Haemonetics (NYSE:HAE) said it plans to shutter manufacturing operations in its Massachusetts home base and shift them to Mexico and Asia, reportedly cutting 320 jobs in the process.
The Braintree, Mass.-based blood management company also said it plans to add 100 new science and engineering jobs in a planned "technology center of excellence" to develop new products.
In reporting lower profits despite increased sales during both its fiscal 4th quarter and full year 2013, Haemonetics said the reorganization is expected to save between $35 million and $40 million by fiscal 2018. The company also said it closed its long-delayed $27 million buyout of Hemerus Medical.
Haemonetics posted profits of $38.8 million, or 74¢ per share, on sales of $892.0 million during fiscal 2013, representing a bottom-line slide of 42.0% on top-lien growth of 22.6%. Fourth-quarter profits were down 29.5% to $12.6 million, or 24¢ per share, on a 33.9% sales increase to $249.9 million.
Adjusted to exclude 1-time items, earnings per share were 48¢ during Q42013, 6 ahead of expectations on Wall Street. But full-year adjusted EPS missed badly at $1.71, a full 31¢ below The Street’s forecast.
Investors reacted to the news by sending HAE shares down 5.6% to a $37.75 close May 1. Shares closed at $37.96 yesterday and were trading at $38 apiece as of about 11:10 a.m. today.
Haemonetics said it expects sales growth of 9-12% during fiscal 2014, making $1 billion the high end of that range. Adjusted EPS are slated to be $2.30-$2.40.
The manufacturing reorganization will see the Braintree operations shifted to a Tijuana plant acquired in Haemonetics’ $555 million acquisition of Pall Corp. last year. The 320 job cuts will come over the next 12-18 months, spokesman Gerry Gould told the Boston Business Journal.
"We picked up new manufacturing plants and spent one year combining those two businesses,” Gould said. “In doing so it became apparent that we had some redundancies and overlap. We needed to change our manufacturing imprint."