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Last updated on April 16, 2014 at 17:34 EDT

Haemonetics Reports 10% Revenue Growth for Fourth Quarter of Fiscal 2012 and $0.80 Adjusted EPS; Also Establishes Fiscal 2013 Guidance

April 29, 2012

BRAINTREE, Mass., April 29, 2012 /PRNewswire/ — Haemonetics Corporation (NYSE: HAE) today reported fourth quarter 2012 GAAP net revenue of $186.7 million, up 10%, net income of $17.8 million, down 15%, and diluted earnings per share of $0.69, down 14%. Excluding restructuring, transformation and transaction costs, adjusted fourth quarter net income was $20.6 million, down 6%, and adjusted earnings per share were $0.80, down 5%. Excluding currency impacts, net revenue was up 8% in the quarter.[1]

(Logo: http://photos.prnewswire.com/prnh/20120206/NE47232LOGO )

For fiscal year 2012, Haemonetics reported GAAP net revenue of $727.8 million, up 8%, net income of $66.9 million, down 16%, and diluted earnings per share of $2.59, down 17%. Excluding restructuring, transformation and transaction costs, and contingent consideration income, adjusted net income was $78.4 million, down 6%, and adjusted earnings per share were $3.04, down 7%. Excluding currency impacts, year to date fiscal 2012 net revenue was up 6%.[1]

Brian Concannon, Haemonetics’ President and CEO, commented: “The fourth quarter performance completes a fiscal year in which we realized revenue growth every quarter. Plasma disposables growth continued to be strong and our blood management solutions gained traction as the year progressed. This was evident in both Blood Center and Hospital disposables. Growth in Hospital disposables was fueled by demand for the Cell Saver® Elite®, our newest cell salvage device, and continued demand for TEG® disposables as hospital customers continue to seek ways to reduce costs and improve clinical outcomes under the mounting pressures of healthcare reform.”

STRATEGIC AND PRODUCT GROWTH HIGHLIGHTS

Haemonetics continues to make progress expanding its business, reporting the following fourth quarter fiscal 2012 highlights:

  • 13% revenue growth in plasma disposables, as collection volume remains robust.
  • 9% revenue growth in Blood Center disposables, as platelet growth drives revenues.
  • 27% revenue growth in diagnostic disposables products, with Blood Management Solutions driving growth at leading US hospitals.
  • 17% growth in equipment sales, giving confidence that disposables revenue growth will continue.
  • IMPACT® accounts increased by 21 in the quarter to 258 as more customers embrace the value of blood management.
  • OrthoPAT® device recall, build and replacement substantially completed.
  • HS Core Bowl reintroduced via limited market release, completion expected in Q1 of fiscal 2013.
  • Extended another multi-year comprehensive equipment and disposables supply agreement with a commercial plasma customer.
  • 75% of current commercial plasma business now under contract through Q3 of fiscal 2017 and over 98% through Q3 of fiscal 2015.

Mr. Concannon added: “As we close out fiscal 2012, we are in a very good position to succeed in all of our businesses. The Plasma contract extensions enable us and our customers to confidently plan for and accommodate the growth in demand that is expected in the plasma collection market. Growth in red cell and platelet disposables validates the value inherent in our Blood Management Solutions for our Blood Center customers. And the combination of new OrthoPAT devices, strong demand for TEG devices, our new Cell Saver Elite and an expanding IMPACT customer base bodes well for growth in our Hospital business.”

Revenue was $186.7 million in the quarter, up 10% and $727.8 million in the full fiscal year, up 8%. A revenue breakdown follows:

Plasma

Plasma disposables revenue was $61.9 million for the quarter, up 13%, and $258.1 million for fiscal 2012, up 14%. In the quarter, momentum continued as expected in Haemonetics’ North America plasma business and was unusually strong in Japan due to the Japanese Red Cross (“JRC”) increasing inventories of our disposables in anticipation of a system conversion. The company expects its plasma business to have a mid-single digit percentage growth in fiscal 2013 consistent with end market growth rates for plasma derived biopharmaceuticals, despite the first quarter correction of the JRC inventory.

Blood Center

Platelet disposables revenue was $44.1 million for the quarter, up 13%, and $167.9 million in fiscal 2012, up 7%. Platelet revenue continues to benefit from strong sales in emerging markets and the impact of the JRC system conversion.

