HAEMONETICS CORP 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA HAEMONETICS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) Year Ended March 30, 2024 April 1, 2023 April 2, 2022 Net revenues $ 1,309,055 $ 1,168,660 $ 993,196 Cost of goods sold 617,507 553,563 487,694 Gross profit 691,548 615,097 505,502 Operating expenses: Research and development 54,435 50,131 46,801 Selling, general and administrative 431,780 376,675 340,140 Amortization of acquired intangible assets 32,031 32,640 47,414 Gains on divestiture and sale of assets ( 2,000 ) ( 382 ) ( 9,603 ) Impairment of intangible assets 10,419 — — Total operating expenses 526,665 459,064 424,752 Operating income 164,883 156,033 80,750 Interest and other expense, net ( 13,018 ) ( 14,630 ) ( 17,121 ) Income before provision for income taxes 151,865 141,403 63,629 Provision for income taxes 34,307 26,002 20,254 Net income $ 117,558 $ 115,401 $ 43,375 Net income per share – basic $ 2.32 $ 2.27 $ 0.85 Net income per share – diluted $ 2.29 $ 2.24 $ 0.84 Weighted average shares outstanding Basic 50,706 50,783 51,047 Diluted 51,397 51,420 51,353 The accompanying notes are an integral part of these consolidated financial statements. 49 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) Year Ended March 30, 2024 April 1, 2023 April 2, 2022 Net income $ 117,558 $ 115,401 $ 43,375 Other comprehensive (loss) income: Impact of defined benefit plans, net of tax ( 2,327 ) 2,456 2,179 Foreign currency translation adjustment, net of tax ( 4,339 ) ( 6,016 ) ( 6,391 ) Unrealized gain on cash flow hedges, net of tax 4,912 4,269 5,785 Reclassifications into earnings of cash flow hedge (gains) losses, net of tax ( 3,497 ) ( 5,136 ) 2,020 Other comprehensive (loss) income ( 5,251 ) ( 4,427 ) 3,593 Comprehensive income $ 112,307 $ 110,974 $ 46,968 The accompanying notes are an integral part of these consolidated financial statements. 50 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share data) March 30, 2024 April 1, 2023 ASSETS Current assets: Cash and cash equivalents $ 178,800 $ 284,466 Accounts receivable, less allowance for credit losses of $ 5,695 at March 30, 2024 and $ 4,932 at April 1, 2023 206,562 179,142 Inventories, net 317,202 259,379 Prepaid expenses and other current assets 66,339 46,735 Total current assets 768,903 769,722 Property, plant and equipment, net 311,362 310,885 Intangible assets, less accumulated amortization of $ 455,213 at March 30, 2024 and $ 417,422 at April 1, 2023 406,117 275,771 Goodwill 565,082 466,231 Deferred tax asset 7,739 5,241 Other long-term assets 136,388 106,975 Total assets $ 2,195,591 $ 1,934,825 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Notes payable and current maturities of long-term debt $ 10,229 $ 11,784 Accounts payable 73,358 63,929 Accrued payroll and related costs 80,708 64,475 Other current liabilities 136,088 111,628 Total current liabilities 300,383 251,816 Long-term debt, net of current maturities 797,564 754,102 Deferred tax liability 62,644 36,195 Other long-term liabilities 75,041 74,715 Stockholders’ equity: Common stock, $ 0.01 par value; Authorized — 150,000,000 shares; Issued and outstanding — 50,787,859 shares at March 30, 2024 and 50,448,519 shares at April 1, 2023 508 504 Additional paid-in capital 634,627 594,706 Retained earnings 360,456 253,168 Accumulated other comprehensive loss ( 35,632 ) ( 30,381 ) Total stockholders’ equity 959,959 817,997 Total liabilities and stockholders’ equity $ 2,195,591 $ 1,934,825 The accompanying notes are an integral part of these consolidated financial statements. 51 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (In thousands, except share data) Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income/(Loss) Total Stockholders’ Equity Shares Par Value Balance, April 3, 2021 50,869 $ 509 $ 602,727 $ 157,981 $ ( 29,547 ) $ 731,670 Employee stock purchase plan 74 — 4,209 — — 4,209 Exercise of stock options 66 1 2,337 — — 2,338 Issuance of restricted stock, net of cancellations 115 1 — — — 1 Share-based compensation expense — — 24,359 — — 24,359 Cumulative effect of change in accounting standards — — ( 61,156 ) 1,035 — ( 60,121 ) Net income — — — 43,375 — 43,375 Other comprehensive income — — — — 3,593 3,593 Balance, April 2, 2022 51,124 $ 511 $ 572,476 $ 202,391 $ ( 25,954 ) $ 749,424 Employee stock purchase plan 102 — 4,378 — — 4,378 Exercise of stock options 59 1 2,637 — — 2,638 Shares repurchased ( 997 ) ( 10 ) ( 10,366 ) ( 64,624 ) — ( 75,000 ) Issuance of restricted stock, net of cancellations 161 2 ( 2 ) — — — Share-based compensation expense — — 25,583 — — 25,583 Net income — — — 115,401 — 115,401 Other comprehensive loss — — — — ( 4,427 ) ( 4,427 ) Balance, April 1, 2023 50,449 $ 504 $ 594,706 $ 253,168 $ ( 30,381 ) $ 817,997 Employee stock purchase plan 79 1 5,603 — — 5,604 Exercise of stock options 163 2 6,816 ( 5,208 ) — 1,610 Issuance of restricted stock, net of cancellations 166 2 ( 2 ) — — — Tax withholding on employee equity awards ( 69 ) ( 1 ) ( 828 ) ( 5,062 ) — ( 5,891 ) Share-based compensation expense — — 28,332 — — 28,332 Net income — — — 117,558 — 117,558 Other comprehensive loss — — — — ( 5,251 ) ( 5,251 ) Balance, March 30, 2024 50,788 $ 508 $ 634,627 $ 360,456 $ ( 35,632 ) $ 959,959 The accompanying notes are an integral part of these consolidated financial statements. 52 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended March 30, 2024 April 1, 2023 April 2, 2022 Cash Flows from Operating Activities: Net income $ 117,558 $ 115,401 $ 43,375 Adjustments to reconcile net income to net cash provided by operating activities: Non-cash items: Depreciation and amortization 97,215 93,307 97,747 Share-based compensation expense 28,332 25,583 24,359 Impairment of assets 10,419 607 7,953 Gain on divestiture and sale of assets ( 2,000 ) ( 382 ) ( 9,603 ) Contingent consideration — ( 504 ) 10,461 Amortization of fair value inventory step-up 3,347 — — Deferred tax benefit ( 11,039 ) 4,783 5,013 Amortization of deferred financing costs 3,175 1,970 3,404 Provision (benefit) for losses on inventory 9,312 664 ( 861 ) Other non-cash operating activities 133 6,126 5,592 Change in operating assets and liabilities: Change in accounts receivable ( 24,193 ) ( 24,421 ) ( 34,974 ) Change in inventories ( 60,061 ) 30,754 24,307 Change in prepaid income taxes ( 983 ) 1,688 2,870 Change in other assets and other liabilities ( 34,046 ) ( 22,334 ) ( 15,022 ) Change in accounts payable and accrued expenses 44,582 39,816 7,642 Net cash provided by operating activities 181,751 273,058 172,263 Cash Flows from Investing Activities: Capital expenditures ( 66,296 ) ( 110,191 ) ( 96,509 ) Proceeds from divestiture and sale of assets 1,500 850 10,642 Proceeds from sale of property, plant and equipment 1,810 1,608 2,022 Acquisitions ( 243,852 ) ( 2,850 ) ( 2,500 ) Other investments ( 15,551 ) ( 33,205 ) — Net cash used in investing activities ( 322,389 ) ( 143,788 ) ( 86,345 ) Cash Flows from Financing Activities: Term loan borrowings — 280,000 — Term loan redemption — ( 280,000 ) — Repayment of term loan borrowings ( 12,250 ) ( 9,625 ) ( 17,500 ) Proceeds from revolving facility 110,000 50,000 — Payments on revolving facility ( 60,000 ) ( 50,000 ) — Debt issuance costs — ( 1,118 ) — Contingent consideration payments ( 849 ) ( 21,593 ) ( 4,791 ) Proceeds from employee stock purchase plan 5,604 4,378 4,209 Proceeds from exercise of stock options 1,610 2,638 2,338 Cash used to net share settle employee equity awards ( 5,885 ) — — Share repurchases — ( 75,000 ) — Other financing activities ( 73 ) ( 44 ) ( 5 ) Net cash provided by (used in) financing activities 38,157 ( 100,364 ) ( 15,749 ) Effect of exchange rates on cash and cash equivalents ( 3,185 ) ( 3,936 ) ( 2,978 ) Net Change in Cash and Cash Equivalents ( 105,666 ) 24,970 67,191 Cash and Cash Equivalents at Beginning of Year 284,466 259,496 192,305 Cash and Cash Equivalents at End of Year $ 178,800 $ 284,466 $ 259,496 Supplemental Disclosures of Cash Flow Information: Interest paid $ 20,901 $ 13,587 $ 6,187 Income taxes paid $ 52,706 $ 17,967 $ 24,298 Non-Cash Investing and Financing Activities: Transfers from inventory to fixed assets for placement of Haemonetics equipment $ 28,781 $ 81,136 $ 51,800 The accompanying notes are an integral part of these consolidated financial statements. 53 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION Haemonetics is a global healthcare company dedicated to providing a suite of innovative medical technology solutions that improve the quality, effectiveness and efficiency of care. We challenge ourselves to think big and make new possibilities a reality, so that our customers can make it matter for patients, every single day. Our technology addresses important medical markets: blood and plasma component collection, the surgical suite and hospital transfusion services. When used in this report, the terms “we,” “us,” “our,” “Haemonetics” and the “Company” mean Haemonetics Corporation. Haemonetics manages its business in three principal reporting segments: Plasma, Blood Center and Hospital. For that purpose, “Plasma” includes plasma collection devices and disposables, donor management software and supporting software solutions sold to plasma customers. “Blood Center” includes blood collection and processing devices and disposables for red cells, platelets and whole blood. “Hospital” is comprised of Interventional Technologies, which includes vascular closure devices and sensor-guided technologies, and Blood Management Technologies, which includes devices and methodologies for measuring coagulation characteristics of blood, specialized blood cell processing systems and disposables, surgical blood salvage systems and blood transfusion management software. The accompanying consolidated financial statements present separately the Company’s consolidated financial position, results of operations, cash flows and changes in shareholders’ equity. The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). All amounts presented, except per share amounts, are stated in thousands of U.S. dollars, unless otherwise indicated. The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated as required. There were no material recognized or unrecognized subsequent events except as described in Note 3, Acquisitions, Divestitures and Strategic Investments, Note 9, Property, Plant & Equipment and Note 12, Notes Payable and Long-Term Debt . 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Fiscal Year Haemonetics’ fiscal year ends on the Saturday closest to the last day of March. Fiscal years 2024 , 2023 and 2022 include 52 weeks with each quarter having 13 weeks. Principles of Consolidation The accompanying consolidated financial statements include all accounts including those of its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. In addition, we assess our strategic investments to determine whether they meet the definition of a variable interest entity (“VIE”), and if so, whether the Company has controlling financial interest. Controlling financial interest occurs if the Company has both the power to direct activities of the VIE that most significantly impact the VIE’s economic performance and an obligation to absorb losses of or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company’s strategic investments did not meet the controlling financial interest criteria, as such no VIEs were consolidated during fiscal 2024 , 2023 or 2022. