What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-02 compared with 2023-08-08 · 215 added, 92 removed, 468 unchanged (40% of the section changed)

3 unchanged sentences

(Unaudited in thousands, except per share data)

Three Months Ended

Three Months Ended Six Months Ended

September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Net revenues $ 318,183 $ 297,485 $ 629,515 $ 558,943

5 unchanged sentences

Amortization of acquired intangible assets 7,222 8,221 14,695 16,588

Impairment of intangible assets 10,419 — 10,419 —

Total operating expenses 135,207 111,146 248,813 222,642

14 unchanged sentences

(Unaudited in thousands, except share data)

September 30,

2023 April 1,

1 unchanged sentence

Cash and cash equivalents $ 351,005 $ 284,466

Accounts receivable, less allowance for credit losses of $ 5,047 at July 1, 2023 and $ 4,932 at April 1, 2023

Accounts receivable, less allowance for credit losses of $ 5,044 at September 30, 2023 and $ 4,932 at April 1, 2023

174,249 179,142

3 unchanged sentences

Property, plant and equipment, net 307,766 310,885

Intangible assets, less accumulated amortization of $ 427,521 at July 1, 2023 and $ 417,422 at April 1, 2023

Intangible assets, less accumulated amortization of $ 433,092 at September 30, 2023 and $ 417,422 at April 1, 2023

250,504 275,771

16 unchanged sentences

Authorized — 150,000,000 shares;

Issued and outstanding — 50,705,779 shares at July 1, 2023 and 50,448,519 shares at April 1, 2023

Issued and outstanding — 50,740,389 shares at September 30, 2023 and 50,448,519 shares at April 1, 2023

Additional paid-in capital 616,960 594,706

21 unchanged sentences

Balance, July 1, 2023 50,706 $ 507 $ 609,610 $ 284,017 $ ( 29,518 ) $ 864,616

Exercise of stock options 12 — 655 37 — 692

Issuance of restricted stock, net of cancellations 22 — — — — —

Tax withholding on employee equity awards — — ( 11 ) ( 64 ) — ( 75 )

Share-based compensation expense — — 6,706 — — 6,706

Net income — — — 24,908 — 24,908

Other comprehensive loss — — — — ( 3,187 ) ( 3,187 )

Balance, September 30, 2023 50,740 $ 507 $ 616,960 $ 308,898 $ ( 32,705 ) $ 893,660

Common Stock Additional

11 unchanged sentences

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

Exercise of stock options 50 1 2,191 — — 2,192

Shares repurchased ( 786 ) ( 8 ) ( 23,891 ) ( 51,101 ) — ( 75,000 )

Issuance of restricted stock, net of cancellations 26 — — — — —

Share-based compensation expense — — 5,735 — — 5,735

Net income — — — 33,197 — 33,197

Other comprehensive loss — — — — ( 7,538 ) ( 7,538 )

Balance, October 1, 2022 50,605 $ 506 $ 564,394 $ 204,364 $ ( 40,255 ) $ 729,009

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

2 unchanged sentences

(Unaudited in thousands)

Three Months Ended

Six Months Ended

September 30,

2023 October 1,

Cash Flows from Operating Activities:

4 unchanged sentences

Share-based compensation expense 13,695 11,034

Impairment of assets 10,419 94

Amortization of deferred financing costs 1,610 313

11 unchanged sentences

Acquisition — ( 2,850 )

Proceeds from divestiture — 850

Proceeds from sale of property, plant and equipment 921 7,537

2 unchanged sentences

Cash Flows from Financing Activities:

Term loan borrowings — 280,000

Term loan redemption — ( 280,000 )

Proceeds from revolving facility — 50,000

Repayment of term loan borrowings ( 5,250 ) ( 6,125 )

Debt issuance costs — ( 1,118 )

Share repurchases — ( 75,000 )

Contingent consideration payments ( 849 ) ( 21,593 )

22 unchanged sentences

All intercompany transactions have been eliminated.

Operating results for the three months ended July 1, 2023 are not necessarily indicative of the results that may be expected for the full fiscal year ending March 30, 2024 or any other interim period.

Operating results for the six months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the full fiscal year ending March 30, 2024 or any other interim period.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the Annual Report on Form 10-K for the fiscal year ended April 1, 2023.