Red cell disposables revenue was $12.4 million for the quarter, down 1%, in comparison with a strong prior year quarter and $48.0 million in fiscal 2012, up 3%. Though the clinical demand for blood remains flat, red cell revenue grew in fiscal 2012 due to increased collections on the Company’s devices as the Company leveraged its IMPACT selling approach to advance Blood Management Solutions.

Hospital

Surgical disposables revenue was $17.3 million for the quarter, up 2%, and $66.6 million in fiscal 2012, flat with the prior year. Notably this was the third consecutive increase after eight consecutive quarters of decline, as the product launch of the Cell Saver Elite device accelerated as expected. Strong Cell Saver Elite equipment sales in the quarter should provide strong near-term disposables growth. Disposables revenue from our OrthoPAT orthopedic perioperative autotransfusion system was $8.4 million in the quarter, down 8%, and $31.2 million in fiscal 2012, down 12%, as the impact of the voluntary recall of pre-2002 devices upon disposables usage began to diminish.

Diagnostics revenue was $6.1 million for the quarter, up 27%, and $23.1 million in the fiscal year, up 19%, as the company’s IMPACT initiative continues to drive growth in disposables utilized in the TEG® Thrombelastograph® Hemostasis Analyzer business. TEG equipment sales were especially strong toward the end of the third quarter, a known key indicator for near-term future disposables revenue growth. TEG( )disposables sales increased 127% in the quarter in China.

Software Solutions revenue was $19.3 million for the quarter, up 9% over a strong prior year quarter, and $70.6 million in fiscal 2012, up 6%. The enhanced offering of software products for Blood Center and Hospital customers continued to drive revenue growth in North America, where a major customer implemented Blood Track, and several installations were completed in the UK.

Equipment and other revenue was $17.2 million in the quarter, up 17%, and $62.4 million in the full fiscal year, up 8%. Equipment revenue is influenced by the timing of tenders and capital budgets. Sales of Cell Saver Elite devices in North America were particularly strong in the quarter.

Haemonetics reported fourth quarter fiscal 2012 revenue growth of 9% in North America, 24% in Japan, 11% in Asia and 2% in Europe. For fiscal 2012, North America revenue was up 11%, Japan revenue was up 13%, Asia revenue was up 9% and Europe revenue was down 2%.

In the quarter, Haemonetics reported adjusted gross margin of 50.8%, down 70 basis points, and adjusted operating margin of 14.5%, down 350 basis points. The Company’s adjusted operating expenses were $67.7 million, up 19%. Gross and operating margins were significantly impacted by product recall and quality-related issues that normalized by the end of the quarter. The negative impact on operating results due to our product quality initiatives was approximately 150 basis points of gross margin and $3.5 million of operating earnings, which equates to $0.10 per share in the quarter; and 160 basis points of gross margin and $14.5 million of operating earnings, which equates to $0.41 per share in fiscal 2012.

Balance Sheet and Cash Flow

Cash on hand was $229 million, an increase of $24 million during the quarter. The Company reported continued strong cash flows, though at somewhat reduced levels from the prior year due to the impact of the product recall and other quality-related issues. The cash balance on hand is net of a $50 million share buyback completed in the second quarter of fiscal 2012.

Guidance

Fiscal 2013 organic revenue growth is expected to be approximately 4-6%, with Plasma expected to grow 4-6%, Blood Center 0-2%, Hospital products 12-15% and Software Solutions 5-7%. Full year adjusted gross margin is expected to be in a range of 52-53%, adjusted operating income between $117-$119 million, adjusted earnings per share between $3.30-$3.40, up 9%-12% over fiscal 2012, and free cash flow approximating $85 million, all on an organic basis exclusive of planned acquisitions. Excluding the expected one-time costs associated with two business acquisitions, which are the subject of separate press releases issued today, Haemonetics anticipates the impact to adjusted earnings per share to be at least neutral in fiscal 2013, and accretive in fiscal 2014 and beyond.

