TO BUSINESS EDITOR:
 
Haemonetics® Reports Strong Results for Second Quarter Fiscal 2008
 
— Company Generates Double Digit Growth in Sales and Earnings Per Share and Raises Annual Revenue Growth Guidance —
 
BRAINTREE, Mass., Nov. 1 /PRNewswire-FirstCall/ -- Haemonetics Corporation (NYSE: HAE) today reported second quarter fiscal 2008 GAAP net revenues of $121 million, up 11.7%; net income of $11 million, up 782.1%; and net earnings per share of $0.42, up 837.8%.
 
Second quarter fiscal 2008 adjusted net income, excluding charges in both fiscal 2007 and 2008, was $12 million, up 7.8%, and adjusted earnings per share were $0.45, up 13.9%(1). Haemonetics also reported year-to-date net revenues of $243 million, up 10.9% over the first half of fiscal 2007; adjusted net income of $26 million, up 10.5%; and adjusted net earnings per share of $0.95, up 14.7%(2).
 
Brad Nutter, Haemonetics’ President and CEO, said, “Our Q2 performance was strong, and we are pleased to report our second consecutive quarter of double digit revenue growth. Our 12% growth comes from strength across multiple product lines and geographies. The outlook for these markets is very positive. As such, we are adjusting our annual revenue guidance up from 7-9% growth to 10-12% growth.”
 
“Haemonetics is a different company today than it was just a few years ago. Our product portfolio is diverse and expanding, and addresses a $2 billion market. We executed well in the quarter on our vision to be the global leader in blood management solutions for our customers,” Mr. Nutter added.
 
The Company has attached to this release a reconciliation of GAAP to adjusted results. A copy of the reconciliation is also posted on the web at http://www.haemonetics.com/investors.
 
FINANCIALS
 
In addition to revenues and earnings per share, Haemonetics reported second quarter gross profit of $60 million, up 8.6%, and gross margin of 49.4%, down 140 basis points. Gross margin was impacted by product mix as the Company’s lower gross margin contributor, plasma, had stronger than expected sales growth. Year-to-date gross profit is $121 million, up 7.9%, and gross margin is 49.9%, down 140 basis points.
 
Adjusted operating expenses for the quarter were $44 million, up 10.8%, with part of the increase coming from three areas: 1) planned enterprise resource planning (“ERP”) spending; 2) the acquisition of IDM, whose expenses were not included in Q2FY07 financial reports; and 3) continued investment in Arryx R&D. Year-to-date adjusted operating expenses are $88 million, up 9.2%.
 
Haemonetics’ tax rate was 32.8% in the quarter and 32.0% year-to-date.
 
Haemonetics ended the quarter with a cash balance of $155 million, and $24 million of debt. During the quarter, the Company generated $7 million of cash flow from operations and invested $15 million in capital expenditures. In the quarter, Haemonetics spent $50 million to complete a $75 million share repurchase program initiated in the first quarter of fiscal 2008.
 
 
EXPANDING THE BUSINESS
 
Haemonetics continued to make progress expanding the business. The Company reported the following highlights:
 
 
·
Ongoing restructuring of the European business, which reported 10.8% revenue growth
 
·
A definitive agreement with Haemoscope Corporation, which is expected to close within thirty days and, once closed, adds annual revenues exceeding $16 million
 
·
The successful merger of 5D Information Management, Inc. (“5D”) and Information Data Management, Inc. (“IDM”) to form Haemonetics Software Solutions, Inc. to provide innovative information technology solutions to the blood and plasma collection industries
 
·
Progress on the launch of 7 new products with market potential of $400 million
 

 
 
QUARTERLY PRODUCT LINE GROWTH
 
Brian Concannon, Haemonetics’ Chief Operating Officer, said, “A diverse product portfolio drove the Company to almost 12% revenue growth. Our product line growth drivers continue to do well. I am also pleased to announce that our geographic growth was strong. In the quarter, Asia, a $32 million business, grew nearly 30% and Europe, a $135 million business, grew almost 11%. Our reorganization of these businesses is paying off.”
 
