What changed in this filing

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Item 1. Financial Statements

2022-08-10 compared with 2022-02-08 · 141 added, 305 removed, 413 unchanged (52% of the section changed)

3 unchanged sentences

(Unaudited in thousands, except per share data)

Three Months Ended Nine Months Ended

2022 December 26,

2020 January 1,

2022 December 26,

Three Months Ended

Net revenues $ 261,458 $ 228,528

9 unchanged sentences

Interest and other expense, net ( 5,273 ) ( 4,398 )

Income before provision for income taxes 31,388 37,374 48,302 100,310

Income (loss) before provision for income taxes 25,494 ( 3,008 )

Provision for income taxes 5,617 1,446

Net income $ 23,232 $ 31,882 $ 33,634 $ 90,510

Net income per share - basic $ 0.45 $ 0.63 $ 0.66 $ 1.79

Net income per share - diluted $ 0.45 $ 0.62 $ 0.65 $ 1.77

Net income (loss) $ 19,877 $ ( 4,454 )

Net income (loss) per share - basic $ 0.39 $ ( 0.09 )

Net income (loss) per share - diluted $ 0.38 $ ( 0.09 )

Weighted average shares outstanding

1 unchanged sentence

Diluted 51,683 50,939

Comprehensive income $ 23,419 $ 40,496 $ 33,832 $ 105,787

Comprehensive income (loss) $ 13,114 $ ( 4,007 )

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

5 unchanged sentences

Cash and cash equivalents $ 214,948 $ 259,496

Accounts receivable, less allowance of $2,382 at January 1, 2022 and $2,226 at April 3, 2021 154,980 127,555

Accounts receivable, less allowance of $2,495 at July 2, 2022 and $2,475 at April 2, 2022 146,463 159,376

Inventories, net 277,887 293,027

2 unchanged sentences

Property, plant and equipment, net 288,321 258,482

Intangible assets, less accumulated amortization of $362,637 at January 1, 2022 and $320,640 at April 3, 2021 323,951 365,483

Intangible assets, less accumulated amortization of $386,235 at July 2, 2022 and $376,552 at April 2, 2022 302,710 310,261

Goodwill 466,115 467,287

7 unchanged sentences

Accrued payroll and related costs 30,422 48,540

Other liabilities 121,126 138,586

Other current liabilities 85,305 121,207

Total current liabilities 180,487 442,266

5 unchanged sentences

Authorized — 150,000,000 shares;

Issued and outstanding — 51,111,046 shares at January 1, 2022 and 50,868,820 shares at April 3, 2021 511 509

Issued and outstanding — 51,315,653 shares at July 2, 2022 and 51,124,240 shares at April 2, 2022 513 511

Additional paid-in capital 580,359 572,476

16 unchanged sentences

Issuance of restricted stock, net of cancellations 131 1 ( 1 ) — — —

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

Share-based compensation expense — — 5,299 — — 5,299

Net loss — — — ( 4,454 ) — ( 4,454 )

Other comprehensive income — — — — 447 447

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

Exercise of stock options 28 1 1,069 — — 1,070

Issuance of restricted stock, net of cancellations 19 — — — — —

Share-based compensation expense — — 5,979 — — 5,979

Net income — — — 19,877 — 19,877

Other comprehensive income — — — — ( 436 ) ( 436 )

Balance, October 2, 2021 51,060 $ 511 $ 558,156 $ 169,418 $ ( 29,536 ) $ 698,549

Employee stock purchase plan 36 — 1,999 — — 1,999

Exercise of stock options 12 — 353 — — 353

Issuance of restricted stock, net of cancellations 3 — — — — —

Share-based compensation expense — — 6,455 — — 6,455

Net income — — — 23,232 — 23,232

Other comprehensive income — — — — 187 187

Balance, January 1, 2022 51,111 $ 511 $ 566,963 $ 192,650 $ ( 29,349 ) $ 730,775

HAEMONETICS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited in thousands)

Other comprehensive loss — — — — ( 6,763 ) ( 6,763 )

Balance, July 2, 2022 51,315 $ 513 $ 580,359 $ 222,268 $ ( 32,717 ) $ 770,423

Common Stock Additional

3 unchanged sentences

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

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

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

2 unchanged sentences

(Unaudited in thousands)

