What changed in this filing

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Item 1. Financial Statements

2021-08-11 compared with 2021-02-02 · 241 added, 240 removed, 424 unchanged (53% of the section changed)

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HAEMONETICS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND COMPREHENSIVE (LOSS) INCOME

(Unaudited in thousands, except per share data)

Three Months Ended Nine Months Ended

2020 December 28,

2019 December 26,

2020 December 28,

Three Months Ended

2021 June 27,

Net revenues $ 228,528 $ 195,577

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Selling, general and administrative 91,218 62,302

Impairment of assets — 1,876 1,028 50,597

Amortization of intangible assets 12,379 8,263

Gains on divestitures and sale of assets ( 9,603 ) —

2 unchanged sentences

Interest and other expense, net ( 4,398 ) ( 3,735 )

Income before provision for income taxes 37,374 37,829 100,310 65,192

Provision for income taxes 5,492 7,934 9,800 6,290

Net income $ 31,882 $ 29,895 $ 90,510 $ 58,902

Net income per share - basic $ 0.63 $ 0.59 $ 1.79 $ 1.16

Net income per share - diluted $ 0.62 $ 0.58 $ 1.77 $ 1.13

(Loss) income before provision (benefit) for income taxes ( 3,008 ) 7,980

Provision (benefit) for income taxes 1,446 ( 2,547 )

Net (loss) income $ ( 4,454 ) $ 10,527

Net (loss) income per share - basic $ ( 0.09 ) $ 0.21

Net (loss) income per share - diluted $ ( 0.09 ) $ 0.21

Weighted average shares outstanding

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Diluted 50,939 51,247

Comprehensive income $ 40,496 $ 32,296 $ 105,787 $ 55,577

Comprehensive (loss) income $ ( 4,007 ) $ 11,956

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

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(Unaudited in thousands, except share data)

2020 March 28,

2021 April 3,

Current assets:

Cash and cash equivalents $ 173,462 $ 192,305

Accounts receivable, less allowance of $2,525 at December 26, 2020 and $3,824 at March 28, 2020 146,939 165,207

Accounts receivable, less allowance of $2,236 at July 3, 2021 and $2,226 at April 3, 2021 132,908 127,555

Inventories, net 326,500 322,614

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Property, plant and equipment, net 214,782 217,559

Intangible assets, less accumulated amortization of $309,951 at December 26, 2020 and $296,942 at March 28, 2020 119,716 133,106

Intangible assets, less accumulated amortization of $335,060 at July 3, 2021 and $320,640 at April 3, 2021 353,688 365,483

Goodwill 466,314 466,444

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Authorized — 150,000,000 shares;

Issued and outstanding — 50,817,222 shares at December 26, 2020 and 50,322,930 shares at March 28, 2020 508 503

Issued and outstanding — 51,012,969 shares at July 3, 2021 and 50,868,820 shares at April 3, 2021 510 509

Additional paid-in capital 551,108 602,727

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Shares Par Value

Balance, March 28, 2020 50,323 $ 503 $ 553,229 $ 78,512 $ ( 45,135 ) $ 587,109

Employee stock purchase plan 22 — 2,144 — — 2,144

Exercise of stock options 28 1 1,192 — — 1,193

Issuance of restricted stock, net of cancellations 298 3 ( 3 ) — — —

Share-based compensation expense — — 6,167 — — 6,167

Net income — — — 10,527 — 10,527

Other comprehensive income — — — — 1,429 1,429

Balance, June 27, 2020 50,671 $ 507 $ 562,729 $ 89,039 $ ( 43,706 ) $ 608,569

Exercise of stock options 2 — 67 — — 67

Issuance of restricted stock, net of cancellations 30 — — — — —

Share-based compensation expense — — 5,952 — — 5,952

Net income — — — 48,101 — 48,101

Other comprehensive income — — — — 5,234 5,234

Balance, September 26, 2020 50,703 $ 507 $ 568,748 $ 137,140 $ ( 38,472 ) $ 667,923

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

Employee stock purchase plan 39 — 2,210 — — 2,210

1 unchanged sentence

Issuance of restricted stock, net of cancellations 91 1 ( 1 ) — — —

Cumulative effect of change in accounting standards — — ( 61,156 ) 1,035 — ( 60,121 )

Share-based compensation expense — — 6,828 — — 6,828

Net income — — — 31,882 — 31,882

Net loss — — — ( 4,454 ) — ( 4,454 )

Other comprehensive income — — — — 447 447

Balance, December 26, 2020 50,817 $ 508 $ 579,480 $ 169,022 $ ( 29,858 ) $ 719,152

HAEMONETICS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited in thousands)

