What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-02-08 compared with 2023-11-02 · 226 added, 135 removed, 548 unchanged (40% of the section changed)

3 unchanged sentences

(Unaudited in thousands, except per share data)

Three Months Ended Six Months Ended

September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Three Months Ended Nine Months Ended

2023 December 31,

2022 December 30,

2023 December 31,

Net revenues $ 336,250 $ 305,301 $ 965,765 $ 864,244

22 unchanged sentences

(Unaudited in thousands, except share data)

September 30,

2023 April 1,

1 unchanged sentence

Cash and cash equivalents $ 193,978 $ 284,466

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

Accounts receivable, less allowance for credit losses of $ 5,725 at December 30, 2023 and $ 4,932 at April 1, 2023

211,611 179,142

3 unchanged sentences

Property, plant and equipment, net 318,665 310,885

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

Intangible assets, less accumulated amortization of $ 442,810 at December 30, 2023 and $ 417,422 at April 1, 2023

429,270 275,771

10 unchanged sentences

Total current liabilities 261,755 251,816

Long-term debt, net of current maturities 748,662 754,102

Long-term debt 856,849 754,102

Deferred tax liability 62,246 36,195

3 unchanged sentences

Authorized — 150,000,000 shares;

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

Issued and outstanding — 50,785,040 shares at December 30, 2023 and 50,448,519 shares at April 1, 2023

Additional paid-in capital 627,094 594,706

28 unchanged sentences

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

Employee stock purchase plan 39 — 2,732 — — 2,732

Exercise of stock options 4 1 189 ( 4 ) — 186

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

Tax withholding on employee equity awards ( 1 ) — ( 4 ) ( 36 ) — ( 40 )

Share-based compensation expense — — 7,217 — — 7,217

Net income — — — 31,241 — 31,241

Other comprehensive income — — — — 8,323 8,323

Balance, December 30, 2023 50,785 $ 508 $ 627,094 $ 340,099 $ ( 24,382 ) $ 943,319

Common Stock Additional

18 unchanged sentences

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

Employee stock purchase plan 45 — 1,919 — — 1,919

Shares repurchased ( 211 ) ( 2 ) 13,525 ( 13,523 ) — —

Exercise of stock options 3 — 160 — — 160

Issuance of restricted stock, net of cancellations 2 — — — — —

Share-based compensation expense — — 7,491 — — 7,491

Net income — — — 32,944 — 32,944

Other comprehensive income — — — — 4,456 4,456

Balance, December 31, 2022 50,444 $ 504 $ 587,489 $ 223,785 $ ( 35,799 ) $ 775,979

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

2 unchanged sentences

(Unaudited in thousands)

Six Months Ended

September 30,

2023 October 1,

Nine Months Ended

2023 December 31,

Cash Flows from Operating Activities:

17 unchanged sentences

Capital expenditures ( 56,611 ) ( 98,272 )

Acquisition — ( 2,850 )

Acquisitions ( 243,852 ) ( 2,850 )

Proceeds from divestiture — 850

6 unchanged sentences

Proceeds from revolving facility 110,000 50,000

Payments on revolving facility — ( 50,000 )

Repayment of term loan borrowings ( 8,750 ) ( 7,875 )

6 unchanged sentences

Other financing activities 35 ( 32 )

Net cash used in financing activities ( 7,770 ) ( 49,081 )

Net cash provided by (used in) financing activities 101,659 ( 98,761 )

Effect of exchange rates on cash and cash equivalents ( 484 ) ( 4,398 )

16 unchanged sentences

All intercompany transactions have been eliminated.

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.

Operating results for the nine months ended December 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 six months ended September 30, 2023, except for those discussed in Note 3, Acquisitions and Strategic Investments .

There were no material recognized or unrecognized subsequent events as of or for the nine months ended December 30, 2023.

RECENT ACCOUNTING PRONOUNCEMENTS

Standards Implemented

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

Standards to be Implemented

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) Update No.

2023-07, Segment Reporting (Topic 280).

The new guidance requires public entities to provide expanded disclosures over significant segment expenses and additional disclosures related to the chief operating decision maker.

ASC Update No.

2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The new guidance is applicable to Haemonetics beginning with the fiscal 2025 Annual Report on Form 10-K.

The Company is currently evaluating the impact to its interim and annual report disclosures.

In December 2023, the FASB issued ASC Update No.

2023-09, Income Taxes (Topic 740).

ASC Update No.

2023-09 requires public entities to provide detailed income tax disclosures, including rate reconciliations and disaggregated income tax payment information, on an annual basis.