More information on the impact of the cost of quality on our adjusted operating results, both for the fourth quarter and the full year, can be found on our web site at http://www.haemonetics.com. [1]( )

CONFERENCE CALL

In consideration of the need to discuss the implications of the two acquisition announcements in addition to these quarterly and full year results, Haemonetics will host its webcast two hours earlier than previously communicated, on Monday, April 30, 2012 at 8:00 am Eastern time. Interested parties can participate at:

http://phoenix.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=72118&eventID=4702718.

Haemonetics (NYSE: HAE) is a global healthcare company dedicated to providing innovative blood management solutions for our customers. Together, our devices and consumables, information technology platforms, and consulting services deliver a suite of business solutions to help our customers improve clinical outcomes and reduce the cost of healthcare for blood collectors, hospitals, and patients around the world. Our technologies address important medical markets: blood and plasma component collection, the surgical suite, and hospital transfusion services. To learn more about Haemonetics, visit our web site at http://www.haemonetics.com.

This release contains forward-looking statements that involve risks and uncertainties, including technological advances in the medical field and standards for transfusion medicine and our ability to successfully implement products that incorporate such advances and standards, product demand, product quality, market acceptance, regulatory uncertainties, the effect of economic and political conditions, the impact of competitive products and pricing, blood product reimbursement policies and practices, foreign currency exchange rates, changes in customers’ ordering patterns, the effect of industry consolidation as seen in the plasma market, the effect of communicable diseases and the effect of uncertainties in markets outside the U.S. (including Europe and Asia) in which we operate and other risks detailed in the Company’s filings with the Securities and Exchange Commission. The foregoing list should not be construed as exhaustive.

These forward-looking statements are based on estimates and assumptions made by management of the Company and are believed to be reasonable, though inherently uncertain and difficult to predict. Actual results and experience could differ materially from the forward-looking statements. Information set forth in this press release is current as of today and the Company undertakes no duty or obligation to update this information.

[1] A reconciliation of GAAP to adjusted financial results is included at the end of the financial sections of this press release as well as on the web at http://www.haemonetics.com. GAAP results include the following items which are excluded from adjusted results: $6.1 million of pre-tax restructuring, transformation and transaction costs in the fourth quarter of fiscal 2012; $1.7 million in pre-tax restructuring and transformation costs in the fourth quarter of fiscal 2011; $19.3 million of pre-tax restructuring, transformation and transaction costs and $1.6 million of contingent consideration income in fiscal 2012; and $8.3 million in pre-tax restructuring and integration costs and $1.9 million of contingent consideration in fiscal 2011. Fiscal 2012 pre-tax restructuring and transformation costs excluded from adjusted financial results include $4.5 million of transaction costs and $3.1 million of expenses for customer claims arising from the HS Core Bowl quality issue. Fiscal 2013 guidance excludes: $20-25 million of planned costs associated with the completion and integration of the two transactions announced today. Those costs include transaction costs necessary to finalize the transaction, and costs necessary to integrate the acquisitions including a dedicated integration team. One time adjustments to increase the cost of inventory acquired in the two transactions, such that only a distributor’s profit is earned on the first turn of the acquired inventory, will also be excluded from adjusted financial results.

CONTACT:
Gerry Gould, VP-Investor Relations
Tel. (781) 356-9402
gerry.gould@haemonetics.com
Alt. (781) 356-9613

                                      Haemonetics Corporation Financial Summary
                                (Unaudited data in thousands, except per share data)
                      Consolidated Statements of Income for the Fourth Quarter of FY12 and FY11

                                             3/31/2012                  4/2/2011                     % Inc/(Dec)
                                           As Reported               As Reported                    vs Prior Year
                                           -----------               -----------                    -------------
    Net revenues                              $186,670                  $170,033                                  9.8 %
    Gross profit                                             94,612                    87,501                              8.1 %

                     R&D                                      8,611                     8,786                             (2.0)%
                     S,G&A                                   65,041                    49,820                             30.6 %
    Operating
     expenses                                                73,652                    58,606                             25.7 %

    Operating income                                         20,960                    28,895                            (27.5)%

    Other income
     (expense), net                                             369                      (323)                          (214.2)%

    Income before
     taxes                                                   21,329                    28,572                            (25.3)%

    Tax expense                                               3,524                     7,584                            (53.5)%