Among the product line growth drivers, plasma disposables revenue was $38 million for the quarter, up 17.2%. Year-to-date plasma disposables revenue is $74 million, up 15.1%. Plasma disposable sales benefited from continued growth in U.S. and European plasma collections. Haemonetics expects that growth in the plasma market will continue to drive strong plasma sales for the next several years.
 
Blood bank disposables revenue was $34 million for the quarter, up 7.8%. Year-to-date blood bank disposables revenue is $67 million, up 6.6%. Blood bank growth was driven by strong sales in Europe and Asia as the Company sees early benefits from reorganization efforts in the prior year.
 
Red cell disposables revenue was $11 million for the quarter, up 4.5%. Year-to-date red cell disposables revenue is $22 million, up 3.8%. The Company continues to see strong placements and sales of the Cymbal™ automated blood collection system. The Cymbal system is Haemonetics’ next generation red cell technology to collect two units of red cells from one donor. Strong Cymbal equipment sales are a leading indicator of future disposable sales. Including equipment sales, total revenues for the red cell product line have grown 11.5% year-to-date.
 
Software and services revenue grew to $9 million for the quarter, up 11.9%. Year-to-date software and services revenue is $19 million, up 31.9%. In the quarter, Haemonetics successfully integrated the IDM and 5D subsidiaries into a single operating unit: Haemonetics Software Solutions.
 
OrthoPAT® autotransfusion system disposables revenue was $8 million for the quarter, up 10.8%. Year-to-date OrthoPAT disposables revenue is $16 million, up 9.5%. In the quarter, Hthe Company placed 54 OrthoPAT devices in the field. Equipment placements are expected to continue to drive disposables growth in the second half of the year.
 
Equipment revenue was $7 million for the quarter, up 55.1%, and $14 million year-to-date, up 37.8%. Equipment sales growth was driven by sales of plasma devices in the growing European and Asian markets and by sales of automated red cell collection systems.
 
 
FY08 GUIDANCE
 
Haemonetics raised its FY08 revenue growth guidance from 7-9% growth to 10-12% growth, and affirmed that it expects gross profit to be in a range of $248-$253 million and adjusted operating income to grow approximately 10%. The Company also tightened the range for its adjusted earnings per share from an annual range of $2.02-$2.12 to the range of $2.07-$2.12.
 
Adjusted FY08 guidance excludes approximately $4-5 million, or approximately $0.11 per share, of anticipated costs to restructure Haemonetics’ European business.
 
FY08 GAAP earnings per share guidance is $1.96-$2.01.
 
For the full year, the Company expects to generate $25-$30 million of free cash flow.
 
Haemonetics has posted potential income scenarios reflecting guidance ranges on its website at www.haemonetics.com.
 
 
HAEMOSCOPE DEFINITIVE AGREEMENT
 
On October 30, 2007, Haemonetics announced a definitive agreement with Haemoscope Corporation.
 
Brad Nutter, Haemonetics’ President and CEO, said, “This is a strategic acquisition that contributes to our vision of being a global leader in blood management solutions for our customers. The Haemoscope technology can help our hospital customers specifically determine a surgical patient’s need for blood prior to surgery. By knowing this, hospitals can implement strategies to reduce blood cost. It fits well with our recent Infonale acquisition, positioning Haemonetics as a total blood management solution to the hospital market.”
 
Chris Lindop, Haemonetics’ CFO, noted, “Not only is Haemoscope’s business a great strategic fit, but it meets our strict financial criteria for acquisitions. Haemoscope is a $16 million business growing annually more than 15% with gross margin and operating margin accretive to our existing business. The acquisition will be neutral to earnings per share in FY08 and accretive in FY09. The acquisition will be a $44 million cash acquisition.”
 
 
CONFERENCE CALL
 
Haemonetics will hold a conference call on Thursday, November 1st at 10:00 am Eastern to discuss these results. Interested parties can participate in the conference call by dialing 888-802-8577 (U.S. only) or (973) 935-8754 (International) with conference ID 9302807. The call will be replayed through November 16, 2007 at (877) 9302807.
 
Haemonetics (NYSE: HAE) is a global healthcare company dedicated to providing innovative blood management solutions for our customers. Together, our devices and consumables, IT products, 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.
 