The updated guidance is effective for fiscal years beginning after December 15, 2024 and early adoption is permitted.

ASC Update No.

2023-09 is applicable to Haemonetics beginning with the fiscal 2026 Annual Report on Form 10-K and the Company is currently evaluating the impact to its annual report disclosures.

ACQUISITIONS AND STRATEGIC INVESTMENTS

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.

During fiscal 2024, the Compan y has made strategic investments totaling $ 7.6 million.

During fiscal yea r 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’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 and six months ended September 30, 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.

Acquisition of OpSens, Inc.

On October 10, 2023, the Company announced it had entered into an Arrangement Agreement with OpSens, Inc.

(“OpSens”), a medical device cardiology-focused company delivering solutions based on its proprietary optical technology, pursuant to which, among other things, the Company agreed to acquire all of the issued and outstanding common shares of OpSens.

On December 12, 2023, the Company completed its acquisition of OpSens for total consideration of approximately $ 254.5 million, or $ 243.9 million, net of cash acquired.

The Company financed the acquisition through a combination of cash on hand and borrowings under its revolving credit facility.

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’ core products include the SavvyWire ® , a sensor-guided 3-in-1 guidewire for TAVR procedures, 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 addition of OpSens expands the Hospital business unit portfolio in the interventional cardiology market and will be included in the Hospital reportable segment.

Purchase Price Allocation

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

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

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

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

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

The finalization of the Company’s purchase accounting assessment could result in changes in the valuation of assets acquired and liabilities assumed, which could be material.

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

As of December 30, 2023, the valuation studies necessary to determine the fair market value of the assets acquired and liabilities assumed are preliminary, including the projection of the underlying cash flows used to determine the fair value of the identified tangible, intangible and financial assets and liabilities.

The purchase price of $ 243.9 million, net of $ 10.6 million of cash acquired consists of the amounts presented below, which represent the preliminary determination of the fair value of the identifiable assets acquired and liabilities assumed:

(In thousands) December 12, 2023

Accounts receivable $ 5,960

Inventories 11,255

Prepaid expenses and other current assets 2,062

Property, plant and equipment 3,028

Intangible assets 180,500

Goodwill 87,079

Other long-term assets 4,705

Total assets acquired $ 294,589

Accounts payable 5,626

Accrued payroll and related costs 1,723

Other liabilities 7,277

Deferred tax liability 30,258

Other long-term liabilities 5,853

Total liabilities assumed $ 50,737

Net assets acquired $ 243,852

The Company determined the identifiable intangible assets were developed technology, customer contracts and related relationships and trade names.

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

Developed technology and customer contracts and related relationships were valued using the excess earnings method.

Trademarks were valued using the relief from royalty method.

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

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

As of December 30, 2023, the valuation of the intangible assets is preliminary as the Company is still gathering information related to the assets’ cash flow projections.

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

As a result of the acquisition of OpSens, the Company recognized goodwill of $ 87.1 million based on expected synergies from integration into our Hospital business.

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

Intangible assets acquired consist of the following:

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

Rates used in Purchase Price Allocation

Developed technology $ 121,600 15 years 20.0 %

Customer contracts and related relationships 53,900 15 years 18.4 %

Trade names 5,000 15 years 20.0 %

Total $ 180,500

The Company recorded a long-term net deferred tax liability of $ 30.3 million primarily related to definite-lived intangible assets which cannot be deducted for tax purposes, partially offset by deferred tax assets primarily related to net operating losses acquired.

Acquisition-Related Costs

The Company incurred $ 6.6 million of acquisition-related costs for the nine months ended December 30, 2023 in connection with the acquisition.

These costs related to legal and other professional fees, which were recognized in selling, general and administrative on the Condensed Consolidated Statements of Income.

The Company’s condensed consolidated financial statements include the results of OpSens from the date the acquisition was completed.

Pro forma financial information has not been presented as the acquisition is not material to the Company’s overall financial results.

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 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.

As of December 30, 2023, the Company had $ 23.5 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 86 % 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 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.

As of December 30, 2023 and April 1, 2023, the Company had contract liabilities of $ 31.1 million and $ 30.2 million, respectively.

During the three and nine months ended December 30, 2023, the Company recognized $ 4.9 million and $ 25.4 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 September 30, 2023 and April 1, 2023, the Company’s contract assets were immaterial.

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

RESTRUCTURING

1 unchanged sentence

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

Operating Excellence Program

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

2 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 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.

