What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2021-05-26 compared with 2020-05-20 · 787 added, 374 removed, 951 unchanged (55% of the section changed)

3 unchanged sentences

(In thousands, except per share data)

2021 March 28,

2020 March 30,

Net revenues $ 870,463 $ 988,479 $ 967,579

Cost of goods sold 472,625 503,966 550,043

Gross profit 397,838 484,513 417,536

Operating expenses:

1 unchanged sentence

Selling, general and administrative 274,188 282,017 273,474

Amortization of intangible assets 32,830 25,746 24,803

Impairment of assets 1,028 50,599 —

Gains on divestitures and sale of assets ( 32,812 ) ( 8,083 ) —

Total operating expenses 308,091 381,162 333,991

Operating income 89,747 103,351 83,545

Gain on divestiture

Interest and other expense, net ( 16,834 ) ( 16,199 ) ( 9,912 )

Income before provision for income taxes

Provision for income taxes

Income before (benefit) provision for income taxes 72,913 87,152 73,633

(Benefit) provision for income taxes ( 6,556 ) 10,626 18,614

Net income $ 79,469 $ 76,526 $ 55,019

Net income per share – basic $ 1.57 $ 1.51 $ 1.07

1 unchanged sentence

Weighted average shares outstanding

Basic 50,688 50,692 51,533

Diluted 51,292 51,815 52,942

The accompanying notes are an integral part of these consolidated financial statements.

2 unchanged sentences

(In thousands)

2021 March 28,

2020 March 30,

Net income $ 79,469 $ 76,526 $ 55,019

Other comprehensive income:

3 unchanged sentences

Reclassifications into earnings of cash flow hedge losses (gains), net of tax 6,856 625 ( 200 )

Other comprehensive (loss) income

Other comprehensive income (loss) 15,588 ( 14,755 ) ( 11,389 )

Comprehensive income $ 95,057 $ 61,771 $ 43,630

3 unchanged sentences

(In thousands, except share data)

2021 March 28,

Current assets:

Cash and cash equivalents $ 192,305 $ 137,311

Accounts receivable, less allowance of $3,824 at March 28, 2020 and $3,937 at March 30, 2019

Accounts receivable, less allowance of $ 2,226 at April 3, 2021 and $ 3,824 at March 28, 2020

127,555 165,207

Inventories, net 322,614 270,276

2 unchanged sentences

Property, plant and equipment, net 217,559 253,399

Intangible assets, less accumulated amortization of $296,942 at March 28, 2020 and $263,479 at March 30, 2019

Intangible assets, less accumulated amortization of $ 320,640 at April 3, 2021 and $ 296,942 at March 28, 2020

365,483 133,106

Goodwill 466,444 210,652

Deferred tax asset 6,009 3,930

Other long-term assets 70,882 62,384

Total assets $ 1,819,923 $ 1,267,110

LIABILITIES AND STOCKHOLDERS’ EQUITY

11 unchanged sentences

Authorized — 150,000,000 shares;

Issued and outstanding — 50,322,930 shares at March 28, 2020 and 51,019,918 shares at March 30, 2019

Issued and outstanding — 50,868,820 shares at April 3, 2021 and 50,322,930 shares at March 28, 2020

Additional paid-in capital 602,727 553,229

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(In thousands, except share data)

Paid-in Capital

Retained Earnings

Comprehensive Income/(Loss)

Common Stock Additional

Paid-in Capital Retained Earnings Accumulated

Comprehensive Income/(Loss) Total

Stockholders’ Equity

Balance, April 1, 2017

Shares Par Value

Balance, March 31, 2018 52,343 $ 523 $ 503,955 $ 266,942 $ ( 18,991 ) $ 752,429

Employee stock purchase plan 67 1 3,253 — — 3,254

3 unchanged sentences

Share-based compensation expense — — 17,188 — — 17,188

Other comprehensive income

Cumulative effect of change in accounting standards — — — 1,176 — 1,176

Net income — — — 55,019 — 55,019

Other comprehensive loss — — — — ( 11,389 ) ( 11,389 )

Balance, March 30, 2019 51,020 $ 510 $ 536,320 $ 161,418 $ ( 30,380 ) $ 667,868

4 unchanged sentences

Share-based compensation expense — — 20,454 — — 20,454

Cumulative effect of change in accounting standards

Net income — — — 76,526 — 76,526

Other comprehensive loss — — — — ( 14,755 ) ( 14,755 )

2 unchanged sentences

Exercise of stock options 128 1 6,218 — — 6,219

Shares repurchased

Issuance of restricted stock, net of cancellations 374 4 ( 4 ) — — —

Share-based compensation expense — — 25,516 — — 25,516

Other comprehensive loss

Balance, March 28, 2020

Equity component of convertible notes, net of issuance costs — — 61,156 — — 61,156

Purchase of capped call related to convertible notes — — ( 47,400 ) — — ( 47,400 )

Net income — — — 79,469 — 79,469

Other comprehensive income — — — — 15,588 15,588

Balance, April 3, 2021 50,869 $ 509 $ 602,727 $ 157,981 $ ( 29,547 ) $ 731,670

The accompanying notes are an integral part of these consolidated financial statements.

2 unchanged sentences

(In thousands)

2021 March 28,

2020 March 30,

Cash Flows from Operating Activities:

Net income $ 79,469 $ 76,526 $ 55,019

Adjustments to reconcile net income to net cash provided by operating activities:

5 unchanged sentences

Deferred tax (benefit) provision ( 19,866 ) ( 6,958 ) 13,351

Unrealized (gain) loss from hedging activities

Provision for losses on accounts receivable

Unrealized loss (gain) from hedging activities 1,913 813 ( 24 )

Provision (benefit) for losses on inventory 7,860 ( 2,904 ) 2,111

Other non-cash operating activities 151 2,043 3,798

10 unchanged sentences

Proceeds from sale of property, plant and equipment 1,815 16,774 2,813

Acquisitions ( 434,804 ) ( 35,000 ) —

Net cash used in investing activities ( 425,442 ) ( 57,176 ) ( 116,148 )

2 unchanged sentences

Repayment of term loan borrowings ( 21,875 ) ( 13,125 ) ( 266,853 )

Net increase in short-term loans

Net (decrease) increase in short-term loans ( 60,000 ) 45,000 15,000

Proceeds from issuance of convertible notes 500,000 — —

Purchase of capped call related to convertible notes ( 47,400 ) — —

Transaction costs paid in connection with convertible notes issuance ( 13,457 ) — —

Proceeds from employee stock purchase plan 4,013 3,369 3,254

2 unchanged sentences

Other financing activities ( 46 ) ( 99 ) —

Net cash used in financing activities

Net cash provided by (used) in financing activities 367,452 ( 131,208 ) ( 50,628 )

Effect of exchange rates on cash and cash equivalents 4,179 ( 1,873 ) ( 3,323 )

12 unchanged sentences

DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

Haemonetics Corporation ("Haemonetics" or the "Company") is a global healthcare company dedicated to providing a suite of innovative hematology products and solutions to customers to help improve patient care and reduce the cost of healthcare.

Its technology addresses important medical markets including blood and plasma component collection, the surgical suite, and hospital transfusion services.

Haemonetics is a global healthcare company dedicated to providing a suite of innovative medical products and solutions for customers, to help them improve patient care and reduce the cost of healthcare.

Our technology addresses important medical markets:

blood and plasma component collection, the surgical suite and hospital transfusion services.

Blood is essential to a modern healthcare system.

Blood and its components (plasma, platelets and red cells) have many vital and frequently life-saving clinical applications.

Blood and its components (plasma, red cells and platelets) have many vital and frequently life-saving clinical applications.

Plasma is used for patients with major blood loss and is manufactured into biopharmaceuticals to treat a variety of illnesses, including immune diseases and coagulation disorders.

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Platelets have many uses in patient care, including supporting cancer patients undergoing chemotherapy.

Haemonetics develops and markets a wide range of devices and solutions to serve its customers.

The Plasma business unit provides plasma collection devices and disposables and plasma donor management software that enable the collection of plasma used by biopharmaceutical companies to make life saving pharmaceuticals.

The Blood Center business unit offers blood collection and processing devices and disposables for red cells, platelets and whole blood as well as related donor management software that make blood donations more efficient and track life giving blood components.

The Hospital Business unit, which is comprised of Hemostasis Management, Cell Salvage and Transfusion Management products, includes devices and methodologies for measuring the coagulation of blood that enable healthcare providers to better manage their patients’ bleeding risk, as well as surgical blood salvage systems, specialized blood cell processing systems and disposables and blood transfusion management software that facilitate blood transfusions and cell processing.

Haemonetics manages its business in three principal reporting segments:

Plasma, Blood Center and Hospital.

For that purpose, “Plasma” includes plasma collection devices and disposables, plasma donor management software, and anticoagulant and saline sold to plasma customers.

“Blood Center” includes blood collection and processing devices and disposables for red cells, platelets and whole blood.

“Hospital”, which is comprised of Hemostasis Management, Cell Salvage, Transfusion Management and Vascular Closure products, includes devices and methodologies for measuring coagulation characteristics of blood, surgical blood salvage systems, specialized blood cell processing systems and disposables, blood transfusion management software and vascular closure devices.

The accompanying consolidated financial statements present separately the Company's consolidated financial position, results of operations, cash flows and changes in shareholders’ equity.

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The Company has assessed its ability to continue as a going concern.

As of March 28, 2020 , Haemonetics has concluded that substantial doubt about its ability to continue as a going concern does not exist.

As of April 3, 2021, Haemonetics has concluded that substantial doubt about its ability to continue as a going concern does not exist.

The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure.

Refer to Note 13 , Notes Payable and Long-Term Debt , for information pertaining to a $ 150.0 million draw down on the Company's revolving credit facility that was made after the balance sheet date but prior to the issuance of the financial statements.

Additionally, on April 1, 2020, the Company acquired all outstanding shares of enicor GmbH.

Refer to Note 4 , Acquisitions , for further information.

Subsequent events have been evaluated as required.

There were no material recognized or unrecognized subsequent events.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Haemonetics' fiscal year ends on the Saturday closest to the last day of March.

Fiscal 2020 , 2019 and 2018 include 52 weeks with each quarter having 13 weeks.

Fiscal 2021 included 53 weeks with each of the first three quarters having 13 weeks and the fourth quarter having 14 weeks.

Fiscal 2020 and 2019 included 52 weeks with each quarter having 13 weeks.

Principles of Consolidation

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The preparation of financial statements in conformity with U.S.

GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could vary from the amounts derived from its estimates and assumptions.

The Company considers estimates to be critical if they are required to make assumptions about material matters that are uncertain at the time of estimation or if materially different estimates could have been made or it is reasonably likely that the accounting estimate will change from period to period.

The following are areas considered to be critical and require management’s judgment:

revenue recognition, inventory provisions, intangible asset and goodwill valuation, legal and other judgmental accruals and income taxes.

Reclassifications

Certain immaterial reclassifications have been made to prior years' amounts to conform to the current year's presentation.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

following are areas considered to be critical and require management’s judgment:

revenue recognition, inventory provisions, intangible asset and goodwill valuation, convertible note valuation, legal and other judgmental accruals and income taxes.

Contingencies

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The Company's standard contracts with its distributors state that title to the equipment passes to the distributors at point of shipment to a distributor’s location.

The distributors are

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

responsible for shipment to the end customer along with any installation, training and acceptance of the equipment by the end customer.

The distributors are responsible for shipment to the end customer along with any installation, training and acceptance of the equipment by the end customer.

Payments from distributors are not contingent upon resale of the product.

2 unchanged sentences

The Company recovers the cost of providing the equipment from the sale of its disposables.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Software and Other Revenues

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When applicable, the Company has also elected to use the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component if it is expected, at contract inception, that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service, will be one year or less.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Translation of Foreign Currencies

3 unchanged sentences

The impact of foreign exchange on long-term intercompany loans, for which repayment has not been scheduled or planned, are recorded in accumulated other comprehensive loss on the consolidated balance sheet.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Cash and Cash Equivalents

2 unchanged sentences

Cash and cash equivalents are recorded at cost, which approximates fair market value.

As of March 28, 2020 , cash and cash equivalents consisted of investments in United States Government Agency and institutional money market funds.

As of April 3, 2021, cash and cash equivalents consisted of investments in United States Government Agency and institutional money market funds.

Allowance for Doubtful Accounts

11 unchanged sentences

The Company provides for depreciation and amortization by charges to operations using the straight-line method in amounts estimated to recover the cost of the building and improvements, equipment and furniture and fixtures over their estimated useful lives as follows:

Asset Classification

Building improvements

Plant equipment and machinery

Office equipment and information technology

Haemonetics equipment

Asset Classification Estimated

Building 30 - 40 Years

Building improvements 5 - 20 Years

Plant equipment and machinery 3 - 15 Years

Office equipment and information technology 3 - 10 Years

Haemonetics equipment 3 - 7 Years

The Company evaluates the depreciation periods of property, plant and equipment to determine whether events or circumstances warrant revised estimates of useful lives.

3 unchanged sentences

Generally, the customer has the right to use it for a period of time as long as they meet the conditions the Company has established, which among other things, generally include one or more of the following:

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

• Purchase and consumption of a certain level of disposable products

2 unchanged sentences

Consistent with the impairment tests noted below for other intangible assets subject to amortization, the Company reviews Haemonetics equipment and the related useful lives of such equipment at least once a year, or more frequently if certain conditions arise, to determine if any adverse conditions exist that would indicate the carrying value of these assets may not be recoverable.

To conduct these reviews, the Company estimates the future amount and timing of demand for disposables used with these devices, from which it generate revenues.

To conduct these reviews, the Company estimates the future amount and timing of demand for disposables used with these devices, from which it generates revenues.

The Company also considers product life cycle in its evaluation of useful life and recoverability.

Changes in expected demand can result in additional depreciation expense, which is classified as cost of goods sold.

Changes in expected demand can result in additional depreciation expense, which is classified as cost of

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Any significant unanticipated changes in demand could impact the value of the Company's devices and its reported operating results.

15 unchanged sentences

As a result of adopting ASC Update No.

2016-02, the Company recognized additional right-of-use assets of $ 22.9 million and corresponding liabilities of $ 22.7 million for its existing lease portfolio on the condensed consolidated balance sheets, with no material impact to the condensed consolidated statements of operations or condensed consolidated statements of cash flows.

2016-02, the Company recognized additional right-of-use assets of $ 22.9 million and corresponding liabilities of $ 22.7 million for its existing lease portfolio on the consolidated balance sheets, with no material impact to the consolidated statements of operations or consolidated statements of cash flows.

Additionally, the Company implemented a new lease administration and lease accounting system and has updated controls and procedures for maintaining and accounting for its lease portfolio under the new standard.

9 unchanged sentences

A reporting unit is defined as an operating segment or one level below an operating segment, referred to as a component.

The Company determines its reporting units by first identifying its operating segments and then by assessing whether any components of these segments constitute a business for which discrete financial information is available and where segment management regularly

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

reviews the operating results of that component.

The Company aggregates components within an operating segment that have similar economic characteristics.

5 unchanged sentences

In addition, for purposes of performing its goodwill impairment tests, assets and liabilities, including corporate assets, which relate to a reporting unit’s operations and would be considered in determining its fair value, are allocated to the individual reporting units.

The Company allocates assets and liabilities not directly related to a specific reporting unit, but from which the reporting unit benefits, based primarily on the respective revenue contribution of each reporting unit.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

allocates assets and liabilities not directly related to a specific reporting unit, but from which the reporting unit benefits, based primarily on the respective revenue contribution of each reporting unit.