As part of this release, Haemonetics has presented supplemental non-GAAP financial results which exclude restructuring costs and an in-process research and development charge. Haemonetics believes that these non-GAAP results are useful to investors because it allows for an evaluation of the Company with a focus on the results of our core business.
 
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, 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. The forward-looking statements are based on estimates and assumptions made by management of the Company and are believed to be reasonable, though are inherently uncertain and difficult to predict. Actual results and experience could differ materially from the forward-looking statements.
 
(1)
Haemonetics’ Q2FY08 adjusted financial results exclude restructuring costs in connection with changes to the Company’s international operations resulting in (pre-tax) charges of $1.2 million, or $0.03 per share. Q2FY07 adjusted financial results to which the Company is comparing also exclude restructuring charges of $1.1 million (pre-tax), or $0.03 per share, and an in-process R&D charge related to the Arryx acquisition of $9 million (pre-tax) or $0.32 per share.

(2)
FY08 year-to-date adjusted financial results exclude restructuring costs resulting in (pre-tax) charges of $2.8 million, or $0.07 per share. FY07 first half financial results to which the Company is comparing also exclude restructuring charges of $2.7 million (pre-tax), or $0.06 per share, and the in-process R&D charge of $9 million (pre-tax), or $0.32 per share.

 
 
CONTACT:
 
Julie Fallon
Tel. (781) 356-9517
Alternate Tel. (617) 320-2401
fallon@haemonetics.com




HAEMONETICS CORPORATION FINANCIAL SUMMARY
(UNAUDITED DATA IN THOUSANDS, EXCEPT PER SHARE DATA)
CONSOLIDATED STATEMENTS OF INCOME
FOR THE SECOND QUARTER FYE08
 
 
   
9/29/07
  
9/30/06
  
% Inc/(Dec)
  
 
  
As Reported
  
As Reported
 
vs Prior Year
  
NET REVENUES
  
$
121,179
  
$
108,487
    
11.7
%
Gross profit
    
59,889
    
55,162
    
8.6
  
R&D
    
6,727
    
6,192
    
8.6
  
S,G&A
    
38,546
    
34,741
    
11.0
  
In-Process R&D
    
0
    
9,073
    
(100.0
)
Operating expenses
    
45,273
    
50,006
    
(9.5
)
                     
Operating income
    
14,616
    
5,156
    
183.5
  
Interest expense
    
(153
)
  
(421
)
  
(63.7
)
Interest income
    
1,414
    
1,951
    
(27.5
)
Other income/(expense), net
    
731
    
425
    
72.0
  
                     
Income before taxes
    
16,608
    
7,111
    
133.6
  
                     
Tax expense
    
5,441
    
5,845
    
(6.9
)
                     
NET INCOME
  
$
11,167
  
$
1,266
    
782.1
%
                     
Net income per common share
                    
assuming dilution
  
$
0.42
  
$
0.05
    
837.8
%
                     
Weighted average number of shares
                    
Basic
    
25,609
    
27,087
        
Diluted
    
26,461
    
27,969
        
                     

PROFIT MARGINS
          
Inc/(Dec)
vs prior
year profit
margin %
  
Gross profit
    
49.4
%
  
50.8
%
  
(1.4
%)
R&D
    
5.6
%
  
5.7
%
  
(0.1
%)
S,G&A
    
31.8
%
  
32.0
%
  
(0.2
%)
Operating income
    
12.1
%
  
4.8
%
  
7.3
%
Income before taxes
    
13.7
%
  
6.6
%
  
7.1
%
Net income
    
9.2
%
  
1.2
%
  
8.0
%


 
 
CONSOLIDATED STATEMENTS OF INCOME FOR FYE08 YEAR TO DATE

   
9/29/07
 
9/30/06
 
% Inc/(Dec)
 
 
 
As Reported
 
As Reported
 
vs Prior Year
 
NET REVENUES
  
$
243,115
  
$
219,161
    
10.9
%
Gross profit
    
121,383
    
112,535
    
7.9
  
R&D
    
13,003
    
11,766
    
10.5
  
S,G&A
    
77,985
    
71,649
    
8.8
  
In-Process R&D
    
0
    
9,073
    
(100.0
)
Operating expenses
    
90,988
    
92,488
    
(1.6
)
                     