1 unchanged sentence

Subsequent events have been evaluated as required.

There were no material recognized or unrecognized subsequent events as of or for the three months ended July 1, 2023, except for those discussed in Note 8, Inventories .

There were no material recognized or unrecognized subsequent events as of or for the six months ended September 30, 2023, except for those discussed in Note 3, Acquisitions and Strategic Investments .

RECENT ACCOUNTING PRONOUNCEMENTS

1 unchanged sentence

There are currently no recent accounting pronouncements that the Company expects to have a material impact on its financial position and results of operations.

STRATEGIC INVESTMENTS

ACQUISITIONS AND STRATEGIC INVESTMENTS

As part of the Company’s business development activities, it holds strategic investments in certain entities.

During fiscal 2024, the Company made strategic investments totaling $ 7.0 million.

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

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

The Company made certain other strategic investments totaling $ 6.0 million during the first quarter of fiscal 2024.

The Company’s strategic investments are classified as other long-term assets on the Company’s Condensed Consolidated Balance Sheets and the Company has not recorded any adjustments to the carrying value of the strategic investments during three months ended July 1, 2023 .

Agreement to acquire OpSens, Inc.

On October 10, 2023, the Company announced it has entered into a definitive agreement to acquire all of the issued and outstanding common shares of OpSens, Inc.

(“OpSens”) for CAD $ 2.90 per share in an all-cash transaction, representing a fully diluted equity value of approximately USD $ 253.0 million at the exchange rate on the date of announcement.

Completion of the acquisition is subject to the approval of OpSens shareholders, receipt of court and regulatory approval, as well as certain other closing conditions customary for transactions of this nature.

The transaction is expected to close by the end of January 2024.

OpSens offers commercially and clinically validated optical technology for use primarily in interventional cardiology.

OpSens’ core products include the SavvyWire® that acts as pacing and pressure monitoring wire advancing the workflow of the procedure and enabling potentially shorter hospital stays for patients, and the OptoWire®, a pressure guidewire that aims to improve clinical outcomes by accurately and consistently measuring Fractional Flow Reserve (FFR) and diastolic pressure ratio (dPR) to aid clinicians in the diagnosis and treatment of patients with coronary artery disease.

OpSens also manufactures a range of fiber optic sensor solutions used in medical devices and other critical industrial applications.

The addition of OpSens will expand the Hospital business unit portfolio in the interventional cardiology market.

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

10 unchanged sentences

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

As of July 1, 2023, the Company had $ 24.6 million of transaction price allocated to remaining performance obligations related to executed contracts with an original duration of one year or more.

As of September 30, 2023, the Company had $ 22.0 million of transaction price allocated to remaining performance obligations related to executed contracts with an original duration of one year or more.

The Company expects to recognize approximately 78 % of this amount as revenue within the next twelve months and the remaining balance thereafter.

2 unchanged sentences

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

As of July 1, 2023 and April 1, 2023, the Company had contract liabilities of $ 32.9 million and $ 30.2 million, respectively.

During the three months ended July 1, 2023, the Company recognized $ 13.5 million of revenue that was included in the above April 1, 2023 contract liability balance.

As of September 30, 2023 and April 1, 2023, the Company had contract liabilities of $ 31.7 million and $ 30.2 million, respectively.

During the three and six months ended September 30, 2023, the Company recognized $ 7.0 million and $ 20.5 million of revenue, respectively, that was included in the above April 1, 2023 contract liability balance.

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

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

As of September 30, 2023 and April 1, 2023, the Company’s contract assets were immaterial.

RESTRUCTURING

5 unchanged sentences

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

During the three months ended July 1, 2023 and July 2, 2022, the Company incurred $ 2.2 million and $ 3.5 million, respectively, of restructuring and restructuring related costs under this program.

During the three and six months ended September 30, 2023, the Company incurred $ 2.0 million and $ 4.2 million, respectively, of restructuring and restructuring related costs under this program.

During the three and six months ended October 1, 2022, the Company incurred $ 3.1 million and $ 6.6 million, respectively, of restructuring and restructuring related costs under this program.

Total cumulative charges under this program are $ 71.4 million.

