What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-05-22 compared with 2022-05-25 · 293 added, 279 removed, 1370 unchanged (29% of the section changed)

4 unchanged sentences

2023 April 2,

2021 March 28,

2022 April 3,

Net revenues $ 1,168,660 $ 993,196 $ 870,463

4 unchanged sentences

Selling, general and administrative 376,675 340,140 275,216

Amortization of intangible assets 47,414 32,830 25,746

Impairment of assets 577 1,028 50,599

Amortization of acquired intangible assets 32,640 47,414 32,830

Gains on divestitures and sale of assets ( 382 ) ( 9,603 ) ( 32,812 )

15 unchanged sentences

2023 April 2,

2021 March 28,

2022 April 3,

Net income $ 115,401 $ 43,375 $ 79,469

Other comprehensive income (loss):

Other comprehensive (loss) income:

Impact of defined benefit plans, net of tax 2,456 2,179 ( 351 )

1 unchanged sentence

Unrealized gain (loss) on cash flow hedges, net of tax 4,269 5,785 ( 489 )

Reclassifications into earnings of cash flow hedge losses, net of tax 2,020 6,856 625

Other comprehensive income (loss) 3,593 15,588 ( 14,755 )

Reclassifications into earnings of cash flow hedge (gains) losses, net of tax ( 5,136 ) 2,020 6,856

Other comprehensive (loss) income ( 4,427 ) 3,593 15,588

Comprehensive income $ 110,974 $ 46,968 $ 95,057

6 unchanged sentences

Cash and cash equivalents $ 284,466 $ 259,496

Accounts receivable, less allowance of $ 2,475 at April 2, 2022 and $ 2,226 at April 3, 2021

Accounts receivable, less allowance for credit losses of $ 4,932 at April 1, 2023 and $ 2,475 at April 2, 2022

179,142 159,376

40 unchanged sentences

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

Shares repurchased ( 1,483 ) ( 15 ) ( 15,553 ) ( 159,432 ) — ( 175,000 )

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

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

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

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

Net income — — — 79,469 — 79,469

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

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

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

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

Employee stock purchase plan 74 — 4,209 — — 4,209

2 unchanged sentences

Share-based compensation expense — — 24,359 — — 24,359

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

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

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

Net income — — — 43,375 — 43,375

3 unchanged sentences

Exercise of stock options 59 1 2,637 — — 2,638

Shares repurchased ( 997 ) ( 10 ) ( 10,366 ) ( 64,624 ) — ( 75,000 )

Issuance of restricted stock, net of cancellations 161 2 ( 2 ) — — —

Share-based compensation expense — — 25,583 — — 25,583

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

Net income — — — 115,401 — 115,401

Other comprehensive income — — — — 3,593 3,593

Other comprehensive loss — — — — ( 4,427 ) ( 4,427 )

Balance, April 1, 2023 50,449 $ 504 $ 594,706 $ 253,168 $ ( 30,381 ) $ 817,997

4 unchanged sentences

2023 April 2,

2021 March 28,

2022 April 3,

Cash Flows from Operating Activities:

5 unchanged sentences

Share-based compensation expense 25,583 24,359 25,516

Gain on divestiture and sale of assets ( 9,603 ) ( 32,812 ) ( 8,083 )

Contingent consideration expense 10,461 — —

Gain on divestitures and sale of assets ( 382 ) ( 9,603 ) ( 32,812 )

Contingent consideration ( 504 ) 10,461 —

Deferred tax benefit 4,783 5,013 ( 19,866 )

Amortization of deferred financing costs 1,970 3,404 564

(Benefit) provision for losses on inventory ( 861 ) 7,860 ( 2,904 )

Provision (benefit) for losses on inventory 664 ( 861 ) 7,860

Other non-cash operating activities 6,126 5,592 1,500

8 unchanged sentences

Capital expenditures ( 110,191 ) ( 96,509 ) ( 37,040 )

Proceeds from divestiture 10,642 44,587 9,808

Proceeds from divestitures 850 10,642 44,587

Proceeds from sale of property, plant and equipment 1,608 2,022 1,815

Acquisitions ( 2,850 ) ( 2,500 ) ( 434,804 )

Other investments ( 33,205 ) — —

Net cash used in investing activities ( 143,788 ) ( 86,345 ) ( 425,442 )

Cash Flows from Financing Activities:

Term loan borrowings 280,000 — —

Term loan redemption ( 280,000 ) — —

Repayment of term loan borrowings ( 9,625 ) ( 17,500 ) ( 21,875 )

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

Proceeds from revolving facility 50,000 — —

Payments on revolving facility ( 50,000 ) — —

Debt issuance costs ( 1,118 ) — ( 13,457 )

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

Proceeds from issuance of convertible notes — — 500,000

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

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

Contingent consideration payments ( 21,593 ) ( 4,791 ) —

13 unchanged sentences

Transfers from inventory to fixed assets for placement of Haemonetics equipment $ 81,136 $ 51,800 $ 9,287

Tenant improvement allowances excluded from capital expenditures $ — $ — $ 5,660

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

5 unchanged sentences

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

When used in this report, the terms “we,” “us,” “our,” “Haemonetics” and the “Company” mean Haemonetics Corporation.

Blood is essential to a modern healthcare system.

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

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

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

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

8 unchanged sentences

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

Fiscal years 2023 and 2022 included 52 weeks with each quarter having 13 weeks.

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

Fiscal 2022 and 2020 included 52 weeks with each quarter having 13 weeks.

Principles of Consolidation

1 unchanged sentence

All significant intercompany accounts and transactions have been eliminated in consolidation.

In addition, we assess our strategic investments to determine whether they meet the definition of a variable interest entity (“VIE”), and if so, whether the Company has controlling financial interest.

Controlling financial interest occurs if the Company has both the power to direct activities of the VIE that most significantly impact the VIE’s economic performance and an obligation to absorb losses of or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Company’s strategic investments did not meet the controlling financial interest criteria, as such no VIEs were consolidated during fiscal 2023, 2022 or 2021.

Use of Estimates

1 unchanged sentence

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

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

Actual results

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

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

1 unchanged sentence

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Contingencies

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

Software and Other Revenues

To a lesser extent, the Company enters into other types of contracts including certain software licensing arrangements to provide software solutions to support its plasma, blood collection and hospital customers.

A portion of its software sales are perpetual licenses typically accompanied by significant implementation services related to software customization as well as

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

other professional and technical services.

Software and Other Revenues

A portion of its software sales are perpetual licenses typically accompanied by significant implementation services related to software customization as well as other professional and technical services.

