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Haemonetics Reports Fourth Quarter and Fiscal 2024 Results

Provides Fiscal 2025 Guidance

Boston, MA, May 9, 2024 - Haemonetics Corporation (NYSE HAE) reported financial results for its fourth quarter and fiscal 2024, which ended March 30, 2024

Chris Simon, Haemonetics' CEO, stated Fourth quarter and fiscal 2024 performance was strong. We advanced our market leadership and portfolio evolution by investing selectively, acquiring attractive new products and rationalizing non-strategic assets to accelerate revenue growth and margin expansion. Midway through our long-range plan we are on track to deliver increased value to our customers and our shareholders.

Fourth quarter fiscal 2024 revenue was $343.3 million, up 12.8% compared with the fourth quarter of fiscal 2023. Business unit revenue and growth rates compared with the prior year period were as follows

Gross margin was 51.2% in the fourth quarter of fiscal 2024, compared with 51.3% in the fourth quarter of fiscal 2023.

The primary drivers of the decrease in the gross margin percentage were the impact of foreign exchange, portfolio rationalization initiatives and amortization of inventory fair value step-up related to the OpSens Inc. acquisition, partially offset by volume and mix. Operating expenses as a percentage of revenue were 42.5% in the fourth quarter of fiscal 2024, compared with 39.7% in the fourth quarter of fiscal 2023. The increase in operating expenses as a percentage of revenue was primarily driven by continuous growth investments, digital transformation costs, write downs of certain in-process intangible assets, the recent acquisition of OpSens Inc. and freight, partially offset by operating leverage. The Company had operating income of $29.9 million and a 8.7% operating margin in the fourth quarter of fiscal 2024, compared with operating income of $35.3 million and an operating margin of 11.6% in the fourth quarter of fiscal 2023. The income tax rates were 13% and 10% in the fourth quarters of fiscal 2024 and fiscal 2023, respectively. Fourth quarter fiscal 2024 net income and earnings per diluted share were $20.4 million and $0.40, respectively, compared with net income and earnings per diluted share of $29.4 million and $0.57, respectively, in the fourth quarter of fiscal 2023.

Organic revenue for the fourth quarter of fiscal 2024 was up 10.2% compared with the same period of fiscal 2023. Business unit organic revenue growth rates compared with the prior year period were as follows

Fourth quarter fiscal 2024 adjusted gross margin was 54.0%, up 220 basis points compared with the prior year period. The primary drivers of the increase in the adjusted gross margin percentage were volume and mix, partially offset by the impact of foreign exchange.

Adjusted operating expenses as a percentage of revenue were 35.2% in the fourth quarter of fiscal 2024, compared with 34.0% in the prior year period. The increase in adjusted operating expenses as a percentage of revenue was primarily driven by continuous growth investments, the recent acquisition of OpSens Inc. and freight, partially offset by operating leverage. Adjusted operating income for the fourth quarter of fiscal 2024 was $64.6 million, up $10.7 million or 19.8%, and adjusted operating margin was 18.8%, up 110 basis points when compared with the same period of fiscal 2023. The adjusted income tax rates were 21% and 23% in the fourth quarter of fiscal 2024 and fiscal 2023, respectively.

Fourth quarter fiscal 2024 adjusted net income was $46.0 million, up $6.8 million or 17.3%, and adjusted earnings per diluted share was $0.90, up 16.9%, each when compared with the same period of fiscal 2023.

AMORTIZATION OF ACQUIRED INTANGIBLE ASSETS, RESTRUCTURING AND DIGITAL TRANSFORMATION COSTS.

The Company recorded amortization of acquired intangible assets of $10.4 million in the fourth quarter of fiscal 2024 compared with $8.0 million in the fourth quarter of fiscal 2023 and incurred restructuring costs of $6.0 million in the fourth quarter of fiscal 2024 compared with $0.5 million in the fourth quarter of fiscal 2023. The Company also incurred $5.0 million of digital transformation costs related to the upgrade of our enterprise resource planning system compared with $2.1 million in the fourth quarter of fiscal 2023.

BALANCE SHEET AND CASH FLOW

Cash on hand at March 30, 2024 was $178.8 million, a decrease of $105.7 million since April 1, 2023, primarily driven by the OpSens Inc. acquisition.

Cash flow from operating activities was $181.8 million and free cash flow before restructuring and restructuring related costs was $127.2 million during fiscal 2024, compared with $273.1 million and $190.4 million in fiscal 2023, respectively. The driver of the decrease in both operating cash flow and free cash flow before restructuring and restructuring related costs was increased inventory balances.

FISCAL 2025 GUIDANCE

The Company issued its fiscal 2025 GAAP total revenue and organic revenue growth guidance in its updated revenue reporting format1 as follows

Additionally, the Company issued its adjusted operating margin, adjusted earnings per diluted share and free cash flow guidance as follows

WEBCAST CONFERENCE CALL AND RESULTS ANALYSIS

The Company will host a conference call with investors and analysts to discuss fourth quarter and full year fiscal 2024 results on Thursday, May 9, 2024 at 8 00 a.m. ET. The call can be accessed via teleconference at https register.vevent.com register BI7654787bc47144b39cb181c1abab0531. Once registration is completed, participants will receive a dial-in number along with a personalized PIN to access the call. While not required, it is recommended that participants join 10 minutes prior to the event start.