The Company uses the income approach, specifically the discounted cash flow method, to derive the fair value of each of its reporting units in preparing its goodwill impairment assessments.

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If the Company determines the estimate of an intangible asset's remaining useful life should be reduced based on its expected use of the asset, the remaining carrying amount of the asset is amortized prospectively over the revised estimated useful life.

During fiscal 2020 , 2019 and 2018 the Company did not incur any intangible asset impairments.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

During fiscal 2021 , 2020 and 2019 the Company did no t incur any intangible asset impairments.

Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed

3 unchanged sentences

The Company capitalizes costs associated with both software that it sells as a separate product and software that is embedded in a device.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company reviews the net realizable value of capitalized assets periodically to assess the recoverability of amounts capitalized.

4 unchanged sentences

The items included in the fiscal year end balances were:

(In thousands)

(In thousands) April 3,

2021 March 28,

VAT liabilities $ 4,431 $ 3,279

3 unchanged sentences

Lease liability 7,708 7,306

Acquisition related liability (1)

Contingent consideration 20,942 —

All other 39,235 36,051

Total $ 138,586 $ 97,641

(1) Related to equity and employee compensation payments associated with the acquisition of Cardiva Medical Inc.

that were funded to a third party agent at the transaction closing date but were not yet paid to certain selling shareholders and/or employees as of April 3, 2021.

Other Long-Term Liabilities

1 unchanged sentence

The items included in the fiscal year end balances were:

(In thousands)

(In thousands) April 3,

2021 March 28,

Unfunded pension liability 15,749 13,083

3 unchanged sentences

Lease liability 62,960 52,014

Contingent consideration 7,791 —

All other 2,214 5,721

Total $ 100,341 $ 89,104

Research and Development Expenses

All research and development costs are expensed as incurred.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Advertising Costs

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Shipping and handling costs are included in selling, general and administrative expenses.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The income tax provision is calculated for all jurisdictions in which the Company operates.

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The Company's position is based upon several factors including management’s evaluation of the Haemonetics and its subsidiaries’ financial requirements, the short-term and long-term operational and fiscal objectives of the Company and the tax consequences associated with the repatriation of earnings.

Convertible Senior Notes

The Company accounts for convertible senior notes as separate liability and equity components, determining the fair value of the respective liability components based on an estimate of the fair value of a similar liability without a conversion option and assigning the residual value to the equity component.

The Company estimates the fair value of the liability component of the convertible senior notes using a discounted cash flow model with a risk adjusted yield for similar debt instruments, absent any embedded conversion feature.

In estimating the risk adjusted yield, the Company utilizes both an income and market approach.

For the income approach, the Company uses a convertible bond pricing model, which includes several assumptions including volatility and the risk-free rate.

For the market approach, the Company performs an evaluation of issuances of convertible debt securities issued by other comparable companies.

Additionally, a detailed analysis of the terms of the convertible senior notes transactions is required to determine existence of any derivatives that may require separate mark-to-market accounting under applicable accounting guidance.

Derivative Instruments

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The cash flows related to the gains and losses are classified in the consolidated statements of cash flows as part of cash flows from operating activities.

For those derivative instruments that are not designated as part of a hedging relationship the Company records the gains or losses in earnings currently.

These gains and losses are intended to offset the gains and losses recorded on net

For those derivative instruments that are not designated as part of a hedging relationship the Company records the

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

monetary assets or liabilities that are denominated in foreign currencies.

gains or losses in earnings currently.

These gains and losses are intended to offset the gains and losses recorded on net monetary assets or liabilities that are denominated in foreign currencies.

The Company recorded foreign currency losses of $ 0.7 million, $ 2.9 million and $ 2.3 million in fiscal 2021 , 2020 and 2019, respectively.

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Additionally, costs directly related to the Company's active restructuring initiatives, including program management costs, accelerated depreciation and costs to transfer product lines among facilities are included within costs of goods sold and selling, general and administrative costs in its consolidated statement of income.

See Note 3 , Restructuring , for further information and discussion of its restructuring plans.

Refer to Note 3, Restructuring, for further information and discussion of its restructuring plans.

Valuation of Acquisitions

The Company allocates the amounts it pays for each acquisition to the assets acquired and liabilities assumed based on their estimated fair values at the dates of acquisition, including acquired identifiable intangible assets.

The Company bases the estimated fair value of identifiable intangible assets on detailed valuations that use historical information and market assumptions based upon the assumptions of a market participant.

The Company bases the estimated fair value of identifiable intangible assets on detailed valuations that use significant assumptions including forecasted cash flows, revenues attributable to existing technology and existing customer attrition.

When estimating the significant assumptions to be used in the valuation, the Company includes a consideration of current industry information, market and economic trends, historical results of the acquired business, and other relevant factors.

These significant assumptions are forward-looking and could be affected by future economic and market conditions.

The Company allocates any excess purchase price over the fair value of the net tangible and intangible assets acquired to goodwill.

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In fiscal 2021, 2020 and 2019, the Company's ten largest customers accounted for approximately 49 %, 54 % and 52 % of net revenues, respectively.

In fiscal 2020 , 2019 and 2018 , two Plasma customers, CSL Plasma Inc.

("CSL") and Grifols S.A.

("Grifols"), each were greater than 10% of total net revenue and in total accounted for approximately 27 % , 27 % and 26 % of net revenues, respectively.

Additionally, one customer accounted for greater than 10% of the Blood Center segment’s net revenues in fiscal 2020 , 2019 and 2018 .

In fiscal 2021, 2020 and 2019, two Plasma customers, CSL Limited.

(together with

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

its affiliates, “CSL”) and Grifols S.A.

(together with its affiliates, “Grifols”), each were greater than 10% of total net revenue and in total accounted for approximately 23 %, 27 % and 27 % of net revenues, respectively.

In addition, a third customer accounted for greater than 10% of the Plasma segment's net revenues, but did not exceed 10% of total net revenue in fiscal 2021, 2020 and 2019.

One customer also accounted for greater than 10% of the Blood Center segment's net revenues, but did not exceed 10% of total net revenues, in fiscal 2021, 2020 and 2019.

Certain other markets and industries can expose the Company to concentrations of credit risk.

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Standards Implemented

In March 2017, the FASB issued ASC Update No.

2017-07, Compensation - Retirement Benefits (Topic 715) .

The guidance revises the presentation of net periodic pension cost and net periodic post-retirement benefit cost.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) Update No.

2016-13, Financial Instruments - Credit Losses (Topic 326).

ASC Update No.

2016-13 is intended to replace the current incurred loss impairment methodology for financial assets measured at amortized cost with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information, including forecasted information, to develop credit loss estimates.

The Company adopted ASC Update No.

2016-13 during the first quarter of fiscal 2021.

The adoption of ASC Update No.

2017-07 did not have a material impact on the Company's condensed consolidated financial statements.

In June 2018, the FASB issued ASC Update No.

2018-07, Compensation - Stock Compensation (Topic 718) .

The new guidance aligns the accounting for non-employee share-based payments with the existing employee share-based transactions guidance.

The adoption did not have a material impact on the Company's consolidated financial statements.

In August 2018, the FASB issued ASC Update No.

2018-15, Intangibles, Goodwill and Other - Internal-Use Software (Subtopic 350-40).

The new guidance aligns the accounting implementation costs incurred in a cloud computing arrangement that is a service contract with the accounting for internal-use software licenses.

The Company adopted ASC Update No.

2018-15 during the first quarter of fiscal 2021.

The adoption of ASC Update No.

2018-07 did not have a material impact on the Company's financial position and results of operations.

The adoption did not have a material impact on the Company's consolidated financial statements.

In May 2020, the Securities and Exchange Commission (“SEC”) issued a final rule that amends the financial statement requirements for acquisitions and dispositions of businesses.

The amendments primarily relate to disclosures required by Rule 3-05 and Article 11 of Regulation S-X and modifies the tests provided in Rule 1-02(w) of Regulation S-X used to determine whether a subsidiary or an acquired or disposed business is significant and modifies the number of years of audited financial statements required for acquisitions with significance levels greater than specified percentages.

The Company early adopted these amendments during the fourth quarter of fiscal 2021.

RESTRUCTURING

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The 2020 Program is designed to improve operational performance and reduce cost principally in our manufacturing and supply chain operations.

The Company estimates that it will incur aggregate charges between $ 60 million and $ 70 million in connection with the 2020 Program.

These charges, the majority of which will result in cash outlays, including severance and other employee costs, will be incurred as the specific actions required to execute these initiatives are identified and approved and are expected to be substantially completed by the end of fiscal 2023.

During fiscal 2020 , the Company incurred $ 11.9 million of restructuring and turnaround costs under this program.

The Company initially expected to incur aggregate charges between $ 60 million and $ 70 million by the end of fiscal 2023.

However, the Company is currently assessing the potential impact of CSL's decision not to renew its supply agreement for the purchase of disposable plasmapheresis kits on the timing and charges of the 2020 Program.

The majority of charges will result in cash outlays, including severance and other employee costs, and will be incurred as the specific actions required to execute these initiatives are identified and approved.

During fiscal 2021 and fiscal 2020 the Company incurred $ 15.1 million and $ 11.9 million of restructuring and turnaround costs under this program, respectively.

Total cumulative charges under this program are $ 27.0 million as of April 3, 2021.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

During fiscal 2018, the Company launched a Complexity Reduction Initiative (the “2018 Program”), a company-wide restructuring program designed to improve operational performance and reduce cost, freeing up resources to invest in accelerated growth.

During fiscal 2021, 2020 and 2019, the Company incurred $ 0.6 million, $ 7.9 million and $ 13.7 million of restructuring and turnaround costs under this program, respectively.

Total cumulative charges under this program are $ 58.2 million as of March 28, 2020 .

The 2018 Program is substantially complete.

During fiscal 2017, the Company launched a restructuring program (the "2017 Program") designed to reposition its organization and improve its cost structure.

The Company did not incur any charges under this program during fiscal 2020 and 2019 .

During fiscal 2018, the Company incurred $ 7.2 million of restructuring and turnaround charges under this program, respectively.

Total cumulative charges under this program are $ 58.8 million as of April 3, 2021.

The 2018 Program is substantially complete.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes the activity for restructuring reserves related to the 2020 Program and the 2018 and Prior Programs for the fiscal years ended March 28, 2020 , March 30, 2019 and March 31, 2018 , substantially all of which relates to employee severance and other employee costs:

(In thousands)

2018 and Prior Programs

Balance at April 1, 2017

Costs incurred, net of reversals

Non-cash adjustments

The following table summarizes the activity for restructuring reserves related to the 2020 Program, the 2018 Program and prior programs for the fiscal years ended April 3, 2021, March 28, 2020 and March 30, 2019, substantially all of which relates to employee severance and other employee costs:

(In thousands) 2020 Program 2018 and Prior Programs Total

Balance at March 31, 2018 $ — $ 28,535 $ 28,535

Costs incurred, net of reversals — 395 395

Payments — ( 21,392 ) ( 21,392 )

Non-cash adjustments — ( 59 ) ( 59 )

1 unchanged sentence

Costs incurred, net of reversals 2,234 1,357 3,591

Payments ( 1,098 ) ( 7,177 ) ( 8,275 )

Non-cash adjustments — ( 147 ) ( 147 )

Balance at March 28, 2020 $ 1,136 $ 1,512 $ 2,648

Costs incurred, net of reversals 1,501 ( 57 ) 1,444

Payments ( 2,062 ) ( 1,018 ) ( 3,080 )

Balance at April 3, 2021 $ 575 $ 437 $ 1,012

The following presents the restructuring costs by line item during fiscal 2021 , 2020 and 2019 within our accompanying consolidated statements of income and comprehensive income:

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Selling, general and administrative expenses 912 1,977 ( 346 )

As of March 28, 2020 , the Company had a restructuring liability of $ 2.6 million , of which approximately $ 2.2 million is payable within the next twelve months.

Total $ 1,444 $ 3,591 $ 395

As of April 3, 2021, the Company had a restructuring liability of $ 1.0 million, of which approximately $ 0.6 million is payable within the next twelve months.

In addition to the restructuring expenses included in the table above, the Company also incurred costs of $ 14.2 million, $ 16.3 million and $ 13.2 million in fiscal 2021, 2020 and 2019, respectively, that do not constitute restructuring costs under ASC 420, Exit and Disposal Cost Obligations, and which the Company instead refers to as turnaround costs.

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Selling, general and administrative expenses 3,873 13,706 11,923

Total $ 14,217 $ 16,287 $ 13,228

HAEMONETICS CORPORATION AND SUBSIDIARIES

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(In thousands) 2021 2020 2019

Plasma $ 454 $ 544 $ ( 67 )

Blood Center 201 ( 5 ) 164

Hospital 322 845 828

Corporate 467 2,207 ( 530 )

Total $ 1,444 $ 3,591 $ 395

Turnaround costs

(In thousands) 2021 2020 2019

Plasma $ 1,870 $ 820 $ 174

Blood Center 1,599 320 145

Hospital 14 — ( 270 )

Corporate 10,734 15,147 13,179

Total $ 14,217 $ 16,287 $ 13,228

Total restructuring and turnaround $ 15,661 $ 19,878 $ 13,623

On April 1, 2020, the Company acquired all of the outstanding equity of enicor GmbH, the manufacturer of ClotPro ® , a new generation whole blood coagulation testing system.

The acquisition of this innovative viscoelastic diagnostic device further augments the Company's portfolio of hemostasis analyzers within the Hospital business unit.

The purchase accounting for this acquisition will be completed in fiscal 2021.

Cardiva Medical, Inc.

On January 17, 2021, the Company entered into an Agreement and Plan of Merger with Cardiva Medical, Inc.

(“Cardiva”), an industry-leading manufacturer of vascular closure systems based in Santa Clara, California.

In connection with this acquisition, which closed on March 1, 2021, the Company acquired 100 % of the issued and outstanding shares of capital stock of Cardiva for total consideration of $ 489.8 million, which consisted of upfront payments in the aggregate of $ 465.5 million ($ 418.2 million net of cash acquired) and the fair value of contingent consideration of $ 24.3 million.

The Company’s purchase price is subject to customary working capital and certain other adjustments as of the closing of the transaction and a maximum of $ 35.0 million in contingent consideration payable over the next two years based on sales growth.

The Company financed the acquisition through a combination of cash, borrowings under its revolving credit facility and an additional $ 150.0 million term loan under the existing credit facility.

Cardiva’s portfolio includes two catheter-based vascular access site closure devices.

The VASCADE® vascular closure system is designed for “small-bore” femoral arterial and venous closure, generally used in interventional cardiology and peripheral vascular procedures.

The VASCADE MVP® vascular closure system is designed for “mid-bore” multi-access femoral venous closure, generally used in electrophysiology procedures, and is the only U.S.

Food and Drug Administration (“FDA”) approved closure device for use following cardiac ablation procedures requiring two or more access sites within the same vessel.

The addition of the VASCADE portfolio to the Hospital business unit includes products with demonstrated benefits and enhances penetration into the large and growing interventional cardiology and electrophysiology markets.

Purchase Price Allocation

The Company accounted for the acquisition as a business combination, and in accordance with FASB ASC Topic 805, Business Combinations (Topic 805), recorded the assets acquired and liabilities assumed at their fair values as of the acquisition date.

The fair value of assets acquired and liabilities assumed have been recognized based on management’s estimates and assumptions using the information regarding facts and circumstances that existed at the closing date.

The assessment of fair value is preliminary and is based on information that was available at the time the consolidated financial statements were prepared.

The most significant open items included the valuation of certain intangible assets and the accounting for income taxes as the Company is awaiting additional information to complete its assessment of these matters.