The Company generally recognizes revenue from the sale of perpetual licenses and related customization services over time (the Company is creating or enhancing an asset that the customer controls) using an input method which requires it to make estimates of the extent of progress toward completion of the contract.

13 unchanged sentences

Contract Balances

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

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

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

7 unchanged sentences

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Cash and Cash Equivalents

1 unchanged sentence

government obligations and commercial paper with maturities of three months or less at date of acquisition.

Cash and cash equivalents are recorded at cost, which

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approximates fair market value.

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

As of April 1, 2023, cash and cash equivalents consisted primarily of investments in United States Government Agency and institutional money market funds.

Allowance for Doubtful Accounts

Allowance for Credit Losses

The Company establishes a specific allowance for customers when it is probable that they will not be able to meet their financial obligations.

2 unchanged sentences

The Company establishes allowances for balances not yet due and past due accounts based on past experience.

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

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.

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

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

To conduct these reviews, the Company estimates the future amount and timing of demand for disposables used

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

with these devices, from which it generates revenues.

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

1 unchanged sentence

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

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Leasehold improvements are depreciated over the lesser of their useful lives or the term of the lease.

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Goodwill represents the excess purchase price over the fair value of the net tangible and other identifiable intangible assets acquired.

Goodwill is not amortized.

Instead goodwill is reviewed for impairment at least annually, or on an interim basis between annual tests when events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying value.

Goodwill is not amortized and is instead reviewed for impairment at least annually, or on an interim basis between annual tests when events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying value.

The Company performs its annual impairment test on the first day of the fiscal fourth quarter for each of its reporting units.

6 unchanged sentences

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

The Company's reportable and operating segments are as follows:

The Company’s reportable segments and reporting units are as follows:

Plasma, Blood Center and Hospital.

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There were no reporting units at risk of impairment as of the fiscal 2023, 2022 and 2021 annual test date.

The Company reviews intangible assets subject to amortization for impairment at least annually or more frequently if certain conditions arise to determine if any adverse conditions exist that would indicate that the carrying value of an asset or asset group may not be recoverable, or that a change in the remaining useful life is required.

Conditions indicating that an impairment exists include, but are not limited to, a change in the competitive landscape, internal decisions to pursue new or different technology strategies, a loss of a significant customer or a significant change in the marketplace including prices paid for its products or the size of the market for its products.

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When an impairment indicator exists, the Company tests the intangible asset for recoverability.

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

During fiscal 2022 the Company recognized impairment charges of intangible assets of $ 0.6 million.

In 2021 and 2020 the Company did no t incur any intangible asset impairments.

The Company has in-process research and development (“IPR&D”) intangible assets with indefinite lives.

3 unchanged sentences

The Company makes assumptions about future cash flows, terminal value growth, costs for completion and appropriate discount rates.

The Company elected a qualitative assessment in fiscal year 2022.

The Company elected qualitative assessments in fiscal 2023 and 2022.

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

6 unchanged sentences

In the future, the net realizable value may be adversely affected by the loss of a significant customer or a significant change in the market place, which could result in an impairment being recorded.

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Other Current Liabilities

3 unchanged sentences

2023 April 2,

VAT liabilities $ 3,681 $ 4,431

Forward contracts and interest rate swaps 1,894 6,353

Deferred revenue 31,826 26,272

Accrued taxes 10,227 19,226

Lease liability 7,196 7,708

Acquisition related liability (1)

Contract liabilities 30,209 26,809

Contingent consideration 863 31,184

1 unchanged sentence

Total $ 111,628 $ 121,207

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

that were funded to a third party agent at the transaction closing date but were not yet paid to certain selling shareholders and/or employees as of April 2, 2022 and April 3, 2021.

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Other Long-Term Liabilities

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All tax reserves are analyzed quarterly and adjustments are made as events occur that result in changes in judgment.

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The Company evaluates at the end of each reporting period whether some or all of the undistributed earnings of its foreign subsidiaries are permanently reinvested.

8 unchanged sentences

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

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Derivative Instruments

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The Company does not enter into derivative transactions for speculative purposes and it does not have any non-derivative instruments that are designated as hedging instruments pursuant to ASC 815.

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Share-Based Compensation

8 unchanged sentences

The costs are expensed in accordance with ASC Topic 420 and ASC Topic 360 , Property, Plant and Equipment and are included primarily in selling, general and administrative costs in its consolidated statement of income.

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

Additionally, costs directly related to the Company’s active restructuring initiatives, including program management costs, accelerated depreciation and costs to transfer product lines

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among facilities are included within costs of goods sold and selling, general and administrative costs in its consolidated statement of income.

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

5 unchanged sentences

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

Strategic Investments

The Company holds strategic investments, including preferred stock and a special share, in a privately held entity.

The special share allows the Company to acquire the entity in accordance with an agreement between the parties.

As these equity instruments do not have readily determinable fair values, they have been measured using the measurement alternative, at cost less impairment.

The carrying amount for these instruments would be subsequently adjusted for observable price changes, or prices in orderly transactions for an identical investment or similar investment of the same issuer.

In addition, these investments are periodically evaluated for impairment.

The investments are classified as other long-term assets on the Company’s Consolidated Balance Sheets and the Company has not recorded any adjustments to the carrying value of strategic investments in fiscal 2023.

Concentration of Credit Risk and Significant Customers

1 unchanged sentence

In fiscal 2023, 2022 and 2021, the Company’s ten largest customers accounted for approximately 48 %, 45 % and 49 % of net revenues, respectively.

In fiscal 2022, one Plasma customer, CSL Limited (together with its affiliates, “CSL”) was greater than 10% of both total net revenue and accounts receivable and in total accounted for approximately 12 % of net revenues and 14 % of accounts receivable.

In fiscal 2023, one Plasma customer, CSL Limited (together with its affiliates, “CSL”) was greater than 10% of total net revenues and in total accounted for approximately 14 % of net revenues.

In addition to CSL, two customers also accounted for greater than 10% of the Plasma segment’s net revenues and one customer also accounted for greater than 10% of the Blood Center segment’s net revenues, but did not exceed 10% of total net revenues, in fiscal 2023.

8 unchanged sentences

If the financial condition of customers or the countries’ healthcare systems deteriorate such that their ability to make payments is uncertain, allowances may be required in future periods.

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Recent Accounting Pronouncements

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In August 2018, the FASB issued ASC Update No.

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

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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.

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 expects to incur aggregate charges between $ 95 million and $ 105 million by the end of fiscal 2025 under the program.

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

1 unchanged sentence

Total cumulative charges under this program are $ 67.2 million as of April 1, 2023.