Alternatively, a live webcast of the call can be accessed on Haemonetics' investor relations website at the following direct link https edge.media-server.com mmc p 5cppxurr

The Company has made available on its investor relations website certain supplemental analytical tables that include two years of historical revenue information recast in the updated revenue reporting structure. These supplemental analytical tables can be accessed at the following direct link https haemonetics.gcs-web.com static-files e6895d75-dd6f-4f9f-af30-387bd364b386

Haemonetics (NYSE HAE) is a global healthcare company dedicated to providing a suite of innovative medical products and solutions for customers, to help them improve patient care and reduce the cost of healthcare. Our technology addresses important medical markets blood and plasma component collection, the surgical suite and hospital transfusion services. To learn more about Haemonetics, visit www.haemonetics.com.

FORWARD-LOOKING STATEMENTS

Any statements contained in this press release that do not describe historical facts may constitute forward-looking statements. Forward-looking statements in this press release may include, without limitation, statements regarding (i) plans and objectives of management for operations of the Company, including plans or objectives related to the development and commercialization of, and regulatory approvals related to, the Company's products and plans or objectives related to the Company's Operational Excellence Program and portfolio rationalization initiatives (ii) estimates or projections of financial results, financial condition, capital expenditures, capital structure or other financial items, including with respect to the share repurchase program (iii) the impact of inflationary pressures in our global manufacturing and supply chain and (iv) the assumptions underlying or relating to any statement described in points (i), (ii) or (iii) above. Such forward-looking statements are not meant to predict or guarantee actual results, performance, events or circumstances and may not be realized because they are based upon the Company's current projections, plans, objectives, beliefs, expectations, estimates and assumptions and are subject to a number of risks and uncertainties and other influences. Actual results and the timing of certain events and circumstances may differ materially from those described by the forward-looking statements as a result of these risks and uncertainties. Factors that may influence or contribute to the inaccuracy of the forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation, availability and demand for the Company's products the Company's ability to implement as planned and realize estimated cost savings from the Operational Excellence Program and portfolio rationalization initiatives inflationary pressures, rising interest rates and macroeconomic conditions the Company's ability to execute business continuity plans risks arising from planned or completed acquisitions or divestitures by the Company, including any failure to realize the anticipated strategic benefits and opportunities of such transactions the impact of share repurchases on the Company's stock price and volatility as well as the effect of short-term price fluctuations on the share repurchase program's effectiveness technological advances in the medical field and standards for transfusion medicine and the Company's ability to successfully offer products that incorporate such advances and standards product quality market acceptance regulatory uncertainties, including in the receipt or timing of regulatory approvals the effect of economic and political conditions the impact of competitive products and pricing blood product reimbursement policies and practices and the effect of industry consolidation as seen in the plasma market. These and other factors are identified and described in more detail in the Company's periodic reports and other filings with the U.S. Securities and Exchange Commission (the "SEC"). The Company does not undertake to update these forward-looking statements.

MANAGEMENT'S USE OF NON-GAAP MEASURES

This press release contains financial measures that are considered "non-GAAP" financial measures under applicable SEC rules and regulations. Management uses non-GAAP measures to monitor the financial performance of the business, make informed business decisions, establish budgets and forecast future results. Performance targets for management are also based on certain non-GAAP financial measures. These non-GAAP financial measures should be considered supplemental to, and not a substitute for, the Company's reported financial results prepared in accordance with U.S. GAAP. In this release, supplemental non-GAAP measures have been provided to assist investors in evaluating the performance of the Company's core operations and provide a baseline for analyzing trends in the Company's underlying businesses. We strongly encourage investors to review the Company's financial statements and publicly-filed reports in their entirety and not rely on any single financial measure.

When used in this release, organic revenue growth excludes the impact of currency fluctuation and acquisitions. Adjusted gross profit, adjusted operating expenses, adjusted operating income, adjusted provision for income taxes, adjusted net income and adjusted earnings per diluted share exclude restructuring costs, restructuring related costs, digital transformation costs, amortization of acquired intangible assets, asset impairments and write downs, amortization of fair value inventory step-up, accelerated device depreciation and related costs, costs related to compliance with the European Union Medical Device Regulation ( MDR ) and In Vitro Diagnostic Regulation ( IVDR ), integration and transaction costs, divestitures and sale of assets, certain tax settlements and unusual or infrequent and material litigation-related charges. Adjusted net income and adjusted earnings per diluted share also exclude the tax impact of these items. The adjustments to provision for income taxes are calculated based on the jurisdictions in which pre-tax adjustments occurred. Free cash flow is defined as cash provided by operating activities less capital expenditures, net of the proceeds from the sale of property, plant and equipment. Free cash flow before restructuring and restructuring related costs is defined as cash provided by operating activities less capital expenditures, net of the proceeds from the sale of property, plant and equipment and restructuring and restructuring related costs, net of tax. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures to similarly titled measures used by other companies.

A reconciliation of non-GAAP historical financial measures to their most comparable GAAP measure are included at the end of the financial sections of this press release as well as on the Company's website at www.haemonetics.com. The Company does not attempt to provide reconciliations of forward-looking adjusted operating margin guidance, adjusted earnings per diluted share guidance or free cash flow guidance to the comparable GAAP measures because the combined impact and timing of recognition of certain potential charges or gains, such as restructuring costs, impairment charges and capital expenditures, is inherently uncertain and difficult to predict and is unavailable without unreasonable efforts. In addition, the Company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors. Such items could have a substantial impact on GAAP measures of the Company's financial performance.