Measurement period adjustments will be recorded in the period in which they are determined, as if they had been completed at the acquisition date.

The finalization of the Company’s purchase accounting assessment could result in changes in the valuation of assets acquired

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

and liabilities assumed, which could be material.

The final determination of the fair value of certain assets and liabilities will be completed within the measurement period as required by Topic 805.

As of April 3, 2021, the valuation studies necessary to determine the fair market value of the assets acquired and liabilities assumed are preliminary, including the projection of the underlying cash flows used to determine the fair value of the identified tangible, intangible and financial assets and liabilities.

The preliminary purchase price of $ 442.5 million, net of $ 47.3 million of cash acquired, consisted of the amounts presented below, which represent the preliminary determination of the fair value of the identifiable assets acquired and liabilities assumed:

(In thousands) March 1, 2021

Accounts receivable $ 7,304

Inventories 18,765

Prepaid expenses and other current assets 850

Property, plant and equipment 1,186

Intangible assets 253,929

Goodwill 251,635

Other long-term assets 1,868

Total assets acquired $ 535,537

Accounts payable 3,292

Accrued payroll and related costs 58,211

Other liabilities 1,853

Deferred tax liability 27,912

Other long-term liabilities 1,772

Total liabilities assumed $ 93,040

Net assets acquired $ 442,497

The Company determined the identifiable intangible assets were completed technology, customer relationships and trademarks.

The fair values of intangible assets were based on valuation techniques with estimates and assumptions developed by the Company.

Completed technology was valued using the excess earnings method.

Customer relationships were valued using the distributor method.

Trademarks were valued using the relief from royalty method.

The cash flows used in the valuation of the intangible assets were based on estimates used to price the transaction.

In developing the discount rates applied to the cash flow projections, the discount rates were benchmarked with reference to the implied rate of return from the transaction model and the weighted average cost of capital and then adjusted to reflect the relative risk of the asset.

As of April 3, 2021, the valuation of the intangible assets is preliminary as the Company is still gathering information related to the assets’ cash flow projections.

The excess of the purchase price over the tangible assets, identifiable intangible assets and assumed liabilities was recorded as goodwill.

As a result of the acquisition of Cardiva, the Company recognized goodwill of $ 251.6 million, which is attributable to the revenue and cash flow projections associated with completed technologies and the development of future technology that does not exist in the current in-process research and development (“IPR&D”) pipeline.

The goodwill is not deductible for tax purposes and relates entirely to the Hospital reportable segment.

Intangible assets acquired consist of the following:

(In thousands) Amount Weighted-Average Amortization Period Risk-Adjusted Discount

Rates used in Purchase Price Allocation

Completed technology $ 230,326 13 years 13.5 %

Customer relationships 18,166 12 years 13.0 %

Trademarks 5,437 13 years 13.5 %

Total $ 253,929

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company recorded a long-term deferred tax liability, net, of $ 27.9 million primarily related to definite-lived intangible assets which cannot be deducted for tax purposes, partially offset by deferred tax assets primarily related to net operating losses acquired.

Acquisition-Related Costs

The amount of acquisition-related costs incurred associated with the acquisition was $ 9.6 million for the fiscal year ending April 3, 2021.

The Company incurred acquisition costs related legal and other professional fees in the amount of $ 6.6 million and an additional $ 3.0 million of debt financing costs and lender fees which were recognized in selling, general and administrative and as interest expense on the consolidated statements of income, respectively.

Unaudited Pro Forma Financial Information

Cardiva contributed revenues of $ 7.7 million to net revenues and losses of $ 7.6 million to net income for the period post acquisition through April 3, 2021.

The unaudited estimated pro forma results presented below include the effects of the acquisition of Cardiva as if it was consummated on March 31, 2019.

In fiscal 2021, the Company incurred nonrecurring charges attributed to the acquisition of Cardiva, which are presented in the consolidated statements of income for this period.

These charges include acquisition-related costs, retention bonuses and severance payments, adjusted for the related tax effects.

These nonrecurring charges are reflected as adjustments to the pro forma earnings presented below for fiscal 2021 and fiscal 2020.

Additionally, these pro forma amounts have been calculated, net of tax, after adjusting the results of Cardiva to reflect the additional costs associated with fair value adjustments relating to inventories, leases and intangible assets as if the acquisition had occurred on March 31, 2019 and adjusting interest amounts related to long-term debt assumptions.

There was no significant impact to the pro forma amounts after applying the Company’s accounting policies.

The supplemental pro forma information presented below is for informational purposes only and should be read in conjunction with our historical financial statements.

The pro forma results do not include any anticipated synergies or other expected benefits of the acquisition.

Accordingly, the unaudited estimated pro forma financial information below is not necessarily indicative of what the actual results of operations of the combined companies would have been had the acquisition of Cardiva occurred as of March 31, 2019, nor are they indicative of future results of operations.

The pro forma assumptions and adjustments are reasonable and appropriate under the circumstances and are factually supported based on information currently available.

(In thousands) (Unaudited) 2021 2020

Net revenues $ 916,601 $ 1,024,235

Net income $ 53,884 $ 19,191

HAS Intellectual Property

In January 2021, the Company entered into an agreement to acquire certain intellectual property owned by HemoAssay Science and Technology (Suzhou) Co.

Ltd., a China-incorporated company, and its affiliates (collectively, “HemoAssay”) underlying their HAS viscoelastic diagnostic devices, related assays and disposables.

The Company previously entered into exclusive manufacturing and distribution agreements with HemoAssay pursuant to which it has exclusive rights to commercialize HemoAssay’s HAS devices in China.

In connection with the transaction, which did not meet the definition of a business, the Company has agreed to pay up to $ 15.0 million to HemoAssay in contingent consideration based on certain developmental and manufacturing based milestones.

These products augment the Company's portfolio of hemostasis analyzers within the Hospital business unit.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

On April 1, 2020, the Company acquired all of the outstanding equity of enicor GmbH (“enicor”), the manufacturer of ClotPro ® , a new generation whole blood coagulation testing system that is currently available in select European and Asia Pacific markets, for total consideration of $ 20.5 million, which consisted of upfront payments of $ 16.6 million and the fair value of contingent consideration of $ 3.9 million.

The contingent consideration, which could total a maximum of $ 4.5 million, consists of payments related to the achievement of certain revenue and regulatory milestones.

The acquisition of this viscoelastic diagnostic device augments the Company's portfolio of hemostasis analyzers within the Hospital business unit.

Purchase Price Allocation

The Company accounted for the acquisition of enicor as a business combination, and in accordance with FASB ASC Topic 805, Business Combinations ( Topic 805 ), recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date.

The following amounts represent the fair value of the identifiable assets acquired and liabilities assumed for enicor completed during the fiscal 2021:

(In thousands) April 1, 2020

Inventory $ 634

Other current assets 685

Property, plant and equipment 289

Intangible assets 14,090

Goodwill 8,153

Total assets acquired $ 23,851

Other current liabilities 289

Deferred tax liability 3,036

Total liabilities assumed $ 3,325

Net assets acquired $ 20,526

The Company determined the identifiable intangible assets were completed technology, customer relationships and a trademark.

The fair value of the intangible assets was estimated using the income approach.

The cash flows were based on estimates used to price the transaction, and the discount rates applied were benchmarked with reference to the implied rate of return from the transaction model and the weighted average cost of capital.

The benefits of adding a viscoelastic diagnostic device to the Company’s portfolio of hemostasis analyzers within the Hospital business unit contributed to an acquisition price in excess of the fair value of net assets acquired for enicor, which resulted in the establishment of goodwill.

In addition, the benefits of lower cost manufacturing and complementary sales channels also contributed to the establishment of goodwill for this acquisition.

None of the goodwill is expected to be deductible for income tax purposes.

Intangible assets acquired consist of the following:

(In thousands) Amount Weighted-Average Amortization Period Risk-Adjusted Discount

Rates used in Purchase Price Allocation

Completed technology $ 13,441 10 Years 20 %

Customer relationships 347 10 Years 20 %

Trademark 302 10 Years 20 %

Total $ 14,090

Acquisition-Related Costs

During fiscal 2021, the Company incurred $ 0.2 million of acquisition-related costs associated with the acquisition.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Unaudited Pro Forma Financial Information

enicor had an immaterial impact to the Company's net revenues and net income for fiscal 2021.

The unaudited estimated pro forma impact of the results of the acquisition of enicor as if it was consummated on April 1, 2019 are immaterial.

TEG ® 6s Hemostasis Analyzer System Intellectual Property

On January 13, 2020, the Company purchased the technology underlying the TEG ® 6s Hemostasis Analyzer System from Cora Healthcare, Inc.

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The intangible asset acquired as a result of this transaction was recorded in the Company's Hospital business unit.

On May 21, 2019, the Company transferred to CSL Plasma Inc.

(“CSL”) substantially all of its tangible assets held relating to the manufacture of anti-coagulant and saline (together, “Liquids”) at its Union, South Carolina facility (“Union”), which consist primarily of property, plant and equipment and inventory, and CSL assumed certain related liabilities (the “Asset Transfer”) pursuant to the terms of a settlement, release and asset transfer agreement between the parties dated May 13, 2019.

The Asset Transfer excludes all other assets related to Union, including accounts receivable, customer contracts and the Company's U.S.

Food and Drug Administration (“FDA”) product approvals for manufacturing Liquids.

At closing, Haemonetics received $ 9.8 million of proceeds for the Asset Transfer and was concurrently released from its obligations to supply Liquids under a 2014 supply agreement with CSL.

In connection with the Asset Transfer, CSL and Haemonetics also entered into related transition services, supply and manufacturing services and quality agreements that, among other things, permit CSL to manufacture Liquids under the Company's FDA product approvals, exclusively for Haemonetics and CSL, until CSL obtains independent product approvals from the FDA to manufacture the Liquids.

Fajardo, Puerto Rico Manufacturing Operations

On June 29, 2020, the Company sold its Fajardo, Puerto Rico, manufacturing operations to GVS, S.p.A (“GVS”), a leading provider of advanced filtration solutions for critical applications for $ 15.1 million ($ 7.8 million, net of cash transferred).

Under the terms of the agreement, Haemonetics retained all intellectual property rights to its proprietary blood filters currently manufactured at its Fajardo facility and GVS acquired certain assets consisting primarily of property, plant and equipment, inventory and cash and has assumed certain related liabilities.

In connection with this transaction, the Company and GVS also entered into a long-term supply and development agreement that, among other things, grants GVS exclusive rights to manufacture and supply the blood filters currently produced at the Fajardo facility for Haemonetics.

The Company also agreed to provide certain transition services to GVS, generally for a period of up to three months depending on the nature of the service.

As a result of this transaction, Haemonetics recognized a pre-tax impairment charge in its Blood Center business unit of $ 1.0 million in the first quarter of fiscal 2021 and an incremental loss of $ 0.4 million based on closing adjustments during the third quarter of fiscal 2021, as the carrying value of the assets and liabilities in the asset transfer exceeded the net of the $ 15.1 million of cash proceeds and an additional contingent liability of $ 1.5 million.

The disposal group consisted of $ 3.3 million of inventory, $ 7.2 million of fixed assets, $ 3.2 million of other liabilities, and $ 0.4 million of goodwill allocated based on fair value to the business.

Blood Donor Management Software

On July 1, 2020, the Company sold certain U.S.

blood donor management software solution assets within its Blood Center business unit to the GPI Group (“GPI”) for an upfront cash payment of $ 14.0 million ($ 13.6 million, net of working capital adjustments) and up to $ 14.0 million in additional consideration contingent on the achievement of commercial milestones over the twelve month period immediately following the closing of the transaction.

The disposal group consisted of $ 1.4 million of accounts receivable, $ 0.9 million of intangible assets, other liabilities of $ 1.8 million and $ 1.4 million of goodwill allocated based on fair value to the business.

The Company recognized a gain of $ 13.2 million associated with the transaction in fiscal 2021.

To the extent the additional contingent consideration is earned and realized in a future period then such amounts will be recorded as additional gains in such future period.

The Company also agreed to provide certain transition services to GPI, generally for a period of one to nine months depending on the nature of the service.

Inlog Holdings France

On September 18, 2020, the Company sold its wholly-owned subsidiary Inlog Holdings France SAS to Abénex Capital (“Abénex”), a private equity firm based in France for $ 30.5 million ($ 24.5 million, net of cash transferred), of which $ 29.2 million was received at closing and $ 1.5 million which was received during the fourth quarter of fiscal 2021.

Inlog Holdings France SAS, through its subsidiary In Log SAS, develops and sells blood bank and hospital software solutions used predominantly in France and in several other countries outside of the U.S.

The disposal group included $ 2.2 million of intangible assets, $ 2.2 million accounts receivable, $ 0.3 million other assets, $ 3.3 million of liabilities and $ 3.3 million of

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

balances of the property, plant and equipment exceeding the consideration received under the terms of the Agreement.

The charge will not result in any future cash expenditures.

goodwill allocated based on the fair value of the business which impacted both the Blood Center and Hospital business units.

The Company recognized a gain of $ 20.0 million associated with the transaction in fiscal 2021.

Asset Transfer to CSL

On May 21, 2019, the Company transferred to CSL substantially all of its tangible assets held relating to the manufacture of anti-coagulant and saline (together, “Liquids”) at its Union, South Carolina facility (“Union”), which consisted primarily of property, plant and equipment and inventory, and CSL assumed certain related liabilities (the “Asset Transfer”) pursuant to the terms of a settlement, release and asset transfer agreement between the parties dated May 13, 2019.

The Asset Transfer excluded all other assets related to Union, including accounts receivable, customer contracts and the Company's U.S.

Food and Drug Administration (“FDA”) product approvals for manufacturing Liquids.

At closing, Haemonetics received $ 9.8 million of proceeds for the Asset Transfer and was concurrently released from its obligations to supply Liquids under a 2014 supply agreement with CSL.

In connection with the Asset Transfer, CSL and Haemonetics also entered into related transition services, supply and manufacturing services and quality agreements that, among other things, permitted CSL to manufacture Liquids under the Company's FDA product approvals, exclusively for Haemonetics and CSL, until CSL obtains independent product approvals from the FDA to manufacture the Liquids.

In connection with the Company's and CSL's entry into the May 13, 2019 agreement for the Asset Transfer, the Company recognized a pre-tax impairment charge of $ 48.7 million in the first quarter of fiscal 2020, primarily related to the carrying balances of the property, plant and equipment exceeding the consideration received under the terms of the Agreement.

The charge did not result in any future cash expenditures.

Goodwill associated with the disposal was immaterial.

Domestic and foreign income before provision for income tax is as follows:

Domestic and foreign income before (benefit) provision for income tax is as follows:

(In thousands) 2021 2020 2019

The income tax provision from continuing operations contains the following components:

Domestic $ 5,526 $ 5,344 $ 26,665

Foreign 67,387 81,808 46,968

Total $ 72,913 $ 87,152 $ 73,633

The income tax (benefit) provision from continuing operations contains the following components:

(In thousands) 2021 2020 2019

Federal $ ( 289 ) $ 3,834 $ ( 4,165 )

State 1,256 1,054 844

Foreign 13,319 12,467 8,584

Total current $ 14,286 $ 17,355 $ 5,263

Federal ( 12,906 ) ( 8,257 ) 12,220

State ( 2,436 ) 280 463

Foreign ( 5,500 ) 1,248 668

Total deferred $ ( 20,842 ) $ ( 6,729 ) $ 13,351

Total $ ( 6,556 ) $ 10,626 $ 18,614

The Company conducts business globally and reports its results of operations in a number of foreign jurisdictions in addition to the United States.

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statutory tax rate.