Operating income
    
30,395
    
20,047
    
51.6
  
Interest expense
    
(360
)
  
(846
)
  
(57.4
)
Interest income
    
3,317
    
3,977
    
(16.6
)
Other income/(expense), net
    
1,688
    
1,337
    
26.3
  
                     
Income before taxes
    
35,040
    
24,515
    
42.9
  
                     
Tax expense
    
11,196
    
12,093
    
(7.4
)
                     
NET INCOME
    
23,844
    
12,422
    
91.9
%
                     
Net income per common share assuming dilution
  
$
0.89
  
$
0.44
    
99.3
%
                     
Weighted average number of shares
                    
Basic
    
26,072
    
26,993
        
Diluted
    
26,934
    
27,948
        

PROFIT MARGINS
          
Inc/(Dec)
vs prior
year profit
margin %
  
Gross profit
    
49.9
%
  
51.3
%
  
(1.4
%)
R&D
    
5.3
%
  
5.4
%
  
(0.1
%)
S,G&A
    
32.1
%
  
32.7
%
  
(0.6
%)
Operating income
    
12.5
%
  
9.1
%
  
3.4
%
Income before taxes
    
14.4
%
  
11.2
%
  
3.2
%
Net income
    
9.8
%
  
5.7
%
  
4.1
%
 
 

 
REVENUE ANALYSIS FOR THE SECOND QUARTER FYE08 AND FYE08 YEAR TO DATE
 
   
Second Quarter
  
               
   
9/29/07
  
09/30/06
  
% 
  
   
As Reported
  
As Reported
  
Inc/(Dec)
  
Revenues by Geography
              
United States
  
$
53,773
  
$
46,811
    
14.9
%
International
    
67,406
    
61,676
    
9.3
  
Net Revenues
  
$
121,179
  
$
108,487
    
11.7
%
                     
Disposable Revenues by Product Family
                   
                     
Donor:
                    
Plasma
  
$
37,581
  
$
32,072
    
17.2
%
Blood Bank
    
34,160
    
31,678
    
7.8
  
Red Cell
    
10,835
    
10,373
    
4.5
 
   
$
82,576
  
$
74,123
    
11.4
  
Patient:
                    
Surgical
    
15,232
    
15,108
    
0.8
  
OrthoPAT
    
7,849
    
7,085
    
10.8
  
   
$
23,081
  
$
22,193
    
4.0
  
                     
Subtotal
  
$
105,657
  
$
96,316
    
9.7
  
                     
Equipment
  
$
6,833
  
$
4,405
    
55.1
  
Software & Services
    
8,689
    
7,766
    
11.9
  
Net Revenues
  
$
121,179
  
$
108,487
    
11.7
%
 

   
Six Months Ended
  
               
   
9/29/07
 
09/30/06
 
%
 
 
 
As Reported
 
As Reported
 
Inc/(Dec)
 
Revenues by Geography
              
United States
  
$
108,604
  
$
93,231
    
16.5
%
International
    
134,511
    
125,930
    
6.8
  
Net Revenues
  
$
243,115
  
$
219,161
    
10.9
%
                     
Disposable Revenues by Product Family
                    
                     
Donor:
                    
Plasma
  
$
73,536
  
$
63,891
    
15.1
%
Blood Bank
    
67,192
    
63,044
    
6.6
  
Red Cell
    
21,779
    
20,973
    
3.8
  
   
$
162,507
  
$
147,908
    
9.9
  
Patient:
                    
Surgical
    
31,926
    
32,309
    
(1.2
)
OrthoPAT
    
16,036
    
14,641
    
9.5
  
   
$
47,962
  
$
46,950
    
2.2
  
                     
Subtotal
  
$
210,469
  
$
194,858
    
8.0
  
                     
Equipment
  
$
13,801
  
$
10,013
    
37.8
  
Software & Services
    
18,845
    
14,290
    
31.9
  
Net Revenues
  
$
243,115
  
$
219,161
    
10.9
%
 

 
 