Nine Months Ended

2022 December 26,

Three Months Ended

Cash Flows from Operating Activities:

Net income $ 33,634 $ 90,510

Net income (loss) $ 19,877 $ ( 4,454 )

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

1 unchanged sentence

Depreciation and amortization 22,447 25,033

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

Impairment of assets 94 5,144

1 unchanged sentence

Amortization of deferred finance costs 797 1,019

(Benefit) provision for losses on inventory ( 280 ) 3,779

Benefit for losses on inventory ( 2,075 ) ( 544 )

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

Deferred tax benefit 1,999 ( 3,953 )

Contingent consideration expense ( 504 ) 9,774

6 unchanged sentences

Change in accounts payable and accrued expenses ( 27,181 ) ( 29,299 )

Net cash provided by operating activities 104,213 107,258

Net cash provided by (used in) operating activities 41,993 ( 1,680 )

Cash Flows from Investing Activities:

1 unchanged sentence

Acquisition ( 2,850 ) ( 2,500 )

Proceeds from divestitures 10,642 44,587

Proceeds from sale of property, plant and equipment 498 568

Net cash (used in) provided by investing activities ( 51,833 ) 3,658

Other investments ( 10,395 ) —

Net cash used in investing activities ( 58,214 ) ( 15,851 )

Cash Flows from Financing Activities:

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

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

Contingent consideration payments ( 21,593 ) —

Proceeds from employee stock purchase plan 2,459 2,210

20 unchanged sentences

All intercompany transactions have been eliminated.

Operating results for the nine months ended January 1, 2022 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 January 1, 2022, the Company has concluded that substantial doubt about its ability to continue as a going concern does not exist.

Operating results for the three months ended July 2, 2022 are not necessarily indicative of the results that may be expected for the full fiscal year ending April 1, 2023 or any other interim period.

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 2, 2022.

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.

Subsequent events have been evaluated as required.

There were no material recognized or unrecognized subsequent events as of or for the three and nine months ended January 1, 2022.

Subsequent events have been evaluated as r equired.

There were no material recognized or unrecognized subsequent events as of or for the three months ended July 2, 2022, except for those discussed in Note 5, Earnings Per Share and Note 9, Notes Payable and Long-term Debt .

RECENT ACCOUNTING PRONOUNCEMENTS

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

Standards to be Implemented

In March 2020, the FASB issued ASU 2020-04 — Reference Rate Reform (Topic 848).

The new guidance allows companies to elect certain practical expedients to ease the financial reporting burden during the transition period of reference rate reform.

The Company is evaluating the impact of this ASU and the related practical expedients allowed under ASU 848 on the Company's financial position and results of operations.

RESTRUCTURING

2 unchanged sentences

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.

During 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 and nine months ended January 1, 2022, the Company incurred $ 5.7 million and $ 20.2 million, respectively, of restructuring and restructuring related costs under this program.

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

During the three months ended July 2, 2022 and July 3, 2021, the Company incurred $ 3.5 million and $ 9.9 million, respectively, of restructuring and restructuring related costs under this program.

Total cumulative charges under this program are $ 59.2 million .

The following table summarizes the activity for restructuring reserves related to the 2020 Program and prior programs for the nine months ended January 1, 2022, substantially all of which relates to employee severance and other employee costs:

The following table summarizes the activity for restructuring reserves related to the 2020 Program and prior programs for the three months ended July 2, 2022, substantially all of which relates to employee severance and other employee costs:

(In thousands) 2020 Program Prior Programs Total

2 unchanged sentences

Payments ( 703 ) ( 20 ) ( 723 )

Balance at January 1, 2022 $ 2,595 $ 432 $ 3,027

Balance at July 2, 2022 $ 1,713 $ 325 $ 2,038

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) January 1,

2022 December 26,

2020 January 1,

2022 December 26,

Three Months Ended

(In thousands) July 2,

Cost of goods sold $ ( 206 ) $ 2,253

2 unchanged sentences

$ ( 44 ) $ 3,420

As of January 1, 2022, the Company had a restr ucturing liability of $ 3.0 million, of which $ 2.6 million is paya ble within the next twelve months.

