LOS ANGELES--(BUSINESS WIRE)--HemaCare Corporation (OTC Pink: HEMA), a provider of human blood products and services in support of the rapidly expanding field of immune therapy, including stem cell therapy, today announced operational highlights and financial results for the year ended December 31, 2017.
2017 Operational Highlights
- Expanded HemaCare’s product line for healthy and disease-state products and services which include fresh and cryopreserved isolated cells. These cells are sourced from peripheral blood, mobilized peripheral blood, bone marrow, and cord blood for our biotech, biopharma, and research organization customers.
- Achieved strong revenue growth domestically and from distribution partners in Europe, Japan, and China.
- In January 2017, HemaCare negotiated a transaction with OneBlood whereby they purchased an equity stake in HemaCare, and signed a Sales and Distribution Agreement in which both parties collaborate globally in the sales and distribution of blood-derived products. On December 28, 2017, OneBlood exercised its option to make a second tranche investment of $1.25 million in shares of HemaCare’s common stock at $3.44 per share.
- During 2017, collaboration discussions resulted in a strategic partnership with Charles River Laboratories International, Inc. whereby HemaCare’s peripheral blood mononuclear cells (PBMCs) will be integrated into Charles River’s NCG/PBMC Select Humanization Kit.
- In July 2017, HemaCare signed a long term lease to relocate its operations and corporate headquarters to a larger nearby site in the San Fernando Valley (City of Los Angeles) toward the end of 2018. The new single story 40,000 square foot facility will allow HemaCare to optimize process flow, utilize flexible production environments to serve HemaCare customers’ increasingly complex requirements, and provide sufficient scalability to support the increasing demand of our global customer base.
Financial Results
For the year ended December 31, 2017, HemaCare reported total revenues of $20.2 million, compared to $13.9 million for the year ended December 31, 2016, representing an increase of $6.3 million, or approximately 46%. The increase in revenues was primarily derived from international expansion and improved results from key distributors and direct cell therapy customers.
Gross profit for the year ended December 31, 2017 was $10.6 million, or 53% of net revenues, compared to $6.4 million, or 46% of net revenues, for the year ended December 31, 2016.
HemaCare’s net income for the year ended December 31, 2017 increased to $4.4 million, as compared to $0.8 million for the year ended December 31, 2016, due not only to operating leverage and improved product mix but also to a one-time tax benefit of $1 million.
As of December 31, 2017, HemaCare had $9.3 million in cash and cash equivalents compared to $2.3 million in cash at December 31, 2016.
For complete audited December 31, 2017 Financial Statements, please click here.
Pete van der Wal, HemaCare’s President and Chief Executive, stated: “2017 was another productive year of substantial progress for the Company. In addition to HemaCare’s outstanding revenue and net income growth, we have seen continued strong growth from our distributors in Europe, Japan, and China, resulting in a 116% increase in international revenues over the prior year. HemaCare also significantly expanded its offering of disease-state products and services, resulting in 651% growth over the prior year.
“Quality starting material is the basis of any successful cell therapy, as the number of healthy therapeutic cells present in precursor material is directly related to the 'live' drug efficacy. Best practices for allogeneic cell therapy and autologous process development rely on highly coordinated donor supply and management. HemaCare has been building and maintaining reliable and recallable donor relationships for 40 years; longer than anyone else in the industry. In 2018, we intend to continue to build our sales and marketing team, increase our operational capabilities, enlarge our portfolio of healthy and disease-state products, and continue to expand into additional strategic markets. Furthermore, we will seek to continue to strengthen our leadership position as a critical supplier to customers performing cell therapy research, process development, and commercialization. This includes expanding our highly functional cryopreserved isolated cell product line, as well as our superior leukapheresis collections for autologous and allogeneic cell therapies,” said van der Wal.