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could vary from the amounts derived from its estimates and assumptions. The Company considers estimates to be critical if they are required to make assumptions about material matters that are uncertain at the time of estimation or if materially different estimates could have been made or it is reasonably likely that the accounting estimate will change from period to period. The 54 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) following are areas considered to be critical and require management’s judgment: revenue recognition, inventory provisions, intangible asset and goodwill valuation, legal and other judgmental accruals and income taxes. Contingencies The Company may become involved in various legal proceedings that arise in the ordinary course of business, including, without limitation, patent infringement, product liability and environmental matters. Accruals recorded for various contingencies including legal proceedings, employee related litigation, self-insurance and other claims are based on judgment, the probability of losses and, where applicable, the consideration of opinions of internal and/or external legal counsel and actuarially determined estimates. When a loss is probable and a range of loss is established but a best estimate cannot be made, the Company records the minimum loss contingency amount, which could be zero. These estimates are often initially developed substantially earlier than the ultimate loss is known and the estimates are reevaluated each accounting period, as additional information is available. As information becomes known, an additional loss provision is recorded when either a best estimate can be made or the minimum loss amount is increased. When events result in an expectation of a more favorable outcome than previously expected, the best estimate is changed to a lower amount. Revenue Recognition The Company's revenue recognition policy is to recognize revenues from product sales, software and services in accordance with the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) Update No. 2014-19, Revenue from Contracts with Customers (Topic 606) . Revenue is recognized when obligations under the terms of a contract with a customer are satisfied; this occurs with the transfer of control of the Company’s goods or services. The Company considers revenue to be earned when all of the following criteria are met: it has a contract with a customer that creates enforceable rights and obligations; promised products or services are identified; the transaction price, or the consideration the Company expects to receive for transferring goods or providing services, is determinable and it has transferred control of the promised items to the customer. A promise in a contract to transfer a distinct good or service to the customer is identified as a performance obligation. A contract’s transaction price is allocated to each performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Some of the Company’s contracts have multiple performance obligations. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation based on the estimated standalone selling prices of the good or service in the contract. 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. Product Revenues The majority of the Company’s performance obligations related to product sales are satisfied at a point in time. Product revenue consists of the sale of its disposable products and the related equipment. The Company’s performance obligation related to product sales is satisfied upon shipment or delivery to the customer based on the specified terms set forth in the customer contract. Shipping and handling activities performed after a customer obtains control of the good are treated as fulfillment activities and are not considered to be a separate performance obligation. Revenue is recognized over time for maintenance plans provided to customers that provide services beyond the Company’s standard warranty period. Payment terms between customers related to product sales vary by the type of customer, country of sale, and the products or services offered and could result in an unbilled receivable or deferred revenue balance depending on whether the performance obligation has been satisfied (or partially satisfied). For product sales to distributors, the Company recognizes revenue for both equipment and disposables upon shipment to distributors, which is when its performance obligations are complete. The Company's standard contracts with its distributors state that title to the equipment passes to the distributors at point of shipment to a distributor’s location. The distributors are responsible for shipment to the end customer along with any installation, training and acceptance of the equipment by the end customer. Payments from distributors are not contingent upon resale of the product. The Company also places equipment at customer sites. While the Company retains ownership of this equipment, the customer has the right to use it for a period of time provided they meet certain agreed to conditions. The Company recovers the cost of providing the equipment from the sale of its disposables. 55 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Software and Other Revenues To a lesser extent, the Company enters into other types of contracts including certain software licensing arrangements to provide software solutions to support its plasma, blood collection and hospital customers. A portion of its software sales are perpetual licenses typically accompanied by significant implementation services related to software customization as well as other professional and technical services. The Company generally recognizes revenue from the sale of perpetual licenses and related customization services over time (the Company is creating or enhancing an asset that the customer controls) using an input method which requires it to make estimates of the extent of progress toward completion of the contract. When the Company provides other services, including in some instances hosting, technical support and maintenance, it recognizes these fees and charges over time (the customer simultaneously receives and consumes benefits), as performance obligations for these services are satisfied during the contract period. Certain of the Company’s software licensing arrangements are term-based licenses that include a per-collection or a usage-based fee related to the use of the license and the related technical support and hosting services. For these usage-based arrangements, the Company applies the revenue recognition exception resulting in revenue recognition occurring upon the later of actual usage or satisfaction of the related performance obligations. The payment terms for software licensing arrangements vary by customer pursuant to the terms set forth in the customer contract and result in an unbilled receivable or deferred revenue balance depending on whether the performance obligation has been satisfied (or partially satisfied). Significant Judgments Revenues from product sales are recorded at the net sales price, which includes estimates of variable consideration related to rebates, product returns and volume discounts. These reserves, which are based on estimates of the amounts earned or to be claimed on the related sales, are recorded as a reduction of revenue and a current liability. The Company’s estimates take into consideration historical experience, current contractual and statutory requirements, specific known market events and trends, industry data, and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the contract. The amount of variable consideration included in the net sales price is limited to the amount that is probable not to result in a significant reversal in the amount of the cumulative revenue recognized in a future period. Revenue recognized in the current period related to performance obligations satisfied in prior periods was not material. If the Company is unable to estimate the expected rebates reasonably, it records a liability for the maximum potential rebate or discount that could be earned. In circumstances where the Company provides upfront rebate payments to customers, it capitalizes the rebate payments and amortizes the resulting asset as a reduction of revenue using a systematic method over the life of the contract. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables and contract assets, as well as customer advances, customer deposits and deferred revenue (contract liabilities) on the consolidated balance sheets. The difference in timing between billing and revenue recognition primarily occurs in software licensing arrangements, resulting in contract assets and contract liabilities. Practical Expedients The Company elected not to disclose the value of transaction price allocated to unsatisfied performance obligations for contracts with an original expected length of one year or less. When applicable, the Company has also elected to use the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component if it is expected, at contract inception, that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service, will be one year or less. Translation of Foreign Currencies All assets and liabilities of foreign subsidiaries are translated at the rate of exchange at year-end while sales and expenses are translated at an average rate in effect during the year. The net effect of these translation adjustments is shown in the accompanying financial statements as a component of stockholders’ equity. Foreign currency transaction gains and losses, including those resulting from intercompany transactions, are charged directly to earnings and included in other expense, net on the consolidated statements of income. The impact of foreign exchange on long-term intercompany loans, for which repayment has not been scheduled or planned, are recorded in accumulated other comprehensive loss on the consolidated balance sheet. 