The following table summarizes the activity for restructuring reserves related to the 2020 Program and prior programs for the fiscal years ended April 2, 2022, April 3, 2021 and March 28, 2020, substantially all of which relates to employee severance and other employee costs:

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The following table summarizes the activity for restructuring reserves related to the 2020 Program and prior programs for the fiscal years ended April 1, 2023, April 2, 2022 and April 3, 2021, substantially all of which relates to employee severance and other employee costs:

(In thousands) 2020 Program Prior Programs Total

2 unchanged sentences

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

Non-cash adjustments — ( 147 ) ( 147 )

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

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

Costs incurred, net of reversals 4,202 28 4,230

11 unchanged sentences

As of April 1, 2023, the Company had a restructuring liability of $ 2.2 million, of which approximately $ 1.8 million is payable within the next twelve months.

In addition to the restructuring expenses included in the table above, the Company also incur red costs of $ 24.6 million, $ 14.2 million and $ 16.3 million in fiscal 2022, 2021 and 2020, respecti vely, that do not constitute restructuring costs under ASC 420, Exit and Disposal Cost Obligations, and which the Company instead refers to as restructuring related costs.

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.

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In addition to the restructuring expenses included in the table above, the Company also incurred costs of $ 10.9 million, $ 24.6 million and $ 14.2 million in fiscal 2023, 2022 and 2021, respectively, that do not constitute restructuring costs under ASC 420, Exit and Disposal Cost Obligations, and which the Company instead refers to as restructuring related costs.

These costs consist primarily of expenditures directly related to the restructuring actions.

The following presents the restructuring related costs by line item during fiscal 2023 , 2022 and 2021 within our accompanying consolidated statements of income and comprehensive income:

4 unchanged sentences

Total $ 10,892 $ 24,594 $ 14,217

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

14 unchanged sentences

Total restructuring and restructuring related costs $ 11,549 $ 28,824 $ 15,661

ACQUISITIONS AND STRATEGIC INVESTMENTS

Cardiva Medical, Inc.

2 unchanged sentences

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.

Cardiva achieved the contingent consideration maximum payout of $ 35.0 million, of which the final payment was made in fiscal 2023.

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.

4 unchanged sentences

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.

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Purchase Price Allocation

The Company accounted for the acquisition of Cardiva 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.

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The following amounts represent the fair value of the identifiable assets acquired and liabilities assumed for Cardiva:

33 unchanged sentences

Total $ 250,560

The Company recorded a long-term deferred tax liability, net, of $ 26.8 million primarily related to acquired intangible assets which cannot be deducted for tax purposes, partially offset by deferred tax assets primarily related to net operating losses acquired.

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Acquisition-Related Costs

6 unchanged sentences

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

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

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

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

12 unchanged sentences

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.

In fiscal 2022, the Company made $ 2.5 million of milestone payments which were recorded within intangible assets on the consolidated balance sheets.

In fiscal years 2023 and 2022, the Company made milestone payments of $ 2.9 million and $ 2.5 million, respectively, which were recorded within intangible assets on the consolidated balance sheets.

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

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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.

As of April 1, 2023, the Company has made $ 2.3 million of milestone payments.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Purchase Price Allocation

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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.

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The goodwill is not deductible for income tax purposes.

Intangible assets acquired consist of the following:

10 unchanged sentences

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Strategic Investments

During fiscal year 2023, the Company made investments in Vivasure Medical LTD (“Vivasure”), totaling € 30 million.

The investments include both preferred stock and a special share that allows the Company to acquire Vivasure in accordance with an agreement between the parties.

The investments are classified as other long-term assets on the consolidated balance sheets and the Company has not recorded any adjustments to the carrying value of our strategic investments in fiscal 2023.

Fajardo, Puerto Rico Manufacturing Operations

9 unchanged sentences

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

In fiscal year 2022, the Company recognized an additional gain of $ 9.6 million for contingent consideration earned.

In fiscal years 2023 and 2022, the Company recognized additional gains of $ 0.4 million and $ 9.6 million, respectively, 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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

predominantly in France and in several other countries outside of the U.S.

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 associated with the transaction in fiscal 2021.

Asset Transfer to CSL

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

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

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

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

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

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

The charge did not result in any future cash expenditures.

Goodwill associated with the disposal was immaterial.

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

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

(In thousands) 2023 2022 2021

2 unchanged sentences

Total $ 141,403 $ 63,629 $ 72,913

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

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

(In thousands) 2023 2022 2021

11 unchanged sentences

statutory tax rate.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

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

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

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Operating lease assets ( 13,220 ) ( 12,877 )

Debt discount — ( 19,868 )

Other deferred tax liabilities ( 2,942 ) ( 2,643 )

1 unchanged sentence

Net deferred tax liabilities $ ( 30,954 ) $ ( 24,259 )

The decrease in the worldwide net deferred tax liability is primarily due to the adoption of ASU 2020-06, for which the reduction in the deferred tax liability related to convertible debt was recorded through equity.

Other changes in the worldwide net deferred tax liability were the result of current year operating results.

The valuation allowance increase of $ 3.0 million during fiscal 2022 is primarily due to additional valuation allowances recorded on US state net operating loss and tax credit carryforwards.

The increase in the worldwide net deferred tax liability is primarily due to tax depreciation deductions in excess of book depreciation expense during fiscal 2023 and utilization of net operating loss carryforwards, partially offset by research expenditures capitalized for tax purposes and impact of the release of valuation allowance previously maintained against certain U.S.

state and foreign deferred tax assets.

The valuation allowance decrease of $ 5.2 million during fiscal 2023 is primarily due to the release of valuation allowance related to certain U.S.

state and foreign deferred tax assets and changes in the valuation allowance in other jurisdictions based on current year operating results.

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

It has also considered the ability to implement certain strategies that would, if necessary, be implemented to accelerate taxable income and use expiring deferred tax assets.

Based upon cumulative profitability in the U.S.

and Malaysia, and increases in future taxable income projections, management has determined there is sufficient positive evidence to release a portion of the valuation allowance previously provided against certain U.S.

state and foreign deferred tax assets.

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

In addition, the Company has concluded that it cannot rely on future taxable income in certain risk bearing principal jurisdictions due to uncertainty surrounding future taxable income including the effects of Covid-19, the announcement of CSL intent not to renew its supply agreement and the general uncertainty surrounding the global economy.

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

1 unchanged sentence

As of April 1, 2023, the Company maintains a valuation allowance against certain U.S.

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

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

tax credit carryforwards that are not more-likely-than-not realizable as well as a valuation allowance against the net deferred tax assets of certain foreign subsidiaries.