    Net income                                 $17,805                   $20,988                                (15.2)%
                                               =======                   =======

    Net income per
     common share
     assuming
     dilution                                    $0.69                     $0.81                                (14.2)%

    Weighted average
     number of
     shares:
                     Basic                                   25,229                    25,509
                     Diluted                                 25,678                    25,970

    Profit Margins:                                                                            Inc/(Dec) vs prior year
                                                                                                       profit margin %
                                                                                                        --------------
    Gross profit                                              50.7 %                    51.5 %                            (0.8)%
    R&D                                                        4.6 %                     5.2 %                            (0.6)%
    S,G&A                                                     34.8 %                    29.3 %                             5.5 %
    Operating income                                          11.2 %                    17.0 %                            (5.8)%
    Income before
     taxes                                                    11.4 %                    16.8 %                            (5.4)%
    Net income                                                 9.5 %                    12.3 %                            (2.8)%

                                                Haemonetics Corporation Financial Summary
                                           Consolidated Statements of Income for FY12 and FY11

                                                                     3/31/2012                  4/2/2011               % Inc/(Dec)
                                                                   As Reported               As Reported              vs Prior Year
                                                                   -----------               -----------              -------------
    Net revenues                                                      $727,844                  $676,694                          7.6 %
    Gross profit                                                                    369,240              355,209                           4.0 %

                                R&D                                                  36,801               32,656                          12.7 %
                                S,G&A                                               245,261              213,899                          14.7 %
                                Contingent consideration income                      (1,580)              (1,894)                        (16.6)%

    Operating expenses                                                              280,482              244,661                          14.6 %

    Operating income                                                                 88,758              110,548                         (19.7)%

    Other income (expense), net                                                         740                 (467)                       (258.5)%

    Income before taxes                                                              89,498              110,081                         (18.7)%

    Tax expense                                                                      22,612               30,101                         (24.9)%

    Net income                                                         $66,886                   $79,980                        (16.4)%
                                                                       =======                   =======

    Net income per common share
     assuming dilution                                                   $2.59                     $3.12                        (16.9)%

    Weighted average number of
     shares:
                                Basic                                                25,364               25,077
                                Diluted                                              25,795               25,596

    Profit Margins:                                                                                                Inc/(Dec) vs prior
                                                                                                                  year profit margin %
                                                                                                                   -------------------
    Gross profit                                                                      50.7 %               52.5 %                         (1.8)%
    R&D                                                                                5.1 %                4.8 %                          0.3 %
    S,G&A                                                                             33.7 %               31.6 %                          2.1 %
    Operating income                                                                  12.2 %               16.3 %                         (4.1)%
    Income before taxes                                                               12.3 %               16.3 %                         (4.0)%
    Net income                                                                         9.2 %               11.8 %                         (2.6)%

                                        Revenue Analysis for the Fourth Quarter and FY12 and FY11
                                                      (Unaudited data in thousands)

                                                               Three Months Ended
                                                               ------------------
                                                                     3/31/2012                                 4/2/2011    % Inc/(Dec)
                                                           As Reported                              As Reported           vs Prior Year
                                                           -----------                              -----------           -------------
    Revenues by geography
                 United States                                       $87,485                                  $80,277            9.0 %
                 International                                        99,185                                   89,756           10.5 %
                                                                      ------
    Net revenues                                                    $186,670                                 $170,033            9.8 %
                                                                    ========                                 ========

    Disposable revenues

                 Plasma disposables                                  $61,855                                  $54,965           12.5 %

                 Blood center disposables
                 Platelet                                             44,058                                   39,130           12.6 %
                 Red cell                                             12,358                                   12,545           (1.5)%
                                                                      ------
                                                                      56,416                                   51,675            9.2 %
                 Hospital disposables
                 Surgical                                             17,338                                   17,024            1.8 %
                 OrthoPAT                                              8,382                                    9,145           (8.3)%
                 Diagnostics                                           6,132                                    4,839           26.7 %
                                                                       -----
                                                                      31,852                                   31,008            2.7 %

                 Subtotal                                            150,123                                  137,648            9.1 %

    Software solutions                                                19,349                                   17,722            9.2 %
    Equipment & other                                                 17,198                                   14,663           17.3 %
                                                                      ------
    Net revenues                                                    $186,670                                 $170,033            9.8 %
                                                                    ========                                 ========