56 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Cash and Cash Equivalents Cash equivalents include various instruments such as money market funds, U.S. government obligations and commercial paper with maturities of three months or less at date of acquisition. Cash and cash equivalents are recorded at cost, which approximates fair market value. As of March 30, 2024, cash and cash equivalents consisted primarily of investments in United States Government Agency and institutional money market funds. Allowance for Credit Losses The Company establishes a specific allowance for customers when it is probable that they will not be able to meet their financial obligations. Customer accounts are reviewed individually on a regular basis and reserves are established as deemed appropriate. The Company also maintains a general reserve using a percentage that is established based upon the age of its receivables and its collection history. The Company establishes allowances for balances not yet due and past due accounts based on past experience. Inventories 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. The Company has based its provisions for excess, expired and obsolete inventory primarily on its estimates of forecasted net sales. Significant changes in the timing or level of demand for the Company’s products result in recording additional provisions for excess, expired and obsolete inventory. Additionally, uncertain timing of next-generation product approvals, variability in product launch strategies, non-cancelable purchase commitments, product recalls and variation in product utilization all affect the Company’s estimates related to excess, expired and obsolete inventory. Property, Plant and Equipment Property, plant and equipment is recorded at historical cost. The Company provides for depreciation and amortization by charges to operations using the straight-line method in amounts estimated to recover the cost of the building and improvements, equipment and furniture and fixtures over their estimated useful lives as follows: Asset Classification Estimated Useful Lives Building 30 - 40 Years Building improvements 5 - 20 Years Plant equipment and machinery 3 - 15 Years Office equipment and information technology 3 - 10 Years Haemonetics equipment 3 - 7 Years The Company evaluates the depreciation periods of property, plant and equipment to determine whether events or circumstances warrant revised estimates of useful lives. All property, plant and equipment are also tested for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. The Company’s installed base of devices includes devices owned by the Company and devices sold to the customer. The asset on its balance sheet classified as Haemonetics equipment consists of medical devices installed at customer sites but owned by Haemonetics. Generally, the customer has the right to use it for a period of time as long as they meet the conditions the Company has established, which among other things, generally include one or more of the following: • Purchase and consumption of a certain level of disposable products • Payment of monthly rental fees • An asset utilization performance metric, such as performing a minimum level of procedures per month per device Consistent with the impairment tests noted below for other intangible assets subject to amortization, the Company reviews Haemonetics equipment and the related useful lives of such equipment at least once a year, or more frequently if certain conditions arise, to determine if any adverse conditions exist that would indicate the carrying value of these assets may not be recoverable. To conduct these reviews, the Company estimates the future amount and timing of demand for disposables used 57 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) with these devices, from which it generates revenues. The Company also considers product life cycle in its evaluation of useful life and recoverability. Changes in expected demand can result in additional depreciation expense, which is classified as cost of goods sold. Any significant unanticipated changes in demand could impact the value of the Company’s devices and its reported operating results. Leasehold improvements are depreciated over the lesser of their useful lives or the term of the lease. Maintenance and repairs are generally expensed to operations as incurred. When the repair or maintenance costs significantly extend the life of the asset, these costs may be capitalized. When equipment and improvements are sold or otherwise disposed of, the asset cost and accumulated depreciation are removed from the accounts and the resulting gain or loss, if any, is included in the consolidated statements of income. Goodwill and Intangible Assets Goodwill represents the excess purchase price over the fair value of the net tangible and other identifiable intangible assets acquired. Goodwill is not amortized and is instead reviewed for impairment at least annually, or on an interim basis between annual tests when events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying value. The Company performs its annual impairment test on the first day of the fiscal fourth quarter for each of its reporting units. A reporting unit is defined as an operating segment or one level below an operating segment, referred to as a component. The Company determines its reporting units by first identifying its operating segments and then by assessing whether any components of these segments constitute a business for which discrete financial information is available and where segment management regularly reviews the operating results of that component. The Company aggregates components within an operating segment that have similar economic characteristics. The Company’s reportable segments and reporting units are as follows: Plasma, Blood Center and Hospital. When the Company completes business combinations, the Company assigns goodwill to the reporting units that it expects to benefit from the respective business combination at the time of acquisition. Under ASC Update No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment entities perform their goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount by either performing a qualitative or quantitative assessment. The Company may elect to perform only a qualitative assessment for its annual impairment test when certain qualitative criteria are met that indicate that it is more likely than not the fair values of each reporting unit exceed their carrying values. If the Company elects to perform a quantitative test, it determines carrying values of each reporting unit by allocating assets and liabilities, including corporate assets, which relate to a reporting unit’s operations and would be considered in determining its fair value, to the individual reporting units. The Company allocates assets and liabilities not directly related to a specific reporting unit, but from which the reporting unit benefits, based primarily on the respective revenue contribution of each reporting unit. In addition, when performing a quantitative test, the Company uses the income approach, specifically the discounted cash flow method, to derive the fair value of each of its reporting units in preparing its goodwill impairment assessments. This approach calculates fair value by estimating the after-tax cash flows attributable to a reporting unit and then discounting these after-tax cash flows to a present value using a risk-adjusted discount rate. The Company selected this method as being the most meaningful in preparing its goodwill assessments because the use of the income approach typically generates a more precise measurement of fair value than the market approach. In applying the income approach to its accounting for goodwill, the Company makes assumptions about the amount and timing of future expected cash flows, terminal value growth rates and appropriate discount rates. The amount and timing of future cash flows within the Company’s discounted cash flow analysis is based on its most recent operational budgets, long range strategic plans and other estimates. The terminal value growth rate is used to calculate the value of cash flows beyond the last projected period in the Company’s discounted cash flow analysis and reflects the Company’s best estimates for stable, perpetual growth of its reporting units. The Company uses estimates of market-participant risk adjusted weighted average cost of capital as a basis for determining the discount rates to apply to its reporting units’ future expected cash flows. The Company corroborates the valuations that arose from the discounted cash flow approach by performing both a market multiple valuation and by reconciling the aggregate fair value of its reporting units to its market capitalization at the time of the test. An impairment charge, if any, would then be recognized for the amount by which the carrying value exceeds the reporting unit’s fair value. 58 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) During the fourth quarter of fiscal 2024, the Company elected to perform a qualitative assessment for its annual impairment test whereas in fiscal 2023 and 2022, the Company performed quantitative assessments. In fiscal 2024, 2023 and 2022, the results of the goodwill impairment test performed indicated that the estimated fair value of all of its reporting units exceeded their respective carrying values and there were no reporting units at risk of impairment as of the annual test dates. The Company reviews intangible assets subject to amortization for impairment indicators at least annually or more frequently if certain conditions arise to determine if any adverse conditions exist that would indicate that the carrying value of an asset or asset group may not be recoverable, or that a change in the remaining useful life is required. Conditions indicating that an impairment exists include, but are not limited to, a change in the competitive landscape, internal decisions to pursue new or different technology strategies, a loss of a significant customer or a significant change in the marketplace including prices paid for its products or the size of the market for its products. When an impairment indicator exists, the Company tests the intangible asset for recoverability. For purposes of the recoverability test, the Company groups its amortizable intangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the intangible asset (asset group) exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the intangible asset (asset group), the Company will write the carrying value down to the fair value in the period identified. The Company generally calculates the fair value of its intangible assets as the present value of estimated future cash flows it expects to generate from the asset using a risk-adjusted discount rate. In determining its estimated future cash flows associated with its intangible assets, the Company uses estimates and assumptions about future revenue contributions, cost structures and remaining useful lives of the asset (asset group). If the Company determines the estimate of an intangible asset’s remaining useful life should be reduced based on its expected use of the asset, the remaining carrying amount of the asset is amortized prospectively over the revised estimated useful life. The Company has in-process research and development (“IPR&D”) intangible assets with indefinite lives. IPR&D assets are not amortized. The Company reviews these assets for impairment at least annually, or on an interim basis between annual tests when events or circumstances indicate that it is more likely than not that the fair value of the asset is less than its carrying value. The Company performs its annual impairment test on the first day of the fiscal fourth quarter for its IPR&D assets. The Company makes assumptions about future cash flows, terminal value growth, costs for completion and appropriate discount rates. The Company elected qualitative assessments in fiscal 2024, 2023 and 2022, which all indicated that the estimated fair value of the in-process research and development intangible asset exceeded its carrying value and it was not at risk of impairment as of the annual test dates. Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed ASC Topic 985-20, Software - Costs of Software to be Sold, Leased or Marketed , specifies that costs incurred internally in researching and developing a computer software product should be charged to expense until technological feasibility has been established for the product. Once technological feasibility is established, all software costs should be capitalized until the product is available for general release to customers, at which point capitalized costs are amortized over their estimated useful life of 5 to 10 years. Technological feasibility is established when it has a detailed design of the software and when research and development activities on the underlying device, if applicable, are completed. The Company capitalizes costs associated with both software that it sells as a separate product and software that is embedded in a device. The Company reviews the net realizable value of capitalized assets periodically to assess the recoverability of amounts capitalized. There were no impairment charges recorded during fiscal 2024 , 2023 and 2022. In the future, the net realizable value may be adversely affected by the loss of a significant customer or a significant change in the market place, which could result in an impairment being recorded. 59 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Other Current Liabilities Other current liabilities represent items payable or expected to settle within the next twelve months. The items included in the fiscal year end balances were: (In thousands) March 30, 2024 April 1, 2023 Contract liabilities 31,242 30,209 All other 104,846 81,419 Total $ 136,088 $ 111,628 Other Long-Term Liabilities Other long-term liabilities represent items that are not payable or expected to settle within the next twelve months. Research and Development Expenses All research and development costs are expensed as incurred. Advertising Costs All advertising costs are expensed as incurred and are included in selling, general and administrative expenses in the consolidated statements of income. Advertising expenses were $ 7.1 million, $ 7.2 million and $ 4.4 million in fiscal 2024 , 2023 and 2022, respectively. Shipping and Handling Costs Shipping and handling costs are included in selling, general and administrative expenses. Income Taxes The income tax provision is calculated for all jurisdictions in which the Company operates. The income tax provision process involves calculating current taxes due and assessing temporary differences arising from items that are taxable or deductible in different periods for tax and accounting purposes and are recorded as deferred tax assets and liabilities. Deferred tax assets are evaluated for realizability and a valuation allowance is maintained for the portion of the Company’s deferred tax assets that are not more-likely-than-not realizable. All available evidence, both positive and negative, has been considered to determine whether, based on the weight of that evidence, a valuation allowance is needed against the deferred tax assets. Refer to Note 6, Income Taxes, for further information and discussion of the Company’s income tax provision and balances. The Company files income tax returns in all jurisdictions in which it operates. The Company records a liability for uncertain tax positions taken or expected to be taken in income tax returns. The Company’s financial statements reflect expected future tax consequences of such positions presuming the taxing authorities’ full knowledge of the position and all relevant facts. The Company records a liability for the portion of unrecognized tax benefits claimed that it has determined are not more-likely-than-not realizable. These tax reserves have been established based on management’s assessment as to the potential exposure attributable to the Company’s uncertain tax positions as well as interest and penalties attributable to these uncertain tax positions. All tax reserves are analyzed quarterly and adjustments are made as events occur that result in changes in judgment. The Company evaluates at the end of each reporting period whether some or all of the undistributed earnings of its foreign subsidiaries are permanently reinvested. The Company recognizes deferred income tax liabilities to the extent that management asserts that undistributed earnings of its foreign subsidiaries are not permanently reinvested or will not be permanently reinvested in the future. The Company’s position is based upon several factors including management’s evaluation of the Haemonetics and its subsidiaries’ financial requirements, the short-term and long-term operational and fiscal objectives of the Company and the tax consequences associated with the repatriation of earnings. 60 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Convertible Senior Notes Effective April 4, 2021, the Company accounted for convertible senior notes as a single liability measured at its amortized cost. See Recent Accounting Pronouncements below. At issuance, the carrying amount is calculated as the proceeds, net of initial debt issuance costs. The difference between the principal amount and carrying value is amortized to interest expense over the term of the convertible senior notes using the effective interest rate method. A detailed analysis of the terms of the convertible senior notes transactions is required to determine existence of any derivatives that may require separate mark-to-market accounting under applicable accounting guidance. Derivative Instruments The Company accounts for its derivative financial instruments in accordance with ASC Topic 815, Derivatives and Hedging (“ASC 815”) and ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”) . In accordance with ASC 815, the Company records all derivatives on the balance sheet at fair value. The accounting for the change in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative as a hedging instrument for accounting purposes and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. In addition, ASC 815 provides that, for derivative instruments that qualify for hedge accounting, changes in the fair value are either (a) offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or (b) recognized in equity until the hedged item is recognized in earnings, depending on whether the derivative is being used to hedge changes in fair value or cash flows. The ineffective portion of a derivative’s change in fair value is immediately recognized in earnings. The Company does not use derivative financial instruments for trading or speculation purposes. When the underlying hedged transaction affects earnings, the gains or losses on the forward foreign exchange rate contracts designated as hedges are recorded in net revenues, cost of goods sold, operating expenses and other expense, net in the Company’s consolidated statements of income, depending on the nature of the underlying hedged transactions. The cash flows related to the gains and losses are classified in the consolidated statements of cash flows as part of cash flows from operating activities. For those derivative instruments that are not designated as part of a hedging relationship the Company records the gains or losses in earnings currently. These gains and losses are intended to offset the gains and losses recorded on net monetary assets or liabilities that are denominated in foreign currencies. The Company recorded foreign currency losses of $ 4.0 million, $ 1.0 million and $ 1.5 million in fiscal 2024 , 2023 and 2022, respectively. On a quarterly basis, the Company assesses whether the cash flow hedges are highly effective in offsetting changes in the cash flow of the hedged item. The Company manages the credit risk of its counterparties by dealing only with institutions that it considers financially sound and considers the risk of non-performance to be remote. Additionally, the Company’s interest rate risk management strategy includes the use of interest rate swaps to mitigate its exposure to changes in variable interest rates. The Company’s objective in using interest rate swaps is to add stability to interest expense and to manage and reduce the risk inherent in interest rate fluctuations. The Company’s derivative instruments do not subject its earnings or cash flows to material risk, as gains and losses on these derivatives are intended to offset losses and gains on the item being hedged. The Company does not enter into derivative transactions for speculative purposes and it does not have any non-derivative instruments that are designated as hedging instruments pursuant to ASC 815. Share-Based Compensation The Company expenses the fair value of share-based awards granted to employees, board members and others, net of estimated forfeitures. To calculate the grant-date fair value of its stock options the Company uses the Black-Scholes option-pricing model and for performance share units it uses Monte Carlo simulation models. 61 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Costs Associated with Exit Activities The Company records employee termination costs in accordance with ASC Topic 712 , Compensation - Nonretirement and Postemployment Benefits , if it pays the benefits as part of an on-going benefit arrangement, which includes benefits provided as part of its established severance policies or that it provides in accordance with international statutory requirements. The Company accrues employee termination costs associated with an on-going benefit arrangement if the obligation is attributable to prior services rendered, the rights to the benefits have vested, the payment is probable and the liability can be reasonably estimated. The Company accounts for employee termination benefits that represent a one-time benefit in accordance with ASC Topic 420 , Exit or Disposal Cost Obligation s. It records such costs into expense over the employee’s future service period, if any. Other costs associated with exit activities may include contract termination costs, including costs related to leased facilities to be abandoned or subleased, consultant fees and impairments of long-lived assets. The costs are expensed in accordance with ASC Topic 420 and ASC Topic 360 , Property, Plant and Equipment and are included in costs of goods sold and selling, general and administrative costs in its consolidated statement of income. Additionally, costs directly related to the Company’s active restructuring initiatives, including program management costs, accelerated depreciation and costs to transfer product lines among facilities are included within costs of goods sold and selling, general and administrative costs in its consolidated statement of income. Refer to Note 5, Restructuring, for further information and discussion of its restructuring plans. Valuation of Acquisitions The Company allocates the amounts it pays for each acquisition to the assets acquired and liabilities assumed based on their estimated fair values at the dates of acquisition, including acquired identifiable intangible assets. The Company bases the estimated fair value of identifiable intangible assets on detailed valuations that use significant assumptions including forecasted cash flows, revenues attributable to existing technology and discount rates. When estimating the significant assumptions to be used in the valuation, the Company includes a consideration of current industry information, market and economic trends, historical results of the acquired business, and other relevant factors. These significant assumptions are forward-looking and could be affected by future economic and market conditions. The Company allocates any excess purchase price over the fair value of the net tangible and intangible assets acquired to goodwill. Strategic