As of July 2, 2022, the Company had a restr ucturing liability of $ 2.0 million , of which $ 1.7 million is paya ble 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 restructuring related costs.

1 unchanged sentence

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

Restructuring costs Three Months Ended Nine Months Ended

(In thousands) January 1, 2022 December 26, 2020 January 1, 2022 December 26, 2020

Restructuring costs Three Months Ended

(In thousands) July 2, 2022 July 3, 2021

Plasma $ ( 211 ) $ 2,288

3 unchanged sentences

Total $ ( 44 ) $ 3,420

Restructuring related costs Three Months Ended Nine Months Ended

(In thousands) January 1, 2022 December 26, 2020 January 1, 2022 December 26, 2020

Restructuring related costs Three Months Ended

(In thousands) July 2, 2022 July 3, 2021

Plasma $ 640 $ 1,738

4 unchanged sentences

Total restructuring and restructuring related costs $ 3,478 $ 10,055

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 its 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 accounting for income taxes remains preliminary, as the Company is finalizing additional information to complete its assessment.

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 assessm ent 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 January 1, 2022, the valuation studies necessary to determine the fair market value of the assets acquired and liabilities assumed are completed.

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 250,560

Goodwill 253,966

Other long-term assets 1,868

Total assets acquired $ 534,499

Accounts payable 3,292

Accrued payroll and related costs 58,211

Other liabilities 1,853

Deferred tax liability 27,102

Other long-term liabilities 1,772

Total liabilities assumed $ 92,230

Net assets acquired $ 442,269

The Company determined the identifiable intangible assets were completed technology, customer relationships, trademarks and in-process research and development (“IPR&D”).

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

Completed technology and IPR&D were 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 .

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 $ 254.0 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 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 $ 213,290 13 years 13.5 %

Customer relationships 18,166 12 years 13.0 %

Trademarks 5,437 13 years 13.5 %

IPR&D 13,667 Indefinite 15.0 %

Total $ 250,560

The Company recorded a long-term deferred tax liability, net, of $ 27.1 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 to 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 Income and Comprehensive Income, respectively.

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, 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 nine months ended January 1, 2022, 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.

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 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

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, and the cash flow projections were discounted using a rate of 20 %.

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

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

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.

During the first quarter of fiscal year 2022, 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).

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 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.

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

1 unchanged sentence

statutory tax rate.

For the three and nine months ended January 1, 2022, the Company reported income tax expense of $ 8.2 million and $ 14.7 million, respectively, representing effective tax rates of 26.0 % and 30.4 %, respectively.

The effective tax rate for the nine months ended January 1, 2022 includes discrete tax expense relating to stock compensation shortfalls of $ 0.9 million, with no discrete tax expense relating to stock compensation shortfalls recorded in the three months ended January 1, 2022.

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 rates for the three and nine months ended December 26, 2020 included 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.

For the three months ended July 2, 2022, the Company reported income tax expense of $ 5.6 million representing an effective tax rate of 22.0 %.

The effective tax rate for the three months ended July 2, 2022 includes $ 0.6 million of discrete tax expense relating to stock compensation shortfalls.

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.

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) January 1,

2022 December 26,

2020 January 1,

2022 December 26,

Net income $ 23,232 $ 31,882 $ 33,634 $ 90,510

Three Months Ended

(In thousands, except per share amounts) July 2,

Net income (loss) $ 19,877 $ ( 4,454 )

Weighted average shares 51,224 50,939

Basic income per share $ 0.45 $ 0.63 $ 0.66 $ 1.79

Net income $ 23,232 $ 31,882 $ 33,634 $ 90,510

Basic income (loss) per share $ 0.39 $ ( 0.09 )

Net income (loss) $ 19,877 $ ( 4,454 )

Basic weighted average shares 51,224 50,939

1 unchanged sentence

Diluted weighted average shares 51,683 50,939

Diluted income per share $ 0.45 $ 0.62 $ 0.65 $ 1.77

Diluted income (loss) per share $ 0.38 $ ( 0.09 )

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

1 unchanged sentence

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 and nine months ended January 1, 2022, weighted average shares outstanding, assuming dilution, excludes the impact of 0.9 million anti-dilutive shares.