In connection with the March 2021 acquisition of Cardiva, the Company acquired federal and state net operating loss carryforwards of $ 150.9 million and $ 93.3 million, respectively.

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

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

These net operating loss and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

shareholders over a three-year period in excess of 50 percent as defined under Section 382 and 383 of the U.S.

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

3 unchanged sentences

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

The Company does not believe it has had an ownership change through April 1, 2023.

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

As of April 1, 2023, the Company has U.S.

1 unchanged sentence

The Company has U.S.

state net operating losses of $ 107.2 million of which $ 85.7 million will begin to expire in fiscal 2023 and $ 21.5 million can be carried forward indefinitely.

state net operating losses of $ 75.7 million of which $ 62.3 million will expire at various times between fiscal 2024 and fiscal 2040 and $ 13.4 million can be carried forward indefinitely.

The Company has federal and state tax credits of $ 0.6 million and $ 5.4 million, respectively, which will begin to expire in fiscal 2029 and fiscal 2028, respectively.

1 unchanged sentence

As of April 1, 2023, substantially all of the unremitted earnings of the Company have been taxed in the U.S.

The Company has provided $ 1.3 million of U.S.

income and foreign withholding taxes on approximately $ 150.5 million of unremitted earnings that are not indefinitely reinvested.

The Company has not provided U.S.

deferred income taxes or foreign withholding taxes on unremitted earnings of foreign subsidiaries of approximately $ 72.0 million as such amounts are considered to be indefinitely reinvested in the business.

The accumulated earnings in the foreign subsidiaries are primarily utilized to fund working capital requirements as its subsidiaries continue to expand their operations, to service existing debt obligations and to fund future foreign acquisitions.

The accumulated earnings in the foreign subsidiaries are primarily utilized to fund working capital requirements as its subsidiaries continue to expand their operations and to fund future foreign acquisitions.

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

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

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

federal statutory income tax rate due to the following:

1 unchanged sentence

Tax at federal statutory rate $ 29,695 21.0 % $ 13,362 21.0 % $ 15,312 21.0 %

Difference between U.S.

and foreign tax ( 3,799 ) ( 6.0 ) % ( 7,049 ) ( 9.7 ) % ( 6,688 ) ( 7.7 ) %

Impact of foreign operations ( 2,408 ) ( 1.7 ) % ( 3,799 ) ( 6.0 ) % ( 7,049 ) ( 9.7 ) %

State income taxes net of federal benefit 2,939 2.1 % 1,384 2.2 % ( 924 ) ( 1.3 ) %

5 unchanged sentences

Non-deductible expenses 827 0.6 % 741 1.2 % 2,038 2.8 %

Stock compensation benefits 2,070 3.3 % ( 5,504 ) ( 7.5 ) % ( 12,133 ) ( 13.9 ) %

Stock compensation shortfalls (benefits) 1,883 1.3 % 2,070 3.3 % ( 5,504 ) ( 7.5 ) %

Research credits ( 2,073 ) ( 1.5 ) % ( 1,496 ) ( 2.4 ) % ( 1,230 ) ( 1.7 ) %

3 unchanged sentences

Other, net ( 409 ) ( 0.3 ) % 1,713 2.7 % ( 1,171 ) ( 1.6 ) %

Income tax (benefit) provision $ 20,254 31.8 % $ ( 6,556 ) ( 9.0 ) % $ 10,626 12.2 %

Income tax provision (benefit) $ 26,002 18.4 % $ 20,254 31.8 % $ ( 6,556 ) ( 9.0 ) %

The Company recorded an income tax expense of $ 26.0 million, representing an effective tax rate of 18.4 %.

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

statutory rate of 21.0 %, primarily due to the impact of GILTI, non-deductible executive

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

statutory rate of 21.0 %, primarily due to jurisdictional mix of earnings, research credits generated and the change in valuation allowance, partially offset by state taxes, non-deductible executive compensation and disallowed stock compensation expense.

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

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

compensation , contingent consideration from the Cardiva acquisition, and state taxes partially offset by the jurisdictional mix of earnings, research credits generated, and reductions to uncertain tax positions.

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

Unrecognized Tax Benefits

2 unchanged sentences

As of April 2, 2022, the Company had $ 3.9 million of unrecognized tax benefits, of which $ 3.1 million would impact the effective tax rate, if recognized.

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

The following table summarizes the activity related to its gross unrecognized tax benefits for the fiscal years ended April 2, 2022, April 3, 2021 and March 28, 2020:

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

The following table summarizes the activity related to its gross unrecognized tax benefits for the fiscal years ended April 1, 2023, April 2, 2022 and April 3, 2021:

(In thousands) April 1,

2023 April 2,

2021 March 28,

2022 April 3,

Beginning Balance $ 3,939 $ 6,107 $ 4,620

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Settlements of tax positions — ( 1,579 ) —

Closure of statute of limitations — — —

Ending Balance $ 3,941 $ 3,939 $ 6,107

2 unchanged sentences

Approximately $ 0.2 million and $ 0.1 million of gross interest and penalties were accrued at April 1, 2023 and April 2, 2022, respectively, and are not included in the amounts above.

Additionally, $ 0.1 million, $ 0.9 million and $ 0.3 million of accrued interest and penalties was included in income tax provision (benefit) for the years ended April 2, 2022, April 3, 2021and March 28, 2020, respectively.

Additionally, $ 0.1 million, $ 0.1 million and $ 0.9 million of accrued interest and penalties was included in income tax provision (benefit) for the years ended April 1, 2023, April 2, 2022 and April 3, 2021, respectively.

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

3 unchanged sentences

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

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

EARNINGS PER SHARE

9 unchanged sentences

Diluted income per share $ 2.24 $ 0.84 $ 1.55

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

3 unchanged sentences

Share Repurchase Plan

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

During fiscal 2022, the Company did not make any additional repurchases under this program, which expired in May 2021.

In August 2022, the Company announced that its Board of Directors had approved a new three-year share repurchase program authorizing the repurchase of up to $ 300.0 million of Haemonetics common stock, based on market conditions, through August 2025.

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 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.

In November 2022, the Company completed a $ 75.0 million repurchase of its common stock pursuant to an accelerated share repurchase agreement (“ASR”) entered into with Citibank N.A.

in August 2022.

The total number of shares repurchased under the ASR was 1.0 million at an average price per share upon final settlement of $ 75.20 .

As of April 1, 2023, the total remaining authorization for repurchases of the Company’s common stock under the share repurchase program was $ 225.0 million.

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 .

13 unchanged sentences

Contract Balances

The difference in

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

As of April 1, 2023 and April 2, 2022, the Company had contract liabilities of $ 30.2 million and $ 26.8 million, respectively.