Investments The Company holds strategic investments, including preferred stock and a special share, in privately held entities. The special share allows the Company to acquire the related entity in accordance with an agreement between the parties. As these equity instruments do not have readily determinable fair values, they have been measured using the measurement alternative, at cost less impairment. The carrying amount for these instruments would be subsequently adjusted for observable price changes, or prices in orderly transactions for an identical investment or similar investment of the same issuer. In addition, these investments are periodically evaluated for impairment. The investments are classified as other long-term assets on the Company’s Consolidated Balance Sheets and the Company did not record any adjustments to the carrying value of strategic investments in fiscal 2024 or 2023. Concentration of Credit Risk and Significant Customers Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash equivalents and accounts receivable. In fiscal 2024, 2023 and 2022, the Company’s ten largest customers accounted for approximately 48 %, 48 % and 45 % of net revenues, respectively. In fiscal 2024, one Plasma customer, CSL Limited (together with its affiliates, “CSL”), was greater than 10 % of total net revenues and accounted for approximately 13 % of net revenues. In addition to CSL, two customers also accounted for greater than 10 % of the Plasma segment’s net revenues and two customers accounted for greater than 10 % of the Blood Center segment’s net revenues, but did not exceed 10% of total net revenues, in fiscal 2024. Certain markets and industries can expose the Company to concentrations of credit risk. For example, in the Plasma business unit, sales are concentrated with several large customers. As a result, accounts receivable extended to any one of these biopharmaceutical customers can be significant at any point in time. Also, a portion of the Company’s trade accounts receivable outside the U.S. include sales to government-owned or supported healthcare systems in several countries, which are subject to payment delays. Payment is dependent upon the financial stability and creditworthiness of those countries’ national economies. The Company has not incurred significant losses on government receivables. The Company continually evaluates all government receivables for potential collection risks associated with the availability of government funding and reimbursement 62 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) practices. If the financial condition of customers or the countries’ healthcare systems deteriorate such that their ability to make payments is uncertain, allowances may be required in future periods. Recent Accounting Pronouncements Standards Implemented In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) Update No. 2019-12 — Income Taxes (Topic 740). The new guidance improves consistent application of and simplifies the accounting for income taxes by removing certain exceptions to the general principals in Topic 740. The Company adopted ASC Update No. 2019-12 effective April 4, 2021. The adoption did not have a material impact on the Company’s financial position or results of operations. In August 2020, the FASB issued ASC ASU Update No. 2020-06 Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40). The amendments simplify the complexity associated with applying U.S. GAAP for certain financial instruments with characteristics of liabilities and equity. Update No. 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The Company early adopted ASC Update No. 2020-06 effective April 4, 2021 using the modified retrospective method, which resulted in a decrease of $ 61.2 million to additional paid-in capital, a decrease to non-current deferred tax liabilities of $ 20.0 million, and an increase of $ 80.3 million to non-current convertible notes, net, on the consolidated balance sheets. Additionally, retained earnings was adjusted to remove amortization expense recognized in prior periods related to the debt discount and the convertible notes no longer have a debt discount that will be amortized, net of taxes. The impact to retained earnings on the consolidated balance sheets as of April 4, 2021 is an increase of $ 1.0 million. In July 2021, the FASB issued ASC Update No. 2021-05 — Leases (Topic 842). The new guidance requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate as an operating lease at lease commencement if the lease would have been classified as a sales-type lease or a direct financing lease in accordance with the classification criteria of ASC 842 and the lessor would have otherwise recognized a day-one loss. The Company prospectively adopted ASC Update No. 2021-05 effective in the second quarter of fiscal year 2022. The adoption did not have a material impact on the Company’s financial position or 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. 63 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 3. ACQUISITIONS, DIVESTITURES AND STRATEGIC INVESTMENTS Acquisitions Attune Medical On March 5, 2024, the Company entered into a definitive agreement to acquire Advanced Cooling Therapy, Inc., d/b/a Attune Medical (“Attune Medical”), the manufacturer of the ensoETM® proactive esophageal cooling device, based in Chicago, Illinois. The acquisition closed on April 1, 2024, subsequent to our fiscal year end. The Company acquired Attune Medical for total upfront consideration of $ 160.0 million. The agreement also provides for additional contingent consideration based on sales growth over the next three years and the achievement of certain other milestones. The Company financed the acquisition through a combination of cash on hand and borrowings under its senior unsecured revolving credit facility. The addition of Attune Medical expands the Hospital business unit’s presence in electrophysiology and complements its Vascular Closure product line. OpSens Inc. On October 10, 2023, the Company 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 senior unsecured revolving credit facility. OpSens offers commercially and clinically validated optical technology for use primarily in interventional cardiology. 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 expands the Hospital business unit portfolio in the interventional cardiology market and is 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. 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 March 30, 2024, the deferred tax liability assumed remains preliminary, pending certain tax filings and analyses. 64 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 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 12,075 Prepaid expenses and other current assets 2,062 Property, plant and equipment 3,028 Intangible assets 172,000 Goodwill 99,362 Other long-term assets 4,705 Total assets acquired $ 299,192 Accounts payable 3,251 Accrued payroll and related costs 1,723 Other liabilities 9,746 Deferred tax liability 34,767 Other long-term liabilities 5,853 Total liabilities assumed $ 55,340 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. 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 $ 99.4 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 $ 114,900 15 years 20.5 % Customer contracts and related relationships 52,300 15 years 18.9 % Trade names 4,800 15 years 20.5 % Total $ 172,000 The Company recorded a net long-term deferred tax liability of $ 34.8 million primarily related to definite-lived intangible assets which cannot be deducted for tax purposes, partially offset by deferred tax assets primarily related to tax attribute carryforwards including net operating losses acquired. 65 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Acquisition-Related Costs The Company incurred $ 6.6 million of acquisition-related costs for fiscal 2024 in connection with the OpSens acquisition. These costs related to legal and other professional fees, which were recognized in selling, general and administrative on the Consolidated Statements of Income. The Company’s 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. Sale of Assets U.S. Blood Donor Management Software In fiscal 2021, the Company sold certain U.S. blood donor management software solution assets within its Blood Center business unit to the GPI Group (“GPI”). As part of the sale agreement, the Company was entitled to additional consideration contingent on the achievement of commercial milestones over the twelve month period immediately following the closing of the transaction. In fiscal years 2023 and 2022, the Company recognized gains of $ 0.4 million and $ 9.6 million, respectively, for contingent consideration earned. Strategic Investments As part of the Company’s business development activities, it holds strategic investments in certain entities. During fiscal years 2024 and 2023, the Company made investments in Vivasure Medical LTD (“Vivasure”), totaling € 5.0 million and € 30.0 million, respectively. The investments include both preferred stock and a special share that allows the Company to acquire Vivasure in accordance with an agreement between the parties. In addition, the Compan y has made other certain strategic investments totaling $ 7.6 million during fiscal 2024. The Company’s strategic investments are classified as other long-term assets on the consolidated balance sheets and the Company did not record any adjustments to the carrying value of our strategic investments in fiscal 2024 or fiscal 2023. 4. REVENUE As of March 30, 2024, the Company had $ 26.8 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 79 % of this amount as revenue within the next twelve months and the remaining balance thereafter. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables and contract assets, as well as customer advances, customer deposits and deferred revenue (contract liabilities) on the consolidated balance sheets. The difference in timing between billing and revenue recognition primarily occurs in software licensing arrangements, resulting in contract assets and contract liabilities. As of March 30, 2024 and April 1, 2023, the Company had contract liabilities of $ 31.2 million and $ 30.2 million, respectively. During fiscal 2024 , we recognized $ 27.9 million of revenue that was included in the above April 1, 2023 contract liability balance. Contract liabilities are classified as other current liabilities and other long-term liabilities on the consolidated balance sheet. As of March 30, 2024 and April 1, 2023, the Company’s contract assets were immaterial. 5. RESTRUCTURING On an ongoing basis, the Company reviews the global economy, the healthcare industry, and the markets in which it competes to identify opportunities for efficiencies, enhance commercial capabilities, align its resources and offer its customers better solutions. In order to realize these opportunities, the Company undertakes restructuring-type activities to transform its business. 