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 the three months ended July 2, 2022, weighted average shares outstanding, assuming dilution, excludes the impact of 0.9 million anti-dilutive shares.

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.

In August 2022, the Company announced that its Board of Directors had authorized the repurchase of up to $ 300 million of Haemonetics common shares over the next three years .

Under the share repurchase program, the Company is authorized to repurchase, from time to time, outstanding shares of common stock in accordance with applicable laws on the open market, including under trading plans established pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, and in privately negotiated transactions.

The actual timing, number and value of shares repurchased will be determined by the Company at its discretion, with the intent of beginning activity under the program during fiscal 2023, and will depend on a number of factors, including market conditions, applicable legal requirements and compliance with the terms of loan covenants.

The share repurchase program may be suspended, modified or discontinued at any time, and the Company has no obligation to repurchase any amount of its common stock under the program.

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 January 1, 2022, the Company had $ 23.4 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 2, 2022, the Company had $ 24.7 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 76 % of this amount as revenue within the next twelve months and the remaining balance thereafter.

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

As of January 1, 2022 and April 3, 2021, the Company had contract assets of $ 5.5 million and $ 4.8 million, respectively.

As of July 2, 2022 and April 2, 2022, the Company had contract assets of $ 6.4 million and $ 5.5 million, respectively.

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

As of January 1, 2022 and April 3, 2021, the Company had contract liabilities of $ 24.4 million and $ 20.9 million, respectively.

During the three and nine months ended January 1, 2022, the Company recognized $ 4.0 million and $ 17.2 million of revenue, respectively, 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) January 1,

As of July 2, 2022 and April 2, 2022, the Company had contract liabilities of $ 25.4 million and $ 26.8 million, respectively.

During the three months ended July 2, 2022, the Company recognized $ 11.7 million of revenue, respectively, that was included in the above April 2, 2022 contract liability balance.

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

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

(In thousands) July 2,

2022 April 2,

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Total inventories $ 277,887 $ 293,027

Lessee Activity

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 to the Clinton, PA facility.

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 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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The allocation of revenue between the lease and non-lease components is based on stand-alone selling prices.

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

Operating lease revenue represents approximately 3 percent of the Company’s total net sales.

NOTES PAYABLE AND LONG-TERM DEBT

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

During the third 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 January 1, 2022 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.

During the first quarter of fiscal 2023, the conditions allowing holders of the 2026 Notes to convert have not been met.

The 2026 Notes were therefore not convertible as of July 2, 2022 and were classified as long-term debt on the Company’s Condensed Consolidated Balance Sheets.

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

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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 January 1, 2022, the $ 500.0 million principal balance was netted down by $ 11.2 million of deferred financing costs.

As of July 2, 2022, the $ 500.0 million principal balance was netted down by $ 9.9 million of remaining debt issuance costs, resulting in a net convertible note payable of $ 490.1 million.

Interest expense related to the 2026 Notes was $ 0.7 million, which is entirely attributable to the amortization of the debt issuance costs.

The debt issuance costs are amortized at an effective interest rate of 0.5 %.

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, as amended from time to time, the “Credit Facilities”).

The Credit Facilities expire on June 15, 2023.

On June 15, 2018, the Company entered into a credit agreement with certain lenders that provided for a $ 350.0 million term loan and a $ 350.0 million revolving loan (together with the term loan, as amended from time to time, the “2018 Credit Facilities”) that mature on June 15, 2023.

Interest on the 2018 Credit Facilities is established using LIBOR plus 1.13 % - 1.75 %, depending on the Company’s leverage ratio.

Under the 2018 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 January 1, 2022, $ 288.8 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 $ 24.7 million of uncommitted operating lines of credit to fund its global operations under which there were no outstanding borrowings as of January 1, 2022.

The Company has required scheduled principal payments of $ 4.4 million during the remainder of fiscal 2022, $ 214.4 million during fiscal 2023 and $ 70.0 million during the first quarter of 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 January 1, 2022.

At July 2, 2022, $ 280.0 million was outstanding under the term loan with an effective interest rate of 3.4 %.