Balance, July 3, 2021 51,013 $ 510 $ 551,108 $ 154,562 $ ( 29,100 ) $ 677,080

Common Stock Additional

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Exercise of stock options 28 1 1,192 — — 1,193

Shares repurchased ( 616 ) ( 6 ) ( 21,473 ) ( 53,521 ) — ( 75,000 )

Issuance of restricted stock, net of cancellations 298 3 ( 3 ) — — —

Share-based compensation expense — — 6,167 — — 6,167

Net loss — — — ( 8,479 ) — ( 8,479 )

Other comprehensive loss — — — — ( 3,618 ) ( 3,618 )

Balance, June 29, 2019 50,771 $ 508 $ 525,038 $ 99,418 $ ( 33,998 ) $ 590,966

Exercise of stock options 64 1 2,409 — — 2,410

Shares repurchased ( 360 ) ( 4 ) 1,274 ( 51,270 ) — ( 50,000 )

Issuance of restricted stock, net of cancellations 133 1 ( 1 ) — — —

Share-based compensation expense — — 5,000 — — 5,000

Net income — — — 10,527 — 10,527

Other comprehensive loss — — — — ( 2,108 ) ( 2,108 )

Balance, September 28, 2019 50,608 $ 506 $ 533,720 $ 85,634 $ ( 36,106 ) $ 583,754

Employee stock purchase plan 20 1 1,537 — — 1,538

Exercise of stock options 60 — 1,667 — — 1,667

Shares repurchased ( 411 ) ( 4 ) ( 4,335 ) ( 45,661 ) — ( 50,000 )

Issuance of restricted stock, net of cancellations 114 1 ( 1 ) — — —

Share-based compensation expense — — 5,325 — — 5,325

Net income — — — 29,895 — 29,895

Other comprehensive income — — — — 1,429 1,429

Balance, December 28, 2019 50,391 $ 504 $ 537,913 $ 69,868 $ ( 33,705 ) $ 574,580

Balance, June 27, 2020 50,671 $ 507 $ 562,729 $ 89,039 $ ( 43,706 ) $ 608,569

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

2 unchanged sentences

(Unaudited in thousands)

Nine Months Ended

2020 December 28,

Three Months Ended

2021 June 27,

Cash Flows from Operating Activities:

Net income $ 90,510 $ 58,902

Net (loss) income $ ( 4,454 ) $ 10,527

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

1 unchanged sentence

Depreciation and amortization 25,033 20,724

Amortization of fair value inventory step-up 5,295 —

Impairment of assets 5,144 1,028

Share-based compensation expense 6,828 6,167

Deferred tax benefit ( 3,953 ) ( 4,747 )

Provision for losses on accounts receivable and inventory 2,942 ( 2,246 )

Amortization of deferred finance costs 1,019 147

(Benefit) provision for losses on inventory ( 544 ) 1,452

Gains on divestitures and sale of assets ( 9,603 ) —

Contingent consideration expense 9,774 —

Other non-cash operating activities ( 355 ) ( 841 )

5 unchanged sentences

Change in accounts payable and accrued expenses ( 29,299 ) ( 25,223 )

Net cash provided by operating activities 107,258 111,811

Net cash (used in) provided by operating activities ( 1,680 ) 11,812

Cash Flows from Investing Activities:

3 unchanged sentences

Proceeds from sale of property, plant and equipment 568 406

Net cash provided by (used in) investing activities 3,658 ( 12,041 )

Net cash used in investing activities ( 15,851 ) ( 23,896 )

Cash Flows from Financing Activities:

Net (decrease) increase in short-term loans ( 60,000 ) 30,000

Net increase in short-term loans — 150,000

Repayment of term loan borrowings ( 4,375 ) ( 4,375 )

Share repurchases — ( 175,000 )

Proceeds from employee stock purchase plan 2,210 2,144

1 unchanged sentence

Other 31 ( 11 )

Net cash used in financing activities ( 65,307 ) ( 142,580 )

Net cash (used in) provided by financing activities ( 1,634 ) 148,951

Effect of exchange rates on cash and cash equivalents 322 1,547

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All intercompany transactions have been eliminated.

Operating results for the nine months ended December 26, 2020 are not necessarily indicative of the results that may be expected for the full fiscal year ending April 3, 2021 or any other interim period.

Operating results for the three months ended July 3, 2021 are not necessarily indicative of the results that may be expected for the full fiscal year ending April 2, 2022 or any other interim period.

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

As of December 26, 2020, the Company has concluded that substantial doubt about its ability to continue as a going concern does not exist.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the annual report on Form 10-K for the fiscal year ended March 28, 2020.

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

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the Annual Report on Form 10-K for the fiscal year ended April 3, 2021.