66 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Operational 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. During fiscal 2022, the Company revised the program to improve product and service quality, reduce cost principally in its manufacturing and supply chain operations and ensure sustainability while helping to offset impacts from a previously announced customer loss, rising inflationary pressures and effects of the COVID-19 pandemic. The Company expects to incur aggregate charges between $ 85 million and $ 95 million by the end of fiscal 2025 under the program. The majority of charges will result in cash outlays, including severance and other employee costs, and will be incurred as the specific actions required to execute these initiatives are identified and approved. During fiscal 2024 , 2023 and 2022, the Company incurred $ 9.8 million, $ 11.5 million and $ 28.7 million of restructuring and restructuring related costs under this program, respectively. Total cumulative charges under this program are $ 77.0 million as of March 30, 2024. Portfolio Rationalization Initiatives In November 2023, the C ompany announced its plans to end of life the ClotPro analyzer system within the Hospital business unit and certain products within the Blood Center business unit, primarily in Whole Blood, including the associated manufacturing operations and closure of certain other facilities. The following table summarizes the activity for restructuring reserves related to portfolio rationalization initiatives, the 2020 Program and prior programs for the fiscal years ended March 30, 2024, April 1, 2023 and April 2, 2022, substantially all of which relates to employee severance and other employee costs: (In thousands) Portfolio Rationalization 2020 Program Prior Programs Total Balance at April 3, 2021 $ — $ 575 $ 437 $ 1,012 Costs incurred, net of reversals — 4,202 28 4,230 Payments — ( 2,317 ) ( 120 ) ( 2,437 ) Balance at April 2, 2022 $ — $ 2,460 $ 345 $ 2,805 Costs incurred, net of reversals — 576 81 657 Payments — ( 1,226 ) ( 86 ) ( 1,312 ) Balance at April 1, 2023 $ — $ 1,810 $ 340 $ 2,150 Costs incurred, net of reversals 13,915 450 ( 276 ) 14,089 Payments ( 2,606 ) ( 1,775 ) ( 64 ) ( 4,445 ) Balance at March 30, 2024 11,309 485 — 11,794 The following presents the restructuring costs by line item during fiscal 2024 , 2023 and 2022 within our accompanying consolidated statements of income and comprehensive income: (In thousands) 2024 2023 2022 Cost of goods sold $ 11,286 $ ( 215 ) $ 2,236 Research and development 456 — 105 Selling, general and administrative expenses 2,347 872 1,889 Total $ 14,089 $ 657 $ 4,230 As of March 30, 2024, the Company had a restructuring liability of $ 11.8 million, all of which is payable within the next twelve months. In addition to the restructuring expenses included in the table above, the Company also incurred costs of $ 9.5 million, $ 10.9 million and $ 24.6 million in fiscal 2024, 2023 and 2022, respectively, that do not constitute restructuring costs under ASC 420, Exit and Disposal Cost Obligations, and which the Company instead refers to as restructuring related costs. These costs consist primarily of expenditures directly related to the restructuring actions. 67 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The following presents the restructuring related costs by line item during fiscal 2024 , 2023 and 2022 within our accompanying consolidated statements of income and comprehensive income: (In thousands) 2024 2023 2022 Cost of goods sold $ 5,734 $ 7,991 $ 17,832 Research and development 1,750 1,050 714 Selling, general and administrative expenses 2,015 1,851 6,048 Total $ 9,499 $ 10,892 $ 24,594 The tables below present restructuring and restructuring related costs by reportable segment: Restructuring costs (In thousands) 2024 2023 2022 Plasma $ 1,015 $ ( 48 ) $ 2,492 Blood Center 5,606 — ( 18 ) Hospital 3,863 165 ( 93 ) Corporate 3,605 540 1,849 Total $ 14,089 $ 657 $ 4,230 Restructuring related costs (In thousands) 2024 2023 2022 Plasma $ 1,050 $ 1,385 $ 7,906 Blood Center 286 75 556 Hospital 408 546 379 Corporate 7,755 8,886 15,753 Total $ 9,499 $ 10,892 $ 24,594 Total restructuring and restructuring related costs $ 23,588 $ 11,549 $ 28,824 68 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 6. INCOME TAXES Domestic and foreign income before provision (benefit) for income tax is as follows: (In thousands) 2024 2023 2022 Domestic $ 112,563 $ 85,657 $ ( 5,219 ) Foreign 39,302 55,746 68,848 Total $ 151,865 $ 141,403 $ 63,629 The income tax provision (benefit) from continuing operations contains the following components: (In thousands) 2024 2023 2022 Current Federal $ 29,113 $ 6,461 $ 3,586 State 6,539 4,824 1,682 Foreign 9,532 8,940 9,940 Total current $ 45,184 $ 20,225 $ 15,208 Deferred Federal ( 6,165 ) 14,298 3,455 State 2,132 ( 7,678 ) 310 Foreign ( 6,844 ) ( 843 ) 1,281 Total deferred $ ( 10,877 ) $ 5,777 $ 5,046 Total $ 34,307 $ 26,002 $ 20,254 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. statutory tax rate. The Company’s subsidiary in Malaysia has been granted a full income tax exemption to manufacture whole blood and apheresis devices that could be in effect for up to ten years , provided certain conditions are satisfied. The income tax exemption was in effect beginning June 1, 2016. 69 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Tax effected, significant temporary differences comprising the net deferred tax liability are as follows: (In thousands) March 30, 2024 April 1, 2023 Deferred tax assets: Depreciation $ 1,817 $ 174 Amortization of intangibles 3,715 1,013 Inventory 5,502 7,674 Accruals, reserves and other deferred tax assets 18,777 15,680 Net operating loss carry-forward 16,221 20,996 Stock based compensation 3,965 4,230 Operating lease liabilities 16,132 15,851 Tax credit carry-forward, net 7,766 5,072 Capitalized research expenses 31,370 19,671 Gross deferred tax assets 105,265 90,361 Less valuation allowance ( 10,239 ) ( 8,838 ) Total deferred tax assets (after valuation allowance) 95,026 81,523 Deferred tax liabilities: Depreciation ( 35,279 ) ( 37,400 ) Amortization of goodwill and intangibles ( 96,597 ) ( 57,752 ) Unremitted earnings ( 1,334 ) ( 1,163 ) Operating lease assets ( 13,341 ) ( 13,220 ) Other deferred tax liabilities ( 3,380 ) ( 2,942 ) Total deferred tax liabilities ( 149,931 ) ( 112,477 ) Net deferred tax liabilities $ ( 54,905 ) $ ( 30,954 ) The increase in the worldwide net deferred tax liability is primarily due to the acquisition of intangibles with book basis in excess of tax basis during fiscal 2024, partially offset by research expenditures capitalized for tax purposes. The valuation allowance increase of $ 1.4 million during fiscal 2024 is primarily due to acquired foreign deferred tax assets for which the valuation allowance was recorded in acquisition accounting and changes in the valuation allowance in certain foreign jurisdictions based on current year operating results. The Company has assessed, on a jurisdictional basis, the available means of recovering deferred tax assets, including the ability to carry-back net operating losses, the existence of reversing temporary differences, the availability of tax planning strategies and available sources of future taxable income. It has also considered the ability to implement certain strategies that would, if necessary, be implemented to accelerate taxable income and use expiring deferred tax assets. The Company has concluded future taxable income can be considered a source of income to realize a benefit for deferred tax assets in certain jurisdictions. The Company believes it is able to support the deferred tax assets recognized as of the end of the year based on all of the available evidence. The worldwide net deferred tax liability as of March 30, 2024 includes deferred tax liabilities related to amortizable tax basis in goodwill and other indefinite lived assets, which can only be used as a source of income to benefit other indefinite lived deferred tax assets. As of March 30, 2024, the Company maintains a valuation allowance against certain U.S. federal tax credit carryforwards and U.S. state net operating loss and tax credit carryforwards that are not more-likely-than-not realizable as well as a valuation allowance against the net deferred tax assets of certain foreign subsidiaries. In connection with the March 2021 acquisition of Cardiva Medical, Inc., the Company acquired federal and state net operating loss carryforwards of $ 150.9 million and $ 93.3 million, respectively. The Company also acquired federal and state tax research credit carryforwards of $ 0.2 million and $ 0.4 million, respectively. These net operating loss and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50 percent as defined under Section 382 and 383 of the U.S. Internal Revenue Code of 1986, respectively, as well as similar state provisions. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. The Company conducted a Section 382 study covering the period of inception (July 2002) through March 1, 2021. The study concluded that ownership changes occurred during that 70 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) period which limit the amount of the Company’s net operating losses and tax credit carryforwards that can be utilized before expiring. The remaining carryforwards disclosed in the deferred tax table above represent the amount of attributes that can be utilized based on the results of the study. The Company does not believe it has had an ownership change from March 2, 2021 through March 30, 2024 that would result in a limitation. Subsequent ownership changes may further affect the limitation in future years. As of March 30, 2024, the Company has U.S. federal net operating loss carryforwards of $ 28.2 million of which $ 8.2 million will begin to expire in fiscal 2025 and $ 20.0 million can be carried forward indefinitely. The Company has U.S. state net operating losses of $ 56.3 million of which $ 51.0 million will expire at various times between fiscal 2025 and fiscal 2040 and $ 5.3 million can be carried forward indefinitely. The Company has federal and state tax credits of $ 0.6 million and $ 5.5 million, respectively, which will begin to expire in fiscal 2029 and fiscal 2028, respectively. As of March 30, 2024, the Company has Canadian federal and provincial net operating loss carryforwards of $ 19.6 million and $ 21.2 million, respectively, which will expire from fiscal 2036 through fiscal 2044. The Company has other foreign net operating losses of approximately $ 4.0 million that are available to reduce future income which can be carried forward indefinitely. The Company has foreign research tax credits of $ 3.5 million which will begin to expire in fiscal 2027. As of March 30, 2024, substantially all of the unremitted earnings of the Company have been taxed in the U.S. The Company has not provided U.S. deferred income taxes or foreign withholding taxes on unremitted earnings of foreign subsidiaries of approximately $ 96.3 million as such amounts are considered to be indefinitely reinvested in the business. The accumulated earnings in the foreign subsidiaries are primarily utilized to fund working capital requirements as its subsidiaries continue to expand their operations and to fund future foreign acquisitions. The Company does not believe it is practicable to estimate the amount of income taxes payable on the earnings that are indefinitely reinvested in foreign operations, however a significant portion of the unremitted earnings could be remitted without a future tax cost. The income tax provision differs from the tax provision computed at the U.S. federal statutory income tax rate due to the following: (In thousands) 2024 2023 2022 Tax at federal statutory rate $ 31,892 21.0 % $ 29,695 21.0 % $ 13,362 21.0 % Impact of foreign operations ( 3,631 ) ( 2.4 ) % ( 2,408 ) ( 1.7 ) % ( 3,799 ) ( 6.0 ) % State income taxes net of federal benefit 7,037 4.6 % 2,939 2.1 % 1,384 2.2 % Change in uncertain tax positions ( 107 ) ( 0.1 ) % 81 0.1 % ( 777 ) ( 1.2 ) % Global intangible low taxed income ( 555 ) ( 0.4 ) % ( 828 ) ( 0.6 ) % 3,608 5.7 % Unremitted earnings 171 0.1 % ( 91 ) ( 0.1 ) % 194 0.3 % Deferred statutory rate changes ( 159 ) ( 0.1 ) % 82 0.1 % 40 0.1 % Non-deductible executive compensation 3,256 2.1 % 1,439 1.0 % 1,080 1.7 % Non-deductible expenses 2,355 1.6 % 827 0.6 % 741 1.2 % Stock compensation shortfalls (benefits) ( 1,841 ) ( 1.2 ) % 1,883 1.3 % 2,070 3.3 % Research credits ( 1,378 ) ( 0.9 ) % ( 2,073 ) ( 1.5 ) % ( 1,496 ) ( 2.4 ) % Contingent consideration — — % — — % 1,880 3.0 % Impact of foreign tax law changes ( 2,739 ) ( 1.8 ) % — — % — — % Valuation allowance ( 393 ) ( 0.2 ) % ( 5,135 ) ( 3.6 ) % 254 0.2 % Other, net 399 0.3 % ( 409 ) ( 0.3 ) % 1,713 2.7 % Income tax provision $ 34,307 22.6 % $ 26,002 18.4 % $ 20,254 31.8 % The Company recorded an income tax expense of $ 34.3 million, representing an effective tax rate of 22.6 %. The effective tax rate is higher than the U.S. statutory rate of 21.0 %, primarily due to state taxes, non-deductible executive compensation and disallowed stock compensation expense, partially offset by jurisdictional mix of earnings, impact of foreign tax law changes and research credits generated. 