Beginning in fiscal 2019 , the Company incorporated certain provisions of the Tax Cuts and Jobs Act (the "Act") in the calculation of the tax provision and effective tax rate, including the provisions related to global intangible low taxed income (“GILTI”), foreign derived intangible income (“FDII”), base erosion anti abuse Tax (“BEAT”), as well as other provisions which limit tax deductibility of expenses.

For fiscal 2020 , the GILTI provisions have the most significant impact to the Company.

Under the new law, U.S.

taxes are imposed on foreign income in excess of a deemed return on tangible assets of its foreign subsidiaries.

The Company incorporated certain provisions of the Tax Cuts and Jobs Act (the “Act”) in the calculation of the tax provision and effective tax rate, including the provisions related to global intangible low taxed income (“GILTI”), foreign derived intangible income (“FDII”), base erosion anti abuse Tax (“BEAT”), as well as other provisions which limit tax deductibility of expenses.

Under the GILTI provisions, U.S.

taxes are imposed on foreign income in excess of a deemed return on tangible

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

assets of its foreign subsidiaries.

The ability to benefit from a deduction and foreign tax credits against a portion of the GILTI income may be limited under the GILTI rules as a result of the utilization of net operating losses, foreign sourced income, and other potential limitations within the foreign tax credit calculation.

Interpretive guidance on the accounting for GILTI states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only.

The Company has made the accounting policy election to recognize GILTI as a period expense.

In July 2020, the U.S.

Treasury issued final regulations and additional proposed regulations that address the application of the high-taxed exclusion from GILTI.

Under these regulations, the Company can make an annual election to exclude from its GILTI calculation, income from its foreign subsidiaries that have effective income tax rate exceeds 18.9% for that year.

The regulations must be applied for tax years beginning after July 23, 2020 but companies have the option to apply them retroactively for tax years beginning after December 31, 2017 and before July 23, 2020.

The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was enacted in the United States on March 27, 2020.

The CARES Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and fund a nationwide effort to curtail the effect of COVID-19.

While the CARES Act provides extensive tax changes in response to the COVID-19 pandemic, the provisions are not expected to have a significant impact on the Company’s financial results.

The Company's subsidiary in Puerto Rico has been granted a fifteen -year tax grant that expires in calendar 2027.

Its qualification for the tax grant is dependent on the continuation of its manufacturing activities in Puerto Rico.

The Company benefits from a reduced tax rate on its earnings in Puerto Rico under the tax grant.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

While the CARES Act provides extensive tax changes in response to the COVID-19 pandemic, the provisions did not have a significant impact on the Company’s financial results.

The Company's subsidiary in Malaysia has been granted a full income tax exemption to manufacture whole blood and apheresis devices that could be in effect for up to ten years , provided certain conditions are satisfied.

The income tax exemption was in effect beginning June 1, 2016.

Tax affected, significant temporary differences comprising the net deferred tax liability are as follows:

(In thousands)

Tax effected, significant temporary differences comprising the net deferred tax liability are as follows:

(In thousands) April 3,

2021 March 28,

Deferred tax assets:

Depreciation $ 1,054 $ 1,922

Amortization of intangibles 1,167 1,156

Inventory 5,166 2,904

Accruals, reserves and other deferred tax assets 17,274 17,345

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Deferred tax liabilities:

Depreciation ( 10,470 ) ( 15,840 )

Amortization of goodwill and intangibles ( 68,802 ) ( 15,450 )

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Operating lease assets ( 14,722 ) ( 12,743 )

Debt discount ( 19,868 ) —

Other deferred tax liabilities ( 5,980 ) ( 2,366 )

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Net deferred tax liabilities $ ( 37,816 ) $ ( 6,632 )

The valuation allowance increased by $ 3.3 million during fiscal 2020 , primarily as a result of net operating losses and tax credits generated in jurisdictions in which the Company has concluded that its deferred tax assets are not more-likely-than-not realizable.

The increase in the worldwide net deferred tax liability is primarily due to the acquisition of Cardiva in March 2021 (as described in Note 4, Acquisitions ).

For federal income tax purposes the acquisition was deemed a stock purchase and therefore the historical tax basis in the assets acquired and liabilities assumed was carried over upon acquisition.

Taxable or deductible temporary differences arising from differences in the assigned fair value for financial statement purposes and the historical tax bases in assets acquired or liabilities assumed is recorded as part of goodwill in the period the transaction occurred.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

increase in the net deferred tax liabilities is also attributable to the basis difference in the conversion feature of the convertible senior notes (as described in Note 13 , Notes Payable and Long-term Debt ).

In accounting for the issuance of the convertible senior notes, the Company recorded the basis difference associated with the equity component representing the conversion option to additional paid-in capital.

The valuation allowance decrease of $ 3.5 million during fiscal 2021 is primarily due to the sale or transfer of net assets as part Puerto Rico Divesture in June 2020 (as described in Note 5, Divestitures ) off as well as changes to valuation allowances on certain foreign jurisdictions where the Company has concluded that its deferred tax assets are not more-likely-than-not realizable.

The Company has assessed, on a jurisdictional basis, the available means of recovering deferred tax assets, including the ability to carry-back net operating losses, the existence of reversing temporary differences, the availability of tax planning strategies and available sources of future taxable income.

1 unchanged sentence

The Company has concluded future taxable income can be considered a source of income to realize a benefit for deferred tax assets in certain jurisdictions.

In addition, the Company has concluded that it cannot rely on future taxable income in certain risk bearing principal jurisdictions due uncertainty surrounding future taxable income including as a result of the effects of Covid-19 and the recent announcement of CSL intent not to renew its supply agreement for the use of PCS2 plasma collection system devices and the purchase of disposable plasmapheresis kits in the U.S.

following the expiration of the current term in June 2022.

The Company believes it is able to support the deferred tax assets recognized as of the end of the year based on all of the available evidence.

The worldwide net deferred tax liability as of March 28, 2020 includes deferred tax liabilities related to amortizable tax basis in goodwill, which are indefinite lived and can only be used as a source of income to benefit other indefinite lived assets.

As of March 28, 2020 , the Company maintains a valuation allowance against certain U.S.

deferred tax assets that are not more-likely-than-not realizable and maintains a full valuation allowance against the net deferred tax assets of certain foreign subsidiaries.

As of March 28, 2020 , the Company has no U.S.

federal net operating loss carryforwards.

The Company has U.S.

state net operating losses of $ 35.6 million of which $ 30.3 million will begin to expire in fiscal 2021 and $ 5.3 million can be carried

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

forward indefinitely.

The Company has federal and state tax research credits of $ 1.3 million and $ 4.9 million , respectively, which will begin to expire in fiscal 2039 and fiscal 2025, respectively.

The Company's net operating loss and tax credit carry-forwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50 percent as defined under Section 382 and 383 of the U.S.

The worldwide net deferred tax liability as of April 3, 2021 includes deferred tax liabilities related to amortizable tax basis in goodwill, which are indefinite lived and can only be used as a source of income to benefit other indefinite lived assets.

As of April 3, 2021, the Company maintains a valuation allowance against certain U.S.

state deferred tax assets that are not more-likely-than-not realizable and maintains a full valuation allowance against the net deferred tax assets of certain foreign subsidiaries.

In connection with the acquisition of Cardiva, the Company acquired federal and state net operating loss carryforwards of $ 151.4 million and $ 70.7 million, respectively.

The Company also acquired federal and state tax research credit carryforwards of $ 0.2 million and $ 0.4 million, respectively.

These net operating loss and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50 percent as defined under Section 382 and 383 of the U.S.

Internal Revenue Code of 1986, respectively, as well as similar state provisions.

The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change.

The Company conducted a Section 382 study covering the period April 2, 2011 through December 31, 2017.

The study concluded that there were no limitations on the Company’s net operating losses and tax credit carryforwards as of December 31, 2017.

The Company does not believe it has had an ownership change through March 28, 2020 .

Subsequent ownership changes may further affect the limitation in future years.

As of March 28, 2020 , the Company has foreign net operating losses of approximately $ 14.6 million that are available to reduce future income of which $ 5.5 million will begin to expire in fiscal 2034 and $ 9.1 million can be carried forward indefinitely.

As of March 28, 2020 , substantially all of the unremitted earnings of the Company have been taxed in the U.S.

The Company conducted a preliminary Section 382 study covering the period of inception (July 2002) through March 1, 2021.

The study concluded that ownership changes occurred during that period which limit the amount of the Company’s net operating losses and tax credit carryforwards that can be utilized before expiring.

The carryforwards disclosed represent the amount of attributes that can be utilized based on the results of the study.

As of April 3, 2021, the Company has U.S.

federal net operating loss carryforwards of $ 141.9 million of which $ 27.3 million will begin to expire in fiscal 2022 and $ 114.6 million can be carried forward indefinitely.

The Company has U.S.

state net operating losses of $ 102.7 million of which $ 79.7 million will begin to expire in fiscal 2022 and $ 23.0 million can be carried forward indefinitely.

The Company has federal and state tax credits of $ 0.4 million and $ 5.7 million, respectively, which will begin to expire in fiscal 2031 and fiscal 2025, respectively.

As of April 3, 2021, the Company has foreign net operating losses of approximately $ 12.6 million that are available to reduce future income of which $ 6.3 million will begin to expire in fiscal 2034 and $ 6.3 million can be carried forward indefinitely.

As of April 3, 2021, substantially all of the unremitted earnings of the Company have been taxed in the U.S.

The Company has provided $ 0.6 million of net foreign withholding taxes on approximately $ 204.8 million of unremitted earnings that are not indefinitely reinvested.

3 unchanged sentences

The Company does not believe it is practicable to estimate the amount of income taxes payable on the earnings that are indefinitely reinvested in foreign operations, however a significant portion of the unremitted earnings could be remitted without a future tax cost.

The income tax provision from continuing operations differs from tax provision computed at the U.S.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The income tax (benefit) provision from continuing operations differs from the tax provision (benefit) computed at the U.S.

federal statutory income tax rate due to the following:

12 unchanged sentences

Research credits ( 1,230 ) ( 1.7 ) % ( 2,085 ) ( 2.4 ) % ( 768 ) ( 1.0 ) %

Intercompany sale of intellectual property ( 7,550 ) ( 10.4 ) % — — % — — %

One-time transition tax from tax reform — — % — — % 26 — %

Valuation allowance ( 3,144 ) ( 4.4 ) % 2,939 3.4 % ( 184 ) ( 0.3 ) %

Income tax provision (benefit)

The Company recorded an income tax provision of $ 10.6 million , representing an effective tax rate of 12.2 % .

Other, net ( 1,171 ) ( 1.6 ) % ( 187 ) ( 0.2 ) % ( 1 ) — %

Income tax (benefit) provision $ ( 6,556 ) ( 9.0 ) % $ 10,626 12.2 % $ 18,614 25.3 %

The Company recorded an income tax benefit of $ 6.6 million, representing an effective tax rate of ( 9.0 )%.

The effective tax rate is lower than the U.S.

statutory rate of 21.0 % primarily as a result of the impact of tax benefits of stock compensation windfall deductions;

research credits generated and jurisdictional mix of earnings, partially offset by the impact of GILTI, non-deductible executive compensation, tax reserves and changes in valuation allowance.

statutory rate of 21.0 % primarily as a result of the tax benefit from the sale or transfer of net assets as part Puerto Rico Divesture in June 2020 (as described in Note 5, Divestitures ) as well as recognizing a non-recurring tax benefit from the release of a portion of the valuation allowance due to taxable temporary differences acquired with the acquisition of Cardiva.

Other factors decreasing the effective tax rate include the impact of tax benefits of stock compensation windfall deductions, research credits generated and jurisdictional mix of earnings, partially offset by the impact of GILTI, non-deductible executive compensation, tax reserves and non-deductible acquisition costs.

The Company has recorded an immaterial tax expense related to unremitted foreign earnings that are not considered permanently reinvested.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Unrecognized Tax Benefits

Unrecognized tax benefits represent uncertain tax positions for which reserves have been established.

As of March 28, 2020 , the Company had $ 4.6 million of unrecognized tax benefits, of which $ 4.0 million would impact the effective tax rate, if recognized.

As of April 3, 2021, the Company had $ 6.1 million of unrecognized tax benefits, of which $ 5.3 million would impact the effective tax rate, if recognized.

As of March 28, 2020, the Company had $ 4.6 million of unrecognized tax benefits, of which $ 4.0 million would impact the effective tax rate, if recognized.

At March 30, 2019, the Company had $ 4.7 million of unrecognized tax benefits, of which $ 3.9 million would impact the effective tax rate, if recognized.

During the fiscal year ended March 28, 2020 , the Company's unrecognized tax benefits were decreased by an immaterial amount, primarily relating to uncertain tax positions established against foreign tax provisions and various federal and state tax credits offset by the settlement of prior exposures.

The following table summarizes the activity related to its gross unrecognized tax benefits for the fiscal years ended March 28, 2020 , March 30, 2019 and March 31, 2018 :

(In thousands)

During the fiscal year ended April 3, 2021, the Company settled an ongoing withholding tax audit with the Swiss taxing authorities covering fiscal 2014 through fiscal 2018.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes the activity related to its gross unrecognized tax benefits for the fiscal years ended April 3, 2021, March 28, 2020 and March 30, 2019:

(In thousands) April 3,

2021 March 28,

2020 March 30,

Beginning Balance $ 4,620 $ 4,657 $ 4,450

5 unchanged sentences

Ending Balance $ 6,107 $ 4,620 $ 4,657

As of March 28, 2020 , the Company anticipates that the liability for unrecognized tax benefits for uncertain tax positions could change by up to $ 1.4 million in the next twelve months, as a result of closure of various statutes of limitations and potential settlements with tax authorities.

As of April 3, 2021, the Company anticipates that the liability for unrecognized tax benefits for uncertain tax positions could change by up to $ 2.3 million in the next twelve months, as a result of closure of various statutes of limitations and potential settlements with tax authorities.

The Company's historical practice has been and continues to be to recognize interest and penalties related to federal, state and foreign income tax matters in income tax expense.

Approximately $ 0.4 million , $ 0.2 million , and $ 0.2 million of gross interest and penalties were accrued at March 28, 2020 , March 30, 2019 , and March 31, 2018 , respectively, and are not included in the amounts above.

Additionally, $ 0.3 million of accrued interest and penalties was included in income tax expense for the year ended March 28, 2020 .

Such amounts were immaterial during the fiscal years ended March 30, 2019 and March 31, 2018 .

Approximately $ 1.4 million and $ 0.4 million of gross interest and penalties were accrued at April 3, 2021 and March 28, 2020, respectively, and are not included in the amounts above.

Additionally, $ 0.9 million and $ 0.3 million of accrued interest and penalties was included in income tax benefit for the years ended April 3, 2021 and March 28, 2020, respectively.

Such amounts were immaterial during the fiscal year ended and March 30, 2019.

The Company conducts business globally and, as a result, files federal, state and foreign income tax returns in multiple jurisdictions.

3 unchanged sentences

To the extent that the Company has tax attribute carry-forwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service, state, or foreign tax authorities to the extent utilized in a future period.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

EARNINGS PER SHARE

1 unchanged sentence

(In thousands, except per share amounts) 2021 2020 2019

Net income $ 79,469 $ 76,526 $ 55,019

Weighted average shares 50,688 50,692 51,533

Basic income per share $ 1.57 $ 1.51 $ 1.07

Net income $ 79,469 $ 76,526 $ 55,019

Basic weighted average shares 50,688 50,692 51,533

3 unchanged sentences

Basic earnings per share is calculated using the Company's weighted-average outstanding common shares.

Diluted earnings per share is calculated using its weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method.