During the three and nine months ended December 30, 2023, the Company incurred $ 2.6 million and $ 6.8 million, respectively, of restructuring and restructuring related costs under this program.

During the three and nine months ended December 31, 2022, the Company incurred $ 4.1 million and $ 10.7 million, respectively, of restructuring and restructuring related costs under this program.

Total cumulative charges under this program are $ 74.0 million.

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

Portfolio Rationalization Initiatives

In November 2023, the Company announced its plans to end of life the ClotPro analyzer system within the Hospital business unit and whole blood inline collection products within the Blood Center business unit, including the associated manufacturing operations and closure of certain other facilities.

The following table summarizes the activ ity for restructuring reserves related to portfolio rationalization initiatives, the 2020 Program and prior programs for the nine months ended December 30, 2023, substantially all of which relates to employee severance and other employee costs:

(In thousands) Portfolio Rationalization 2020 Program Prior Programs Total

Balance at April 1, 2023

2 unchanged sentences

Payments ( 126 ) ( 1,006 ) ( 58 ) ( 1,190 )

Balance at September 30, 2023

Balance at December 30, 2023

$ 7,530 $ 1,160 $ 313 $ 9,003

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

Three Months Ended Six Months Ended

(In thousands) September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Three Months Ended Nine Months Ended

(In thousands) December 30,

2023 December 31,

2022 December 30,

2023 December 31,

Cost of goods sold $ 7,065 $ ( 49 ) $ 7,329 $ ( 226 )

Research and development 343 — 343 —

Selling, general and administrative expenses 560 93 371 391

Total $ 7,968 $ 44 $ 8,043 $ 165

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.

As of December 30, 2023, the Company had a restr ucturing liability of $ 9.0 million , of which approximately $ 8.7 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 Six Months Ended

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

Restructuring costs Three Months Ended Nine Months Ended

(In thousands) December 30, 2023 December 31, 2022 December 30, 2023 December 31, 2022

Plasma $ 33 $ ( 50 ) $ ( 164 ) $ ( 261 )

Blood Center 4,546 — 4,546 —

Hospital 2,503 — 2,745 —

1 unchanged sentence

Total $ 7,968 $ 44 $ 8,043 $ 165

Restructuring related costs Three Months Ended Six Months Ended

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

Restructuring related costs Three Months Ended Nine Months Ended

(In thousands) December 30, 2023 December 31, 2022 December 30, 2023 December 31, 2022

Plasma $ 72 $ 241 $ 315 $ 989

5 unchanged sentences

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

The Company’s reported tax rate is impacted by the jurisdictional mix of earnings in any given period as the foreign jurisdictions in which it operates have tax rates that differ from the U.S.

The Company’s reported tax rate differs from the statutory tax rate due to the jurisdictional mix of earnings in any given period as the foreign jurisdictions in which it operates have tax rates that differ from the U.S.

statutory tax rate.

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.

The Company’s effective tax rate is adversely impacted by non-deductible expenses including executive compensation and transaction costs.

For the three and nine months ended December 30, 2023, the Company reported income tax expense of $ 12.8 million and $ 31.3 million, respectively, representing effective tax rates of 29.0 % and 24.3 %, respectively.

The effective tax rate for the nine months ended December 30, 2023 includes $ 1.1 million of discrete tax benefit, of which $ 2.6 million relates to stock compensation windfalls, partially offset by other discrete items.

For the three and nine months ended December 31, 2022, the Company reported income tax expense of $ 9.3 million and $ 22.8 million, respectively, representing effective tax rates of 22.0 % and 20.9 %, respectively.

The effective tax rate for the three months ended December 31, 2022 includes $ 0.1 million of discrete tax expense relating to stock compensation shortfalls.

The effective tax rate for the nine months ended December 31, 2022 includes a discrete tax benefit of $ 0.5 million related to tax rate changes enacted in the period and $ 0.4 million of discrete tax expense relating to stock compensation shortfalls.

The increase in the reported tax rates for the three and nine months ended December 30, 2023, compared to the same periods in fiscal 2023, relates primarily to unfavorable changes in the jurisdictional mix of earnings, research tax credits generated and non-deductible acquisition-related expenses, partially offset by discrete tax benefits from stock compensation windfall deductions.

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 Six Months Ended

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

2023 October 1,

2022 September 30,

2023 October 1,

Three Months Ended Nine Months Ended

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

2023 December 31,

2022 December 30,

2023 December 31,

Net income $ 31,241 $ 32,944 $ 97,191 $ 86,018

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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 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.