During fiscal 2023, the Company recognized $ 24.3 million of revenue that was included in the above April 2, 2022 contract

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

As of April 2, 2022 and April 3, 2021, the Company had contract assets of $ 5.5 million and $ 4.8 million, respectively.

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

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

As of April 2, 2022 and April 3, 2021, the Company had contract liabilities of $ 26.8 million and $ 20.9 million, respectively.

During fiscal 2022, the Company recognized $ 19.0 million of revenue that was included in the above April 3, 2021 contract liability balance.

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

liability balance.

Contract liabilities are classified as other current liabilities on the consolidated balance sheet.

As of April 1, 2023 and April 2, 2022, the Company’s contract assets were immaterial.

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

5 unchanged sentences

Total inventories $ 259,379 $ 293,027

(1) Prior year raw materials and finished goods balances have been adjusted to conform with current year presentation.

PROPERTY, PLANT AND EQUIPMENT

Property and equipment consisted of the following:

Property, plant and equipment consisted of the following:

(In thousands) April 1, 2023 April 2, 2022

4 unchanged sentences

Haemonetics equipment 463,706 405,753

Construction in progress 29,367 53,607

Total 944,215 869,147

accumulated depreciation and amortization ( 610,665 ) ( 599,699 )

accumulated depreciation ( 633,330 ) ( 610,665 )

Property, plant and equipment, net $ 310,885 $ 258,482

Depreciation expense was $ 51.2 million, $ 44.4 million and $ 43.1 million in fiscal 2023 , 2022 and 2021, respectively.

During fiscal 2022, the Company incurred $ 2.8 million of accelerated depreciation costs relating to disposables manufacturing equipment that is no longer in use as a result of the CSL contract expiration discussed below.

The Company also incurred an impairment of property, plant and equipment of $ 5.2 million in connection with the 2020 Program.

Refer to Note 3 - Restructuring for details on the 2020 Program.

These impairment charges were included in cost of goods sold on the consolidated statements of income and impacted the Plasma reporting segment as of April 2, 2022.

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

following the expiration of the current term in June 2022.

As a result, the Company incurred a one-time impairment in fiscal 2021 of $ 20.9 million related to disposables manufacturing equipment previously recorded in construction in process which will not be placed into service as a result of the supply agreement expiration.

The impairment charge was included in cost of goods sold on the consolidated statements of income and impacted the Plasma reporting segment as of April 3, 2021.

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

This impairment is related to the carrying balances of the property, plant and

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

equipment exceeding the consideration received under the terms of the agreement.

The charge will not result in any future cash expenditures.

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

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

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

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

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

During fiscal 2020, the Company incurred $ 18.1 million of accelerated depreciation expense related to the change in estimate of useful lives of PCS ® 2 devices included within Haemonetics Equipment, as these will be replaced by NexSys PCS ® devices.

During fiscal 2022, the Company incurred an impairment of property, plant and equipment of $ 5.2 million in connection with the 2020 Program, refer to Note 3 - Restructuring for details on the 2020 Program, and $ 2.8 million of accelerated depreciation costs related to disposables manufacturing equipment that was no longer in use.

In fiscal 2021, the Company incurred a one-time impairment charge of $ 20.9 million related to in-process disposables manufacturing equipment that would not be placed in service.

These impairment charges were included in cost of goods sold on the consolidated statements of income and impacted the Plasma reporting segment in the respective periods.

GOODWILL AND INTANGIBLE ASSETS

1 unchanged sentence

(In thousands) Plasma Blood Center Hospital Total

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

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

Acquisitions — — 259,788 259,788

Currency translation 64 77 897 1,038

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

2 unchanged sentences

Carrying amount as of April 2, 2022 29,043 34,166 404,078 467,287

Currency translation — ( 311 ) ( 745 ) ( 1,056 )

Carrying amount as of April 1, 2023 $ 29,043 $ 33,855 $ 403,333 $ 466,231

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The results of the Company’s goodwill impairment test performed in the fourth quarter of fiscal 2023, 2022 and 2021 indicated that the estimated fair value of all reporting units exceeded their respective carrying values.

16 unchanged sentences

Total $ 20,473

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(In thousands) Gross Carrying

10 unchanged sentences

In-process software development $ 2,648

In-process research and development 13,667

In-process patents 2,895

Total $ 19,210

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

Refer to Note 4, Acquisitions and Strategic Investments, for additional information regarding acquisitions.

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

1 unchanged sentence

Aggregate amortization expense for amortized intangible assets for fiscal 2023, 2022 and 2021 was $ 42.1 million, $ 56.6 million and $ 41.2 million, respectively.

Intangible asset impairments of $ 0.6 million were included in operating expenses on the consolidated statements of income during fiscal 2022 .

There were no intangible asset impairments during fiscal 2021 or 2020.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

10 unchanged sentences

At April 1, 2023 and April 2, 2022, the Company had a total of $ 82.8 million and $ 79.0 million of software costs capitalized, of which $ 3.8 million and $ 5.0 million are related to in process software development initiatives, respectively, and the remaining balance represents in-service assets that are being amortized over their useful lives.

Amortization expense for capitalized software was $ 8.4 million, $ 7.8 million, and $ 8.2 million for the fiscal years ended April 2, 2022 , April 3, 2021 and March 28, 2020, respectively.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Amortization expense for capitalized software was $ 8.5 million, $ 8.4 million and $ 7.8 million for fiscal 2023 , 2022 and 2021, respectively.

Lessee Activity

10 unchanged sentences

As such, the Company utilizes the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment.

For operating leases that commenced prior to the Company's adoption of ASC 842, the Company measured the lease liabilities and right-of-use assets using the incremental borrowing rate as of March 31, 2019.

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

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.

In fiscal 2023, the Company’s manufacturing operations in Leetsdale, PA were 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.

1 unchanged sentence

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

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

11 unchanged sentences

The Company’s operating lease costs were $ 10.6 million, $ 11.0 million and $ 11.7 million during fiscal 2023, 2022 and 2021, respectively.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

(In thousands) April 2, 2022 April 3, 2021 March 28, 2020

(In thousands) April 1, 2023 April 2, 2022 April 3, 2021

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

15 unchanged sentences

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.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTES PAYABLE AND LONG-TERM DEBT

12 unchanged sentences

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

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

10 unchanged sentences

The 2026 Notes were therefore not convertible as of April 1, 2023 and were classified as long-term debt on the Company’s consolidated balance sheets.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

6 unchanged sentences

As of April 1, 2023, the $ 500.0 million principal balance was netted down by the $ 7.9 million of remaining debt issuance costs, resulting in a net convertible note payable of $ 492.1 million.