The following table summarizes the activity for restructuring reserves related to the 2020 Program and prior programs for the three months ended July 1, 2023, substantially all of which relates to employee severance and other employee costs:

The following table summarizes the activity for restructuring reserves related to the 2020 Program and prior programs for the six months ended September 30, 2023, substantially all of which relates to employee severance and other employee costs:

(In thousands) 2020 Program Prior Programs Total

Balance at April 1, 2023

$ 1,810 $ 340 $ 2,150

Costs incurred, net of reversals 57 18 75

Payments ( 721 ) ( 27 ) ( 748 )

Balance at July 1, 2023 $ 1,210 $ 340 $ 1,550

Balance at September 30, 2023

$ 1,146 $ 331 $ 1,477

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

Three Months Ended

(In thousands) July 1,

Three Months Ended Six Months Ended

(In thousands) September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Cost of goods sold $ 58 $ 29 $ 264 $ ( 177 )

Selling, general and administrative expenses 28 136 ( 189 ) 298

$ ( 11 ) $ ( 44 )

As of July 1, 2023, the Company had a restr ucturing liability of $ 1.6 million , of which approximately $ 1.2 million is paya ble within the next twelve months.

Total $ 86 $ 165 $ 75 $ 121

As of September 30, 2023, the Company had a restr ucturing liability of $ 1.5 million , of which approximately $ 1.1 million is paya ble within the next twelve months.

In addition to the restructuring expenses included in the table above, the Company also incurred costs 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.

1 unchanged sentence

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

Restructuring costs Three Months Ended

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

Restructuring costs Three Months Ended Six Months Ended

(In thousands) September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022

Plasma $ 59 $ — $ ( 197 ) $ ( 211 )

2 unchanged sentences

Total $ 86 $ 165 $ 75 $ 121

Restructuring related costs Three Months Ended

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

Restructuring related costs Three Months Ended Six Months Ended

(In thousands) September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022

Plasma $ 74 $ 108 $ 243 $ 748

7 unchanged sentences

statutory tax rate.

For the three months ended July 1, 2023, the Company reported income tax expense of $ 10.5 million, representing an effective tax rate of 20.4 %.

The effective tax rate for the three months ended July 1, 2023 includes $ 1.2 million of discrete tax benefit primarily related to stock compensation windfalls.

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

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

For the three and six months ended September 30, 2023, the Company reported income tax expense of $ 7.9 million and $ 18.5 million, respectively, representing effective tax rates of 24.1 % an d 21.9 %, respectively.

The effective tax rate for the three months ended September 30, 2023 includes $ 0.1 million of discrete tax benefit primarily related to stock compensation windfalls.

The effective tax rate for the six months ended September 30, 2023, includes $ 1.3 million of discrete tax benefit primarily related to stock compensation windfalls.

For the three and six months ended October 1, 2022, the Company reported inc ome tax expense of $ 7.9 million and $ 13.5 million, respectively, representing effective tax rates of 19.1 % and 20.3 %, respectively.

The effective tax rate for the three months ended October 1, 2022 include a discrete tax benefit of $ 0.5 million related to tax rate changes enacted in the quarter and $ 0.3 million of discrete tax benefit relating to stock compensation windfalls.

The effective tax rate for the six months ended October 1, 2022, includes a discrete tax benefit of $ 0.5 million related to tax rate changes enacted in the period and $ 0.3 million of discrete tax expense relating to stock compensation shortfalls.

EARNINGS PER SHARE

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

Three Months Ended

(In thousands, except per share amounts) July 1,

Three Months Ended Six Months Ended

(In thousands, except per share amounts) September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Net income $ 24,908 $ 33,197 $ 65,950 $ 53,074

9 unchanged sentences

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

For the three months ended July 1, 2023 and July 2, 2022, weighted average shares outstanding, assuming dilution, excludes the impact of 0.6 million and 0.9 million anti-dilutive shares, respectively.

For the three and six months ended September 30, 2023 , weighted average shares outstanding, assuming dilution, excludes the impact of 0.7 million and 0.6 million anti-dilutive shares, respectively.

For the three and six months ended October 1, 2022 , weighted average shares outstanding, assuming dilution, excludes the impact and 0.7 million and 0.8 million anti-dilutive shares, respectively.