For the three and nine months ended December 30, 2023 , weighted average shares outstanding, assuming dilution, excludes the impact of 0.6 million anti-dilutive shares for both periods.

For the three and nine months ended December 31, 2022 , weighted average shares outstanding, assuming dilution, excludes the impact and 0.4 million and 0.7 million anti-dilutive shares, respectively.

Share Repurchase Program

5 unchanged sentences

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.

As of December 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) September 30,

(In thousands) December 30,

2023 April 1,

5 unchanged sentences

and certain foreign jurisdictions.

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

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

PROPERTY, PLANT AND EQUIPMENT

(In thousands) September 30,

(In thousands) December 30,

2023 April 1,

8 unchanged sentences

Property, plant and equipment, net $ 318,665 $ 310,885

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.

During the three and nine months ended December 30, 2023, depreciation expense was $ 14.2 million and $ 41.1 million, respectively.

During the three and nine months ended December 31, 2022, depreciation expense was $ 13.1 million and $ 37.7 million, respectively.

Beginning 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

11 unchanged sentences

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

Acquisitions — — 87,079 87,079

Currency translation — ( 140 ) 1,829 1,689

Carrying amount as of September 30, 2023

Carrying amount as of December 30, 2023

$ 29,043 $ 33,715 $ 492,241 $ 554,999

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

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

(In thousands) Gross Carrying

1 unchanged sentence

Amortization Net

As of September 30, 2023

As of December 30, 2023

Patents $ 18,504 $ 11,562 $ 6,942

24 unchanged sentences

Total $ 20,473

Refer to Note 3, Acquisitions and Strategic Investments, for additional information regarding acquisitions.

During the third quarter of fiscal 2024, the Company acquired OpSens and recorded $ 121.6 million of developed technology, $ 53.9 million of customer contracts and related relationships and $ 5.0 million of trade names based on our preliminary purchase accounting valuation.

Refer to Note 3, Acquisitions and Strategic Investments, for additional information regarding the acquisition.

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

1 unchanged sentence

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:

During the three and nine months ended December 30, 2023, amortization expense was $ 9.3 million and $ 28.5 million, respectively.

During the three and nine months ended December 31, 2022, amortization expense was $ 10.4 million and $ 31.7 million, respectively.

Future annual amortization expense on intangible assets for the next five years is estimated to be as follows:

(In thousands)

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

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.

During third 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 December 30, 2023 and were classified as long-term debt on the Company’s Condensed Consolidated Balance Sheets.

As of December 30, 2023, the $ 500.0 million principal balance was netted down by the $ 5.9 million of remaining debt issuance costs, resulting in a net convertible note payable of $ 494.1 million.

Interest expense related to the 2026 Notes was $ 0.7 million and $ 2.0 million for the three and nine months ended December 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 %.

12 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 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.

At December 30, 2023, $ 266.0 million was outstanding under the term loan with an effective interest rate of 6.8 %.

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

During the third quarter of fiscal 2024 in connection with the acquisition of OpSens, the Company borrowed $ 110.0 million under the revolving credit facility, with an effective interest rate of 6.7 % , which remains outstanding as of December 30, 2023.

The Company also had $ 20.1 million of uncommitted operating lines of credit to fund its global operations under which there were no outstanding borrowings as of December 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 December 30, 2023.

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

The Company manufactures, markets and sells its products globally.

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.

During the three and nine months ended December 30, 2023, 25.4 % and 25.0 %, 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 September 30, 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 December 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 $ 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.

The Company had designated foreign currency hedge contracts outstanding in the contract amount of $ 20.5 million as of December 30, 2023 and $ 51.8 million as of April 1, 2023.

At December 30, 2023, a gain of $ 2.0 million, net of tax, will be reclassified to earnings within the next twelve months.

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

Non-Designated Foreign Currency Contracts

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

The Company had non-designated foreign currency hedge contracts under ASC 815 outstanding in the contract amount of $ 27.1 million as of September 30, 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 $ 38.1 million as of December 30, 2023 and $ 44.7 million as of April 1, 2023.

Interest Rate Swaps

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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.

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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 September 30, 2023 :

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

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

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

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

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Total $ 219,800 $ 214,200 $ 674

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.