CONSOLIDATED BALANCE SHEETS
 
   
Period ending
  
   
9/29/07
  
03/31/07
  
           
Assets
          
Cash & cash equivalents
  
$
154,983
  
$
229,227
  
Accounts receivable, net
    
100,896
    
91,832
 
Inventories, net
    
66,069
    
61,797
  
Other current assets
    
39,053
    
20,815
 
Total current assets
    
361,001
    
403,671
 
Net PP&E
    
103,792
    
90,775
 
Other assets
    
83,897
    
78,289
  
               
Total assets
  
$
548,690
  
$
572,735
  
               

   
Period ending
  
   
9/29/07
  
03/31/07
  
           
Liabilities & Stockholders' Equity
          
S/T debt & current maturities
  
$
17,917
  
$
22,201
  
Other current liabilities
    
72,018
    
59,816
  
Total current liabilities
    
89,935
    
82,017
  
Long-term debt
    
6,361
    
6,675
  
Other long-term liabilities
    
4,668
    
4,395
  
Stockholders' equity
    
447,726
    
479,648
  
               
Total liabilities & equity
  
$
548,690
  
$
572,735
  


SECOND QUARTER FYE08
CONSOLIDATED STATEMENTS OF INCOME ADJUSTED FOR CERTAIN ITEMS


   
9/29/07
  
Restructuring
  
9/29/07
  
   
As Reported
  
Costs(3)
  
As Adjusted(4)
  
NET REVENUES
  
$
121,179
  
$
0
  
$
121,179
  
Gross profit
    
59,889
    
0
    
59,889
  
R&D
    
6,727
    
0
    
6,727
  
S,G&A
    
38,546
    
1,155
    
37,391
  
In-Process R&D
    
0
    
0
    
0
  
Operating expenses
    
45,273
    
1,155
    
44,118
  
                     
Operating income
    
14,616
    
(1,155
)
  
15,771
  
Interest expense
    
(153
)
  
0
    
(153
)
Interest income
    
1,414
    
0
    
1,414
  
Other income/(expense), net
    
731
    
0
    
731
  
                     
Income before taxes
    
16,608
    
(1,155
)
  
17,763
  
                     
Tax expense
    
5,441
    
(397
)
  
5,838
  
                     
NET INCOME
  
$
11,167
    
($758
)
$
11,925
  
                     
Net income per common share assuming dilution
  
$
0.42
    
($0.03
)
$
0.45
  
                     
Weighted average number of shares
                    
Basic
    
25,609
    
25,609
    
25,609
  
Diluted
    
26,461
    
26,461
    
26,461
  
                     
PROFIT MARGINS
                    
Gross profit
    
49.4
%
        
49.4
%
R&D
    
5.6
%
        
5.6
%
S,G&A
    
31.8
%
        
30.9
%
Operating income
    
12.1
%
        
13.0
%
Income before taxes
    
13.7
%
        
14.7
%
Net income
    
9.2
%
        
9.8
%
 
 
 
       
9/30/06
As Reported
      
Arryx
IPRD(5)
    
Restructuring
Costs(3) 
      
9/30/06
As Adjusted(6)
  
NET REVENUES 
  
$ 
  108,487   $   0   $  0     108,487  
Gross profit
    
55,162
    
0
    
0
    
55,162
  
R&D
    
6,192
    
0
    
0
    
6,192
  
S,G&A
    
34,741
    
0
    
1,106
    
33,635
  
In-Process R&D
    
9,073
    
9,073
    
0
    
0
  
Operating expenses
    
50,006
    
9,073
    
1,106
    
39,827
  
                           
Operating income
    
5,156
    
(9,073
)
  
(1,106
)
  
15,335
  
Interest expense
    
(421
)
  
0
    
0
    
(421
)
Interest income
    
1,951
    
0
    
0
    
1,951
  
Other income/(expense), net
    
425
    
0
    
0
    
425
  
                           
Income before taxes
    
7,111
    
(9,073
)
  
(1,106
)
  
17,290
  
                           
Tax expense
    
5,845
    
0
    
(381
)
  
6,226
  
                           
NET INCOME
  
$
1,266
    
($9,073
)
  