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 4, Acquisitions for information pertaining to acquisitions that were signed or closed subsequent to December 26, 2020.

There were no other material recognized or unrecognized subsequent events as of or for the three and nine months ended December 26, 2020.

Subsequent events have been evaluated as required.

There were no material recognized or unrecognized subsequent events as of or for the three months ended July 3, 2021.

RECENT ACCOUNTING PRONOUNCEMENTS

Standards Implemented

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 did not have a material impact on the Company's unaudited condensed 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.

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) Update No.

2019-12, Income Taxes (Topic 740).

The new guidance improves consistent application of and simplifies the accounting for income taxes by removing certain exceptions to the general principals in Topic 740.

The Company adopted ASC Update No.

2018-15 during the first quarter of fiscal 2021.

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

2019-12 effective April 4, 2021.

The adoption did not have a material impact on the financial position or results of operations.

In August 2020, the FASB issued ASC ASU Update No.

2020-06 Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40).

The amendments simplify the complexity associated with applying U.S.

GAAP for certain financial instruments with characteristics of liabilities and equity.

2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

The Company early adopted ASC Update No.

2020-06 effective April 4, 2021 using the modified retrospective method, which resulted in a decrease of $ 61.2 million to additional paid-in capital, a decrease to non-current deferred tax liabilities of $ 20.0 million, and an increase of $ 80.3 million to non-current convertible notes, net, on the Condensed Consolidated Balance Sheets.

Additionally, retained earnings was adjusted to remove amortization expense recognized in prior periods related to the debt discount and the convertible notes no longer have a debt discount that will be amortized, net of taxes.

The impact to retained earnings on the Condensed Consolidated Balance Sheets as of April 4, 2021 is an increase of $ 1.0 million.

RESTRUCTURING

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In order to realize these opportunities, the Company undertakes restructuring-type activities to transform its business.

In July 2019, the Board of Directors of the Company approved a new Operational Excellence Program (the “2020 Program”) and delegated authority to the Company's management to determine the detail of the initiatives that will comprise the program.

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 the three and nine months ended December 26, 2020, the Company incurred $ 3.1 million and $ 11.1 million, respectively, of restructuring and turnaround costs under this program.

During the three and nine months ended December 28, 2019, the Company incurred $ 3.9 million and $6.8 million, respectively, of restructuring and turnaround costs under this program.

Total cumulative charges under this program are $ 22.9 million.

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 the three months ended December 26, 2020, the Company incurred minimal charges of restructuring and turnaround costs under this program.

During the nine months ended December 26, 2020, the Company incurred $ 0.5 million of restructuring and turnaround costs under this program.

During the three and nine months ended December 28, 2019, the Company incurred $ 3.9 million and $ 6.8 million, respectively, of restructuring and turnaround costs under this program.

In July 2019, the Board of Directors of the Company approved the Operational Excellence Program (the “2020 Program”) and delegated authority to the Company's management to determine the detail of the initiatives that will comprise the program.

During the first quarter of fiscal 2022, the Company revised the program to improve product and service quality, reduce cost principally in its manufacturing and supply chain operations and ensure sustainability while helping to offset impacts from a previously announced customer loss, rising inflationary pressures and effects of the COVID-19 pandemic.

The Company now expects to incur aggregate charges between $ 95 million and $ 105 million by the end of fiscal 2025.

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 the three months ended July 3, 2021 and June 27, 2020, the Company incurred $ 9.9 million and $ 3.5 million, respectively, of restructuring and restructuring related costs under this program.

Total cumulative charges under this program are $ 36.9 million.

The 2018 Program is substantially complete.

The following table summarizes the activity for restructuring reserves related to the 2020 Program and the 2018 Program and prior programs for the nine months ended December 26, 2020, substantially all of which relates to employee severance and other employee costs:

(In thousands) 2020 Program 2018 Program and Prior Programs Total

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

The following table summarizes the activity for restructuring reserves related to the 2020 Program and prior programs for the three months ended July 3, 2021, substantially all of which relates to employee severance and other employee costs:

(In thousands) 2020 Program Prior Programs Total

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

Costs incurred, net of reversals 3,391 29 3,420

Payments ( 63 ) — ( 63 )

Balance at December 26, 2020 $ 595 $ 520 $ 1,115

The following presents the restructuring costs by line item within our accompanying unaudited condensed consolidated statements of income and comprehensive income:

Three Months Ended Nine Months Ended

(In thousands) December 26,

2020 December 28,

2019 December 26,

2020 December 28,

Non-cash adjustments — 11 11

Balance at July 3, 2021 $ 3,903 $ 477 $ 4,380

The following presents the restructuring costs by line item within our accompanying unaudited Condensed Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income:

Three Months Ended

(In thousands) July 3,

2021 June 27,

Cost of goods sold $ 2,253 $ 503

2 unchanged sentences

$ 3,420 $ 1,065

As of December 26, 2020, the Company had a restructuring liability of $ 1.1 million, of which $ 0.7 million is payable within the next twelve months.

