The blood collection devices maker plans to close a Scotland manufacturing plant and repurchase $100 million of its own shares in efforts to cut costs and reset the company’s value.
Haemonetics will close a Bothwell, Scotland, manufacturing facility that currently employs about 270 workers, an initiative named among the company’s "Value Creation & Capture Activities." Products currently manufactured there will be shifted to existing Haemonetics facilities in Malaysia, the BBC reported.
The closure should help the company save $30 million in fiscal 2015 and as much as $60-$65 million annually by 2018.
The plant will close during the coming fiscal year, which looks to be a tough one for Haemonetics. The company projected a 0-2% decline in reported revues for 2015, due largely to volume and pricing declines in the U.S. and weakness in the Japanese yen. Haemonetics hopes to return to mid-single digit revenue growth in fiscal 2016.
"Our VCC initiatives position us to compete in this new environment and planned value engineering initiatives will allow us to further reduce manufacturing costs over the next 2 years," president & CEO Brian Concannon said during a conference call with analysts.
Haemonetics also announced plans to repurchase up to $100 million of its own shares, a measure that the company says reflects its strong cash flow and $192 million cash balance.
"We have the resources to utilize a share repurchase program to enhance shareholder return, while continuing to fund Value Creation and Capture programs and new product introductions that are critical to future growth," Concannon said in prepared remarks.
The news didn’t do much for HAE shares, which dropped 6.2% on the day that Haemonetics released its financial report and announced the buyback. The stock lost 6% over the course of last week but had gained 1% back on Friday, closing at $31.21.
For its 4th quarter of fiscal 2014 Haemonetics reported. profits of $10.2 million, or 19¢ per diluted share, on sales of $241.1 million. That compared with profits of $12.6 million, or 24¢ per share, on sales of $250 million during the same period last year, for a revenue decline of 3.5% and an earnings drop of 19%
Excluding special charges, adjusted per-share earnings amounted to 46¢, about 12¢ shy of analysts’ consensus estimates.
For the full year, the company posted profits of $35.1 million, or 67¢ per share, on sales of $938.5 million. That compared with profits of $38.8 million, or 74¢ per share, on sales of $892 million during 2013, for a sales increase of 5.2% and a profit decline of 9.4%.
Adjusted earnings came to $2.19 per share for 2014, compared with $1.99 for 2013.