For the nine months ended December 30, 2023, the Company rec orded a gain of $ 1.3 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

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

(In thousands) December 30, 2023 December 31, 2022 December 30, 2023 December 31, 2022

Beginning balance $ 5,044 $ 2,495 $ 4,932 $ 2,475

Credit loss 653 224 833 429

Write-offs ( 33 ) ( 59 ) ( 69 ) ( 184 )

Recoveries (Write-offs) 28 19 ( 40 ) ( 166 )

Ending balance $ 5,725 $ 2,738 $ 5,725 $ 2,738

7 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 six months ended September 30, 2023:

Derivative Instruments Amount of Gain Recognized

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Designated interest rate swaps, net of tax $ 1,312 $ 2 Interest and other expense, net $ —

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.

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

As of December 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.

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

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:

As of December 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 December 30, 2023 and April 1, 2023:

(In thousands) Location in Condensed Consolidated

Balance Sheets As of As of

September 30, 2023 April 1, 2023

December 30, 2023 April 1, 2023

Derivative Assets:

2 unchanged sentences

Designated interest rate swaps Other current assets 1,146 1,110

Designated interest rate swaps Other long-term assets 526 —

$ 1,991 $ 2,813

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Fair Value Measured on a Recurring Basis

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

As of September 30, 2023

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

As of December 30, 2023

(In thousands) Level 1 Level 2 Level 3 Total

6 unchanged sentences

Non-designated foreign currency hedge contracts — 179 — 179

Designated interest rate swaps — 472 — 472

$ — $ 669 $ — $ 669

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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 September 30, 2023 was $ 434.1 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 December 30, 2023 was $ 445.2 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.

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

On January 12, 2024, the Company entered into an agreement with the individual plaintiffs in the qui tam case that provides for settlement of certain unrelated employment matters and releases those individuals’ claims.

The Company previously recorded a loss contingency for these matters and did not record any adjustments during the third quarter of fiscal 2024.

On January 16, 2024, the relators in the qui tam case filed a stipulation of dismissal of their claims against the Company.

The court dismissed the qui tam claims with prejudice as to the relators and without prejudice as to the government.

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.

8 unchanged sentences

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

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.

In the third quarter of fiscal 2024, the parties requested preliminary court approval of a final settlement agreement and the Company recorded an immaterial additional loss contingency related to settlement administration, resulting in a total accrual of $ 8.8 million within Other current liabilities in its Condensed Consolidated Balance Sheets.

Product Recall

1 unchanged sentence

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.

As of December 30, 2023, the Company has recorded cumulative charges of $ 6.8 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.

8 unchanged sentences

Net current period other comprehensive income (loss) 5,438 — 561 5,999

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

Balance as of December 30, 2023 $ ( 28,497 ) $ 4,075 $ 40 $ ( 24,382 )

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

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Selected information by reportable segment is presented below:

Three Months Ended Six Months Ended

(In thousands) September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Three Months Ended Nine Months Ended

(In thousands) December 30,

2023 December 31,

2022 December 30,

2023 December 31,

Plasma $ 146,718 $ 136,574 $ 426,948 $ 368,504

6 unchanged sentences

(1) Reflects revenue for service, maintenance and parts

Three Months Ended Six Months Ended

(In thousands) September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Three Months Ended Nine Months Ended

(In thousands) December 30,

2023 December 31,

2022 December 30,

2023 December 31,

Segment operating income

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Net revenues by business unit are as follows:

Three Months Ended Six Months Ended

(In thousands) September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Three Months Ended Nine Months Ended

(In thousands) December 30,

2023 December 31,

2022 December 30,

2023 December 31,

Plasma $ 146,805 $ 135,461 $ 427,315 $ 365,735

Whole Blood 14,683 19,893 34,724 39,488

Apheresis 50,666 52,398 151,380 152,287

Whole Blood 19,814 20,964 54,538 60,452

Blood Center 70,480 73,362 205,918 212,739

Interventional Technologies (1)

43,007 32,154 119,169 91,297

Hemostasis Management 41,423 34,921 116,241 102,737

Vascular Closure 38,541 29,575 76,162 59,143

28,989 24,485 80,760 76,875

3 unchanged sentences

Net revenues $ 336,250 $ 305,301 $ 965,765 $ 864,244

(1) Interventional Cardiology includes Vascular Closure and Sensor Guided Technologies product lines of the Hospital business unit.

(2) Other includes the Cell Salvage and Transfusion Management product lines of the Hospital business unit.

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

Three Months Ended Six Months Ended

(In thousands) September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Three Months Ended Nine Months Ended

(In thousands) December 30,

2023 December 31,

2022 December 30,

2023 December 31,

United States $ 250,804 $ 224,104 $ 724,222 $ 617,824

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