In addition to the restructuring costs included in the table above, the Company also incurred costs that do not constitute restructuring under ASC 420, Exit and Disposal Cost Obligations, and which the Company instead refers to as turnaround costs.

These costs consist primarily of expenditures directly related to the restructuring actions and include program management costs associated with the 2020 Program and operational performance improvement initiatives.

The tables below present restructuring and turnaround costs by reportable segment:

Restructuring costs Three Months Ended Nine Months Ended

(In thousands) December 26, 2020 December 28, 2019 December 26, 2020 December 28, 2019

As of July 3, 2021, the Company had a restructuring liability of $ 4.4 million, of which $ 3.9 million is payable within the next twelve months.

These costs consist primarily of expenditures directly related to the restructuring actions and include program management costs associated with the implementation of outsourcing initiatives and recent accounting standards.

The tables below present restructuring and restructuring related costs by reportable segment:

Restructuring costs Three Months Ended

(In thousands) July 3, 2021 June 27, 2020

Plasma $ 2,288 $ 568

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Total $ 3,420 $ 1,065

Turnaround costs Three Months Ended Nine Months Ended

(In thousands) December 26, 2020 December 28, 2019 December 26, 2020 December 28, 2019

Restructuring related costs Three Months Ended

(In thousands) July 3, 2021 June 27, 2020

Plasma $ 1,738 $ —

3 unchanged sentences

Total $ 6,635 $ 2,935

Total restructuring and turnaround costs $ 3,143 $ 7,798 $ 11,583 $ 13,582

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, the Company will pay upfront consideration of $ 475.0 million in cash, subject to customary working capital and certain other adjustments as of the closing of the transaction, as well as up to $ 35.0 million in additional contingent consideration payable over the next two years based on sales growth.

The transaction is not subject to a financing contingency, and the Company expects to finance the transaction through a combination of its cash on hand, revolving credit facility and an additional $ 150.0 million term loan anticipated to be borrowed under its existing credit facility.

The transaction is expected to close in the fourth quarter of fiscal 2021.

Total restructuring and restructuring related costs $ 10,055 $ 4,000

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 contingent consideration, which could total a maximum of $ 35.0 million is 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.

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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 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 July 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 purchase price of $ 442.3 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 251,407

Other long-term assets 1,868

Total assets acquired $ 535,309

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 $ 442,269

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 July 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 $ 251.4 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

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 unaudited Condensed Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income, respectively.

HAS Intellectual Property

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In connection with the transaction, the Company has agreed to pay up to $ 15.0 million to HemoAssay in contingent consideration based on certain developmental and manufacturing based milestones.

During the three months ended July 3, 2021, the Company made $ 2.5 million of milestone payments which were recorded within intangible assets on the Condensed Consolidated Balance Sheets.

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

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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 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 December 26, 2020, 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 following amounts represent the preliminary determination of the fair value of the identifiable assets acquired and liabilities assumed for enicor completed during the first nine months of fiscal 2021:

(In thousands) December 26, 2020

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

(In thousands) April 1, 2020

Inventory $ 634

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Other current liabilities 289

Contingent consideration (current) 504

Contingent consideration (non-current) 3,416

Deferred tax liability 3,036

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Intangible assets acquired consist of the following:

(In thousands) Amount Weighted-Average Amortization Period

Completed technology $ 13,441 10

Customer relationships 347 10

Trademark 302 10

(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

The amount of acquisition-related costs incurred associated with the acquisition was $ 0.2 million for the three and nine months ended December 26, 2020.

Unaudited Pro Forma Financial Information

Enicor had an immaterial impact to the Company's net revenues and net income for the period post acquisition through December 26, 2020.

The unaudited estimated pro forma impact of the results of the acquisition of enicor as if it was consummated on March 29, 2020 are immaterial.

The amount of acquisition-related costs incurred associated with the acquisition was $ 0.2 million for the three months ended June 27, 2020.

Fajardo, Puerto Rico Manufacturing Operations

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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 an $ 11.7 million gain upon closing of the transaction in the second quarter of fiscal 2021 and an additional $ 1.5 million gain in the third quarter of 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.

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

During the three months ended July 3, 2021, the Company recognized an additional gain of $ 9.6 million for contingent consideration earned.

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 $ 1.3 million will be received one-year from the closing date.

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

The disposal group included $ 2.2 million of intangible assets, $ 2.2 million of accounts receivable, $ 0.3 million of other assets, $ 3.3 million of liabilities and $ 3.3 million of 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 upon closing of the transaction in the second quarter of fiscal 2021.