Share Repurchase Program

3 unchanged sentences

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.

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

In fiscal 2023, the Company completed a $ 75.0 million repurchase of its common stock pursuant to an accelerated share repurchase agreement entered into with Citibank N.A.

in August 2022.

As of September 30, 2023 , the total remaining authorization for repurchases of the Company's common stock under the share repurchase program was $ 225.0 million.

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

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

(In thousands) July 1,

(In thousands) September 30,

2023 April 1,

3 unchanged sentences

Total inventories $ 285,830 $ 259,379

In August 2023, the Company issued a voluntary recall of certain products within its Whole Blood business sold to customers in the U.S.

In August 2023, the Company issued a voluntary recall of certain products within the Whole Blood portion of our Blood Center business unit sold to customers in the U.S.

and certain foreign jurisdictions.

The Company recorded a charge of $ 3.4 million related to inventory with respect to this recall in the first quarter of fiscal 2024.

The Company continues to evaluate the impact of this recall and may record additional incremental charges in future periods.

As of September 30, 2023, the Company has recorded charges of $ 4.3 million related to inventory.

PROPERTY, PLANT AND EQUIPMENT

(In thousands) July 1, 2023 April 1, 2023

(In thousands) September 30,

2023 April 1,

Land $ 5,443 $ 5,358

7 unchanged sentences

Property, plant and equipment, net $ 307,766 $ 310,885

Depreciation expense was $ 13.3 million and $ 11.7 million for the three months ended July 1, 2023 and July 2, 2022, respectively.

During the three and six months ended September 30, 2023, depreciation expense was $ 13.6 million and $ 26.9 million, respectively.

During the three and six months ended October 1, 2022, depreciation expense was $ 12.9 million and $ 24.6 million, respectively.

In the second quarter of fiscal 2024, $ 4.3 million of the Company’s property, plant and equipment met held for sale accounting criteria and was reclassed to Prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets.

Lessor Activity

5 unchanged sentences

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

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

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

GOODWILL AND INTANGIBLE ASSETS

The changes in the carrying amount of goodwill by operating segment for fiscal 2024 are as follows:

(In thousands) Plasma Blood Center Hospital Total

Carrying amount as of April 1, 2023

$ 29,043 $ 33,855 $ 403,333 $ 466,231

Currency translation — ( 364 ) ( 462 ) ( 826 )

Carrying amount as of September 30, 2023

$ 29,043 $ 33,491 $ 402,871 $ 465,405

The gross carrying amount of intangible assets and the related accumulated amortization as of September 30, 2023 and April 1, 2023 is as follows:

(In thousands) Gross Carrying

Amount Accumulated

Amortization Net

As of September 30, 2023

Patents $ 18,504 $ 11,301 $ 7,203

Capitalized software 79,431 65,028 14,403

Other developed technology 349,091 163,571 185,520

Customer contracts and related relationships 202,659 188,041 14,618

Trade names 9,508 5,151 4,357

Total $ 659,193 $ 433,092 $ 226,101

Non-amortizable:

In-process software development $ 7,275

In-process research and development 13,667

In-process patents 3,461

Total $ 24,403

(In thousands) Gross Carrying

Amount Accumulated

Amortization Net

As of April 1, 2023

Patents $ 18,504 $ 10,831 $ 7,673

Capitalized software 78,962 60,776 18,186

Other developed technology 362,506 153,099 209,407

Customer contracts and related relationships 203,240 187,774 15,466

Trade names 9,508 4,942 4,566

Total $ 672,720 $ 417,422 $ 255,298

Non-amortizable:

In-process software development $ 3,841

In-process research and development 13,667

In-process patents 2,965

Total $ 20,473

Refer to Note 3, 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 relationship s and trade names.

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

In the second quarter of fiscal 2024, the Company recorded an intangible asset impairment charge of $ 10.4 million related to the intangibles acquired as part of the enicor GmbH acquisition completed in fiscal 2021 within the Hospital business unit.

During the three and six months ended September 30, 2023, amortization expense was $ 9.4 million and $ 19.2 million, respectively.

During the three and six months ended October 1, 2022, amortization expense was $ 10.6 million and $ 21.3 million, respectively.