71 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Unrecognized Tax Benefits Unrecognized tax benefits represent uncertain tax positions for which reserves have been established. As of March 30, 2024, the Company had $ 3.7 million of unrecognized tax benefits, of which $ 3.1 million would impact the effective tax rate, if recognized. As of April 1, 2023, the Company had $ 3.9 million of unrecognized tax benefits, of which $ 3.2 million would impact the effective tax rate, if recognized. As of April 2, 2022, the Company had $ 3.9 million of unrecognized tax benefits, of which $ 3.1 million would impact the effective tax rate, if recognized. The following table summarizes the activity related to its gross unrecognized tax benefits for the fiscal years ended March 30, 2024, April 1, 2023 and April 2, 2022: (In thousands) March 30, 2024 April 1, 2023 April 2, 2022 Beginning Balance $ 3,941 $ 3,939 $ 6,107 Additions for tax positions of current year 234 292 219 Reductions of tax positions ( 198 ) ( 290 ) ( 808 ) Settlements of tax positions — — ( 1,579 ) Expiration of statute of limitations ( 234 ) — — Ending Balance $ 3,743 $ 3,941 $ 3,939 As of March 30, 2024, the Company anticipates that the liability for unrecognized tax benefits for uncertain tax positions could change by up to $ 2.5 million in the next twelve months, as a result of closure of various statutes of limitations. The Company’s historical practice has been and continues to be to recognize interest and penalties related to federal, state and foreign income tax matters in income tax expense. Approximately $ 0.3 million and $ 0.2 million of gross interest and penalties were accrued at March 30, 2024 and April 1, 2023, respectively, and are not included in the amounts above. Additionally, $ 0.1 million of accrued interest and penalties was included in income tax provision for each of the years ended March 30, 2024, April 1, 2023 and April 2, 2022. The Company conducts business globally and, as a result, files federal, state and foreign income tax returns in multiple jurisdictions. In the normal course of business, it is subject to examination by taxing authorities throughout the world. With a few exceptions, the Company is no longer subject to U.S. federal, state, or local income tax examinations for years before fiscal 2021 and foreign income tax examinations for years before fiscal 2019. To the extent that the Company has tax attribute carry-forwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service, state, or foreign tax authorities to the extent utilized in a future period. 7. EARNINGS PER SHARE The following table provides a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations. (In thousands, except per share amounts) 2024 2023 2022 Basic EPS Net income $ 117,558 $ 115,401 $ 43,375 Weighted average shares 50,706 50,783 51,047 Basic income per share $ 2.32 $ 2.27 $ 0.85 Diluted EPS Net income $ 117,558 $ 115,401 $ 43,375 Basic weighted average shares 50,706 50,783 51,047 Net effect of common stock equivalents 691 637 306 Diluted weighted average shares 51,397 51,420 51,353 Diluted income per share $ 2.29 $ 2.24 $ 0.84 72 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Basic earnings per share is calculated using the Company’s weighted-average outstanding common shares. Diluted earnings per share is calculated using its weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method and the convertible senior notes as determined under the net share settlement method. From the time of the issuance of the convertible senior notes, the average market price of the Company’s common shares has been less than the initial conversion price, and consequently no shares have been included in diluted earnings per share for the conversion value of the convertible senior notes. For fiscal 2024, 2023 and 2022, weighted average shares outstanding, assuming dilution, excludes the impact of 0.6 million, 0.6 million and 0.9 million anti-dilutive shares, respectively. Share Repurchase Program In August 2022, the Company announced that its Board of Directors had approved a three-year share repurchase program authorizing the repurchase of up to $ 300.0 million of Haemonetics common stock, based on market conditions, through August 2025. Under the share repurchase program, the Company is authorized to repurchase, from time to time, outstanding shares of common stock in accordance with applicable laws on the open market, including under trading plans established pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, and in privately negotiated transactions. The actual timing, number and value of shares repurchased will be determined by the Company at its discretion and will depend on a number of factors, including market conditions, applicable legal requirements and compliance with the terms of loan covenants. The share repurchase program may be suspended, modified or discontinued at any time, and the Company has no obligation to repurchase any amount of its common stock under the program. In fiscal 2023, the Company completed a $ 75.0 million repurchase of its common stock pursuant to an accelerated share repurchase agreement (“ASR”) entered into with Citibank N.A. in August 2022. The total number of shares repurchased under the ASR was 1.0 million at an average price per share upon final settlement of $ 75.20 . As of March 30, 2024, the total remaining authorization for repurchases of the Company’s common stock under the share repurchase program was $ 225.0 million. 8. INVENTORIES 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) March 30, 2024 April 1, 2023 Raw materials $ 134,150 $ 115,016 Work-in-process 15,488 12,572 Finished goods 167,564 131,791 Total inventories $ 317,202 $ 259,379 In fiscal 2024, 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 has recorded charges of $ 4.4 million related to inventory. 73 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 9. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following: (In thousands) March 30, 2024 April 1, 2023 Land $ 4,130 $ 5,358 Building and building improvements 124,338 127,634 Plant equipment and machinery 204,622 194,539 Office equipment and information technology 129,979 123,611 Haemonetics equipment 456,414 463,706 Construction in progress 39,694 29,367 Total 959,177 944,215 Less: accumulated depreciation ( 647,815 ) ( 633,330 ) Property, plant and equipment, net $ 311,362 $ 310,885 Depreciation expense was $ 55.8 million, $ 51.2 million and $ 44.4 million in fiscal 2024 , 2023 and 2022, respectively. In fiscal 2024, $ 5.8 million of the Company’s property, plant and equipment met held for sale accounting criteria and was reclassified to Prepaid expen ses and other current assets in the consolidated balance sheets. In the first quarter of fiscal 2025, subsequent to the year ended March 30, 2024, the Company received $ 19.9 million in connection with the sale of the applicable facility. During fiscal 2022, the Company incurred an impairment of property, plant and equipment of $ 5.2 million in connection with the 2020 Program, refer to Note 5 - Restructuring for details on the 2020 Program, and $ 2.8 million of accelerated depreciation costs related to disposables manufacturing equipment that was no longer in use. The impairment charge was included in cost of goods sold on the consolidated statements of income and impacted the Plasma reporting segment. 10. GOODWILL AND INTANGIBLE ASSETS The changes in the carrying amount of goodwill by operating segment for fiscal 2024 and 2023 are as follows: (In thousands) Plasma Blood Center Hospital Total Carrying amount as of April 2, 2022 $ 29,043 $ 34,166 $ 404,078 $ 467,287 Currency translation — ( 311 ) ( 745 ) ( 1,056 ) Carrying amount as of April 1, 2023 29,043 33,855 403,333 466,231 Acquisitions — — 87,079 87,079 Purchase accounting adjustments — — 12,283 12,283 Currency translation — ( 371 ) ( 140 ) ( 511 ) Carrying amount as of March 30, 2024 $ 29,043 $ 33,484 $ 502,555 $ 565,082 The results of the Company’s goodwill impairment test performed in the fourth quarter of fiscal 2024, 2023 and 2022 indicated that the estimated fair value of all reporting units exceeded their respective carrying values. Th ere were no reporting units at risk of impairment as of the fiscal 2024 , 2023 and 2022 annual test dates. 74 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The gross carrying amount of intangible assets and the related accumulated amortization as of March 30, 2024 and April 1, 2023 is as follows: (In thousands) Gross Carrying Amount Accumulated Amortization Net As of March 30, 2024 Amortizable: Developed technology $ 464,291 $ 178,413 $ 285,878 Customer contracts and related relationships 255,144 190,033 65,111 Capitalized software 84,837 69,491 15,346 Patents and other 24,504 11,820 12,684 Trade names 14,320 5,456 8,864 Total $ 843,096 $ 455,213 $ 387,883 Non-amortizable: In-process research and development $ 13,667 In-process software development 4,567 Total $ 18,234 (In thousands) Gross Carrying Amount Accumulated Amortization Net As of April 1, 2023 Amortizable: Developed technology $ 362,506 $ 153,099 $ 209,407 Customer contracts and related relationships 203,240 187,774 15,466 Capitalized software 78,962 60,776 18,186 Patents and other 18,504 10,831 7,673 Trade names 9,508 4,942 4,566 Total $ 672,720 $ 417,422 $ 255,298 Non-amortizable: In-process research and development $ 13,667 In-process software development 3,841 In-process patents 2,965 Total $ 20,473 In fiscal 2024, the Company acquired OpSens and recorded $ 114.9 million of developed technology, $ 52.3 million of customer contracts and related relationships and $ 4.8 million of trade names. Refer to Note 3, Acquisitions, Divestitures and Strategic Investments, for additional information regarding the acquisition. In 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. Intangible assets include the value assigned to license rights and developed technology, patents, customer contracts and relationships and trade names. The estimated useful lives for all of these intangible assets are approximately 5 to 15 years. Aggregate amortization expense for amortized intangible assets for fiscal 2024, 2023 and 2022 was $ 41.4 million, $ 42.1 million and $ 56.6 million, respectively. 