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statutory tax rate.

For the three and nine months ended December 26, 2020, the Company reported income tax expense of $ 5.5 million and $ 9.8 million, respectively, representing effective tax rates of 14.7 % and 9.8 %, respectively.

The effective tax rate for the three and nine months ended December 26, 2020 includes discrete tax benefits recognized from excess stock compensation deductions of $ 1.0 million and $ 5.1 million, respectively.

The effective tax rates were also impacted by the jurisdictional mix of earnings including divestiture transactions.

During the nine months ended December 26, 2020, the Company sold its Fajardo, Puerto Rico manufacturing operations, certain U.S.

blood donor management software solution assets, and its wholly-owned subsidiary Inlog Holdings France SAS.

The tax expense on divestitures, including the associated valuation allowance impacts, were included in the computation of the annual effective tax rate.

Refer to Note 5, Divestitures , for information pertaining to these divestitures.

For the three and nine months ended December 28, 2019, the Company reported an income tax provision of $ 7.9 million and $ 6.3 million, respectively, representing effective tax rates of 21.0 % and 9.6 %, respectively.

The effective tax rate for the nine months ended December 28, 2019 was lower than the U.S.

statutory tax rate primarily due to a discrete tax benefit recognized from excess stock compensation deductions of $ 3.1 million and $ 12.4 million, respectively.

The effective tax rates were also impacted by the jurisdictional mix of earnings and the impact of the divestiture of the Union, South Carolina facility.

For the three months ended July 3, 2021, the Company reported income tax expense of $ 1.4 million representing an effective tax rate of ( 48.1 )%.

The effective tax rate for the three months ended July 3, 2021 includes $ 0.8 million of discrete tax expense relating to stock compensation shortfalls.

For the three months ended June 27, 2020, the Company reported an income tax benefit of $ 2.5 million representing an effective tax rate benefit of 31.9 %.

The effective tax rate for the three months ended June 27, 2020 includes discrete tax benefits recognized from excess stock compensation deductions of $ 4.0 million.

The effective tax rate was also impacted by the jurisdictional mix of earnings.

During the three months ended June 27, 2020, the Company transferred certain intangible assets amongst its wholly-owned subsidiaries prior to the divestiture of its Fajardo, Puerto Rico manufacturing operations.

The tax expense on the intercompany sale and establishment of deferred tax assets (including the associated valuation allowance impacts) was included in the computation of the annual effective tax rate.

EARNINGS PER SHARE

The following table provides a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations.

Three Months Ended Nine Months Ended

(In thousands, except per share amounts) December 26,

2020 December 28,

2019 December 26,

2020 December 28,

Net income $ 31,882 $ 29,895 $ 90,510 $ 58,902

Three Months Ended

(In thousands, except per share amounts) July 3,

2021 June 27,

Net (loss) income $ ( 4,454 ) $ 10,527

Weighted average shares 50,939 50,418

Basic income per share $ ( 0.09 ) $ 0.21

Net income $ 31,882 $ 29,895 $ 90,510 $ 58,902

Net (loss) income $ ( 4,454 ) $ 10,527

Basic weighted average shares 50,939 50,418

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

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

For the three and nine months ended December 26, 2020, weighted average shares outstanding, assuming dilution, excludes the impact of 0.4 million and 0.6 million anti-dilutive shares, respectively.

For both the three and nine months ended December 28, 2019, weighted average shares outstanding, assuming dilution, excludes the impact of 0.2 million anti-dilutive shares.

Diluted earnings per share is calculated using its weighted-average outstanding common stock 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 the three months ended July 3, 2021, the Company recognized a net loss;

therefore it excluded the impact of outstanding stock awards from the diluted loss per share calculation as its inclusion would have an anti-dilutive effect.

For the three months ended June 27, 2020, weighted average shares outstanding, assuming dilution, excludes the impact of 0.5 million anti-dilutive shares.

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 .

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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.

As of December 26, 2020, the Company had $ 17.9 million of its transaction price allocated to remaining performance obligations related to executed contracts with an original duration of one year or more.

As of July 3, 2021, the Company had $ 18.4 million of its 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 69 % of this amount as revenue within the next twelve months and the remaining balance thereafter.

1 unchanged sentence

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

As of December 26, 2020 and March 28, 2020, the Company had contract assets of $ 5.4 million and $ 5.0 million, respectively.

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

As of July 3, 2021 and April 3, 2021, the Company had contract assets of $ 4.8 million and $ 4.8 million, respectively.

Contract assets are classified as other current assets and other long-term assets on the Condensed Consolidated Balance Sheets.