There were no borrowings outstanding on the revolving loan.

The Company also has $ 20.9 million of uncommitted operating lines of credit to fund its global operations under which there were no outstanding borrowings as of July 2, 2022.

The Company was in compliance with the leverage and interest coverage ratios specified in the 2018 Credit Facilities as well as all other bank covenants as of July 2, 2022.

On July 26, 2022, the Company entered into an amended and restated credit agreement with certain lenders to refinance the 2018 Credit Facilities and extend their maturity date through June 2025.

The amended and restated credit agreement provides for a $ 280 million senior unsecured term loan, the proceeds of which have been used to retire the balance of the term loan under the 2018 Credit Facilities, and a $ 420 million senior unsecured revolving credit facility (together, the “Revised Credit Facilities”).

Loans under the Revised Credit Facilities will initially bear interest at an annual rate equal to the Adjusted Term SOFR Rate (as specified in the amended and restated credit agreement), which is subject to a floor of 0 %, plus an applicable rate ranging from 1.125 % to 1.750 % based on the Company’s consolidated net leverage ratio (as specified in the amended and restated credit agreement) at the applicable measurement date.

Adjusted Term SOFR Rate loans are also subject to a credit spread adjustment of 0.10 % per annum.

The revolving credit facility carries an unused fee that ranges from 0.125 % to 0.250 % annually based on the Company’s consolidated net leverage ratio at the applicable measurement date.

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

The Revised Credit Facilities mature on June 15, 2025.

The principal amount of the term loan under the Revised Credit Facilities is repayable quarterly through the maturity date at a rate of 2.5 % for the first year and 5 % thereafter, with the unpaid balance due at maturity.

As a result of the Company’s entry into the Revised Credit Facilities, the Company has reclassified short term debt to long term on the condensed consolidated balance sheet accordance with ASC 470.

The Company has required scheduled principal payments of $ 5.3 million during the remainder of fiscal 2023.

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

The Company manufactures, markets and sells its products globally.

During the three and nine months ended January 1, 2022, 35.6 % and 36.8 %, respectively, of the Company’s sales were generated outside the U.S., generally in foreign currencies.

During the three months ended July 2, 2022, 30.4 % of the Company’s sales were generated outside the U.S.

in local currencies.

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

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That program includes the use of derivative financial instruments to minimize, for a period of time, the impact on its financial results from changes in foreign exchange rates.

The Company utilizes foreign currency forward contracts to hedge the anticipated cash flows from transactions denominated in foreign currencies, primarily the Japanese Yen and the Euro, and to a lesser extent the Swiss Franc, Australian Dollar, Canadian Dollar and the Mexican Peso.

This does not eliminate the impact of the volatility of foreign exchange rates.

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Designated Foreign Currency Hedge Contracts

All of the Company’s designated foreign currency hedge contracts as of January 1, 2022 and April 3, 2021 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 2, 2022 and April 2, 2022 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.

Once the related third-party transaction occurs, the Company reclassifies the effective portion of any related gain or loss on the designated foreign currency hedge contracts to earnings.

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 $ 39.1 million as of January 1, 2022 and $ 56.0 million as of April 3, 2021.

At January 1, 2022, a gain of $ 0.4 million, net of tax, will be reclassified to earnings within the next twelve months.

Substantially all currency cash flow hedges outstanding as of January 1, 2022 mature within twelve months.

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 $ 49.8 million as of July 2, 2022 and $ 67.3 million as of April 2, 2022.

At July 2, 2022, a gain 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 2, 2022 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 $ 47.6 million as of January 1, 2022 and $ 95.6 million as of April 3, 2021.

The Company had non-designated foreign currency hedge contracts under ASC 815 outstanding in the contract amount of $ 44.1 million as of July 2, 2022 and $ 39.5 million as of April 2, 2022.

Interest Rate Swaps

On June 15, 2018, the Company entered into Credit Facilities which provided for a $ 350.0 million Term Loan and a $ 350.0 million Revolving Credit Facility.

On June 15, 2018, the Company entered into the 2018 Credit Facilities, which provided for a $ 350.0 million term loan and a $ 350.0 million revolving credit facility.

