Haemonetics ((HAE)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Haemonetics’ recent earnings call painted a mixed picture, showcasing robust growth in certain segments while highlighting challenges in others. The company demonstrated strong performance in its Plasma and TEG segments, contributing to significant margin expansion and financial flexibility. However, difficulties in the Interventional Technologies segment and a decline in Blood Center revenue posed notable concerns. Overall, the positive aspects slightly outweighed the negatives, but the challenges remain a significant consideration.
Strong Organic Revenue Growth
Haemonetics reported a 4% decline in overall revenue; however, the company experienced a 13% organic revenue growth when excluding the impact from CSL. This indicates a strong underlying performance, driven by the company’s strategic initiatives and operational efficiencies.
Plasma Segment Performance
The Plasma segment was a standout performer, generating $130 million in revenue, marking a 29% organic growth excluding CSL. This growth was fueled by technology upgrades and a renegotiated software agreement, underscoring the segment’s importance to Haemonetics’ overall success.
TEG and Hospital Business Growth
Haemonetics’ hospital business delivered impressive results, with $140 million in revenue. Blood Management Technologies grew by 14%, while TEG saw a remarkable 22% growth overall, highlighting the company’s strong position in the hospital sector.
Margin Expansion and EPS Growth
The company achieved a significant milestone with its adjusted gross margin reaching 60.8%, a 550 basis point increase year-over-year. Additionally, adjusted EPS grew by 8% to $1.10, reflecting Haemonetics’ focus on operational efficiency and profitability.
Share Buyback and Financial Flexibility
Haemonetics completed a $150 million share buyback, demonstrating its commitment to returning value to shareholders. The company maintains strong liquidity, with $293 million in cash and up to $1 billion in available capacity, providing financial flexibility for future strategic initiatives.
Revenue Decline in Blood Center
The Blood Center segment faced challenges, with revenue declining 22% on a reported basis to $52 million. This was primarily due to the divestiture of the whole blood business, impacting the segment’s overall performance.
Challenges in Interventional Technologies
Interventional Technologies experienced a 7% decline in the quarter, facing difficulties in sensor-guided technologies and pressures in esophageal cooling. These challenges highlight areas where Haemonetics needs to focus on improvement.
Vascular Closure Softness
Vascular Closure grew by only 3%, with softness in legacy VASCADE impacting performance. This segment represents about 15% of Vascular Closure revenue, indicating a need for strategic adjustments to enhance growth.
Forward-Looking Guidance
Looking ahead, Haemonetics reaffirmed its guidance for fiscal year 2026, expecting a reported revenue decline of 3% to 6%, but projecting organic growth excluding CSL of 6% to 9%. The hospital segment is anticipated to grow 8% to 11%, driven by Blood Management Technologies. The Plasma segment is forecasted to achieve 11% to 14% organic growth excluding CSL. The company emphasized its focus on margin expansion, forecasting an adjusted operating margin of 26% to 27% and reaffirming its full-year adjusted EPS guidance of $4.70 to $5.00. Strategic initiatives, including portfolio transitions and productivity improvements, are expected to drive these targets.
In conclusion, Haemonetics’ earnings call highlighted a balanced mix of achievements and challenges. While the company demonstrated strong growth in key segments and maintained financial flexibility, it faces hurdles in certain areas that require strategic attention. The forward-looking guidance suggests a positive outlook, with a focus on margin expansion and operational efficiency to drive future success.