Interest expense related to the 2026 Notes was $ 2.7 million,

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

which is entirely attributable to the amortization of the debt issuance costs.

Interest expense related to the 2026 Notes was $ 2.7 million for the fiscal year ended April 1, 2023, 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 %.

6 unchanged sentences

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

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

The cost of $ 47.4 million incurred to purchase the Capped Calls was recorded as a reduction to additional paid-in capital in fiscal 2021 and will not be remeasured.

Credit Facilities

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

The Credit Facilities expire on June 15, 2023.

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

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 were each scheduled to mature on June 15, 2023 with applicable interest rates during the period established using LIBOR plus 1.13 % - 1.75 %, depending on the Company's leverage ratio.

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 $ 280.0 million senior unsecured term loan, the proceeds of which have been used to settle the balance of the term loan under the 2018 Credit Facilities, and a $ 420.0 million senior unsecured revolving credit facility (together, the “Revised Credit Facilities”).

Loans under the Revised Credit Facilities 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.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company applied modification accounting for the credit facility refinancing.

For the term loan under the Revised Credit Facilities, for fiscal 2023, the Company recognized interest expense of $ 0.5 million for third party fees incurred and capitalized $ 0.2 million of lender fees related to the term loan.

For fiscal 2023, the Company capitalized $ 1.1 million of lender fees and third-party costs incurred in the refinancing related to the revolving credit facility under the Revised Credit Facilities.

At April 1, 2023, $ 274.7 million was outstanding under the term loan with an effective interest rate of 6.3 %.

At April 2, 2022, no borrowings were outstanding on the Revolving Credit Facility.

There were no outstanding borrowings under the revolving credit facility at April 1, 2023.

The Company also had $ 21.3 million of uncommitted operating lines of credit to fund its global operations under which there were no outstanding borrowings as of April 1, 2023.

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

In connection with the Cardiva acquisition, the Company and its lenders also agreed to increase the maximum consolidated leverage ratio the Company was required to maintain for the four consecutive quarters immediately following the closing of the Cardiva acquisition to 4.25 :1.0 through the third quarter of fiscal 2022, after which the maximum consolidated leverage ratio the Company is required to maintain reverted to 3.5 :1.0.

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

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

The Consolidated Interest Coverage Ratio is calculated as the consolidated EBITDA divided by consolidated interest expense while the consolidated leverage ratio is calculated as consolidated total debt divided by consolidated EBITDA.

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

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

The Consolidated Interest Coverage Ratio is calculated as the consolidated EBITDA divided by consolidated interest expense while the Consolidated Net Leverage ratio is calculated as consolidated total debt minus liquidity, divided by consolidated EBITDA.

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

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

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

Any failure to comply with the financial and operating covenants of the Credit Facilities would prevent the Company from being able to borrow additional funds and would constitute a default, which could result in, among other things, the amounts outstanding including all accrued interest and unpaid fees, becoming immediately due and payable.

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

Any failure to comply with the financial and operating covenants of the Revised Credit Facilities would prevent the Company from being able to borrow additional funds and would constitute a default, which could result in, among other things, the amounts outstanding including all accrued interest and unpaid fees, becoming immediately due and payable.

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

As of April 1, 2023, the Company was in compliance with the covenants.

Commitment Fee

Pursuant to the Credit Facilities, the Company is required to pay, on the last day of each calendar quarter, a commitment fee on the unused portion of the Revolving Credit Facility.

Pursuant to the Revised Credit Facilities, the Company is required to pay, on the last day of each calendar quarter, a commitment fee on the unused portion of the revolving credit facility.

The commitment fee is subject to a pricing grid based on the Company’s consolidated leverage ratio.

1 unchanged sentence

The current commitment fee on the undrawn portion of the revolving credit facility is 0.175 %.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Debt Issuance Costs and Interest

4 unchanged sentences

As of both April 1, 2023 and April 2, 2022, the Company had an insignificant amount of accrued interest associated with the outstanding debt.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Fiscal year (In thousands)

(In thousands)

2024 $ 12,276

10 unchanged sentences

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, Chinese Yuan, and the Mexican Peso.

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

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

8 unchanged sentences

Substantially all currency cash flow hedges outstanding as of April 1, 2023 mature within twelve months.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Non-Designated Foreign Currency Contracts

5 unchanged sentences

The Company had non-designated foreign currency hedge contracts under ASC 815 outstanding in the contract amount of $ 44.7 million as of April 1, 2023 and $ 39.5 million as of April 2, 2022.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Interest Rate Swaps

On June 15, 2018, the Company entered into Credit Facilities which provided for a $ 350 million Term Loan and a $ 350 million Revolving Credit Facility.

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

As a result, the Company's earnings and cash flows are exposed to interest rate risk from changes to LIBOR.

Part of the Company’s interest rate risk management strategy includes the use of interest rate swaps to mitigate its exposure to changes in variable interest rates.

The Company’s objective in using interest rate swaps is to add stability to interest expense and to manage and reduce the risk inherent in interest rate fluctuations.

In August 2018, the Company entered into two interest rate swap agreements (the “Swaps”) to pay an average fixed rate of 2.80 % on a total notional value of $ 241.9 million of debt.

As a result of the interest rate swaps, 70 % of the Term Loan exposed to interest rate risk from changes in LIBOR are fixed at a rate of 4.05 %.

The Swaps mature on June 15, 2023.

As of April 2, 2022, the notional value was $ 199.1 million.

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

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 was established using LIBOR plus the applicable rate ranging from 1.13 % to 1.75 % based on the Company’s leverage ratio.

In August 2018, the Company entered into two interest rate swap agreements to pay an average fixed rate of 2.80 % plus the applicable rate on a total notional value of $ 241.9 million of debt, or 70 % of the notional value of the unsecured term loan.

The 2018 interest rate swaps mature on June 15, 2023.

As a result of the Company’s refinancing of the 2018 Credit Facilities in July 2022, as discussed below, the 2018 interest rate swaps were amended in September 2022 to align with the Term Secured Overnight Financing Rate (“SOFR”) rate rather than LIBOR (the “Amended Swaps”).

In order to avoid dedesignation, the Company elected certain practical expedients under ASC 848.

As a result, the Company’s earnings and cash flows are exposed to interest rate risk from changes to SOFR.

The Company concluded that the Amended Swaps were still effective such that hedge accounting was continued on these swaps.

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

The Revised Credit Facilities include a $ 280.0 million senior unsecured term loan and a $ 420.0 million senior unsecured revolving credit facility.