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

(In thousands)

Remainder of Fiscal 2024 $ 18,345

Fiscal 2025 $ 29,705

Fiscal 2026 $ 24,023

Fiscal 2027 $ 22,066

Fiscal 2028 $ 20,294

NOTES PAYABLE AND LONG-TERM DEBT

5 unchanged sentences

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

During first quarter of fiscal 2024, the conditions allowing holders of the 2026 Notes to convert have not been met.

The 2026 Notes were therefore not convertible as of July 1, 2023 and were classified as long-term debt on the Company’s Condensed Consolidated Balance Sheets.

As of July 1, 2023, the $ 500.0 million principal balance was netted down by the $ 7.2 million of remaining debt issuance costs, resulting in a net convertible note payable of $ 492.8 million.

Interest expense related to the 2026 Notes was $ 0.7 million for the three months ended July 1, 2023, which is entirely attributable to the amortization of the debt issuance costs.

During second quarter of fiscal 2024, the conditions allowing holders of the 2026 Notes to convert have not been met.

The 2026 Notes were therefore not convertible as of September 30, 2023 and were classified as long-term debt on the Company’s Condensed Consolidated Balance Sheets.

As of September 30, 2023, the $ 500.0 million principal balance was netted down by the $ 6.5 million of remaining debt issuance costs, resulting in a net convertible note payable of $ 493.5 million.

Interest expense related to the 2026 Notes was $ 0.6 million and $ 1.3 million for the three and six months ended September 30, 2023, respectively, which is entirely attributable to the amortization of the debt issuance costs.

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

Credit Facilities

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

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

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.

9 unchanged sentences

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 July 1, 2023, $ 273.0 million was outstanding under the term loan with an effective interest rate of 6.6 %.

The Company has scheduled principal payments of $ 14.0 million required during the 12 months following July 1, 2023.

There were no

outstanding borrowings under the revolving credit facility at July 1, 2023.

The Company also had $ 19.6 million of uncommitted operating lines of credit to fund its global operations under which there were no outstanding borrowings as of July 1, 2023.

The Company was in compliance with the leverage and interest coverage ratios specified in the Revised Credit Facilities as well as all other bank covenants as of July 1, 2023.

At September 30, 2023, $ 269.5 million was outstanding under the term loan with an effective interest rate of 6.7 %.

The Company has scheduled principal payments of $ 14.0 million required during the 12 months following September 30, 2023.

There were no outstanding borrowings under the revolving credit facility at September 30, 2023.

The Company also had $ 19.0 million of uncommitted operating lines of credit to fund its global operations under which there were no outstanding borrowings as of September 30, 2023.

The Company was in compliance with the leverage and interest coverage ratios specified in the Revised Credit Facilities as well as all other bank covenants as of September 30, 2023.

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

The Company manufactures, markets and sells its products globally.

During the three months ended July 1, 2023, 23.9 % of the Company’s sales were generated outside the U.S.

During the three and six months ended September 30, 2023, 25.7 % and 24.8 %, respectively, of the Company’s sales were generated outside the U.S.

in local currencies.

8 unchanged sentences

Designated Foreign Currency Hedge Contracts

All of the Company’s designated foreign currency hedge contracts as of July 1, 2023 and April 1, 2023 were cash flow hedges under ASC 815, Derivatives and Hedging (“ASC 815”).

All of the Company’s designated foreign currency hedge contracts as of September 30, 2023 and April 1, 2023 were cash flow hedges under ASC 815, Derivatives and Hedging (“ASC 815”).

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

1 unchanged sentence

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

The Company had designated foreign currency hedge contracts outstanding in the contract amount of $ 32.3 million as of July 1, 2023 and $ 51.8 million as of April 1, 2023.

At July 1, 2023, a gain of $ 1.4 million, net of tax, will be reclassified to earnings within the next twelve months.

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

The Company had designated foreign currency hedge contracts outstanding in the contract amount of $ 50.5 million as of September 30, 2023 and $ 51.8 million as of April 1, 2023.

At September 30, 2023, a gain of $ 2.7 million, net of tax, will be reclassified to earnings within the next twelve months.

All currency cash flow hedges outstanding as of September 30, 2023 mature within twelve months.

