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Third quarter fiscal 2008 adjusted net income, excluding charges in bothfiscal 2007 and 2008 and certain tax benefits in 2007, was $15 million, up12.5%, and adjusted earnings per share were $0.57, up 16.4%.(1) Haemoneticsalso reported year-to-date net revenues of $378 million, up 13.5%; adjustednet income of $41 million, up 11.2%; and adjusted net earnings per share of$1.53, up 15.3%.(2)
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Brad Nutter, Haemonetics' Chairman and CEO, said, "Q3 performance wasstrong, and we are especially pleased to report our third consecutive quarterof double digit revenue growth. Our 19% growth comes from strength acrossmultiple product lines and geographies. The outlook for these marketscontinues to be positive. As such, we are adjusting our annual revenueguidance from 10-12% growth to 11-13% growth."
"We are making good strides on our strategic vision to be the globalleader in blood management solutions for our customers. Haemonetics isproviding customers with a value proposition that includes an extensive depthand breadth of products, services, and software across the blood bank andhospital markets," Mr. Nutter added.
The Company has attached a reconciliation of GAAP to adjusted results atthe end of this release. A copy of the reconciliation is also posted on theweb at http://www.haemonetics.com/investors.
FINANCIALS
In addition to revenues and earnings per share, Haemonetics reported thirdquarter gross profit of $67 million, up 18.0%, and gross margin of 49.5%, down20 basis points. Gross margin was impacted by product mix as lower grossmargin contributors, plasma and equipment, had very strong sales growth.Year-to-date gross profit is $188 million, up 11.2%, and gross margin is49.8%, down 100 basis points.
Adjusted (1,2) operating expenses for the quarter were $46 million, up16.8%, with nearly half of the increase coming from three areas: 1) plannedenterprise resource planning ("ERP") spending; 2) the acquisition of IDM,Infonale, and Haemoscope, whose expenses were not included in Q3FY07 financialresults; and 3) continued investment in Arryx R&D. Year-to-date adjustedoperating expenses are $134 million, up 11.7%.
Haemonetics' tax rate was 31.0% in the quarter and 31.7% year-to-date. Inthe quarter, Haemonetics benefited from resolution of certain taxcontingencies.
Haemonetics ended the quarter with a cash balance of $117 million, and $12million of debt. During the quarter, the Company generated $25 million ofcash flow from operations and invested $15 million in capital expenditures.
EXPANDING THE BUSINESS
Haemonetics continues to make progress expanding the business. TheCompany reported the following highlights:
QUARTERLY PRODUCT LINE GROWTH
Brian Concannon, Haemonetics' Chief Operating Officer, said, "A diverseproduct portfolio drove the Company to nearly 19% revenue growth. Our productline growth drivers continue to do well. I am also pleased to announce thatour geographic growth was strong. In the quarter, Asia, a $32 millionbusiness, grew 21.2% and Europe, a $135 million business, grew 26.5%. Ourreorganization of these businesses is paying off."
Among the product line growth drivers, plasma disposables revenue was $41million for the quarter, up 27.5%. Year-to-date plasma disposables revenue is$115 million, up 19.3%. Plasma disposable sales benefited from continuedgrowth in U.S. and European plasma collections. Haemonetics expects thatgrowth in the plasma market will continue to drive strong plasma sales for thenext several years.
Blood bank disposables revenue was $33 million for the quarter, up 7.3