| HEMACARE CORPORATION | |||||||||||||||||||
| BALANCE SHEETS | |||||||||||||||||||
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ASSETS |
December 31, | ||||||||||||||||||
| 2017 | 2016 | ||||||||||||||||||
| CURRENT ASSETS | |||||||||||||||||||
| Cash and cash equivalents | $ | 9,251,000 | $ | 2,271,000 | |||||||||||||||
| Accounts receivable, net | 2,959,000 | 2,269,000 | |||||||||||||||||
| Product inventories and supplies, net | 2,520,000 | 1,935,000 | |||||||||||||||||
| Prepaid expenses and other current assets | 162,000 | 158,000 | |||||||||||||||||
| Current portion of restricted cash | - | 119,000 | |||||||||||||||||
| TOTAL CURRENT ASSETS | 14,892,000 | 6,752,000 | |||||||||||||||||
| OTHER ASSETS | |||||||||||||||||||
| Property and equipment, net | 1,358,000 | 1,038,000 | |||||||||||||||||
| Restricted cash, net of current portion | - | 309,000 | |||||||||||||||||
| Deferred income taxes | 1,128,000 | - | |||||||||||||||||
| Other assets | 70,000 | 64,000 | |||||||||||||||||
| TOTAL NONCURRENT ASSETS | 2,556,000 | 1,411,000 | |||||||||||||||||
| TOTAL ASSETS | $ | 17,448,000 | $ | 8,163,000 | |||||||||||||||
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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| CURRENT LIABILITIES | |||||||||||||||||||
| Accounts payable | $ | 682,000 | $ | 437,000 | |||||||||||||||
| Accrued payroll and payroll taxes | 1,658,000 | 1,252,000 | |||||||||||||||||
| Other accrued expenses | 210,000 | 103,000 | |||||||||||||||||
| Current portion of deferred rent | 9,000 | 77,000 | |||||||||||||||||
| Current portion of capital lease obligations | 99,000 | 47,000 | |||||||||||||||||
| TOTAL CURRENT LIABILITIES | 2,658,000 | 1,916,000 | |||||||||||||||||
| LONG-TERM LIABILITIES | |||||||||||||||||||
| Deferred rent, net of current portion | - | 7,000 | |||||||||||||||||
| Long-term portion of capital lease obligations | 93,000 | 66,000 | |||||||||||||||||
| TOTAL LONG-TERM LIABILITIES | 93,000 | 73,000 | |||||||||||||||||
| TOTAL LIABILITIES | 2,751,000 | 1,989,000 | |||||||||||||||||
| COMMITMENTS AND CONTINGENCIES | |||||||||||||||||||
| SHAREHOLDERS' EQUITY | |||||||||||||||||||
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Common stock, no par, 40,000,000 shares authorized, 12,011,545 and 10,698,312 shares issued and outstanding, respectively |
21,149,000 | 17,058,000 | |||||||||||||||||
| Accumulated deficit | (6,452,000 | ) | (10,884,000 | ) | |||||||||||||||
| TOTAL SHAREHOLDERS' EQUITY | 14,697,000 | 6,174,000 | |||||||||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 17,448,000 | $ | 8,163,000 | |||||||||||||||
| HEMACARE CORPORATION | ||||||||||||||||||
| STATEMENTS OF INCOME | ||||||||||||||||||
| FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 | ||||||||||||||||||
| 2017 | 2016 | |||||||||||||||||
| REVENUE | $ | 20,212,000 | $ | 13,876,000 | ||||||||||||||
| COST OF REVENUE | 9,594,000 | 7,459,000 | ||||||||||||||||
| GROSS PROFIT | 10,618,000 | 6,417,000 | ||||||||||||||||
| GENERAL AND ADMINISTRATIVE EXPENSES | 7,195,000 | 5,618,000 | ||||||||||||||||
| INCOME BEFORE INCOME TAX BENEFIT (EXPENSE) | 3,423,000 | 799,000 | ||||||||||||||||
| Income tax benefit (expense) | 1,009,000 | (18,000 | ) | |||||||||||||||
| NET INCOME | $ | 4,432,000 | $ | 781,000 | ||||||||||||||
About HemaCare
HemaCare is a global leader in the customization of human-derived biological products and services for biomedical research, drug discovery, and cellular therapy process development. The company’s network of FDA-registered, GMP/GTP-compliant collection centers ensures fresh donor material is available to customers and for use within HemaCare’s isolation laboratory. Human biological material including peripheral blood, bone marrow, and cord blood is isolated into various primary cell types for fresh and frozen distribution. For 40 years, HemaCare has developed an extensive registry of repeat donors and provides human-derived primary blood cells and tissues for biomedical and drug discovery research, cell therapy clinical trials, and supports commercialization with apheresis collections, directly enabling customers to advance both autologous and allogeneic cellular therapies.
For more information please visit www.hemacare.com.
Forward Looking Statements
This press release contains forward-looking statements. The words “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” “expect,” and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements. Forward-looking statements in this press release address the following subjects, among others: plans to develop, market, and expand current and future products; expectations of revenue growth; plans for facility relocation; and plans to hire and retain critical personnel. Forward-looking statements are inherently subject to risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, including, without limitation, the following: the ability of our donors to provide sufficient quality source material; our ability and the ability of our suppliers to maintain compliance with cGMP and other regulatory obligations; the results of regulatory inspections; adverse developments in our customer base or the markets we serve; results of the Company’s collaboration with strategic partners; adverse changes in regulatory, social, and political conditions affecting our industry; our ability to timely and effectively implement 2018 staffing, operations, and product menu changes; our ability to manage growth; and general market, economic, and business conditions. Forward-looking statements are made as of the date of this release, and we expressly disclaim any obligation or undertaking to update forward-looking statements.