Non-Designated Foreign Currency Contracts

4 unchanged sentences

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

The Company had non-designated foreign currency hedge contracts under ASC 815 outstanding in the contract amount of $ 31.2 million as of July 1, 2023 and $ 44.7 million as of April 1, 2023.

The Company had non-designated foreign currency hedge contracts under ASC 815 outstanding in the contract amount of $ 27.1 million as of September 30, 2023 and $ 44.7 million as of April 1, 2023.

Interest Rate Swaps

4 unchanged sentences

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.

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.

6 unchanged sentences

The Company has concluded that the two remaining interest rate swaps entered into during September 2022, which cover 80 % of the notional value of the unsecured term loan through maturity in June 2025, are effective and qualify for hedge accounting treatment.

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

Hedged Item Original Notional Amount Notional Amount as of July 1, 2023

The Company held the following interest rate swaps as of September 30, 2023 :

Hedged Item Original Notional Amount Notional Amount as of September 30, 2023

Designation Date Effective Date Termination Date Fixed Interest Rate Estimated Fair Value Assets (Liabilities)

3 unchanged sentences

Total $ 219,800 $ 217,000 $ 3,102

For the three months ended July 1, 2023, the Company recorded a gain of $ 2.8 million , net of tax, in accumulated other comprehensive loss to recognize the effective portion of the fair value of the swaps that qualify as cash flow hedges.

For the six months ended September 30, 2023, the Company rec orded a gain of $ 3.2 million, ne t 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.

Trade Receivables

4 unchanged sentences

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

Three Months Ended

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

Three Months Ended Six Months Ended

(In thousands) September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022

Beginning balance $ 5,047 $ 2,495 $ 4,932 $ 2,475

10 unchanged sentences

Fair Value of Derivative Instruments

The following table presents the effect of the Company’s derivative instruments designated as cash flow hedges and those not designated as hedging instruments under ASC 815 in its unaudited Condensed Consolidated Statements of Income and Comprehensive Income for the three months ended July 1, 2023:

Derivative Instruments Amount of Gain Recognized

10 unchanged sentences

Designated interest rate swaps, net of tax $ 3,231 $ 1 Interest and other expense, net $ —

The Company did not have fair value hedges or net investment hedges outstanding as of July 1, 2023 or April 1, 2023.

As of July 1, 2023, no material deferred taxes were recognized for designated foreign currency hedges.

The Company did not have fair value hedges or net investment hedges outstanding as of September 30, 2023 or April 1, 2023.

As of September 30, 2023, no material deferred taxes were recognized for designated foreign currency hedges.

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

5 unchanged sentences

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

As of July 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.

The following tables present the fair value of the Company’s derivative instruments as they appear in its Condensed Consolidated Balance Sheets as of July 1, 2023 and April 1, 2023:

As of September 30, 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.

The following tables present the fair value of the Company’s derivative instruments as they appear in its Condensed Consolidated Balance Sheets as of September 30, 2023 and April 1, 2023:

(In thousands) Location in Condensed Consolidated

Balance Sheets As of As of

July 1, 2023 April 1, 2023

September 30, 2023 April 1, 2023

Derivative Assets:

8 unchanged sentences

Designated interest rate swaps Other long-term liabilities — 1,807

$ 441 $ 1,889

Fair Value Measured on a Recurring Basis

Financial assets and financial liabilities measured at fair value on a recurring basis consist of the following as of July 1, 2023 and April 1, 2023.

As of July 1, 2023

Financial assets and financial liabilities measured at fair value on a recurring basis consist of the following as of September 30, 2023 and April 1, 2023.

As of September 30, 2023

(In thousands) Level 1 Level 2 Level 3 Total

27 unchanged sentences

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

The fair value of the 2026 Notes as of July 1, 2023 was $ 428.4 million, which was determined by using the market price on the last trading day of the reporting period.

The fair value of the 2026 Notes as of September 30, 2023 was $ 434.1 million, which was determined by using the market price on the last trading day of the reporting period.

COMMITMENTS AND CONTINGENCIES

13 unchanged sentences

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

During the first quarter of fiscal 2024, the Company recorded an additional loss contingency related to this matter, which did not have a material impact on its condensed consolidated financial statements.