Loans under the Revised Credit Facilities bear interest at an annual rate equal to the 1-month USD Term SOFR plus 0.10 % and an applicable rate ranging from 1.125 % to 1.750 % based on the Company’s consolidated net leverage ratio.

In September 2022, the Company entered into four additional interest rate swaps, which when combined with the Amended Swaps, result in an average blended fixed interest rate of 3.57 % plus the applicable rate on 70 % of the notional value of the unsecured term loan until mid-June 2023 and 4.12 % plus the applicable rate thereafter on 80 % of the notional until the maturity date in June 2025.

The Company has concluded that each of these four additional interest rate swaps are effective and qualify for hedge accounting treatment.

The Company held the following interest rate swaps as of April 1, 2023:

Hedged Item Original Notional Amount Notional Amount as of April 1, 2023 Designation Date Effective Date Termination Date Fixed Interest Rate Estimated Fair Value Assets (Liabilities)

(In thousands)

1-month USD Term SOFR $ 140,719 $ 28,500 9/28/2018 9/30/2022 6/15/2023 2.67 % $ 132

1-month USD Term SOFR 101,219 20,500 9/28/2018 9/30/2022 6/15/2023 2.76 % 91

1-month USD Term SOFR 23,888 71,663 9/23/2022 9/30/2022 6/15/2023 4.44 % 67

1-month USD Term SOFR 23,888 71,663 9/23/2022 9/30/2022 6/15/2023 4.46 % 63

1-month USD Term SOFR 109,900 109,900 9/23/2022 6/15/2023 6/15/2025 4.08 % ( 464 )

1-month USD Term SOFR 109,900 109,900 9/23/2022 6/15/2023 6/15/2025 4.15 % ( 585 )

Total $ 509,514 $ 412,126 $ ( 696 )

For fiscal 2023, the Company recorded a gain of $ 2.6 million, net of tax, in accumulated other comprehensive loss to recognize the effective portion of the fair value of the swaps that qualify as cash flow hedges.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Trade Receivables

4 unchanged sentences

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

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

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

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

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

The following is a roll forward of the allowance for credit losses:

Twelve Months Ended

(In thousands) April 2, 2022 April 3, 2021 March 28, 2020

(In thousands) April 1, 2023 April 2, 2022 April 3, 2021

Beginning balance $ 2,475 $ 2,226 $ 3,824

2 unchanged sentences

Ending balance $ 4,932 $ 2,475 $ 2,226

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Fair Value of Derivative Instruments

1 unchanged sentence

Derivative Instruments

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

Effectiveness

10 unchanged sentences

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

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

quoted prices for identical or similar assets or liabilities

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

in markets that are not active;

other observable inputs for the asset or liability;

1 unchanged sentence

As of April 1, 2023, the Company has classified its derivative assets and liabilities within Level 2 of the fair value hierarchy prescribed by ASC 815, as discussed below, because these observable inputs are available for substantially the full term of its derivative instruments.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following tables present the fair value of the Company’s derivative instruments as they appear in its consolidated balance sheets as of April 1, 2023 and April 2, 2022:

4 unchanged sentences

Non-designated foreign currency hedge contracts Other current assets 302 99

Designated interest rate swaps Other current assets 1,110 —

$ 2,813 $ 3,232

21 unchanged sentences

Non-designated foreign currency hedge contracts — 302 — 302

Designated interest rate swaps — 1,110 $ — 1,110

$ 132,341 $ 2,813 $ — $ 135,154

20 unchanged sentences

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

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

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

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

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

fair value hierarchy.

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

Fair Value at Valuation Unobservable

2 unchanged sentences

Projected fiscal year of payment 2024

Revenue-based payments $ 1,725 Discounted cash flow Discount rate 8.5 %

Projected fiscal year of payment 2023 - 2024

Regulatory-based payment $ 1,741 Discounted cash flow Discount rate 4.9 %

Probability of payment 0% - 100%

Projected fiscal year of payment 2024

During the fiscal year ended April 2, 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 its consolidated statement of income.

The fair value of contingent consideration associated with acquisitions was $ 33.7 million at April 2, 2022.

As of April 2, 2022, $ 31.2 million was included in other liabilities and $ 2.5 million was included in other long-term liabilities on the consolidated balance sheet.

The fair value of contingent consideration associated with acquisitions was $ 0.9 million at April 1, 2023 and was included in other current liabilities.

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

13 unchanged sentences

Defined Contribution Plans

The Company has a Savings Plus Plan (the “401k Plan”) that is a 401(k) plan that allows its U.S.

The Company has a Savings Plus Plan (the “401k Plan”) that allows its U.S.

employees to accumulate savings on a pre-tax basis.

5 unchanged sentences

The employer contributions to these plans totaled $ 0.6 million, $ 0.6 million and $ 0.7 million in fiscal 2023 , 2022 and 2021, respectively.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Defined Benefit Plans

4 unchanged sentences

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

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

10 unchanged sentences

Totals $ 1,191 $ 1,698 $ 2,070

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The activity under those defined benefit plans are as follows:

6 unchanged sentences

Benefits paid 748 928

Actuarial gain (loss) 3,208 ( 1,249 )

Actuarial gain 3,675 3,208

Employee and plan participants contribution ( 1,599 ) ( 2,093 )

6 unchanged sentences

Benefits paid ( 593 ) ( 719 )

(Loss) gain on plan assets ( 108 ) 219

Gain (loss) on plan assets 105 ( 108 )

Employee and plan participants contribution 1,670 2,077

4 unchanged sentences

$ ( 7,002 ) $ ( 12,963 )

Unrecognized net actuarial (gain) loss ( 236 ) 2,948

Unrecognized net actuarial gain ( 3,757 ) ( 236 )

Unrecognized prior service cost ( 1,133 ) ( 1,099 )

5 unchanged sentences

The total liability for this plan, which is included in the table above, was $ 7.5 million and $ 9.6 million as of April 1, 2023 and April 2, 2022, respectively.

The accumulated benefit obligation for all plans was $ 28.4 million and $ 30.6 million for fiscal 2022 and 2021, respectively.

There were no plans where the plan assets were greater than the accumulated benefit obligation as of April 2, 2022 and April 3, 2021.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The accumulated benefit obligation for all plans was $ 25.2 million and $ 28.4 million for fiscal 2023 and 2022, respectively.

There were no plans where the plan assets were greater than the accumulated benefit obligation as of April 1, 2023 and April 2, 2022.