                                                               Year Ended
                                                               ----------
                                                                   3/31/2012                                 4/2/2011    % Inc/(Dec)
                                                         As Reported                              As Reported           vs Prior Year
                                                         -----------                              -----------           -------------
    Revenues by geography
                 United States                                      $352,160                                 $317,355           11.0 %
                 International                                       375,684                                  359,339            4.5 %
                                                                     -------
    Net revenues                                                    $727,844                                 $676,694            7.6 %
                                                                    ========                                 ========

    Disposable revenues

                 Plasma disposables                                 $258,061                                 $227,209           13.6 %

                 Blood center disposables
                 Platelet                                            167,946                                  156,251            7.5 %
                 Red cell                                             48,034                                   46,828            2.6 %
                                                                     215,980                                  203,079            6.4 %
                 Hospital disposables
                 Surgical                                             66,619                                   66,503            0.2 %
                 OrthoPAT                                             31,186                                   35,631          (12.5)%
                 Diagnostics                                          23,087                                   19,414           18.9 %
                                                                     120,892                                  121,548           (0.5)%

                 Subtotal                                            594,933                                  551,836            7.8 %

    Software solutions                                                70,557                                   66,876            5.5 %
    Equipment & other                                                 62,354                                   57,982            7.5 %
                                                                      ------
    Net revenues                                                    $727,844                                 $676,694            7.6 %
                                                                    ========                                 ========

                                  Consolidated Balance Sheets

                                                                              As of
                                                                              -----
                                                              3/31/2012           4/2/2011
                                                              ---------           --------

    Assets
    Cash and cash equivalents                        $228,861           $196,707
    Accounts receivable, net                                             135,464           127,166
    Inventories, net                                                     117,163            84,387
    Other current assets                                                  45,138            40,571
                                                                          ------            ------
                                Total current assets                     526,626           448,831
    Net PP&E                                                             161,657           155,528
    Other assets                                                         222,349           228,905

                                Total assets                   $910,632           $833,264
                                ==========

                                                                             As of
                                                                             -----
                                                              3/31/2012           4/2/2011
                                                              ---------           --------

    Liabilities & Stockholders'
     Equity
    Short term debt & current
     maturities                                          $894               $913
    Other current liabilities                                            129,850           107,758
                                                                         -------           -------
                                Total current liabilities                130,744           108,671
    Long-term debt                                                         2,877             3,966
    Other long-term liabilities                                           41,936            34,491
    Stockholders' equity                                                 735,075           686,136

                                 Total
                                 liabilities &
                                 stockholders'
                                 equity                        $910,632           $833,264
                                ==========

                                   Free Cash Flow Reconciliation

                                          Three Months Ended
                                          ------------------
                                                       3/31/2012  4/2/2011
                                                       ---------  --------

    GAAP cash flow from operations                       $33,975   $32,139

    Capital expenditures                                 (16,239)  (11,683)
    Proceeds from sale of
     property, plant and equipment                           485     1,134
                                                                     -----
    Net investment in property,
     plant and equipment                                 (15,754)  (10,549)

    Free cash flow after
     restructuring and
     transformation costs                                 18,221    21,590

    Restructuring and
     transformation costs                                  3,088     3,222
                                                                     -----
                                                           3,088     3,222

    Free cash flow before
     restructuring and
     transformation costs                                $21,309   $24,812
                                                         =======   =======

                                              Year Ended
                                              ----------
                                                       3/31/2012  4/2/2011
                                                       ---------  --------

    GAAP cash flow from operations                      $115,318  $123,455

    Capital expenditures                                 (53,198)  (46,669)
    Proceeds from sale of
     property, plant and equipment                         1,002     1,468
    Net investment in property,
     plant and equipment                                 (52,196)  (45,201)

    Free cash flow after
     restructuring and
     transformation costs                                 63,122    78,254

    Restructuring and
     transformation costs                                 12,336    12,567
    Global Med employment
     contracts                                                 -     2,122
                                                          12,336    14,689

    Free cash flow before
     restructuring and
     transformation costs                                $75,458   $92,943
                                                         =======   =======

    Cost of Quality
    (in thousands, except per share data)

    The cost of quality are included in both GAAP and Non-GAAP
     results. This table is intended to provide further details.