As of December 26, 2020 and March 28, 2020, the Company had contract liabilities of $ 16.7 million and $ 20.8 million, respectively.

During the three and nine months ended December 26, 2020, the Company recognized $ 2.5 million and $ 16.3 million, respectively, of revenue that was included in the above March 28, 2020 contract liability balance.

Contract liabilities decreased by an additional $ 2.5 million during the three and nine months ended December 26, 2020 as a result of the sale of certain U.S.

blood donor management software solution assets and the Company's wholly-owned subsidiary Inlog Holdings France SAS.

Refer to Note 5, Divestitures for additional detail.

Contract liabilities are classified as other liabilities and other long-term liabilities on the condensed consolidated balance sheets.

As of July 3, 2021 and April 3, 2021, the Company had contract liabilities of $ 24.2 million and $ 20.9 million, respectively.

During the three months ended July 3, 2021, the Company recognized $ 8.6 million of revenue that was included in the above April 3, 2021 contract liability balance.

Inventories are stated at the lower of cost or market and include the cost of material, labor and manufacturing overhead.

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

(In thousands) December 26,

2020 March 28,

(In thousands) July 3,

2021 April 3,

Raw materials $ 75,278 $ 74,910

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Lessee Activity

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

During 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 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 fiscal 2021.

Lessor Activity

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NOTES PAYABLE AND LONG-TERM DEBT

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”).

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.

During the first quarter of fiscal 2022, the conditions allowing holders of the 2026 Notes to convert have not been met.

The 2026 Notes were therefore not convertible as of July 3, 2021 and were classified as long-term debt on the Company’s Condensed Consolidated Balance Sheets.

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.

On April 4, 2021, the Company adopted ASC Update No.

2020-06 using the modified retrospective method, which resulted in a decrease of $ 61.2 million to additional paid-in capital, a decrease to non-current deferred tax liabilities of $ 20.0 million, and an increase of $ 80.3 million to non-current convertible notes, net, on the Condensed Consolidated Balance Sheets.

The impact to retained earnings on the Condensed Consolidated Balance Sheets as of April 4, 2021 is an increase of $ 1.0 million.

As of July 3, 2021, the $ 500.0 million principal balance was netted down by $ 12.5 million of deferred financing costs.

Credit Facilities

The Credit Facilities expire on June 15, 2023.

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Under the Credit Facilities, the Company is required to maintain certain leverage and interest coverage ratios specified in the credit agreement as well as other customary non-financial affirmative and negative covenants.

At December 26, 2020, $ 310.6 million was outstanding under the Term Loan with an effective interest rate of 1.4 %.

At July 3, 2021, $ 297.5 million was outstanding under the Term Loan with an effective interest rate of 1.9 %.

There were no borrowings outstanding on the Revolving Credit Facility.

The Company also has $ 26.2 million of uncommitted operating lines of credit to fund its global operations under which there were no outstanding borrowings as of December 26, 2020.

The Company has required scheduled principal payments of $ 8.7 million during the remainder of fiscal 2021, $ 17.5 million during fiscal 2022, $ 214.4 million during fiscal 2023 and $ 70.0 million during fiscal 2024.

The Company was in compliance with the leverage and interest coverage ratios specified in the Credit Facilities as well as all other bank covenants as of December 26, 2020.

The Company also has $ 25.5 million of uncommitted operating lines of credit to fund its global operations under which there were no outstanding borrowings as of July 3, 2021.

The Company has required scheduled principal payments of $ 13.1 million during the remainder of fiscal 2022, $ 214.4 million during fiscal 2023 and $ 70.0 million during fiscal 2024.

The Company was in compliance with the leverage and interest coverage ratios specified in the Credit Facilities as well as all other bank covenants as of July 3, 2021.

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

The Company manufactures, markets and sells its products globally.

During the three and nine months ended December 26, 2020, 38.6 % and 40.7 %, respectively, of the Company's sales were generated outside the U.S., generally in foreign currencies.

During the three months ended July 3, 2021, 38.3 % of the Company's sales were generated outside the U.S., generally in foreign currencies.

The Company also incurs certain manufacturing, marketing and selling costs in international markets in local currency.

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Designated Foreign Currency Hedge Contracts

All of the Company's designated foreign currency hedge contracts as of December 26, 2020 and March 28, 2020 were cash flow hedges under ASC 815, Derivatives and Hedging (“ASC 815”).

All of the Company's designated foreign currency hedge contracts as of July 3, 2021 and April 3, 2021 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 would 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 $ 78.8 million as of December 26, 2020 and $ 93.8 million as of March 28, 2020.

At December 26, 2020, a loss of $ 1.4 million, net of tax, will be reclassified to earnings within the next twelve months.