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

Balance as of March 28, 2020 $ ( 209 )

Actuarial gain 614

Prior service cost ( 87 )

Plan settlements ( 209 )

Balance as of March 28, 2020 $ ( 209 )

Actuarial loss ( 221 )

Prior service cost ( 130 )

Plan settlements —

Balance as of April 3, 2021 $ ( 560 )

3 unchanged sentences

Balance as of April 2, 2022 $ 1,619

Actuarial gain 2,695

Prior service credit 46

Plan settlements ( 285 )

Balance as of April 1, 2023 $ 4,075

The Company expects to amortize $ 0.4 million from accumulated other comprehensive loss to net periodic benefit cost during fiscal 2024.

31 unchanged sentences

Attorney’s Office for the District of Massachusetts.

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

The Company is fully cooperating with this inquiry.

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

The Company has fully cooperated with this inquiry.

On August 16, 2022, the U.S.

Department of Justice (“DOJ”) filed a motion on behalf of the United States and 31 states reflecting their decision to not intervene in the underlying qui tam action captioned United States ex rel.

Berthelot et al.

Haemonetics Corp., 1:20-cv-11062-ADB, pending in the U.S.

District Court for the District of Massachusetts, indicating that the DOJ had completed its investigative activity based on then available information.

The qui tam case was unsealed by order dated August 18, 2022.

During the fourth fiscal quarter of 2023, the Company recorded a loss contingency related to this matter, which did not have a material impact on its consolidated financial statements.

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.

5 unchanged sentences

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.

In 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.

In March 2023, the Company filed a second motion to dismiss the complaint, which is pending before the court.

The Company believes it has valid and meritorious defenses to the complaint.

During the fourth fiscal quarter of 2023, the Company recorded a loss contingency related to this matter, which did not have a material impact on its consolidated financial statements.

CAPITAL STOCK

1 unchanged sentence

The 2019 Equity Plan permits the award of incentive stock options, non-qualified stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units (including performance-based restricted stock units) and other awards to the Company’s key employees, non-employee directors and certain consultants and advisors of the Company and its subsidiaries.

The 2019 Equity Plan is administered by the Compensation Committee of the Board of Directors (the “Committee”), which consists of three independent members of the Company's Board of Directors, and is the successor to the Haemonetics Corporation 2005 Long-Term Incentive Compensation Plan, as amended (the “2005 Equity Plan”).

The 2019 Equity Plan is administered by the Compensation Committee of the Board of Directors (the “Committee”), which consists of four independent members of the Company’s Board of Directors, and

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

is the successor to the Haemonetics Corporation 2005 Long-Term Incentive Compensation Plan, as amended (the “2005 Equity Plan”).

Upon the Effective Date, no further awards were granted under the 2005 Equity Plan;

1 unchanged sentence

The maximum number of shares available for award under 2019 Equity Plan is 5,759,433 , which consists of 2,700,000 shares of common stock authorized for issuance under the 2019 Equity Plan plus 3,059,433 shares of common stock reserved for issuance under the 2005 Equity Plan that remained available for grant under the 2005 Plan as of the Effective Date.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Under the 2019 Equity Plan, any shares that are subject to the award of stock options or SARs will be counted against the authorized share reserve as one share for every one share issued and any shares that are subject to awards other than stock options, SARs or cash awards will be counted against the authorized share reserve as 2.76 shares for every one share granted.

15 unchanged sentences

Forfeitures are estimated based on historical experience.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A summary of stock option activity for the fiscal year ended April 1, 2023 is as follows:

18 unchanged sentences

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

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

9 unchanged sentences

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

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A summary of RSU activity for the fiscal year ended April 1, 2023 is as follows:

19 unchanged sentences

As a result, the Company may issue up to 647,974 shares related to outstanding performance-based awards.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A summary of PSU activity for the fiscal year ended April 1, 2023 is as follows:

2 unchanged sentences

Unvested at April 2, 2022 282,946 $ 102.17

106,069 72.52

Forfeited ( 47,810 ) 89.43

7 unchanged sentences

Correlation of returns 65.45 % 65.06 % 65.12 %

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

17 unchanged sentences

The weighted average grant date fair value of the six-month option inherent in the Purchase Plan was approximately $ 18.10 , $ 20.77 and $ 30.77 during fiscal 2023 , 2022 and 2021, respectively.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

SEGMENT AND ENTERPRISE-WIDE INFORMATION

6 unchanged sentences

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 integration and transaction costs, deal amortization, restructuring and restructuring related costs, impairments, accelerated device depreciation and related costs, costs related to compliance with the European Union Medical Device Regulation (“MDR”) and In Vitro Diagnostic Regulation (“IVDR”), unusual or infrequent and material litigation-related charges and gains and losses on dispositions and sale of assets.

Although these amounts are excluded from segment operating income, as applicable, they are included in the reconciliations that follow.

These items include integration and transaction costs, amortization of acquired intangible assets, restructuring and restructuring related costs, digital transformation costs related to the upgrade of our enterprise resource planning system, impairments, accelerated device depreciation and related costs, costs related to compliance with the European Union Medical Device Regulation (“MDR”) and In Vitro Diagnostic Regulation (“IVDR”), unusual or infrequent and material litigation-related charges and gains and losses on dispositions and sale of assets.

Although these amounts are excluded from

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

segment operating income, as applicable, they are included in the reconciliations that follow.

Management measures and evaluates the Company’s net revenues and operating income using internally derived standard currency exchange rates that remain constant from year to year;

10 unchanged sentences

(1) Reflects revenue for service, maintenance and parts.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(In thousands) 2023 2022 2021

7 unchanged sentences

Effect of exchange rates 8,419 18,993 12,830

Deal amortization ( 47,414 ) ( 32,830 ) ( 25,746 )

Amortization of acquired intangible assets ( 32,640 ) ( 47,414 ) ( 32,830 )

Impairment of assets and PCS2 related charges 616 ( 5,732 ) ( 25,696 )

1 unchanged sentence

Restructuring and restructuring related costs ( 11,549 ) ( 28,824 ) ( 15,661 )

Digital transformation costs ( 4,536 ) — —

MDR and IVDR costs ( 9,854 ) ( 11,033 ) ( 4,130 )

9 unchanged sentences

Total depreciation and amortization (excluding impairment charges) $ 93,307 $ 97,747 $ 84,287

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(In thousands) April 1,

17 unchanged sentences

(1) Long-lived assets are comprised of property, plant and equipment.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(In thousands) 2023 2022 2021

15 unchanged sentences

Net revenues $ 1,168,660 $ 993,196 $ 870,463

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

ACCUMULATED OTHER COMPREHENSIVE LOSS

1 unchanged sentence

(In thousands) Foreign currency Defined benefit plans Net Unrealized Gain (Loss) on Derivatives Total

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

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

Other comprehensive income (loss) before reclassifications ( 6,391 ) 2,179 5,785 1,573

11 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data