                                                 Q4 FY12         Full Year

    Revenue                                             $(2,013)          $(9,012)
    Standard
     Margin                                             $(2,177)          $(9,489)
    Gross
     Profit                                             $(2,766)         $(11,735)
     Operating
     Expenses                                              $704            $2,760
     Operating
     Income                                             $(3,470)         $(14,495)
                                                        =======          ========

    Earnings
     Per
     Share                                               $(0.10)           $(0.41)

                                                                                       Haemonetics Corporation Financial Summary
                                                                                          Reconciliation of Non-GAAP Measures

    Haemonetics has presented supplemental non-GAAP financial measures as part of this earnings release.  A reconciliation is provided below that reconciles each
     non-GAAP financial measure with the most comparable GAAP measure.  The presentation of non-GAAP financial measures should not be considered in isolation
     from, or as a substitute for, the most directly comparable GAAP measures.  There are material limitations to the usefulness of non-GAAP measures on a
     standalone basis, including the lack of comparability to the GAAP financial results of other companies.

    These measures are used by management to monitor the financial performance of the business, inform business decision making, and forecast future results.
     Performance targets for management are established based upon these non-GAAP measures.  In the reconciliations below, we have removed restructuring and
     transformation costs from our GAAP expenses.  Our restructuring and transformation costs are principally related to transaction costs, HS Core customer
     related expenses, restructuring of certain departments and the disposal of a product line. We believe this information is useful for investors because it
     allows for an evaluation of the Company with a focus on the performance of our core operations.

    Non-GAAP Gross Profit
    The use of these non-GAAP measures allows management to monitor the level of total gross profits without the costs of our business transformation.  We
     establish our budgets, forecasts, and performance targets on this basis.

    Non-GAAP S,G&A and Non-GAAP Operating Expenses
    The use of this non-GAAP measure allows management to monitor the ongoing level of spend that is necessary to support the business in a period when we are
     not transforming our business or completing an acquisition of in-process research and development.  We establish our budgets, forecasts, and performance
     targets excluding these costs.

    Non-GAAP Operating Income and Non-GAAP Income before Income Taxes
    The use of these non-GAAP measures allows management to monitor the level of operating and total pre-tax profits without the costs of our business
     transformation.  We establish our budgets, forecasts, and performance targets on this basis.

    Non-GAAP Net Income and Earnings per Share
    The use of these non-GAAP measures allows management to monitor the level of net income and earnings per share excluding both the costs of our business
     transformation, as well as any related tax effects. We establish our budgets, forecasts, and performance targets on this basis.

    Reconciliation of Non-GAAP Measures for the Fourth Quarter of FY12 and FY11
                                                        Three Months Ended
                                                        ------------------
                                                                     3/31/2012  4/2/2011
                                                                     ---------  --------
    Non-GAAP gross
     profit
    GAAP gross profit                                                  $94,612   $87,501
    Restructuring and
     transformation
     costs                                                                 167         -
                                                                           ---
    Non-GAAP gross
     profit                                                            $94,779   $87,501
                                                                       =======   =======

    Non-GAAP R&D
    GAAP R&D                                                            $8,611    $8,786
    Restructuring and
     transformation
     costs                                                                (962)        -
                                                                          ----
    Non-GAAP R&D                                                        $7,649    $8,786
                                                                        ======    ======

    Non-GAAP S,G&A
    GAAP S,G&A                                                         $65,041   $49,820
    Restructuring and
     transformation
     costs                                                              (4,998)   (1,705)
                                                                        ------
    Non-GAAP S,G&A                                                     $60,043   $48,115
                                                                       =======   =======

    Non-GAAP operating
     expenses
    GAAP operating
     expenses                                                          $73,652   $58,606
    Restructuring and
     transformation
     costs                                                              (5,960)   (1,705)
    Contingent
     consideration
     income                                                                  -         -
                                                                           ---       ---
    Non-GAAP operating
     expenses                                                          $67,692   $56,901
                                                                       =======   =======