Diluted earnings per share is calculated using its weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method and the convertible senior notes as determined under the net share settlement method.

From the time of the issuance of the convertible senior notes, the average market price of the Company's common shares has been less than the initial conversion price, and consequently no shares have been included in diluted earnings per share for the conversion value of the convertible senior notes.

For fiscal 2021, 2020 and 2019, weighted average shares outstanding, assuming dilution, excludes the impact of 0.5 million, 0.2 million and 0.2 million anti-dilutive shares, respectively.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Share Repurchase Plan

In May 2019, the Company's Board of Directors authorized the repurchase of up to $ 500 million of Haemonetics common shares over the next two years.

In July 2019, the Company completed a $ 75.0 million repurchase of its common stock pursuant to an accelerated share repurchase agreement ("ASR") entered into with Citibank N.A.

("Citibank") in June 2019.

The total number of shares repurchased under the ASR was 0.6 million at an average price per share upon final settlement of $ 116.33 .

In October 2019, the Company completed a $ 50.0 million repurchase of its common stock pursuant to an ASR entered into with Morgan Stanley & Co.

LLC ("Morgan Stanley") in September 2019.

The total number of shares repurchased under the ASR was 0.4 million at an average price per share upon final settlement of $ 124.37 .

In January 2020, the Company completed an additional $ 50.0 million repurchase of its common stock pursuant to an ASR entered into with Bank of America, N.A.

("Bank of America") in December 2019.

The total number of shares repurchased under the ASR was 0.4 million at an average price per share upon final settlement of $ 114.73 .

As of March 28, 2020 , the total remaining authorization for repurchases of the Company's common stock under the share repurchase program was $ 325.0 million .

In May 2019, the Company's Board of Directors authorized the repurchase of up to $ 500 million of Haemonetics common shares over the two year period ending May 2021.

As of April 3, 2021, the total remaining authorization for repurchases of the Company's common stock under the share repurchase program was $ 325.0 million.

The Company did not make any additional share repurchases under this program which expired in May 2021.

The Company's revenue recognition policy is to recognize revenues from product sales, software and services in accordance with ASC Topic 606, Revenue from Contracts with Customers .

10 unchanged sentences

For goods or services for which observable standalone selling prices are not available, the Company uses an expected cost plus a margin approach to estimate the standalone selling price of each performance obligation.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of March 28, 2020 , the Company had $ 22.8 million of transaction price allocated to remaining performance obligations related to executed contracts with an original duration of one year or more.

As of April 3, 2021, the Company had $ 20.7 million of transaction price allocated to remaining performance obligations related to executed contracts with an original duration of one year or more.

The Company expects to recognize approximately 67 % of this amount as revenue within the next twelve months and the remaining balance thereafter.

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the condensed consolidated balance sheets.

The difference in timing between billing and revenue recognition primarily occurs in software licensing arrangements, resulting in contract assets and contract liabilities.

As of March 28, 2020 and March 30, 2019 , the Company had contract assets of $ 5.0 million and $ 5.6 million , respectively.

As of April 3, 2021 and March 28, 2020, the Company had contract assets of $ 4.8 million and $ 5.0 million, respectively.

The change is primarily due to the delay in billings compared to the revenue recognized.

Contract assets are classified as other current assets and other long-term assets on the consolidated balance sheet.

As of March 28, 2020 and March 30, 2019 , the Company had contract liabilities of $ 20.8 million and $ 20.3 million , respectively.

As of April 3, 2021 and March 28, 2020, the Company had contract liabilities of $ 20.9 million and $ 20.8 million, respectively.

During fiscal 2021, the Company recognized $ 17.1 million of revenue that was included in the above March 28, 2020 contract liability balance.

2 unchanged sentences

Cost is determined with the first-in, first-out method.

(In thousands)

(In thousands) April 3, 2021 March 28, 2020

Raw materials $ 74,910 $ 76,867

2 unchanged sentences

Total inventories $ 322,614 $ 270,276

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

PROPERTY, PLANT AND EQUIPMENT

Property and equipment consisted of the following:

(In thousands)

March 28, 2020

March 30, 2019

(In thousands) April 3, 2021 March 28, 2020

Land $ 5,116 $ 4,779

Building and building improvements 107,322 101,296

2 unchanged sentences

Haemonetics equipment 372,259 370,473

Total 817,258 832,434

accumulated depreciation and amortization ( 599,699 ) ( 579,035 )

1 unchanged sentence

Depreciation expense was $ 43.1 million, $ 76.6 million and $ 76.8 million in fiscal 2021 , 2020 and 2019, respectively.

There was $ 0.5 million of asset impairments included in depreciation expense during fiscal 2020 and no asset impairments included in depreciation expense during fiscal 2019 .

Fiscal 2018 included $ 0.3 million of additional depreciation expense due to asset impairments.

In December 2018, the Company entered into a lease for office space in Boston, MA to serve as its new corporate headquarters and replace its prior corporate headquarters located in Braintree, MA.

As a result of this lease agreement, the Company received a lease incentive in the form of property, plant and equipment totaling $ 5.6 million which was recorded upon commencement of the lease term in October 2019.

Refer to Note 12 , Leases , for additional information regarding this lease.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

During fiscal 2020, the Company sold $ 7.8 million of real estate and other assets associated with the Braintree corporate headquarters and entered into a lease with the buyer that allowed the Company to leaseback the facility on a rent-free basis through December 31, 2019 until the completion of its relocation to Boston, MA, which occurred during the third quarter of fiscal 2020.

As a result of this transaction, the Company received net cash proceeds of $ 15.0 million and non-cash consideration of $ 0.9 million related to a free rent period ending in December 2019.

The transaction resulted in a net gain of $ 8.1 million .

During the first quarter of fiscal 2020, the Company recognized a pre-tax impairment charge of $ 48.7 million relating to the Asset Transfer between the Company and CSL on May 13, 2019.

In early April 2021 , the Company was informed by CSL of its intent not to renew its supply agreement for the use of PCS2 plasma collection system devices and the purchase of disposable plasmapheresis kits in the U.S.

following the expiration of the current term in June 2022.

As a result, the Company incurred a one-time impairment of $ 20.9 million related to disposables manufacturing equipment previously recorded in construction in process which will not be placed into service as a result of the supply agreement expiration.

The impairment charge was included in cost of goods sold on the consolidated statements of income and impacted the Plasma reporting segment.

During the fiscal 2020, the Company recognized a pre-tax impairment charge of $ 48.7 million relating to the asset transfer between the Company and CSL on May 13, 2019.

This impairment is related to the carrying balances of the property, plant and equipment exceeding the consideration received under the terms of the agreement.

The charge will not result in any future cash expenditures.

For additional information regarding the transaction, refer to Note 5 - Divestiture .

During fiscal 2020, the Company impaired an additional $ 1.9 million of property, plant and equipment as a result of the Company's corporate headquarter move and a review of underperforming assets, resulting in total impairment charges of $ 50.6 million during fiscal 2020.

For additional information regarding the transaction, refer to Note 5 - Divestitures .

The Company also impaired an additional $ 1.9 million of property, plant and equipment as a result of the Company's corporate headquarter move and a review of underperforming assets, resulting in total impairment charges of $ 50.6 million during fiscal 2020.

Substantially all of these impairments were included within selling, general and administrative costs on the consolidated statements of income and primarily impacted the Plasma reporting segment.

During fiscal 2019 and 2018, the Company impaired $ 21.2 million and $ 2.2 million of property, plant and equipment, respectively.

During fiscal 2020, the Company sold $ 7.8 million of real estate and other assets associated with the Braintree corporate headquarters for net cash proceeds of $ 15.0 million and non-cash consideration of $ 0.9 million which resulted in a net gain of $ 8.1 million.

Additionally, in connection with the lease for office space in Boston, MA which serves as the new corporate headquarters, the Company received a lease incentive in the form of property, plant and equipment totaling $ 5.6 million which was recorded during fiscal 2020.

Refer to Note 12 , Leases , for additional information regarding this lease.

During fiscal 2019, the Company recorded impairment charges of $ 21.2 million, which consisted of $ 19.8 million of charges related to the discontinued use of the HDC filter media manufacturing line and $ 1.4 million of charges related to non-core and underperforming assets.

These impairments were included within cost of goods sold on the condensed consolidated statements of income and impacted the Blood Center reporting segment.

These impairments were included within cost of goods sold on the consolidated statements of income and impacted the Blood Center reporting segment.

Additionally, in the second quarter of fiscal 2019, the Company changed the estimated useful lives of PCS ® 2 devices included within Haemonetics Equipment, as these will be replaced by NexSys PCS ® devices.

During fiscal 2020 and 2019, the Company incurred $ 18.1 million and $ 18.0 million, respectively, of accelerated depreciation expense related to this change in estimate.

As of March 28, 2020 , the majority of PCS2 devices are fully depreciated.

As of March 28, 2020, the majority of PCS2 devices were fully depreciated.

GOODWILL AND INTANGIBLE ASSETS

1 unchanged sentence

Refer to Note 18, Segment and Enterprise-Wide Information, for additional information regarding the change in the Company's reportable segments .

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A reporting unit is defined as an operating segment or one level below an operating segment, referred to as a component.

6 unchanged sentences

The prior period information has been restated to conform to the current presentation:

(In thousands)

(In thousands) Plasma Blood Center Hospital Total

Carrying amount as of March 30, 2019 $ 28,979 $ 36,666 $ 145,174 $ 210,819

1 unchanged sentence

Carrying amount as of March 28, 2020 28,979 36,632 145,041 210,652

Divestitures — ( 2,181 ) ( 2,853 ) ( 5,034 )

Acquisitions — — 259,788 259,788

Currency translation 64 77 897 1,038

Carrying amount as of March 28, 2020

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Carrying amount as of April 3, 2021 $ 29,043 $ 34,528 $ 402,873 $ 466,444

The results of the Company's goodwill impairment test performed in the fourth quarter of fiscal 2021, 2020 and 2019 indicated that the estimated fair value of all reporting units exceeded their respective carrying values.

There were no reporting units at risk of impairment as of the fiscal 2021 , 2020 and 2019 annual test dates.

The gross carrying amount of intangible assets and the related accumulated amortization as of March 28, 2020 and March 30, 2019 is as follows:

(In thousands)

Gross Carrying

As of March 28, 2020

The gross carrying amount of intangible assets and the related accumulated amortization as of April 3, 2021 and March 28, 2020 is as follows:

(In thousands) Gross Carrying

Amount Accumulated

Amortization Net

As of April 3, 2021

Patents $ 10,482 $ 8,897 $ 1,585

Capitalized software 71,575 43,858 27,717

1 unchanged sentence

Customer contracts and related relationships 204,701 168,446 36,255

Trade names 9,516 3,921 5,595

Total $ 677,440 $ 320,640 $ 356,800

Non-amortizable:

1 unchanged sentence

In-process patents 4,676

(In thousands)

Gross Carrying

Total $ 8,683

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(In thousands) Gross Carrying

Amount Accumulated

Amortization Net

As of March 28, 2020

Patents $ 9,878 $ 8,653 $ 1,225

Capitalized software 76,740 43,022 33,718

1 unchanged sentence

Customer contracts and related relationships 193,797 158,890 34,907

Trade names 5,141 4,555 586

Total $ 423,839 $ 296,942 $ 126,897

Non-amortizable:

1 unchanged sentence

In-process patents 3,646

Total $ 6,209

During the fourth quarter of fiscal 2021, the Company acquired Cardiva and recorded $ 230.3 million of developed technology, $ 18.2 million of customer relationships, and $ 5.4 million of trademarks based on our preliminary purchase accounting valuation.

During the first quarter of fiscal 2021, the Company acquired enicor and recorded $ 13.4 million of developed technology, $ 0.3 million of customer relationships, and $ 0.3 million of trademarks.

Refer to Note 4, Acquisitions, for additional information regarding these acquisitions.

Intangible assets include the value assigned to license rights and other developed technology, patents, customer contracts and relationships and trade names.

The estimated useful lives for all of these intangible assets are approximately 5 to 15 years.

The changes to the net carrying value of the Company's intangible assets from March 30, 2019 to March 28, 2020 reflect the impact of amortization expense, partially offset by the investment in capitalized software.

The changes to the net carrying value of the Company's intangible assets from March 28, 2020 to April 3, 2021 reflect the impact of acquisitions and investments in capitalized software, partially offset by amortization expense.

Aggregate amortization expense for amortized intangible assets for fiscal 2021, 2020, and 2019 was $ 41.2 million, $ 34.2 million and $ 32.6 million, respectively.

There were no intangible asset impairments during fiscal 2021 , 2020, and 2019.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Future annual amortization expense on intangible assets is estimated to be as follows:

(In thousands)

Fiscal 2022 $ 53,672

Fiscal 2023 $ 39,371

Fiscal 2024 $ 34,937

Fiscal 2025 $ 27,582

Fiscal 2026 $ 22,247

For costs incurred related to the development of software to be sold, leased, or otherwise marketed, the Company applies the provisions of ASC Topic 985-20, Software - Costs of Software to be Sold, Leased or Marketed , which specifies that costs incurred internally in researching and developing a computer software product should be charged to expense until technological feasibility has been established for the product.

2 unchanged sentences

The Company capitalized $ 4.2 million and $ 3.9 million in software development costs for ongoing initiatives during fiscal 2021 and 2020, respectively.

At March 28, 2020 and March 30, 2019 , the Company had a total of $ 79.3 million and $ 75.4 million of software costs capitalized, of which $ 2.6 million and $ 8.7 million are related to in process software development initiatives, respectively, and the remaining balance represents in-service assets that are being amortized over their useful lives.

At April 3, 2021 and March 28, 2020, the Company had a total of $ 75.6 million and $ 79.3 million of software costs capitalized, of which $ 4.0 million and $ 2.6 million are related to in process software development initiatives, respectively, and the remaining balance represents in-service assets that are being amortized over their useful lives.

Amortization expense for capitalized software was $ 7.8 million, $ 8.2 million, and $ 7.6 million for the fiscal years ended April 3, 2021, March 28, 2020, and March 30, 2019, respectively.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Lessee Activity

12 unchanged sentences

Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received.

During the third quarter of fiscal 2020, the Company entered into a lease for office space in Boston, MA to serve as its new corporate headquarters and completed the relocation to this new office from its previous corporate headquarters located in Braintree, MA.

During the first quarter of fiscal 2021, the Company entered into a lease for manufacturing space in Clinton, PA.

The Company's current manufacturing operations in Leetsdale, PA will be relocated.

The lease term associated with the new manufacturing facility is 15 years and 7 months and includes two five year renewal options followed by one four year renewal option.

During the first quarter of fiscal 2021, the Company recorded a right-of-use asset of $ 11.3 million and corresponding liabilities of $ 15.4 million upon commencement of the lease term in May 2020.

In addition, the Company recorded a $ 4.1 million lease incentive receivable associated with this lease agreement which was received during the third quarter of fiscal 2021.

During fiscal 2020, the Company entered into a lease for office space in Boston, MA to serve as its new corporate headquarters and completed the relocation to this new office from its previous corporate headquarters located in Braintree, MA.

The lease term associated with the new corporate headquarters extends through June 30, 2032 and includes two five year renewal options.

During the third quarter of fiscal 2020, the Company recorded a right-of-use asset of $ 36.2 million and corresponding liabilities of $ 41.8 million upon commencement of the lease term in October 2019.

During fiscal 2020, the Company recorded a right-of-use asset of $ 36.2 million and corresponding liabilities of $ 41.8 million.

