HemaCare Corporation (HemaCare), a in vitro diagnostics company, has reported net sales of $37.6 million for the full year of 2008, compared with the net sales of $34.1 million in the previous year-end. It has also reported net income of $0.97 million, or $0.10 per share, for the full year of 2008, compared with the net loss of $7.7 million, or $0.90 loss per share, in the previous year-end.
Sales for the quarter were $10.0 million, 11% greater than the prior year, while sales for the year were $37.6 million, 10% greater than in 2007.
The company generated fourth quarter income of $179,000, or $0.02 per share, and yearly income of $979,000, or $0.10 per share. In 2007, the company generated a loss of $1.4 million in the fourth quarter and a loss of $7.8 million for the year.
Discussion of 2008 continuing operations
Blood Products revenue from continuing operations in the quarter was $8.0 million, against $7.1 million in the same quarter of 2007, representing an increase of 12%. For the year, Blood Products revenue was $29.6 million, against $26.8 million for 2007, representing an increase of 11%.
Blood Services revenue in the quarter was $2.0 million, against $1.8 million in the same quarter of 2007, representing an increase of 11%. Blood Services revenue for the year was $8.0 million, against $7.4 million in 2007, representing an increase of 8%.
Gross profit margin from continuing operations in the quarter was 17%, against 19% in the fourth quarter of 2007. For the year, gross profit margin was 17%, against 15% in 2007. The improvement in gross profit margin in 2008, along with sales growth, resulted in a year over year increase in gross profit of $1.3 million.
For all of 2008, general and administrative expenses decreased $447,000, or 7%, against 2007, which included $326,000 in non-recurring severance expense for the company’s former chief executive officer. For all of 2008, general and administrative expenses represented 16% of revenue, a decrease from 19% reported in 2007.
During 2008 the company recognized $331,000 of non-operating income, primarily related to a gain from the settlement of litigation with the former owners of HemaCare BioScience, Inc.
“We are very pleased to report record revenue for 2008, which enabled the company to make a dramatic swing from a $1.2 million pretax operating loss in 2007 to over $900,000 in pretax operating profit in 2008,” commented John Doumitt, the company’s chief executive officer. “As sales grow in the future, we expect to leverage fixed costs and improve profitability.” Mr. Doumitt added, “In 2009, we will seek to further develop our community whole blood program, which we market in conjunction with local hospitals, and aggressively build our platelet collection and therapeutic blood services businesses. 2008 has given HemaCare a new start, and we intend to build momentum in 2009 by continuing to deliver exceptional value to our customers.”
Discussion of Discontinued Operations
The company’s Florida-based research blood products subsidiary was closed on November 5, 2007. This subsidiary generated a fourth quarter 2008 loss of $13,000 against a $1.6 million loss in the same quarter of 2007. For all of 2008, closure activities resulted in an $80,000 gain against a $6.0 million loss for 2007. Closure activities for this subsidiary are still underway, although it is not expected that they will have a significant negative impact on future results.