HemaCare Reports 72% Drop in Profit for Quarter

HemaCare, a Sherman Oaks provider of blood services, said its second-quarter profit tumbled 72% from a year earlier despite a 29% increase in revenue.

In the quarter that ended June 30, HemaCare’s net income dropped to $27,804 from $99,150 a year earlier, while its revenue climbed to $1.42 million from $1.10 million.

HemaCare blamed the lower earnings on a two-month drop in its efficiency because of regulatory problems related to its hemapheresis treatments, which remove harmful substances from the blood.

HemaCare uses a certain type of equipment for the procedures, and the equipment’s manufacturer must have U.S. Food and Drug Administration approval to use the products in certain ways, such as those employed by HemaCare.

But the manufacturer had failed to get the necessary approval for its equipment, and it was two months before HemaCare could find new equipment that had the necessary regulatory clearance, HemaCare Chairman Thomas Asher said.

“It’s annoying,” he said. “We left it up to the manufacturer to file this with the FDA. In a way we share the blame because we really helped develop this modification of the equipment.”

For the first half of 1989, HemaCare’s profit rose 34% to $206,802 from $154,642 a year earlier. Its six-month revenue was up 25%, to $2.71 million from $2.17 million.