In addition, the Company recorded $ 5.6 million of property, plant and equipment as a result of a lease incentive received associated with this lease agreement.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table presents supplemental balance sheet information related to the Company's operating leases:

(In thousands)

(In thousands) April 3, 2021 March 28, 2020

Operating lease right-of-use assets in Other long-term assets

$ 59,856 $ 52,236

Operating lease liabilities in Other current liabilities

$ 7,708 $ 7,306

Operating lease liabilities in Other long-term liabilities

$ 62,960 $ 52,014

The following table presents the weighted average remaining lease term and discount rate information related to our operating leases:

April 3, 2021 March 28, 2020

Weighted average remaining lease term 10.7 10.0

Weighted average discount rate 4.59 % 3.97 %

During the fiscal year ended March 28, 2020 the Company's operating lease cost was $ 8.3 million .

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company's operating lease cost was $ 11.7 million and $ 8.3 million during fiscal 2021 and 2020, respectively.

The following table presents supplemental cash flow information related to our operating leases:

(In thousands)

(In thousands) April 3, 2021 March 28, 2020

Cash paid for amounts included in the measurement of operating lease liabilities

Operating cash flows used for operating leases $ 10,456 $ 6,780

The following table presents the maturities of our operating lease liabilities as of March 28, 2020 :

The following table presents the maturities of our operating lease liabilities as of April 3, 2021:

Fiscal Year ( In thousands )

Operating Leases

2022 $ 10,769

Thereafter 47,142

Total future minimum operating lease payments 89,965

9 unchanged sentences

Operating lease revenue represents less than 3 percent of the Company's total net sales.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTES PAYABLE AND LONG-TERM DEBT

Notes payable and long-term debt consisted of the following:

(In thousands)

March 28, 2020

March 30, 2019

(In thousands) April 3, 2021 March 28, 2020

Term loan, net of financing fees $ 301,019 $ 322,330

Convertible notes 406,461 —

Other borrowings 128 60,163

1 unchanged sentence

Long-term debt $ 690,592 $ 305,513

Convertible Senior Notes

In March 2021, the Company issued $ 500.0 million aggregate principal amount of 0 % convertible senior notes due 2026 (the “2026 Notes”).

The 2026 Notes are governed by the terms of the Indenture between the Company and U.S.

Bank National Association, as trustee (the “Indenture”).

The total net proceeds from the sale of the 2026 Notes, after deducting the initial purchasers’ discounts and debt issuance costs, were approximately $ 486.7 million.

The 2026 Notes will mature on March 1, 2026, unless earlier converted, redeemed or repurchased.

Holders may convert their notes at their option at any time prior to the close of business on the business day immediately preceding September 1, 2025 only under the following circumstances:

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

• During any calendar quarter (and only during such calendar quarter) beginning after June 30, 2021, if, the last reported sale price per share of the Company’s common stock exceeds 130 % of the applicable conversion price on each applicable trading day for at least 20 trading days (whether or not consecutive) in the period of the 30 consecutive trading day period ending on, and including, the last trading day of the immediately preceding calendar quarter;

• During the five business day period after any five consecutive trading day period in which, for each day of that period, the trading price per $1,000 principal amount of the 2026 Notes for such trading day was less than 98 % of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on such trading day;

• The Company issues to common stockholders any rights, options, or warrants, entitling them, for a period of not more than 60 days, to purchase shares of common stock at a price per share less than the average closing sale price of 10 consecutive trading days, or the Company’s election to make a distribution to common stockholders exceeding 10 % of the previous day’s closing sale price;

• Upon the occurrence of specified corporate events, as set forth in the indenture governing the 2026 Notes;

• Prior to the related redemption date if the Company calls the 2026 Notes for redemption

On or after September 1, 2025, until the close of business on the scheduled trading day immediately preceding the maturity date, holders may convert all or a portion of their 2026 Notes, in multiples of $1,000 principal amount, at any time, regardless of the foregoing circumstances.

The conversion rate for the 2026 Notes is 5.7033 shares of common stock per $1,000 principal amount of notes (which is equal to an initial conversion price of approximately $ 175.34 per share of the Company’s common stock), subject to adjustment as set forth in the Indenture.

Upon conversion, the Company will pay cash up to the aggregate principal amount of the notes to be converted and pay or deliver, as the case may be, cash, common stock or a combination of cash and common stock, at the Company’s election, in respect of the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the notes being converted.

If a make-whole adjustment event, as described in the Indenture, occurs and a holder elects to convert its 2026 Notes in connection with such make-whole adjustment event, such holder may be entitled to an increase in the conversion rate as described in the Indenture.

During fiscal 2021, the conditions allowing holders of the 2026 Notes to convert have not been met.

The 2026 Notes were therefore not convertible as of April 3, 2021 and were classified as long-term debt on the Company’s consolidated balance sheets.

The 2026 Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after March 5, 2024 and on or before the 40th scheduled trading day immediately before the maturity date, if the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately before the date the Company sends the related redemption notice at a redemption price equal to 100 % of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest to, but excluding the redemption date.

Upon the occurrence of certain fundamental changes involving the Company, holders of the 2026 Notes may require the Company to repurchase for cash all or part of their 2026 Notes at a repurchase price equal to 100 % of the principal amount of the 2026 Notes to be repurchased, plus

accrued and unpaid interest.

In accounting for the issuance of the 2026 Notes, the 2026 Notes were separated into liability and equity components.

The Company estimated the liability and equity components of the 2026 Notes to be $ 416.4 million and $ 83.6 million respectively, at the issuance date.

The value of the liability component was estimated by using an interest rate for nonconvertible debt with similar terms to the 2026 Notes.

An interest rate of 3.0 % was used to compute the initial fair value of the liability component.

The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the 2026 Notes.

This difference represents the debt discount that is amortized to interest expense over the contractual terms of the 2026 Notes using the effective interest rate method.

The carrying amount of the equity component representing the conversion option was $ 83.5 million.

The conversion option qualified for the equity scope exception from derivative accounting under ASC 815-10-15-74(a), and thus is equity classified.

The equity component was recorded in additional paid-in capital and is not remeasured as long as it continues to meet the conditions for equity classification.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The fair value is determined based on the quoted price for the 2026 Notes in an inactive market on the last trading day of the reporting period and is considered as level 2 in the fair value hierarchy.

In estimating the risk adjusted yield, the Company utilized both an income and market approach.

For the income approach, the Company used a convertible bond pricing model, which included several assumptions including volatility and the risk-free rate.

For the market approach, the Company performed an evaluation of issuances of debt securities issued by other comparable companies and broader market indices.

In accounting for the debt issuance costs of $ 13.3 million related to the 2026 Notes, the Company allocated the total amount incurred to the liability and equity components of the 2026 Notes in the same proportion as the allocation of the proceeds.

Issuance costs attributable to the liability component were $ 11.1 million and will be amortized, along with the debt discount, to interest expense over the contractual term of the 2026 Notes at an effective interest rate of 4.21 %.

Issuance costs attributable to the equity component were $ 2.2 million and are netted against the equity component in additional paid-in capital.

As of April 3, 2021, the $ 500.0 million principal balance was netted down by the $ 93.5 million of remaining debt discount, resulting in a net convertible note payable of $ 406.5 million.

Interest expense related to the 2026 Notes was $ 1.1 million, which is entirely attributable to the amortization of the debt discount.

In connection with the issuance of the 2026 Notes, the Company entered into capped call transactions with certain counterparties (“Capped Calls”).

The Capped Calls each have an initial strike price of approximately $ 175.34 per share, subject to certain adjustments, which corresponds to the initial conversion price of the 2026 Notes.

The Capped Calls have initial cap prices of $ 250.48 per share, subject to certain adjustments.

The Capped Calls are expected to partially offset the potential dilution to the Company’s common stock upon any conversion of the 2026 Notes, with such offset subject to a cap based on the cap price.

The Capped Calls cover, subject to anti-dilution adjustments, approximately 2.85 million shares of the Company’s common stock.

For accounting purposes, the Capped Calls are separate transactions, and not part of the 2026 Notes.

As these transactions meet certain accounting criteria, the Capped Calls are recorded in stockholders' equity and are not accounted for as derivatives.

The cost of $ 47.4 million incurred to purchase the Capped Calls was recorded as a reduction to additional paid-in capital and will not be remeasured.

Credit Facilities

On June 15, 2018, the Company entered into a credit agreement with certain lenders which provided for a $ 350.0 million term loan (the “Term Loan”) and a $ 350.0 million revolving loan (the “Revolving Credit Facility” and together with the Term Loan, the “Credit Facilities”).

1 unchanged sentence

Interest on the Credit Facilities is established using LIBOR plus 1.13 % - 1.75 %, depending on the Company's leverage ratio.

At March 28, 2020 , $ 323.8 million was outstanding under the Term Loan and $ 60.0 million was outstanding on the Revolving Credit Facility, both with an effective interest rate of 2.9 % .

In April 2020, the Company borrowed an additional $ 150.0 million on the Revolving Credit Facility.

The Company also had $ 25.6 million of uncommitted operating lines of credit to fund its global operations under which there were no outstanding borrowings as of March 28, 2020 .

At April 3, 2021, $ 301.9 million was outstanding under the Term Loan with an effective interest rate of 1.4 %.

During the fourth quarter of fiscal 2021, the Company entered into an additional $ 150.0 million term loan under the existing Credit Facilities and borrowed $ 290.0 million under the Revolving Credit Facility in connection with the acquisition of Cardiva.

Both of these borrowings were subsequently paid in full during the same period using the proceeds from the 2026 Notes.

At April 3, 2021, no borrowings were outstanding on the Revolving Credit Facility.

The Company also had $ 25.7 million of uncommitted operating lines of credit to fund its global operations under which there were no outstanding borrowings as of April 3, 2021.

Under the Credit Facilities, the Company is required to maintain a consolidated leverage ratio not to exceed 3.5 :1.0 and a consolidated interest coverage ratio not to be less than 4.0 :1.0 during periods when the Credit Facilities are outstanding.

In connection with the additional $150 million term loan borrowing, the Company and its lenders also agreed to increase the maximum consolidated leverage ratio the Company is required to maintain for the four consecutive quarters immediately following the closing of the Cardiva acquisition to 4.25 :1.0, after which the maximum consolidated leverage ratio the Company is required to maintain will revert to 3.5 :1.0.

In addition, the Company is required to satisfy these covenants, on a pro forma basis, in connection with any new borrowings (including any letter of credit issuances) on the Revolving Credit Facility as of the time of such borrowings.

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Consolidated EBITDA includes EBITDA adjusted by non-recurring and unusual transactions specifically as defined in the Credit Facilities.

The Credit Facilities also contain usual and customary non-financial affirmative and negative covenants that include certain restrictions with respect to subsequent indebtedness, liens, loans and investments (including acquisitions), financial reporting obligations, mergers, consolidations, dissolutions or liquidation, asset sales, affiliate transactions, change of its business, capital expenditures, share repurchase and other restricted payments.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

obligations, mergers, consolidations, dissolutions or liquidation, asset sales, affiliate transactions, change of its business, capital expenditures, share repurchase and other restricted payments.

These covenants are subject to exceptions and qualifications set forth in the credit agreement.

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In addition, the Credit Facilities include customary events of default, in certain cases subject to customary cure periods.

As of March 28, 2020 , the Company was in compliance with the covenants.

As of April 3, 2021, the Company was in compliance with the covenants.

Commitment Fee

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Expenses associated with the issuance of the Term Loan were capitalized and are amortized to interest expense over the life of the term loan using the effective interest method.

As of March 28, 2020 , the $ 323.8 million term loan balance was netted down by the $ 1.4 million of remaining debt discount, resulting in a net note payable of $ 322.3 million .

As of April 3, 2021, the $ 301.9 million term loan balance was netted down by the $ 0.9 million of remaining debt discount, resulting in a net note payable of $ 301.0 million.

Interest expense was $ 9.4 million, $ 13.5 million and $ 12.6 million for fiscal 2021, 2020 and 2019, respectively.

Accrued interest associated with the outstanding debt is included as a component of other current liabilities in the accompanying

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

consolidated balance sheets.

As of both March 28, 2020 and March 30, 2019 , the Company had an insignificant amount of accrued interest associated with the outstanding debt.

T he aggregate amount of debt maturing during the next five fiscal years and thereafter are as follows:

Accrued interest associated with the outstanding debt is included as a component of other current liabilities in the accompanying consolidated balance sheets.

As of both April 3, 2021 and March 28, 2020, the Company had an insignificant amount of accrued interest associated with the outstanding debt.

T he aggregate amount of debt maturing during the next five fiscal years are as follows:

Fiscal year (In thousands)

DERIVATIVES AND FAIR VALUE MEASUREMENTS

2022 $ 17,500

2023 $ 214,375

2024 $ 70,000

2026 $ 500,000

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

The Company manufactures, markets and sells its products globally.

For the fiscal year ended March 28, 2020 , 34.6 % of the Company's sales were generated outside the U.S.

For the fiscal year ended April 3, 2021, 40.0 % of the Company's sales were generated outside the U.S.

in local currencies.

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However, because the Company generally enters into forward contracts one year out, rates are fixed for a one-year period, thereby facilitating financial planning and resource allocation.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Designated Foreign Currency Hedge Contracts

All of the Company's designated foreign currency hedge contracts as of March 28, 2020 and March 30, 2019 were cash flow hedges under ASC 815, Derivatives and Hedging ("ASC 815").

All of the Company's designated foreign currency hedge contracts as of April 3, 2021 and March 28, 2020 were cash flow hedges under ASC 815, Derivatives and Hedging (“ASC 815”).

The Company records the effective portion of any change in the fair value of designated foreign currency hedge contracts in other comprehensive income until the related third-party transaction occurs.

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In the event the hedged forecasted transaction does not occur, or it becomes probable that it will not occur, the Company will reclassify the amount of any gain or loss on the related cash flow hedge to earnings at that time.

The Company had designated foreign currency hedge contracts outstanding in the contract amount of $ 93.8 million as of March 28, 2020 and $ 81.5 million as of March 30, 2019 .

At March 28, 2020 , gains of $ 0.1 million , net of tax, will be reclassified to earnings within the next twelve months.

Substantially all currency cash flow hedges outstanding as of March 28, 2020 mature within twelve months.

The Company had designated foreign currency hedge contracts outstanding in the contract amount of $ 56.0 million as of April 3, 2021 and $ 93.8 million as of March 28, 2020.

At April 3, 2021, a gain of $ 1.9 million, net of tax, will be reclassified to earnings within the next twelve months.

Substantially all currency cash flow hedges outstanding as of April 3, 2021 mature within twelve months.

Non-Designated Foreign Currency Contracts

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These forward contracts are marked-to-market with changes in fair value recorded to earnings.

The Company had non-designated foreign currency hedge contracts under ASC 815 outstanding in the contract amount of $ 98.0 million as of March 28, 2020 and $ 37.4 million as of March 30, 2019 .

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company had non-designated foreign currency hedge contracts under ASC 815 outstanding in the contract amount of $ 95.6 million as of April 3, 2021 and $ 98.0 million as of March 28, 2020.

Interest Rate Swaps

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The Company designated the Swaps as cash flow hedges of variable interest rate risk associated with $ 345.6 million of indebtedness.

For fiscal 2020 , the Company recorded a loss of $ 8.9 million , net of tax, in accumulated other comprehensive loss to recognize the effective portion of the fair value of the Swaps that qualify as cash flow hedges.

For fiscal 2021, the Company recorded a gain of $ 2.0 million, net of tax, in accumulated other comprehensive loss to recognize the effective portion of the fair value of the Swaps that qualify as cash flow hedges.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Trade Receivables

In the ordinary course of business, the Company grants trade credit to its customers on normal credit terms.

