Market Overview

HemaCare Reports First Half 2018 Results

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HemaCare
Corporation
(OTC: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 six months ended June 30, 2018.

First Half 2018 Operational Highlights

  • Significant revenue growth attributable to existing and new cell
    therapy and global customers and key distributors.
  • International revenue growth was approximately 70% compared to prior
    year which represented 26% of revenues for the six months ended June
    30, 2018.
  • Product and services revenue growth was primarily due to customized
    cell isolation, processing and cryopreservation, and specialized
    collections of leukopaks and mobilized peripheral blood.
  • Construction of our new state-of-the-art facility is on schedule and
    HemaCare is expected to relocate its operations and corporate
    headquarters 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, and enable significantly
    enhanced cGMP technical capabilities to better serve HemaCare
    customers' increasingly complex cell therapy requirements, and provide
    necessary scalability to support the increasing demand of our global
    customer base.

Financial Results

For the six months ended June 30, 2018, HemaCare reported total revenues
of $13.1 million, compared to $8.7 million for the six months ended June
30, 2017, representing an increase of $4.4 million, or approximately 51%.

Gross margin for the six months ended June 30, 2018 increased to 57%
from 52% in the same period last year, due to an improved product mix
and operating leverage.

HemaCare's net income for the six months ended June 30, 2018 increased
to $2.1 million, as compared to $552,00 for the prior-year period.

As of June 30, 2018, HemaCare had $10.3 million in cash and cash
equivalents compared to $9.3 million at December 31, 2017.

Cash provided by operations for the first six months of 2018 was $1.2
million, compared with $281,000 for the prior-year period.

For complete unaudited First Half 2018 Financial Statements, please click
here
.

Pete van der Wal, HemaCare's President and Chief Executive, stated, "We
sustained our steady growth during the first half of 2018 by increasing
the depth and breadth of our customer and collaboration partner
relationships.
The Cell Therapy industry is becoming acutely
aware of the critical importance for quality starting material and the
value of having access to HemaCare's robust pool of reliable and
recallable donors.
As a result, demand for HemaCare's products
and services to support cell therapy process development has continued
to increase rapidly and position us well for future capabilities."

"We continue to leverage our core strengths as well as add new
capabilities to support research discoveries and cell therapy
development.
Our recent leadership and technical team additions,
focused on the cell therapy industry, will accelerate an expanded cGMP
product offering in our new facility.
This includes further
processed cGMP starting material, biorepository capabilities, and
enhanced cold chain logistics services.
These expanded products
and services coupled with our 40-year history of superior leukapheresis
expertise will strengthen an existing high-quality offering for our
research, drug discovery, and cell therapy customers,"
said van der
Wal.

 
HEMACARE CORPORATION
BALANCE SHEETS
   
ASSETS
 
(Unaudited) (Audited)

June 30, 2018

December 31, 2017

CURRENT ASSETS
Cash and cash equivalents $ 10,282,000 $ 9,251,000
Accounts receivable, net 4,154,000 2,959,000
Product inventories and supplies, net 3,045,000 2,520,000
Prepaid expenses and other current assets   255,000     162,000  
 
TOTAL CURRENT ASSETS   17,736,000     14,892,000  
 
OTHER ASSETS
Property and equipment, net 1,650,000 1,358,000
Deferred Income Taxes 612,000 1,128,000
Other assets   43,000     70,000  
 
TOTAL NONCURRENT ASSETS   2,305,000     2,556,000  
 
TOTAL ASSETS $ 20,041,000   $ 17,448,000  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
CURRENT LIABILITIES
Accounts payable $ 946,000 $ 682,000
Accrued payroll and payroll taxes 1,370,000 1,658,000
Other accrued expenses 190,000 210,000
Current portion of deferred rent - 9,000
Current portion of capital lease obligations   220,000     99,000  
 
TOTAL CURRENT LIABILITIES 2,726,000 2,658,000
 
LONG-TERM LIABILITIES
Long-term portion of capital lease obligation   269,000     93,000  
 
TOTAL LIABILITIES   2,995,000     2,751,000  
 
SHAREHOLDERS' EQUITY
Common stock, no par, 40,000,000 shares authorized,
12,139,045 and 12,011,545 shares issued and outstanding 21,368,000 21,149,000
Accumulated deficit   (4,322,000 )   (6,452,000 )
 
TOTAL SHAREHOLDERS' EQUITY   17,046,000     14,697,000  
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 20,041,000   $ 17,448,000  
 
 
HEMACARE CORPORATION
STATEMENTS OF INCOME (unaudited)
   
Six months ended Six months ended

June 30, 2018

June 30, 2017

 
REVENUE $ 13,070,000 $ 8,657,000
 
COST OF REVENUE   5,638,000     4,160,000  
 
GROSS PROFIT 7,432,000 4,497,000
 
GENERAL AND ADMINISTRATIVE EXPENSES 4,509,000 3,917,000
 
OTHER INCOME (EXPENSE)   (3,000 )   (6,000 )
 
INCOME FROM OPERATIONS BEFORE INCOME TAXES 2,920,000 574,000
 
Provision for income taxes   (790,000 )   (22,000 )
 
NET INCOME $ 2,130,000   $ 552,000  
 
 

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 ensure
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 cells 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 and 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.

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