HemaCare Reports Third Quarter Results; Board Approves Expansion and Extension of Share Buyback Program

LOS ANGELES--()--HemaCare Corporation (OTCBB:HEMA) announced today that the Company generated third quarter revenue of $7.3 million and a net loss of $621,000, or $0.06/share, compared to third quarter 2009 revenue of $8.4 million and net income of $233,000, or $0.02/share. The three month loss included $321,000 in expenses related to the closure of an unprofitable facility in Maine and the write off of impaired assets. The Company generated $23.2 million of revenue for the first nine months of 2010, with a net loss of $601,000 or $0.06/share, compared to $28.1 million in revenue for the same period in 2009, with $660,000 in net income or $0.07/share. The nine month 2010 net loss included $321,000 in expenses related to the closure of an unprofitable facility in Maine, the write off of impaired assets, and $184,000 in severance expenses paid to the Company’s former Chief Executive Officer and Chief Financial Officer in the first quarter.

Nationwide pricing pressures affecting our Blood Products business intensified throughout the third quarter, more than offsetting growth in our Therapeutic Services business and obscuring continued progress in our corporate streamlining efforts,” said Pete van der Wal, HemaCare’s CEO. “Nonetheless, we were able to maintain our strong cash position in excess of $2.1 million with no debt. We have implemented further improvements in our cost structure which have already had a favorable impact on the current quarter’s results to date, and are increasing focus on our more profitable lines of business. We expect these efforts to result in improved bottom-line results.”

Also, HemaCare’s Board of Directors approved the expansion and extension of the Company’s existing share repurchase program. This action authorizes the Company to purchase a total of up to 2 million shares, compared to the prior authorization of up to 1 million shares, and extends the share repurchase program through December 31, 2011. To date, the Company has purchased 510,000 shares under the share repurchase program.

ABOUT HEMACARE CORPORATION

Founded in 1978, HemaCare collects, processes, and distributes blood products to hospital and research related organizations, provides cellular collection and other blood related services, principally therapeutic apheresis procedures, stem cell collection and other blood treatments to patients with a variety of disorders. HemaCare is licensed by the FDA and accredited by the AABB.

This press release also 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. The forward-looking statements in this press release include statements that HemaCare expects its cost cutting efforts and increased focus on more profitable lines of business to result in improved bottom line 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: a reduction in operating margins occasioned by costs increasing more rapidly than market prices, the reduced demand for blood products, declining blood donations, the loss of customers or the inability to pass on cost increases due to increased competition, an increase in operating costs due to changes in industry regulations and standards, a decrease in reimbursement rates; our competitive position may decline due to the potential adverse effect from changes in the healthcare industry, including consolidations, which could affect access to customers, our inability to attract, retain and motivate management and other skilled employees, an increased emphasis by our competitors on customer service may diminish the advantages we enjoy from our service-focused operations, and our competitors’ not-for-profit status gives them advantages in acquiring customers; 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.

 
HemaCare Corporation
Condensed Consolidated Data
(Unaudited)
 
  Three Months Ended   Nine Months Ended
September 30, September 30,
2010   2009 2010   2009
Statements of Income:
 
Revenue $ 7,250,000 $ 8,401,000 $ 23,242,000 $ 28,140,000
 
Gross Profit $ 607,000   $ 1,453,000   $ 3,432,000   $ 5,027,000  
 
General and administrative expenses $ 1,285,000   $ 1,295,000   $ 4,056,000   $ 4,368,000  
 
(Loss) income before income taxes and discontinued operations ($678,000 ) $ 158,000 ($624,000 ) $ 659,000
 
Benefit from income taxes   ($70,000 )   ($88,000 )   ($60,000 )   ($38,000 )
 
Net (loss) income before discontinued operations ($608,000 ) $ 246,000 ($564,000 ) $ 697,000
 
Loss from discontinued operations, net of tax   ($13,000 )   ($13,000 )   ($37,000 )   ($37,000 )
 
Net (loss) income   ($621,000 ) $ 233,000     ($601,000 ) $ 660,000  
 
Basic and diluted (loss) earnings per share   ($0.06 ) $ 0.02     ($0.06 ) $ 0.07  
 
Weighted average shares outstanding – basic   10,064,000     10,050,000     10,054,000     9,994,000  
 
Weighted average shares outstanding – diluted   10,064,000     10,257,000     10,054,000     10,086,000  
 
 
Balance Sheets:   9/30/2010   12/31/2009
 
Assets
Cash and cash equivalents $ 2,151,000 $ 1,007,000
Other current assets 4,815,000 5,368,000
Non-current assets   3,528,000   4,200,000
Total assets $ 10,494,000 $ 10,575,000
 

Liabilities and Shareholders’ Equity

Current liabilities $ 5,014,000 $ 4,449,000
Long-term liabilities 634,000 600,000

Shareholders’ equity

  4,846,000   5,526,000

Total liabilities and shareholders’ equity

$ 10,494,000 $ 10,575,000
 

Contacts

HemaCare Corporation
Pete van der Wal, Chief Executive Officer
877-310-0717
www.hemacare.com

Contacts

HemaCare Corporation
Pete van der Wal, Chief Executive Officer
877-310-0717
www.hemacare.com