The Company currently has a loss contingency recorded for this matter and did not record any adjustments during the second quarter of fiscal 2024.

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.

The Company removed the case to the United States District Court for the Northern District Illinois.

See Mary Crumpton v.

1 unchanged sentence

1:21-cv-1402 .

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

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

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

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

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

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 second quarter of fiscal 2024, the Company entered into a Memorandum of Understanding providing terms that would resolve the litigation and recorded an additional loss contingency related to this matter, resulting in a total accrual of approximately $ 8.7 million within Other current liabilities in its condensed consolidated balance sheets.

Product Recall

In August 2023, the Company issued a voluntary recall of certain products within the Whole Blood portion of our Blood Center business unit sold to customers in the U.S.

and certain foreign jurisdictions.

As of September 30, 2023, the Company has recorded cumulative charges of $ 6.5 million related to inventory, returns and customer claims associated with this recall.

The Company continues to evaluate the impact of this recall and may record additional incremental charges in future periods.

ACCUMULATED OTHER COMPREHENSIVE LOSS

7 unchanged sentences

Net current period other comprehensive income (loss) ( 6,661 ) — 4,337 ( 2,324 )

Balance as of July 1, 2023 $ ( 36,736 ) $ 4,075 $ 3,143 $ ( 29,518 )

Balance as of September 30, 2023 $ ( 40,596 ) $ 4,075 $ 3,816 $ ( 32,705 )

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

7 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, amortization of acquired intangible assets, restructuring costs, 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”) and unusual or infrequent and material litigation-related charges.

These items include integration and transaction costs, amortization of acquired intangible assets, restructuring costs, 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 segment operating income, as applicable, they are included in the reconciliations that follow.

2 unchanged sentences

Selected information by reportable segment is presented below:

Three Months Ended

(In thousands) July 1,

Three Months Ended Six Months Ended

(In thousands) September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Plasma $ 141,748 $ 128,888 $ 280,230 $ 231,930

2 unchanged sentences

Net revenues by business unit 314,018 297,102 619,342 555,901

5,045 5,409 10,809 10,546

Effect of exchange rates ( 880 ) ( 5,026 ) ( 636 ) ( 7,504 )

1 unchanged sentence

(1) Reflects revenue for service, maintenance and parts

Three Months Ended

(In thousands) July 1,

Three Months Ended Six Months Ended

(In thousands) September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Segment operating income

6 unchanged sentences

Effect of exchange rates ( 3,091 ) ( 51 ) ( 478 ) 6,194

Integration and transaction costs ( 1,115 ) 758

Amortization of acquired intangible assets ( 7,222 ) ( 8,221 ) ( 14,695 ) ( 16,588 )

Integration and transaction costs ( 1,784 ) ( 46 ) ( 2,899 ) 712

Restructuring costs ( 86 ) ( 165 ) ( 75 ) ( 121 )

4 unchanged sentences

Litigation-related charges ( 5,449 ) ( 198 ) ( 6,507 ) ( 394 )

Impairment of intangible assets ( 10,419 ) — ( 10,419 ) —

Gains on divestiture — 382 — 382

Operating income $ 35,303 $ 46,732 $ 88,962 $ 77,499

(1) Reflects shared service expenses including quality and regulatory, customer and field service, research and development, manufacturing and supply chain, as well as other corporate support functions.

Management reviews revenue based on the reportable segments noted above.

Although these reportable segments are primarily product-based, they differ from the Company’s product line revenues for Plasma products and services and Blood Center products and services.

Specifically, the Blood Center reportable segment includes plasma products utilized for collection in blood centers primarily for transfusion purposes.

Additionally, product line revenues also include service revenues which are excluded from the reportable segments.

Net revenues by business unit are as follows:

Three Months Ended

(In thousands) July 1,

Three Months Ended Six Months Ended

(In thousands) September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Plasma $ 141,900 $ 127,893 $ 280,510 $ 230,274

11 unchanged sentences

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

Three Months Ended

(In thousands) July 1,

Three Months Ended Six Months Ended

(In thousands) September 30,

2023 October 1,

2022 September 30,

2023 October 1,

United States $ 236,345 $ 211,724 $ 473,418 $ 393,720

5 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-Q

Item 1. Financial Statements