    Non-GAAP operating
     income
    GAAP operating
     income                                                            $20,960   $28,895
    Restructuring and
     transformation
     costs                                                               6,127     1,705
    Contingent
     consideration
     income                                                                  -         -
    Non-GAAP operating
     income                                                            $27,087   $30,600
                                                                       =======   =======

    Non-GAAP income
     before taxes
    GAAP income before
     taxes                                                             $21,329   $28,572
    Restructuring and
     transformation
     costs                                                               6,127     1,705
    Contingent
     consideration
     income                                                                  -         -
    Non-GAAP income
     before taxes                                                      $27,456   $30,277
                                                                       =======   =======

    Non-GAAP net income
    GAAP net income                                                    $17,805   $20,988
    Restructuring and
     transformation
     costs                                                               6,127     1,705
    Contingent
     consideration
     income                                                                  -         -
    Tax benefit
     associated with
     non-GAAP items                                                     (3,282)     (681)
                                                                        ------
    Non-GAAP net income                                                $20,650   $22,012
                                                                       =======   =======

    Non-GAAP net
     income per common
     share assuming
     dilution
    GAAP net income per
     common share
     assuming dilution                                                   $0.69     $0.81
    Non-GAAP items
     after tax per
     common share
     assuming dilution                                                   $0.11     $0.04
    Non-GAAP net
     income per common
     share assuming
     dilution                                                            $0.80     $0.85
                                                                         =====     =====
    Presented below are additional Constant Currency performance measures.  We measure
     different components of our business at constant currency.  We believe this information
     is useful for investors because it allows for an evaluation of the Company without the
     effect of changes in foreign exchange rates.  These results convert our local foreign
     currency operating results to the US Dollar at constant exchange rates of 0.833 Euro to
     1.00 US Dollar and 110 Yen to 1.00 US Dollar.  They also exclude the results of our
     foreign currency hedging program described in Note 7 to our consolidated financial
     statements in our Form 10-K.

                                                        Three Months Ended
                                                        ------------------
                                                                     3/31/2012               4/2/2011
                                                                     ---------               --------
    Non-GAAP revenues
    GAAP revenue                                                      $186,670               $170,033
    Foreign currency
     effects                                                           (14,614)               (11,449)
                                                                       -------
    Non-GAAP revenue -
     constant currency                                                $172,056               $158,584
                                                                      ========               ========

    Non-GAAP net income
    Non-GAAP net
     income, adjusted
     for restructuring
     and transformation
     costs                                                             $20,650                $22,012
    Foreign currency
     effects                                                            (4,815)                (4,135)
    Income tax
     associated with
     foreign currency
     effects
    Non-GAAP net income
     - constant
     currency                                                          $15,835                $17,877
                                                                       =======                =======

    Non-GAAP net income
     per common share
     assuming dilution
    Non-GAAP net income
     per common share
     assuming dilution,
     adjusted for
     restructuring and
     transformation
     costs                                                               $0.80                  $0.85
    Foreign currency
     effects after tax
     per common share
     assuming dilution                                                  $(0.18)                $(0.16)
                                                                        ------
    Non-GAAP net income
     per common share
     assuming dilution -
      constant currency                                                  $0.62                  $0.69
                                                                         =====                  =====
    Reconciliation of Non-GAAP Measures for FY12 and FY11

                                                          Year Ended
                                                          ----------
                                                                   3/31/2012  4/2/2011
                                                                   ---------  --------
    Non-GAAP gross profit
    GAAP gross profit                                               $369,240  $355,209
    Restructuring and
     transformation costs                                              1,510         -
                                                                       -----
    Non-GAAP gross profit                                           $370,750  $355,209
                                                                    ========  ========

    Non-GAAP R&D
    GAAP R&D                                                         $36,801   $32,656
    Restructuring and
     transformation costs                                             (2,864)        -
                                                                      ------
    Non-GAAP R&D                                                     $33,937   $32,656
                                                                     =======   =======

    Non-GAAP S,G&A
    GAAP S,G&A                                                      $245,261  $213,899
    Restructuring and
     transformation costs                                            (14,947)   (8,303)
                                                                     -------
    Non-GAAP S,G&A                                                  $230,314  $205,596
                                                                    ========  ========