Under the terms of the 2018 Credit Facilities, interest is established using LIBOR plus 1.13 % - 1.75 %.

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The Swaps mature on June 15, 2023.

As of July 2, 2022 , the notional value was $ 196.0 million.

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 January 1, 2022, a gain of $ 4.9 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 2, 2022, a gain of $ 3.1 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.

On July 26, 2022, the Company entered into an amended and restated credit agreement to refinance the 2018 Credit Facilities and extend the maturity date to June 15, 2025.

The Company is in the process of evaluating additional interest rate swap protection that would extend beyond June 2023.

Trade Receivables

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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.

To date, the Company has not experienced significant customer payment defaults, or identified other significant collectability concerns.

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

Three Months Ended Nine Months Ended

(In thousands) January 1, 2022 December 26, 2020 January 1, 2022 December 26, 2020

Three Months Ended

(In thousands) July 2, 2022 July 3, 2021

Beginning balance $ 2,475 $ 2,226

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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 unaudited Condensed Consolidated Statements of Income and Comprehensive Income for the nine months ended January 1, 2022:

(In thousands) Amount of Gain

(Loss) Recognized

(In thousands) Amount of Gain Recognized

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

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Earnings Location in

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

Condensed Consolidated Statements of Income and Comprehensive Income Amount of Gain Excluded from

Effectiveness

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Designated interest rate swaps, net of tax $ 2,350 $ ( 799 ) Interest and other expense, net $ —

The Company did not have fair value hedges or net investment hedges outstanding as of January 1, 2022 or April 3, 2021.

As of January 1, 2022, no material deferred taxes were recognized for designated foreign currency hedges.

The Company did not have fair value hedges or net investment hedges outstanding as of July 2, 2022 or April 2, 2022.

As of July 2, 2022, no material deferred taxes 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 January 1, 2022, 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 January 1, 2022 and April 3, 2021:

As of July 2, 2022, 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 2, 2022 and April 2, 2022:

(In thousands) Location in Condensed Consolidated

Balance Sheets As of As of

January 1, 2022 April 3, 2021

July 2, 2022 April 2, 2022

Derivative Assets:

1 unchanged sentence

Non-designated foreign currency hedge contracts Other current assets 110 99

Designated interest rate swaps Other current assets 49 —

$ 4,687 $ 3,232

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Designated interest rate swaps Other current liabilities — 1,813

Designated interest rate swaps Other long-term liabilities 622 4,301

$ 478 $ 1,894

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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 January 1, 2022 and April 3, 2021.

As of January 1, 2022

Financial assets and financial liabilities measured at fair value on a recurring basis consist of the following as of July 2, 2022 and April 2, 2022.

As of July 2, 2022

(In thousands) Level 1 Level 2 Level 3 Total

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Non-designated foreign currency hedge contracts — 110 — 110

Designated interest rate swaps — 49 — 49

$ 44,030 $ 4,687 $ — $ 48,717

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Non-designated foreign currency hedge contracts — 196 — 196

Designated interest rate swaps — 5,088 — 5,088

Contingent consideration — — 877 877

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Fair Value at Valuation Unobservable

(In thousands) January 1, 2022 Technique Input Range

Revenue-based payments $ 35,000 Discounted cash flow Discount rate 2.2 %

Projected year of payment 2022

(In thousands) July 2, 2022 Technique Input Range

Revenue-based payments $ 877 Discounted cash flow Discount rate 8.5 %

Projected year of payment 2022 - 2023

Regulatory-based payment $ 1,660 Discounted cash flow Discount rate 4.9 %

Probability of payment 0% - 100%

Projected year of payment 2022 - 2023

As of January 1, 2022, the remaining maximum potential contingent consideration that the Company could be required to pay i s $ 39.1 million.

During the nine months ended January 1, 2022, the Company increased the fair value of the contingent consideration related to the acquisition of Cardiva by $ 10.7 million, which was recorded as selling, general and administrative expenses within the unaudited Condensed Consolidated Statements of Income and Comprehensive Income.

The fair value of contingent consideration associated with acquisitions was $ 38.4 million at January 1, 2022.

As of January 1, 2022, $ 36.2 million was included in other liabilities and $ 2.2 million was in cluded in other long-term liabilities on the condensed consolidated balance sheet.

