HemaCare Reports Sixth Consecutive Profitable Quarter
May 7, 2009 9:10:00 AM
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View Additional ProfilesLOS ANGELES, CA -- (MARKET WIRE) -- 05/07/09 -- HemaCare Corporation (OTCBB: HEMA) announced today first quarter 2009 results, which include a $1.1 million, or 13%, increase in revenue compared to the same quarter of 2008. Sales for the quarter were $9.7 million, compared to $8.6 million for the first quarter of 2008. The Company generated first quarter net income of $69,000, or $0.01 per share, compared to $87,000, or $0.01 per share, in the first quarter of 2008.
Gross profit increased $30,000 in the quarter to $1.535 million. The gross profit margin from continuing operations in the quarter was 16%, compared to 17% in the first quarter of 2008. General and administrative expenses for the quarter increased $38,000, or 3%, compared to the same period of 2008. During the first quarter of 2009, the Company incurred $92,000 in consulting costs associated with Sarbanes-Oxley compliance for 2007 and 2008, which were not incurred in the first quarter of 2008. For the quarter, general and administrative expenses represented 15% of revenue, a decrease from 16% reported for the same quarter of 2008.
Commenting on the results, John Doumitt, the Company's Chief Executive Officer, stated, "Historically, the first quarter is challenging for our industry and this year the usual seasonal pressure on sales was heightened by the poor economy. We are pleased to be able to report increased blood products revenue and overall profitable results in this environment. This is the sixth consecutive quarter of profits from continuing operations and we are encouraged that our many initiatives to rebuild and strengthen HemaCare continue to gain traction. We remain committed to growing sales and margins by delivering exceptional value to customers and improving our own operating efficiencies."
Discussion of Discontinued Operations
The Company's Florida-based research blood products subsidiary was closed on November 5, 2007. This subsidiary generated a first quarter 2009 loss of $12,000, whereas there was no activity recorded for the same period of 2008. Closure activities for this subsidiary are still underway, although it is not expected that they will have a negative impact on future results.
About HemaCare Corporation
Founded in 1978, HemaCare is a provider of blood products and services to the healthcare industry. HemaCare is licensed by the FDA and accredited by the AABB. The Company focuses on the customized delivery of human blood-related products and services.
This press release contains "forward-looking statements" under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). Statements herein that are not historical facts are forward-looking statements pursuant to the safe harbor provisions referenced above. You may also identify forward-looking statements by use of the words "anticipates," "expects," "intends," "plans" and similar expressions. These forward-looking statements include, but are not limited to "we are encouraged that our many initiatives to rebuild and strengthen HemaCare continue to gain traction", "we remain committed to growing sales and margins by delivering exceptional value to customers and improving our own operating efficiencies" and "closure activities for this subsidiary are still underway, although it is not expected that they will have a negative impact on future results". Forward-looking statements are inherently subject to risks and uncertainties some of which cannot be predicted or quantified. Such risks and uncertainties include, without limitation, the following: costs increasing more rapidly than market prices could reduce profitability; changes in demand for blood products could affect profitability; declining blood donations could affect profitability; changing economic conditions could impact the ability of customers to pay the Company's invoices; operations depend on services of qualified professionals and competition for their services is strong; industry regulations and standards could increase operating costs or result in closure of operations; the discontinuation of the operation of the Company's Florida-based research subsidiary may hinder the Company's ability to generate profits; the decrease in reimbursement rates may affect profitability; not-for-profit status gives advantages to competitors; the potential inability of the Company to meet future capital needs could impact ability to operate; reliance on relatively few vendors for significant supplies and services could affect the Company's ability to operate; potential adverse effect from changes in the healthcare industry, including consolidations, could affect access to customers; limited access to insurance could affect ability to defend against possible claims; future technological developments or alternative treatments could jeopardize the business; the ability to attract, retain and motivate management and other skilled employees; product safety and product liability could provide exposure to claims and litigation; targeted partner blood drives involve higher collection costs; environmental risks could cause the Company to incur substantial costs to maintain compliance; the threat of business interruption due to terrorism and the security measures taken in response to terrorism could adversely impact profitability; business interruption due to earthquakes could adversely impact profitability; the evaluation and consideration of strategic alternatives, and other significant projects, may distract management from reacting appropriately to business challenges and lead to reduced profitability; strategy to acquire companies may result in unsuitable acquisitions or failure to successfully integrate acquired companies, which could lead to reduced profitability; the Articles of Incorporation and Rights Plan could delay or prevent an acquisition or sale of HemaCare; quarterly revenue and operating results may fluctuate in future periods and the Company may fail to meet investor expectations; the Company's stock is traded on the OTC Bulletin Board and therefore is subject to greater market risk than those of exchange-traded stocks since they are less liquid; the Company's stock price could be volatile; future sales of equity securities could dilute the Company's common stock; the lack of dividend payments could impact the price of the Company's common stock; the evaluation of internal control and remediation of potential problems will be costly and time consuming and could expose weaknesses in financial reporting; and the other risks and uncertainties discussed from time to time in the documents HemaCare files with the Securities and Exchange Commission. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Consequently, future events and actual results could differ materially from those set forth in, contemplated by, or underlined in the forward-looking statements contained herein. The Company undertakes no obligation to update any of these forward-looking statements to reflect actual results or events or circumstances after the date hereof.
(Financial Table Follows)
HemaCare Corporation
Condensed Consolidated Data
(Unaudited)
Three Months Ended
March 31,
2009 2008
------------ -------------
Statements of Income
Revenue $ 9,711,000 $ 8,608,000
Gross profit $ 1,535,000 $ 1,505,000
General and administrative expenses $ 1,451,000 $ 1,413,000
------------ -------------
Income from continuing operations before income
taxes $ 84,000 $ 92,000
Provision for income taxes $ 3,000 $ 5,000
------------ -------------
Income before continuing operations $ 81,000 $ 87,000
Loss from discontinued operations $ (12,000) $ -
------------ -------------
Net income $ 69,000 $ 87,000
============ =============
Basic earnings per share $ 0.01 $ 0.01
============ =============
Diluted earnings per share $ 0.01 $ 0.01
============ =============
Weighted average shares outstanding - basic 9,904,000 8,909,000
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Weighted average shares outstanding - diluted 9,975,000 9,053,000
============ =============
March 31, December 31,
2009 2008
------------ -------------
Balance Sheets
Assets
Cash and cash equivalents $ 197,000 $ 903,000
Other current assets 7,538,000 8,298,000
Non-current assets 4,340,000 4,495,000
------------ -------------
Total assets $ 12,075,000 $ 13,696,000
============ =============
Liabilities and Shareholders' Equity
Current liabilities $ 6,779,000 $ 8,513,000
Deferred rent 635,000 645,000
Shareholders' equity 4,661,000 4,538,000
------------ -------------
Total liabilities and shareholders' equity $ 12,075,000 $ 13,696,000
============ =============
Contact:
HemaCare Corporation
Robert S. Chilton
Executive Vice President and Chief Financial Officer
877-310-0717
www.hemacare.com
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