($725
)
$
11,064
  
                           
Net income per common share
                          
assuming dilution
  
$
0.05
    
($0.32
)
  
($0.03
)
$
0.40
  
                           
Weighted average number of
                         
shares
                          
Basic
    
27,087
    
27,087
    
27,087
    
27,087
  
Diluted
    
27,969
    
27,969
    
27,969
    
27,969
  
                           
PROFIT MARGINS
                          
Gross profit
    
50.8
%
              
50.8
%
R&D
    
5.7
%
              
5.7
%
S,G&A
    
32.0
%
              
31.0
%
Operating income
    
4.8
%
              
14.1
%
Income before taxes
    
6.6
%
              
15.9
%
Net income
    
1.2
%
              
10.2
%
                           

   
Adjusted % Inc/(Dec) vs Prior Year
  
NET REVENUES
    
11.7
%
Gross profit
    
8.6
  
R&D
    
8.6
  
S,G&A
    
11.2
  
In-Process R&D
    
—
  
Operating expenses
    
10.8
  
         
Operating income
    
2.8
  
Interest expense
    
(63.7
)
Interest income
    
(27.5
)
Other income/(expense), net
    
72.0
  
         
Income before taxes
    
2.7
  
         
Tax expense
    
(6.2
)
         
NET INCOME
    
7.8
  
         
Net income per common share
        
assuming dilution
    
13.9
%
         
Weighted average number of shares
        
Basic
        
Diluted
        
         

PROFIT MARGINS
  
Inc/(Dec) vs prior year profit margin %
  
Gross profit
    
(1.4
%)
R&D
    
(0.1
%)
S,G&A
    
(0.1
%)
Operating income
    
(1.1
%)
Income before taxes
    
(1.2
%)
Net income
    
(0.4
%)
 

FYE08 YEAR TO DATE
CONSOLIDATED STATEMENTS OF INCOME ADJUSTED FOR CERTAIN ITEMS
 

   
9/29/07
As Reported
  
Restructuring
Costs(3)
  
9/29/07
As Adjusted(4)
  
NET REVENUES
  
$
243,115
  
$
0
  
$
243,115
  
Gross profit
    
121,383
    
0
    
121,383
  
R&D
    
13,003
    
0
    
13,003
  
S,G&A
    
77,985
    
2,784
    
75,201
  
In-Process R&D
    
0
    
0
    
0
  
Operating expenses
    
90,988
    
2,784
    
88,204
  
                     
Operating income
    
30,395
    
(2,784
)
  
33,179
  
Interest expense
    
(360
)
  
0
    
(360
)
Interest income
    
3,317
    
0
    
3,317
  
Other income/(expense), net
    
1,688
    
0
    
1,688
  
                     
Income before taxes
    
35,040
    
(2,784
)
  
37,824
  
                     
Tax expense
    
11,196
    
(955
)
  
12,151
  
                     
NET INCOME
  
$ 
23,844
  
 
($1,829
)
$
25,673
  
                     
Net income per common share
assuming dilution
  
$
0.89
    
($0.07
)
$
0.95
  
                     
Weighted average number of shares
                    
Basic
    
26,072
    
26,072
    
26,072
  
Diluted
    
26,934
    
26,934
    
26,934
  
                     
PROFIT MARGINS
                    
Gross profit
    
49.9
%
        
49.9
%
R&D
    
5.3
%
        
5.3
%
S,G&A
    
32.1
%
        
30.9
%
Operating income
    
12.5
%
        
13.6
%
Income before taxes
    
14.4
%
        
15.6
%
Net income
    
9.8
%
        
10.6
%
                     

 
 
 
 
     
9/30/06
As Reported 
    
Arryx
IPRD(5) 
    
Restruc-
turing
Costs(3) 
    
9/30/06
As Adjusted(6) 
  
NET REVENUES 
  
$ 
  219,161 $   0 $   0   $ 
219,161
  
Gross profit 
     112,535      0      0      112,535  
R&D
    
11,766
    
0
    
0
    
11,766
  
S,G&A
    
71,649
    
0
    
2,667
    
68,982
  
In-Process R&D
    
9,073
    
9,073
    
0
    
0
  
Operating expenses
    
92,488
    
9,073
    
2,667
    
80,748
  
                           
Operating income
    
20,047
    
(9,073
)
  