Substantially all currency cash flow hedges outstanding as of December 26, 2020 mature within twelve months.

The Company had designated foreign currency hedge contracts outstanding in the contract amount of $ 40.5 million as of July 3, 2021 and $ 56.0 million as of April 3, 2021.

At July 3, 2021, a loss of $ 0.9 million, net of tax, will be reclassified to earnings within the next twelve months.

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

Non-Designated Foreign Currency Contracts

4 unchanged sentences

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 $ 90.5 million as of December 26, 2020 and $ 98.0 million as of March 28, 2020.

The Company had non-designated foreign currency hedge contracts under ASC 815 outstanding in the contract amount of $ 82.4 million as of July 3, 2021 and $ 95.6 million as of April 3, 2021.

Interest Rate Swaps

8 unchanged sentences

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

For the nine months ended December 26, 2020, a gain of $ 0.3 million, net of tax, was recorded in accumulated other comprehensive loss to recognize the effective portion of the fair value of the Swaps that qualify as cash flow hedges.

For the three months ended July 3, 2021, a gain of $ 2.0 million, net of tax, was recorded in accumulated other comprehensive loss to recognize the effective portion of the fair value of the Swaps that qualify as cash flow hedges.

Trade Receivables

7 unchanged sentences

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

Three Months Ended Nine Months Ended

(In thousands) December 26, 2020 December 28, 2019 December 26, 2020 December 28, 2019

Three Months Ended

(In thousands) July 3, 2021 June 27, 2020

Beginning balance $ 2,226 $ 3,824

3 unchanged sentences

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 condensed consolidated statements of income and comprehensive income for the nine months ended December 26, 2020:

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 unaudited Condensed Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income for the three months ended July 3, 2021:

(In thousands) Amount of Gain

3 unchanged sentences

Earnings Location in

Condensed Consolidated Statements of Income and Comprehensive Income Amount of Gain (Loss) Excluded from

Condensed Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income Amount of Gain (Loss) Excluded from

Effectiveness

Testing Location in

Condensed Consolidated Statements of Income and Comprehensive Income

Condensed Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income

Designated foreign currency hedge contracts, net of tax $ ( 897 ) $ 329 Net revenues, COGS and SG&A $ 371 Interest and other expense, net

1 unchanged sentence

Designated interest rate swaps, net of tax $ 973 $ ( 1,130 ) Interest and other expense, net $ —

The Company did not have fair value hedges or net investment hedges outstanding as of December 26, 2020 or March 28, 2020.

As of December 26, 2020, no material deferred tax assets were recognized for designated foreign currency hedges.

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

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

As of December 26, 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.

The following tables present the fair value of the Company's derivative instruments as they appear in its condensed consolidated balance sheets as of December 26, 2020 and March 28, 2020:

As of July 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 Condensed Consolidated Balance Sheets as of July 3, 2021 and April 3, 2021:

(In thousands) Location in Condensed Consolidated

Balance Sheets As of As of

December 26, 2020 March 28, 2020

July 3, 2021 April 3, 2021

Derivative Assets:

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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 December 26, 2020 and March 28, 2020.

As of December 26, 2020

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

As of July 3, 2021

(In thousands) Level 1 Level 2 Level 3 Total

8 unchanged sentences

$ — $ 8,826 $ 38,402 $ 47,228

As of March 28, 2020

As of April 3, 2021

Level 1 Level 2 Level 3 Total

6 unchanged sentences

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

Contingent Consideration — — 28,733 28,733

$ — $ 10,654 $ 28,733 $ 39,387

7 unchanged sentences

Fair Value at Valuation Unobservable

(In thousands) December 26, 2020 Technique Input Range

(In thousands) July 3, 2021 Technique Input Range

Revenue-based payments $ 34,073 Monte Carlo Simulation Model Discount rate 2.2 %

Projected year of payment 2022 - 2023

Revenue-based payments $ 2,119 Discounted cash flow Discount rate 8.5 %

3 unchanged sentences

Projected year of payment 2021 - 2023

As of December 26, 2020, the maximum potential contingent consideration that the Company could be required to pay is $ 4.5 million.

The fair value of contingent consideration associated with acquisitions was $ 3.9 million at December 26, 2020.

As of December 26, 2020, $ 0.5 million was included in other liabilities and $ 3.4 million was included in other long-term liabilities on the condensed consolidated balance sheet.

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

During three months ended July 3, 2021, the Company increased the fair value of the contingent consideration related to the acquisition of Cardiva by $ 9.8 million, which was recorded as selling, general and administrative expenses within the unaudited Condensed Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income.

The fair value of contingent consideration associated with acquisitions was $ 38.4 million at July 3, 2021.