The fair value of contingent consideration associated with acquisitions was $ 0.9 million at July 2, 2022 and was included in other liabilities.

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

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Currency translation ( 1 )

Balance at January 1, 2022 $ 38,377

Balance at July 2, 2022 $ 877

Other Fair Value Disclosures

The Term Loan, which is carried at amortized cost, accounts receivable and accounts payable approximate fa ir value.

The fair value of the 2026 Notes as of January 1, 2022 was $ 421.4 million, which was determined by using the market price on the last trading day of the reporting period.

The fair value of the 2026 Notes as of July 2, 2022 was $ 396.1 million, which was determined by using the market price on the last trading day of the reporting period.

COMMITMENTS AND CONTINGENCIES

The Company is a party to various legal proceedings and claims arising out of the ordinary course of its business.

The Company believes there are no proceedings or claims pending against it the ultimate resolution of which could have a material adverse effect on the financial condition or results of operations.

At each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under ASC 450, Contingencies, for all matters.

The Company believes that, except for those matters described below, there are no other proceedings or claims pending against it the ultimate resolution of which could have a material adverse effect on its financial condition or results of operations.

At each reporting period, management evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under ASC 450, Contingencies, for all matters.

Legal costs are expensed as incurred.

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The Company is fully cooperating with this inquiry.

In the fourth quarter of fiscal 2021, a putative class action complaint was filed against the Company in the Circuit Court of Cook County, Illinois by Mary Crumpton, on behalf of herself and similarly situated individuals.

See Mary Crumpton v.

Haemonetics Corporation, Case No.

1:21-cv-1402 .

In her complaint, the plaintiff asserts that between June 2017 and August 2018 she donated plasma at a center operated by one of the Company’s customers, that the center required her to scan her finger print in a scanner that stored her finger print to identify her prior to plasma donation, and that the Company’s eQue donor management software sent her biometric information to a Company-owned server to be collected and stored in a manner that violated her rights under the Illinois Biometric Information Privacy Act (“BIPA”).

The plaintiff seeks statutory damages, attorneys’ fees, and injunctive and equitable relief.

In March 2021, the Company moved to dismiss the complaint for lack of personal jurisdiction and concurrently filed a motion to dismiss for failure to state a claim and a motion to stay.

In late March 2022, the court denied the Company’s motion to dismiss for lack of personal jurisdiction but did not address the merits of the Company’s other positions.

The Company believes the allegations in this lawsuit are without merit and will defend vigorously against them.

The case is still in an early stage and the Company cannot reasonably estimate a range of potential loss and expense at this time.

SEGMENT AND ENTERPRISE-WIDE INFORMATION

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Selected information by reportable segment is presented below:

Three Months Ended Nine Months Ended

(In thousands) January 1,

2022 December 26,

2020 January 1,

2022 December 26,

Three Months Ended

(In thousands) July 2,

Plasma $ 103,042 $ 71,803

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Net revenues by business unit 258,799 221,146

5,436 4,972 15,655 15,396

Effect of exchange rates ( 2,478 ) 2,114

1 unchanged sentence

(1) Reflects revenue for service, maintenance and parts

Three Months Ended Nine Months Ended

(In thousands) January 1,

2022 December 26,

2020 January 1,

2022 December 26,

Three Months Ended

(In thousands) July 2,

Segment operating income

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Net revenues by product line are as follows:

Three Months Ended Nine Months Ended

(In thousands) January 1,

2022 December 26,

2020 January 1,

2022 December 26,

Three Months Ended

(In thousands) July 2,

Plasma products and services $ 118,352 $ 90,509

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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) January 1,

2022 December 26,

2020 January 1,

2022 December 26,

Three Months Ended

(In thousands) July 2,

United States $ 181,996 $ 141,028

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Net current period other comprehensive income (loss) ( 9,570 ) — 2,807 ( 6,763 )

Balance as of January 1, 2022 $ ( 25,016 ) $ ( 560 ) $ ( 3,773 ) $ ( 29,349 )

Balance as of July 2, 2022 $ ( 37,489 ) $ 1,619 $ 3,153 $ ( 32,717 )

(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