(2,667
)
  
31,787
  
Interest expense
    
(846
)
  
0
    
0
    
(846
)
Interest income
    
3,977
    
0
    
0
    
3,977
  
Other income/(expense), net
    
1,337
    
0
    
0
    
1,337
  
                           
Income before taxes
    
24,515
    
(9,073
)
  
(2,667
)
  
36,255
  
                           
Tax expense
    
12,093
    
0
    
(927
)
  
13,020
  
                           
NET INCOME
  
$
12,422
    
($9,073
)
  
($1,740
)
$
23,235
  
                           
Net income per common share assuming dilution
  
$
0.44
    
($0.32
)
  
($0.06
)
$
0.83
  
                           
Weighted average number of  shares
                          
Basic
    
26,993
    
26,993
    
26,993
    
26,993
  
Diluted
    
27,948
    
27,948
    
27,948
    
27,948
  
                           
PROFIT MARGINS
                          
Gross profit
    
51.3
%
              
51.3
%
R&D
    
5.4
%
              
5.4
%
S,G&A
    
32.7
%
              
31.5
%
Operating income
    
9.1
%
              
14.5
%
Income before taxes
    
11.2
%
              
16.5
%
Net income
    
5.7
%
              
10.6
%
 
 

 
   
Adjusted % Inc/(Dec) vs. Prior Year
  
NET REVENUES
    
10.9
%
Gross profit
    
7.9
  
R&D
    
10.5
  
S,G&A
    
9.0
  
In-Process R&D
    
—
  
Operating expenses
    
9.2
  
         
Operating income
    
4.4
  
Interest expense
    
(57.4
)
Interest income
    
(16.6
)
Other income/(expense), net
    
26.3
  
         
Income before taxes
    
4.3
  
         
Tax expense
    
(6.7
)
         
NET INCOME
    
10.5
  
         
Net income per common share
        
assuming dilution
    
14.7
%
         
Weighted average number of shares
        
Basic
        
Diluted
        
         

PROFIT MARGINS
  
Inc/(Dec) vs. prior year profit margin %
  
Gross profit
    
(1.4
%)
R&D
    
(0.1
%)
S,G&A
    
(0.6
%)
Operating income
    
(0.9
%)
Income before taxes
    
(0.9
%)
Net income
    
0.0
%
 

 

FREE CASH FLOW RECONCILIATION

   
Three Months Ended
  
Six Months Ended
  
   
9-29-07
  
9-30-06
  
9-29-07
  
9-30-06
  
                   
GAAP CASH FLOW FROM  OPERATIONS
  
$
6,697
  
$
15,990
  
$
20,878
  
$
33,499
  
Capital expenditures
    
($15,807
)
  
(6,983
)
  
(27,255
)
  
(17,290
)
Proceeds from sale of property, plant and equipment
    
657
    
730
    
1,962
    
1,754
 
Net investment in property, plant and equipment
    
(15,150
)
  
(6,253
)
  
(25,293
)
  
(15,536
)
Free Cash Flow
    
($8,453
)
$
9,737
    
($4,415
)
$
17,963
  
                           

(3)
Restructuring costs primarily include severance and related costs associated with eliminating or reorganizing certain positions in our international business operations.

(4)
"As Adjusted" for FY 08 is comprised of "As Reported" less the "Restructuring Costs."

(5)
In-process R&D impact of Arryx acquisition.

(6)
"As Adjusted" for FY 07 is comprised of "As Reported" less the "Restructuring Costs" and "In-Process R&D."

SOURCE Haemonetics Corporation
-0-    11/01/2007
/CONTACT: Julie Fallon of Haemonetics Corporation, +1-781-356-9517, or +1-617-320-2401, fallon@haemonetics.com/
/First Call Analyst: /
/FCMN Contact: /
/Web site: www.haemonetics.com /
(HAE)

CO:
Haemonetics Corporation
ST:
Massachusetts
IN:
MTC HEA
SU:
ERN CCA ERP