As of July 3, 2021, $ 31.7 million was included in other liabilities and $ 6.7 million was included in other long-term liabilities on the condensed 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 3,920

Balance at April 3, 2021 $ 28,733

Change in fair value 9,774

Balance at December 26, 2020 $ 3,920

Currency translation ( 105 )

Balance at July 3, 2021 $ 38,402

Other Fair Value Disclosures

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The Company determines its reportable segments 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 reviews the operating results of that component.

Historically, the Company's operating segments were based primarily on geography.

Effective as of March 31, 2019, the Company completed the transition of its operating structure to three global business units and accordingly, reorganized its reporting structure to align with its three global business units and the information that will be regularly reviewed by the Company's chief operating decision maker.

Following the reorganization, the Company's reportable segments are as follows:

The Company's reporting structure aligns with its operating structure of three global business units and the information that is regularly reviewed by the Company's chief operating decision maker.

The Company's reportable segments are as follows:

• Blood Center

1 unchanged sentence

Management excludes certain corporate expenses from segment operating income.

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, gains on divestitures and sale of assets, asset impairments and other related charges, accelerated depreciation and related costs, costs related to compliance with the European Union Medical Device Regulation, transaction costs and certain legal charges.

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 restructuring related 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.

2 unchanged sentences

Selected information by reportable segment is presented below:

Three Months Ended Nine Months Ended

(In thousands) December 26,

2020 December 28,

2019 December 26,

2020 December 28,

Three Months Ended

(In thousands) July 3,

2021 June 27,

Plasma $ 71,803 $ 68,715

2 unchanged sentences

Net revenues by business unit 221,146 193,600

4,972 5,197 15,396 15,339

Effect of exchange rates 2,114 ( 3,105 )

1 unchanged sentence

(1) Reflects revenue for service, maintenance and parts

Three Months Ended Nine Months Ended

(In thousands) December 26,

2020 December 28,

2019 December 26,

2020 December 28,

Three Months Ended

(In thousands) July 3,

2021 June 27,

Segment operating income

6 unchanged sentences

Effect of exchange rates 5,812 711

Integration and transaction costs ( 16,733 ) ( 1,290 )

Deal amortization ( 12,379 ) ( 8,263 )

Restructuring and turnaround costs ( 3,143 ) ( 7,798 ) ( 11,583 ) ( 13,582 )

Transaction costs — — ( 3,063 ) —

PCS2 accelerated depreciation and related costs ( 1,146 ) ( 6,649 ) ( 3,332 ) ( 18,708 )

Restructuring and restructuring related costs

( 10,055 ) ( 4,000 )

Impairment of assets and PCS2 related charges ( 3,643 ) ( 2,506 )

European Medical Device Regulation costs and other ( 2,371 ) ( 753 )

Impairment of assets and other related charges — — ( 896 ) ( 51,220 )

Litigation-related charges ( 938 ) —

Gains on divestitures and sale of assets 9,603 —

6 unchanged sentences

Net revenues by product line are as follows:

Three Months Ended Nine Months Ended

(In thousands) December 26,

2020 December 28,

2019 December 26,

2020 December 28,

Three Months Ended

(In thousands) July 3,

2021 June 27,

Plasma products and services $ 90,509 $ 88,713

3 unchanged sentences

Net revenues generated in the Company's principle operating regions on a reported basis are as follows:

Three Months Ended Nine Months Ended

(In thousands) December 26,

2020 December 28,

2019 December 26,

2020 December 28,

Three Months Ended

(In thousands) July 3,

2021 June 27,

United States $ 141,028 $ 111,009

7 unchanged sentences

(In thousands) Foreign Currency Defined Benefit Plans Net Unrealized Gain/(Loss) on Derivatives Total

Balance as of March 28, 2020 $ ( 31,100 ) $ ( 209 ) $ ( 13,826 ) $ ( 45,135 )

Other comprehensive income (loss) before reclassifications (1)

Balance as of April 3, 2021 $ ( 21,528 ) $ ( 560 ) $ ( 7,459 ) $ ( 29,547 )

Other comprehensive (loss) income before reclassifications (1)

( 430 ) — 76 ( 354 )

Amounts reclassified from Accumulated Other Comprehensive Loss (1)

— — 4,864 4,864

Net current period other comprehensive income 12,031 — 3,246 15,277

Balance as of December 26, 2020 $ ( 19,069 ) $ ( 209 ) $ ( 10,580 ) $ ( 29,858 )

Net current period other comprehensive (loss) income ( 430 ) — 877 447

Balance as of July 3, 2021 $ ( 21,958 ) $ ( 560 ) $ ( 6,582 ) $ ( 29,100 )

(1) Presented net of income taxes, the amounts of which are insignificant.

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-Q

Item 1. Financial Statements