In an effort to reduce its credit risk, the Company (i) establishes credit limits for all customers, (ii) performs ongoing credit evaluations of customers’ financial condition, (iii) monitors the payment history and aging of customers’ receivables, and (iv) monitors open orders against an individual customer’s outstanding receivable balance.

The Company's allowance for credit losses is maintained for trade accounts receivable based on the expected collectability, the historical collection experience, the length of time an account is outstanding, the financial position of the customer and information provided by credit rating services.

Effective March 29, 2020, the Company adopted Update No.

2016-13, Financial Instruments – Credit Losses (Topic 326) which requires consideration of events or circumstances indicating historic collection rates may not be indicative of future collectability.

For example, potential adverse changes to customer liquidity from new macroeconomic events such as the COVID-19 pandemic must be taken into consideration.

To date, the Company has not experienced significant customer payment defaults, or identified other significant collectability concerns as a result of the pandemic.

The following is a rollforward of the allowance for credit losses:

Twelve Months Ended

(In thousands) April 3, 2021 March 28, 2020 March 30, 2019

Beginning balance $ 3,824 $ 3,937 $ 2,111

Credit (gain) loss ( 991 ) 365 2,097

Write-offs ( 607 ) ( 478 ) ( 271 )

Ending balance $ 2,226 $ 3,824 $ 3,937

Fair Value of Derivative Instruments

The following table presents the effect of the Company's derivative instruments designated as cash flow hedges and those not designated as hedging instruments under ASC 815 in its consolidated statements of income and comprehensive income for the fiscal year ended March 28, 2020 .

Derivative Instruments

Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Loss

Amount of Gain Reclassified from Accumulated Other Comprehensive Loss into Earnings

Location in Consolidated Statements of Income and Comprehensive Income

Amount of Gain Excluded from

Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Loss Amount of (Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings Location in Consolidated Statements of Income and Comprehensive Income Amount of (Loss) Excluded from

Effectiveness

Location in Consolidated Statements of Income and Comprehensive Income

Testing Location in Consolidated Statements of Income and Comprehensive Income

(In thousands)

Designated foreign currency hedge contracts, net of tax

Net revenues, COGS and SG&A

Interest and other expense, net

Non-designated foreign currency hedge contracts

Interest and other expense, net

Designated interest rate swaps, net of tax

Interest and other expense, net

The Company did not have fair value hedges or net investment hedges outstanding as of March 28, 2020 or March 30, 2019 .

As of March 28, 2020 , no material deferred tax assets were recognized for designated foreign currency hedges.

Designated foreign currency hedge contracts, net of tax $ 1,919 $ ( 2,404 ) Net revenues, COGS and SG&A $ ( 741 ) Interest and other expense, net

Non-designated foreign currency hedge contracts — — $ ( 4,405 ) Interest and other expense, net

Designated interest rate swaps, net of tax $ ( 2,410 ) $ ( 4,453 ) Interest and other expense, net

The Company did not have fair value hedges or net investment hedges outstanding as of April 3, 2021 or March 28, 2020.

As of April 3, 2021, no material deferred tax assets were recognized for designated foreign currency hedges.

ASC 815 requires all derivative instruments to be recognized at their fair values as either assets or liabilities on the balance sheet.

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In certain instances, the Company may utilize financial models to measure fair value.

Generally, the Company uses inputs that include quoted prices for similar assets or liabilities in active markets;

Generally, the Company uses inputs that

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

include quoted prices for similar assets or liabilities in active markets;

quoted prices for identical or similar assets or liabilities in markets that are not active;

1 unchanged sentence

and inputs derived principally from, or corroborated by, observable market data by correlation or other means.

As of March 28, 2020 , the Company has classified its derivative assets and liabilities within Level 2 of the fair value hierarchy prescribed by ASC 815, as discussed below, because these observable inputs are available for substantially the full term of its derivative instruments.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following tables present the fair value of the Company's derivative instruments as they appear in its consolidated balance sheets as of March 28, 2020 and March 30, 2019 :

(In thousands)

Balance Sheet

As of March 28, 2020

As of March 30, 2019

As of April 3, 2021, the Company has classified its derivative assets and liabilities within Level 2 of the fair value hierarchy prescribed by ASC 815, as discussed below, because these observable inputs are available for substantially the full term of its derivative instruments.

The following tables present the fair value of the Company's derivative instruments as they appear in its consolidated balance sheets as of April 3, 2021 and March 28, 2020:

(In thousands) Location in

Balance Sheet As of April 3, 2021 As of March 28, 2020

Derivative Assets:

Designated foreign currency hedge contracts

Other current assets

Non-designated foreign currency hedge contracts

Other current assets

Designated foreign currency hedge contracts Other current assets $ 2,061 $ 839

Non-designated foreign currency hedge contracts Other current assets 104 377

$ 2,165 $ 1,216

Derivative Liabilities:

Designated foreign currency hedge contracts

Other current liabilities

Non-designated foreign currency hedge contracts

Other current liabilities

Designated interest rate swaps

Other current liabilities

Designated interest rate swaps

Other long-term liabilities

Designated foreign currency hedge contracts Other current liabilities $ 454 $ 1,854

Non-designated foreign currency hedge contracts Other current liabilities 349 1,435

Designated interest rate swaps Other current liabilities 5,550 5,581

Designated interest rate swaps Other long-term liabilities 4,301 9,475

$ 10,654 $ 18,345

Other Fair Value Measurements

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Fair Value Measured on a Recurring Basis

Financial assets and financial liabilities measured at fair value on a recurring basis consist of the following as of March 28, 2020 and March 30, 2019 .

As of March 28, 2020

(In thousands)

Financial assets and financial liabilities measured at fair value on a recurring basis consist of the following as of April 3, 2021 and March 28, 2020.

As of April 3, 2021

(In thousands) Level 1 Level 2 Level 3 Total

Money market funds $ 49,699 $ — $ — $ 49,699

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Non-designated foreign currency hedge contracts — 104 — 104

$ 49,699 $ 2,165 $ — $ 51,864

Designated foreign currency hedge contracts $ — $ 454 $ — $ 454

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Designated interest rate swaps — 9,851 — 9,851

Contingent consideration — — 28,733 28,733

$ — $ 10,654 $ 28,733 $ 39,387

As of March 28, 2020

Level 1 Level 2 Level 3 Total

Money market funds $ 44,564 $ — $ — $ 44,564

1 unchanged sentence

Non-designated foreign currency hedge contracts — 377 — 377

$ 44,564 $ 1,216 $ — $ 45,780

Designated foreign currency hedge contracts $ — $ 1,854 $ — $ 1,854

Non-designated foreign currency hedge contracts — 1,435 — 1,435

Designated interest rate swaps — 15,056 — 15,056

$ — $ 18,345 $ — $ 18,345

Foreign currency hedge contracts - The fair value of foreign currency hedge contracts was measured using significant other observable inputs and valued by reference to over-the-counter quoted market prices for similar instruments.

The Company does not believe that the fair value of these derivative instruments differs significantly from the amount that could be realized upon settlement or maturity, or that the changes in fair value will have a significant effect on its results of operations, financial condition or cash flows.

Interest rate swaps - The fair values of interest rate swaps are measured using the present value of expected future cash flows using market-based observable inputs, including credit risk and interest rate yield curves.

The Company does not believe that the fair values of these derivative instruments differ significantly from the amounts that could be realized upon settlement or maturity, or that the changes in fair value will have a significant effect on its results of operations, financial condition or cash flows.

Contingent consideration - The fair value of contingent consideration liabilities is based on significant unobservable inputs, including management estimates and assumptions, and is measured based on the probability-weighted present value of the payments expected to be made.

Accordingly, the fair value of contingent consideration has been classified as level 3 within the fair value hierarchy.

The recurring level 3 fair value measurements of contingent consideration liabilities include the following significant unobservable inputs:

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Fair Value at Valuation Unobservable

(In thousands) April 3, 2021 Technique Input Range

Revenue-based payments $ 24,299 Monte Carlo Simulation Model Discount rate 2.2 %

Projected year of payment 2022 - 2023

Revenue-based payments $ 2,189 Discounted cash flow Discount rate 8.5 %

Projected year of payment 2021 - 2023

Regulatory-based payment $ 2,245 Discounted cash flow Discount rate 4.9 %

Probability of payment 0% - 100%

Projected year of payment 2021 - 2023

As of April 3, 2021, the maximum potential contingent consideration that the Company could be required to pay is $ 39.5 million.

The fair value of contingent consideration associated with acquisitions was $ 28.7 million at April 3, 2021.

As of April 3, 2021, $ 20.9 million was included in other liabilities and $ 7.8 million was included in other long-term liabilities on the consolidated balance sheet.

A reconciliation of the change in the fair value of contingent consideration is included in the following table:

(In thousands)

Balance at March 28, 2020 $ —

Acquisition date fair value of contingent consideration 28,219

Change in fair value 189

Currency translation 325

Balance at April 3, 2021 $ 28,733

Other Fair Value Disclosures

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The Company's matching contributions amounted to approximately $ 4.9 million, $ 4.7 million and $ 5.0 million in fiscal 2021 , 2020 and 2019, respectively.

Upon Board approval, additional discretionary contributions can also be made.

Upon the Company's Board of Directors' approval, additional discretionary contributions can also be made.

No discretionary contributions were made for the 401k Plan in fiscal 2021 , 2020, or 2019.

1 unchanged sentence

The employer contributions to these plans totaled $ 0.7 million, $ 0.6 million and $ 0.6 million in fiscal 2021 , 2020 and 2019, respectively.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Defined Benefit Plans

3 unchanged sentences

and (c) recognize changes in the funded status of a defined benefit post retirement plan in the year in which the changes occur.

Accordingly, the Company is required to report changes in its funded status in comprehensive loss on its consolidated statement of stockholders’ equity and consolidated statement of comprehensive income (loss).

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Benefits under these plans are generally based on either career average or final average salaries and creditable years of service as defined in the plans.

3 unchanged sentences

(In thousands) 2021 2020 2019

Service cost $ 1,861 $ 1,829 $ 1,893

Interest cost on benefit obligation 279 301 340

3 unchanged sentences

Plan settlements and curtailments — ( 239 ) ( 82 )

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Totals $ 2,070 $ 1,744 $ 1,989

The activity under those defined benefit plans are as follows:

(In thousands)

(In thousands) April 3,

2021 March 28,

Change in Benefit Obligation:

Benefit Obligation, beginning of year $ ( 28,370 ) $ ( 30,637 )

Service cost ( 1,861 ) ( 1,829 )

Interest cost ( 279 ) ( 301 )

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Funded Status *

$ ( 15,749 ) $ ( 13,083 )

Unrecognized net actuarial loss 2,948 1,867

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Accordingly, that plan has no assets included in the information presented above.

The total asset value associated with the reinsurance contracts was $ 6.3 million and $ 6.1 million at March 28, 2020 and March 30, 2019 , respectively.

The total liability for this plan, which is included in the table above, was $ 9.2 million and $ 9.4 million as of March 28, 2020 and March 30, 2019 , respectively.

The accumulated benefit obligation for all plans was $ 27.9 million and $ 28.6 million for fiscal 2020 and 2019 , respectively.

There were no plans where the plan assets were greater than the accumulated benefit obligation as of March 28, 2020 and March 30, 2019 .

The total asset value associated with the reinsurance contracts was $ 7.0 million and $ 6.3 million at April 3, 2021 and March 28, 2020, respectively.

The total liability for this plan, which is included in the table above, was $ 11.1 million and $ 9.2 million as of April 3, 2021 and March 28, 2020, respectively.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The accumulated benefit obligation for all plans was $ 30.6 million and $ 27.9 million for fiscal 2021 and 2020, respectively.

There were no plans where the plan assets were greater than the accumulated benefit obligation as of April 3, 2021 and March 28, 2020.

The components of the change recorded in the Company's accumulated other comprehensive loss related to its defined benefit plans, net of tax, are as follows (in thousands):

Balance as of April 1, 2017

Balance as of March 31, 2018 $ ( 323 )

Actuarial loss ( 51 )

2 unchanged sentences

Balance as of March 30, 2019 $ ( 527 )

Actuarial loss

Actuarial gain 614

Prior service cost ( 87 )

4 unchanged sentences

Plan settlements and curtailments —

Balance as of March 28, 2020

Balance as of April 3, 2021 $ ( 560 )

The Company expects to amortize $ 0.4 million from accumulated other comprehensive loss to net periodic benefit cost during fiscal 2022.

The weighted average rates used to determine the net periodic benefit costs and projected benefit obligations were as follows:

2021 2020 2019

Discount rate 0.58 % 0.82 % 0.97 %

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Maturities are managed so that sufficient liquidity exists to meet immediate and future benefit payment requirements.

ASC Topic 820, Fair Value Measurements and Disclosures , provides guidance for reporting and measuring the plan assets of the Company's defined benefit pension plan at fair value as of March 28, 2020 .

Using the same three-level valuation hierarchy for disclosure of fair value measurements as described in Note 14 , Derivatives and Fair Value Measurements , all of the assets of the Company’s plan are classified within Level 2 of the fair value hierarchy because the plan assets are primarily insurance contracts.

Expected benefit payments for both plans are estimated using the same assumptions used in determining the Company’s benefit obligation at March 28, 2020 .

ASC Topic 820, Fair Value Measurements and Disclosures , provides guidance for reporting and measuring the plan assets of the Company's defined benefit pension plan at fair value as of April 3, 2021.

Using the same three-level valuation hierarchy for disclosure of fair value measurements as described in Note 14, Financial Instruments and Fair Value Measurements , all of the assets of the Company’s plan are classified within Level 2 of the fair value hierarchy because the plan assets are primarily insurance contracts.

Expected benefit payments for both plans are estimated using the same assumptions used in determining the Company’s benefit obligation at April 3, 2021.

Benefit payments will depend on future employment and compensation levels, average years employed and average life spans, among other factors, and changes in any of these factors could significantly affect these estimated future benefit payments.

4 unchanged sentences

Fiscal 2022 $ 1,629

Fiscal 2023 1,376

Fiscal 2024 1,425

Fiscal 2025 1,250

Fiscal 2026 1,287

Fiscal 2027-2031 7,359

The Company's contributions for fiscal 2022 are expected to be consistent with the current year.

4 unchanged sentences

Legal costs are expensed as incurred.

Product Recalls

In August 2018, the Company issued a voluntary recall of certain whole blood collection kits sold to its Blood Center customers in the U.S.

The recall resulted from some collection sets' filters failing to adequately remove leukocytes from collected blood.

As a result of the recall, the Company's Blood Center customers may have conducted tests to confirm that the collected blood was adequately leukoreduced, sold the collected blood labeled as non-leukoreduced at a lower price or discarded the collected blood.

As of March 28, 2020 , the Company has recorded cumulative charges of $ 1.9 million associated with this recall which consists of $ 0.1 million of charges associated with customer returns and inventory reserves and $ 1.8 million of charges associated with customer claims.

Substantially all outstanding claims have been paid as of March 28, 2020 .

During the third quarter of fiscal 2021, the Company received a subpoena from the U.S.

Attorney’s Office for the District of Massachusetts.

The subpoena requests certain documents regarding the Company’s apheresis and autotransfusion devices and disposables, including documents relating to product complaints and adverse event reporting, regulatory clearances and product design changes, among other matters.

The Company is fully cooperating with this inquiry.

CAPITAL STOCK

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Shares of common stock subject to outstanding grants under the 2005 Equity Plan as of the Effective Date that terminate, expire, or are otherwise canceled without having been exercised will be added to the share reserve at the applicable 2019 Equity Plan ratios.

The total shares available for future grant as of March 28, 2020 were 5,891,063 .