    Non-GAAP operating
     expenses
    GAAP operating
     expenses                                                       $280,482  $244,661
    Restructuring and
     transformation costs                                            (17,811)   (8,303)
    Contingent
     consideration income                                              1,580     1,894
                                                                       -----
    Non-GAAP operating
     expenses                                                       $264,251  $238,252
                                                                    ========  ========

    Non-GAAP operating
     income
    GAAP operating income                                            $88,758  $110,548
    Restructuring and
     transformation costs                                             19,321     8,303
    Contingent
     consideration income                                             (1,580)   (1,894)
    Non-GAAP operating
     income                                                         $106,499  $116,957
                                                                    ========  ========

    Non-GAAP income
     before taxes
    GAAP income before
     taxes                                                           $89,498  $110,081
    Restructuring and
     transformation costs                                             19,321     8,303
    Contingent
     consideration income                                             (1,580)   (1,894)
    Non-GAAP income
     before taxes                                                   $107,239  $116,490
                                                                    ========  ========

    Non-GAAP net income
    GAAP net income                                                  $66,886   $79,980
    Restructuring and
     transformation costs                                             19,321     8,303
    Contingent
     consideration income                                             (1,580)   (1,894)
    Tax benefit
     associated with non-
     GAAP items                                                       (6,227)   (2,622)
                                                                      ------
    Non-GAAP net income                                              $78,400   $83,767
                                                                     =======   =======

    Non-GAAP net income
     per common share
     assuming dilution
    GAAP net income per
     common share
     assuming dilution                                                 $2.59     $3.12
    Non-GAAP items after
     tax per common share
     assuming dilution                                                 $0.45     $0.15
    Non-GAAP net income
     per common share
     assuming dilution                                                 $3.04     $3.27
                                                                       =====     =====

    Presented below are additional
     Constant Currency performance
     measures.  We measure different
     components of our business at
     constant currency.  We believe
     this information is useful for
     investors because it allows for
     an evaluation of the Company
     without the effect of changes in
     foreign exchange rates.  These
     results convert our local
                                        Year Ended
                                        ----------
                                                 3/31/2012  4/2/2011
                                                 ---------  --------
    Non-GAAP revenues
    GAAP revenue                                  $727,844  $676,694
    Foreign currency effects                       (54,720)  (41,237)
                                                             -------
    Non-GAAP revenue - constant
     currency                                     $673,124  $635,457
                                                  ========  ========

    Non-GAAP net income
    Non-GAAP net income, adjusted for
     restructuring, transformation
     costs and                                     $78,400   $83,767
    contingent consideration income
    Foreign currency effects                       (14,479)  (13,207)
    Income tax associated with foreign
     currency effects                                              2
                                                                 ---
    Non-GAAP net income - constant
     currency                                      $63,921   $70,562
                                                   =======   =======

    Non-GAAP net income per common
     share assuming dilution
    Non-GAAP net income per common
     share assuming dilution, adjusted
     for                                             $3.04     $3.27
    restructuring, transformation costs
     and contingent consideration
     income
    Foreign currency effects after tax
     per common share assuming dilution             $(0.56)   $(0.51)
    Non-GAAP net income per common
     share assuming dilution -
     constant currency                               $2.48     $2.76
                                                     =====     =====

    Restructuring and Transformation Costs
    (in thousands)

    GAAP results include the following items which are excluded from adjusted results.

                                                        Three Months Ended
                                                        ------------------
                                                                     3/31/2012         4/2/2011
                                                                     ---------         --------

    Restructuring and
     Transformation                                                     $2,774           $1,705

    HS Core Claims                                                      (1,097)               -

    Transaction Costs                                                    4,450                -

    Contingent
     Consideration                                                           -                -

    Total                                                               $6,127           $1,705
                                                                        ======           ======

                                                        Twelve Months Ended
                                                        -------------------
                                                                     3/31/2012         4/2/2011
                                                                     ---------         --------

    Restructuring and
     Transformation                                                    $11,759           $8,303

    HS Core Claims                                                       3,112                -

    Transaction Costs                                                    4,450                -

    Contingent
     Consideration                                                      (1,580)          (1,894)

    Total                                                              $17,741           $6,409
                                                                       =======           ======

SOURCE Haemonetics Corporation


Source: PR Newswire