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The total shares available for future grant as of April 3, 2021 were 5,031,509 .

Share-Based Compensation

1 unchanged sentence

The total amount of share-based compensation expense, which is recorded on a straight line basis, is as follows:

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(In thousands) 2021 2020 2019

2 unchanged sentences

Cost of goods sold 754 1,222 1,338

$ 25,516 $ 20,454 $ 17,188

Stock Options

4 unchanged sentences

Forfeitures are estimated based on historical experience.

A summary of stock option activity for the fiscal year ended March 28, 2020 is as follows:

A summary of stock option activity for the fiscal year ended April 3, 2021 is as follows:

Outstanding Weighted

Exercise Price

per Share Weighted

Life (years) Aggregate

Outstanding at March 28, 2020 918,988 $ 60.43 4.30 $ 37,471

Granted 205,846 103.36

Exercised ( 128,302 ) 48.76

Forfeited/Canceled ( 35,845 ) 81.66

Outstanding at March 28, 2020

Exercisable at March 28, 2020

Vested or expected to vest at March 28, 2020

Outstanding at April 3, 2021 960,687 $ 70.29 4.04 $ 40,179

Exercisable at April 3, 2021 472,527 $ 47.74 2.94 $ 30,402

Vested or expected to vest at April 3, 2021 893,212 $ 68.08 3.42 $ 39,325

The total intrinsic value of options exercised was $ 8.2 million, $ 18.1 million and $ 19.4 million during fiscal 2021 , 2020 and 2019, respectively.

As of March 28, 2020 , there was $ 8.4 million of total unrecognized compensation cost related to non-vested stock options.

As of April 3, 2021, there was $ 9.1 million of total unrecognized compensation cost related to non-vested stock options.

This cost is expected to be recognized over a weighted average period of 2.5 years.

The fair value was estimated using the Black-Scholes option-pricing model based on the average of the high and low stock prices at the grant date and the weighted average assumptions specific to the underlying options.

The fair value was estimated using the Black-Scholes option-pricing model based on the closing stock price at the grant date and the weighted average assumptions specific to the underlying options.

Expected volatility assumptions are based on the historical volatility of the Company's common stock over the expected term of the option.

2 unchanged sentences

The expected life of the option was estimated with reference to historical exercise patterns, the contractual term of the option and the vesting period.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The assumptions utilized for option grants during the periods presented are as follows:

2021 2020 2019

Volatility 33.5 % 28.2 % 26.1 %

Expected life (years) 4.9 4.9 4.9

2 unchanged sentences

Grant-date fair value per Option $ 30.53 $ 28.25 $ 26.67

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Restricted Stock Units

2 unchanged sentences

The fair market value of RSUs is determined based on the market value of the Company’s shares on the date of grant.

A summary of RSU activity for the fiscal year ended March 28, 2020 is as follows:

A summary of RSU activity for the fiscal year ended April 3, 2021 is as follows:

Shares Weighted

Grant Date Fair Value

Unvested at March 28, 2020 268,217 $ 75.34

Unvested at March 28, 2020

Granted 116,296 102.19

Vested ( 119,692 ) 66.87

Forfeited ( 16,358 ) 85.08

Unvested at April 3, 2021 248,463 $ 91.25

The weighted-average grant-date fair value of RSUs granted and total fair value of RSUs vested are as follows:

2021 2020 2019

Grant-date fair value per RSU $ 102.19 $ 102.32 $ 94.55

Fair value of RSUs vested $ 66.87 $ 54.58 $ 40.04

As of March 28, 2020 , there was $ 14.3 million of total unrecognized compensation cost related to non-vested restricted stock units.

As of April 3, 2021, there was $ 15.4 million of total unrecognized compensation cost related to non-vested restricted stock units.

This cost is expected to be recognized over a weighted average period of 2.5 years.

2 unchanged sentences

The value of these PSUs is generally based on relative total shareholder return which equals total shareholder return for the Company as compared with total shareholder return of the PSU comparison group, measured over a three year performance period.

PSUs granted in fiscal 2020 have a comparison group consisting of the Standard and Poor's ("S&P") Mid Cap 400 Index while PSUs granted in fiscal 2019 and 2018 have a comparison group consisting of the S&P Small Cap 600 and the S&P Mid Cap 400 indices.

PSUs granted in fiscal 2021 and 2020 have a comparison group consisting of the Standard and Poor's (“S&P”) Mid Cap 400 Index while PSUs granted in fiscal 2019 have a comparison group consisting of the S&P Small Cap 600 and the S&P Mid Cap 400 indices.

Depending on the Company's relative performance during the performance period, a recipient of the award is entitled to receive a number of ordinary shares equal to a percentage, ranging from 0 % to 200 %, of the award granted.

3 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A summary of PSU activity for the fiscal year ended March 28, 2020 is as follows:

A summary of PSU activity for the fiscal year ended April 3, 2021 is as follows:

Shares Weighted

Grant Date Fair Value

Unvested at March 28, 2020 293,111 $ 95.17

Unvested at March 28, 2020

216,668 123.92

( 254,340 ) 47.43

Forfeited ( 14,548 ) 121.76

Unvested at April 3, 2021 240,891 $ 129.24

(1) Includes 127,170 shares issued for awards vested during fiscal 2021 based on achievement of performance metrics.

(2) Includes the vesting of 254,340 shares that were earned for awards granted in fiscal 2018 for various performance periods ending during fiscal 2021, based on actual relative total shareholder return of 200%.

Also includes the vesting of 53,654 shares that were earned in connection with the fiscal 2018 and 2017 internal metrics awards granted to the Company's chief executive officer for the performance period ended March 30, 2019 that were certified by the Committee in May 2019 at 144.31% and 80.05%, respectively.

The Company uses the Monte Carlo model to estimate the probability of satisfying the performance criteria and the resulting fair value of PSU awards with market conditions.

The assumptions used in the Monte Carlo model for PSUs granted during each fiscal year were as follows:

2021 2020 2019

Expected stock price volatility 36.79 % 28.64 % 27.07 %

2 unchanged sentences

The weighted-average grant-date fair value of PSUs granted and total fair value of PSUs vested are as follows:

2021 2020 2019

Grant-date fair value per PSU $ 123.92 $ 146.93 $ 115.64

Fair value of PSUs vested $ 47.43 $ 34.78 $ 29.20

As of March 28, 2020 , there was $ 15.2 million of total unrecognized compensation cost related to non-vested performance share units.

As of April 3, 2021, there was $ 14.7 million of total unrecognized compensation cost related to non-vested performance share units.

This cost is expected to be recognized over a weighted average period of 1.7 years.

5 unchanged sentences

The purchase price for shares is the lower of 85 % of the fair market value of the common stock at the beginning of the purchase period, or 85 % of such value at the end of the purchase period.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The fair values of shares purchased under the Employee Stock Purchase Plan are estimated using the Black-Scholes single option-pricing model with the following weighted average assumptions:

2021 2020 2019

Volatility 49.8 % 34.7 % 30.0 %

Expected life (months) 6 6 6

2 unchanged sentences

The weighted average grant date fair value of the six -month option inherent in the Purchase Plan was approximately $ 30.77 , $ 27.11 and $ 21.51 during fiscal 2021 , 2020 and 2019, respectively.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

SEGMENT AND ENTERPRISE-WIDE INFORMATION

3 unchanged sentences

Following the reorganization, the Company's reportable segments are as follows:

• Blood Center

Management measures and evaluates the operating segments based on operating income.

1 unchanged sentence

In addition, certain amounts that management considers to be non-recurring or non-operational are excluded from segment operating income because management evaluates the operating results of the segments excluding such items.

These items include restructuring and turnaround costs, deal amortization, asset impairments, accelerated depreciation, costs related to compliance with the European Union Medical Device Regulation, gains and losses on asset dispositions, certain transaction costs and legal charges.

These items include restructuring and turnaround costs, deal amortization, gains and losses on dispositions and sale of assets, asset impairments, accelerated device depreciation and related costs, costs related to compliance with the European Union Medical Device Regulation, transaction and integration costs and certain tax settlements and unusual or infrequent and material litigation-related charges.

Although these amounts are excluded from segment operating income, as applicable, they are included in the reconciliations that follow.

3 unchanged sentences

(In thousands) 2021 2020 2019

Plasma $ 333,334 $ 460,637 $ 426,781

Blood Center 307,370 325,661 335,557

Hospital 210,606 194,604 190,821

Net revenues by business unit 851,310 980,902 953,159

20,758 19,830 19,906

Effect of exchange rates ( 1,605 ) ( 12,253 ) ( 5,486 )

Net revenues $ 870,463 $ 988,479 $ 967,579

(1) Reflects revenue for service, maintenance and parts.

3 unchanged sentences

Segment operating income

Plasma $ 172,463 $ 225,351 $ 180,300

Blood Center 141,962 159,802 163,628

Hospital 84,066 80,669 76,338

Segment operating income 398,491 465,822 420,266

Corporate expenses (1)

( 256,751 ) ( 255,727 ) ( 263,603 )

Effect of exchange rates 12,830 7,920 8,367

Impairment of assets and other related charges (2)

Deal amortization ( 32,830 ) ( 25,746 ) ( 24,803 )

PCS2 accelerated depreciation and related costs

Impairment of assets, PCS2 accelerated depreciation and other related charges ( 25,696 ) ( 75,750 ) ( 40,296 )

Transaction and Integration costs ( 18,421 ) ( 568 ) —

Restructuring and turnaround costs ( 15,661 ) ( 19,878 ) ( 13,660 )

European Medical Device Regulation costs

Gain on sale of assets (4)

European Medical Device Regulation costs and other ( 4,130 ) ( 1,506 ) —

Litigation-related charges ( 897 ) 701 ( 2,726 )

Gains on divestitures and sale of assets 32,812 8,083 —

Operating income $ 89,747 $ 103,351 $ 83,545

(1) Reflects shared service expenses including quality and regulatory, customer and field service, research and development, manufacturing and supply chain, as well as other corporate support functions.

(2) Includes a $1.9 million adjustment to fiscal 2020 Plasma revenue due to an accelerated charge incurred as a result of the divestiture of the Union, South Carolina liquid solutions operation.

(3) Includes transaction costs and costs related to the resolution of customer damages associated with product recalls.

(4) Reflects gain on the sale of the Company's Braintree corporate headquarters.

(In thousands) 2021 2020 2019

Depreciation and amortization

Plasma $ 24,093 $ 63,347 $ 61,721

Blood Center 39,672 38,429 38,074

Hospital 20,522 8,513 9,623

Total depreciation and amortization (excluding impairment charges) $ 84,287 $ 110,289 $ 109,418

(In thousands)

(In thousands) April 3,

2021 March 28,

2020 March 30,

Long-lived assets (1)

Plasma $ 105,599 $ 141,903 $ 192,628

Blood Center 83,225 93,758 127,272

Hospital 28,735 17,738 24,079

Total long-lived assets $ 217,559 $ 253,399 $ 343,979

(1) Long-lived assets are comprised of property, plant and equipment.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Selected information by principle operating regions is presented below:

(In thousands)

(In thousands) April 3,

2021 March 28,

2020 March 30,

Long-lived assets (1)

United States $ 159,749 $ 186,488 $ 269,849

Japan 1,515 2,037 1,726

Europe 10,384 10,143 11,200

Asia 30,588 29,175 30,930

Other 15,323 25,556 30,274

Total long-lived assets $ 217,559 $ 253,399 $ 343,979

(1) Long-lived assets are comprised of property, plant and equipment.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(In thousands) 2021 2020 2019

United States $ 522,607 $ 646,204 $ 606,845

Japan 77,676 72,218 69,908

Europe 159,077 153,347 164,504

Asia 105,820 109,295 118,700

Other 5,283 7,415 7,622

Net revenues $ 870,463 $ 988,479 $ 967,579

Management reviews revenue based on the reportable segments noted above.

2 unchanged sentences

Additionally, product line revenues also include service revenues which are excluded from the reportable segments.

N et revenues by product line are as follows:

Net revenues by product line are as follows:

(In thousands) 2021 2020 2019

2 unchanged sentences

Hospital products and services 216,583 198,419 196,539

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Net revenues $ 870,463 $ 988,479 $ 967,579

ACCUMULATED OTHER COMPREHENSIVE LOSS

The following is a roll-forward of the components of accumulated other comprehensive loss, net of tax, for the years ended March 28, 2020 and March 30, 2019 :

(In thousands)

Foreign currency

Defined benefit plans

Net Unrealized Gain/loss on Derivatives

Balance, March 31, 2018

Other comprehensive loss before reclassifications

Amounts reclassified from accumulated other comprehensive loss (1)

Net current period other comprehensive loss

The following is a roll-forward of the components of accumulated other comprehensive loss, net of tax, for the years ended April 3, 2021 and March 28, 2020:

(In thousands) Foreign currency Defined benefit plans Net Unrealized Gain/loss on Derivatives Total

Balance, March 30, 2019 $ ( 25,513 ) $ ( 527 ) $ ( 4,340 ) $ ( 30,380 )

Other comprehensive (loss) income before reclassifications ( 5,587 ) 524 ( 10,111 ) ( 15,174 )

Amounts reclassified from accumulated other comprehensive loss (1)

Amounts reclassified from accumulated other comprehensive (loss) income (1)

— ( 206 ) 625 419

Net current period other comprehensive (loss) income ( 5,587 ) 318 ( 9,486 ) ( 14,755 )

Balance, March 28, 2020 $ ( 31,100 ) $ ( 209 ) $ ( 13,826 ) $ ( 45,135 )

Other comprehensive income (loss) before reclassifications 9,572 ( 379 ) ( 489 ) 8,704

Amounts reclassified from accumulated other comprehensive gain (1)

— 28 6,856 6,884

Net current period other comprehensive income (loss) 9,572 ( 351 ) 6,367 15,588

Balance, April 3, 2021 $ ( 21,528 ) $ ( 560 ) $ ( 7,459 ) $ ( 29,547 )

(1) Presented net of income taxes, the amounts of which are insignificant.

2 unchanged sentences

SUMMARY OF QUARTERLY DATA (UNAUDITED)

(In thousands, except per share data)

Three months ended

(In thousands, except per share data) Three months ended

Fiscal 2021 June 27,

2020 September 26,

Operating (loss) income

Net (loss) income

2020 December 26,

2020 April 3,

Net revenues $ 195,577 $ 209,486 $ 240,371 $ 225,029

Gross profit $ 90,030 $ 105,744 $ 120,257 $ 81,807

Operating income (loss) $ 11,715 $ 58,782 $ 40,425 $ ( 21,175 )

Net income (loss) $ 10,527 $ 48,101 $ 31,882 $ ( 11,041 )

Per share data:

Net (loss) income:

(In thousands, except per share data)

Three months ended

Net income (loss):

Basic $ 0.21 $ 0.95 $ 0.63 $ ( 0.22 )

Diluted $ 0.21 $ 0.94 $ 0.62 $ ( 0.22 )

(In thousands, except per share data) Three months ended

Fiscal 2020 June 29,

2019 September 28,

2019 December 28,

2019 March 28,

Net revenues $ 238,451 $ 252,566 $ 258,970 $ 238,492

Gross profit $ 115,906 $ 127,000 $ 128,050 $ 113,557

Operating income $ ( 13,302 ) $ 49,739 $ 40,907 $ 26,007

Net (loss) income

Net income (loss) $ ( 8,479 ) $ 37,486 $ 29,895 $ 17,624

Per share data:

Net (loss) income:

Net income (loss):

Basic $ ( 0.17 ) $ 0.74 $ 0.59 $ 0.35

Diluted $ ( 0.17 ) $ 0.72 $ 0.58 $ 0.34

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data