75 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Amortization expense on intangible assets for the next five years is estimated to be as follows: (In thousands) Fiscal 2025 $ 44,016 Fiscal 2026 $ 37,407 Fiscal 2027 $ 35,228 Fiscal 2028 $ 33,456 Fiscal 2029 $ 32,378 For costs incurred related to the development of software to be sold, leased, or otherwise marketed, the Company applies the provisions of ASC Topic 985-20, Software - Costs of Software to be Sold, Leased or Marketed , which specifies that costs incurred internally in researching and developing a computer software product should be charged to expense until technological feasibility has been established for the product. Once technological feasibility is established, all software costs should be capitalized until the product is available for general release to customers. The costs capitalized for each project are included in intangible assets in the consolidated financial statements. The Company capitalized $ 6.6 million and $ 3.8 million in software development costs for ongoing initiatives during fiscal 2024 and 2023, respectively. At March 30, 2024 and April 1, 2023, the Company had a total of $ 89.4 million and $ 82.8 million of software costs capitalized, of which $ 4.6 million and $ 3.8 million are related to in process software development initiatives, respectively, and the remaining balance represents in-service assets that are being amortized over their useful lives. Amortization expense for capitalized software was $ 8.6 million, $ 8.5 million and $ 8.4 million for fiscal 2024 , 2023 and 2022, respectively. 11. LEASES Lessee Activity The Company has operating leases for office space, land, warehouse and manufacturing space, R&D laboratories, vehicles and certain equipment. Finance leases are not significant. Leases with an initial term of 12 months or less are generally not recorded on the balance sheet and expense for these leases is recognized on a straight-line basis over the lease term. The Company accounts for the lease components and the non-lease components as a single lease component. The Company’s leases have remaining lease terms of 1 year to approximately 30 years, some of which may include options to extend the leases for up to 10 years and some include options to terminate early. These options have been included in the determination of the lease liability when it is reasonably certain that the option will be exercised. The Company does not have any leases that include residual value guarantees. The Company determines whether an arrangement is or contains a lease based on the unique facts and circumstances present at the inception of an arrangement. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. The following table presents supplemental balance sheet information related to the Company’s operating leases: (In thousands) March 30, 2024 April 1, 2023 Assets Operating lease right-of-use assets in Other long-term assets $ 55,268 $ 53,413 Liabilities Operating lease liabilities in Other current liabilities $ 8,133 $ 7,162 Operating lease liabilities in Other long-term liabilities $ 57,958 $ 55,903 76 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The following table presents the weighted average remaining lease term and discount rate information related to our operating leases: March 30, 2024 April 1, 2023 Weighted average remaining lease term 8.2 years 9.0 years Weighted average discount rate 5.31 % 4.95 % The Company’s operating lease costs were $ 10.6 million, $ 10.6 million and $ 11.0 million during fiscal 2024, 2023 and 2022, respectively. The following table presents supplemental cash flow information related to our operating leases: (In thousands) March 30, 2024 April 1, 2023 April 2, 2022 Cash paid for amounts included in the measurement of operating lease liabilities Operating cash flows used for operating leases $ 10,636 $ 11,450 $ 11,014 Right of use assets obtained in exchange for new operating lease liabilities $ 2,450 $ 211 $ 587 The following table presents the maturities of our operating lease liabilities as of March 30, 2024: Fiscal Year ( In thousands ) Operating Leases 2025 $ 11,041 2026 10,609 2027 11,176 2028 9,453 2029 7,622 Thereafter 32,420 Total future minimum operating lease payments 82,321 Less: imputed interest ( 16,230 ) Present value of operating lease liabilities $ 66,091 Lessor Activity Assets on the Company’s balance sheet classified as Haemonetics equipment primarily consists of medical devices installed at customer sites but owned by Haemonetics. These devices are leased to customers under contractual arrangements that typically include an operating or sales-type lease as well as the purchase and consumption of a certain level of disposable products. Sales-type leases are not significant. Contract terms vary by customer and may include options to terminate the contract or options to extend the contract. Where devices are provided under operating lease arrangements, a substantial majority of the entire lease revenue is variable and subject to subsequent non-lease component (disposable products) sales. 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. 77 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 12. NOTES PAYABLE AND LONG-TERM DEBT Notes payable and long-term debt consisted of the following: (In thousands) March 30, 2024 April 1, 2023 Convertible notes $ 494,813 $ 492,131 Term loan, net of financing fees 261,971 273,728 Revolving credit facility 50,000 — Other borrowings 1,009 27 Less current portion ( 10,229 ) ( 11,784 ) Long-term debt $ 797,564 $ 754,102 Convertible Senior Notes The Company has $ 500.0 million aggregate principal amount of 0 % convertible senior notes due 2026 (the “2026 Notes”). The 2026 Notes are governed by the terms of the Indenture between the Company and U.S. Bank National Association, as trustee. The total net proceeds from the sale of the 2026 Notes, after deducting the initial purchasers’ discounts and debt issuance costs, were approximately $ 486.7 million. The 2026 Notes will mature on March 1, 2026, unless earlier converted, redeemed or repurchased. Holders may convert their notes at their option at any time prior to the close of business on the business day immediately preceding September 1, 2025 only under the following circumstances: • During any calendar quarter (and only during such calendar quarter) beginning after June 30, 2021, if, the last reported sale price per share of the Company’s common stock exceeds 130 % of the applicable conversion price on each applicable trading day for at least 20 trading days (whether or not consecutive) in the period of the 30 consecutive trading day period ending on, and including, the last trading day of the immediately preceding calendar quarter; • During the five business day period after any five consecutive trading day period in which, for each day of that period, the trading price per $1,000 principal amount of the 2026 Notes for such trading day was less than 98 % of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on such trading day; • The Company issues to common stockholders any rights, options, or warrants, entitling them, for a period of not more than 60 days, to purchase shares of common stock at a price per share less than the average closing sale price of 10 consecutive trading days, or the Company’s election to make a distribution to common stockholders exceeding 10 % of the previous day’s closing sale price; • Upon the occurrence of specified corporate events, as set forth in the indenture governing the 2026 Notes; or • Prior to the related redemption date if the Company calls the 2026 Notes for redemption. On or after September 1, 2025, until the close of business on the scheduled trading day immediately preceding the maturity date, holders may convert all or a portion of their 2026 Notes, in multiples of $1,000 principal amount, at any time, regardless of the foregoing circumstances. The conversion rate for the 2026 Notes is 5.7033 shares of common stock per $1,000 principal amount of notes (which is equal to an initial conversion price of approximately $ 175.34 per share of the Company’s common stock), subject to adjustment as set forth in the Indenture. Upon conversion, the Company will pay cash up to the aggregate principal amount of the notes to be converted and pay or deliver, as the case may be, cash, common stock or a combination of cash and common stock, at the Company’s election, in respect of the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the notes being converted. If a make-whole adjustment event, as described in the Indenture, occurs and a holder elects to convert its 2026 Notes in connection with such make-whole adjustment event, such holder may be entitled to an increase in the conversion rate as described in the Indenture. During 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 March 30, 2024 and were classified as long-term debt on the Company’s consolidated balance sheets. 78 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The 2026 Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after March 5, 2024 and on or before the 40th scheduled trading day immediately before the maturity date, if the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately before the date the Company sends the related redemption notice at a redemption price equal to 100 % of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest to, but excluding the redemption date. Upon the occurrence of certain fundamental changes involving the Company, holders of the 2026 Notes may require the Company to repurchase for cash all or part of their 2026 Notes at a repurchase price equal to 100 % of the principal amount of the 2026 Notes to be repurchased, plus accrued and unpaid interest. On April 4, 2021, the Company adopted ASC Update No. 2020-06 using the modified retrospective method, which resulted in a decrease of $ 61.2 million to additional paid-in capital, a decrease to non-current deferred tax liabilities of $ 20.0 million, and an increase of $ 80.3 million to non-current convertible notes, net, on the consolidated balance sheets. Additionally, retained earnings was adjusted to remove amortization expense recognized in prior periods related to the debt discount and the convertible notes no longer have a debt discount that will be amortized, net of taxes. The impact to retained earnings on the consolidated balance sheets as of April 4, 2021 is an increase of $ 1.0 million. As of March 30, 2024, the $ 500.0 million principal balance was netted down by the $ 5.2 million of remaining debt issuance costs, resulting in a net convertible note payable of $ 494.8 million. Interest expense related to the 2026 Notes was $ 2.7 million for the fiscal year ended March 30, 2024, 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 %. Capped Calls In connection with the issuance of the 2026 Notes, the Company entered into capped call transactions with certain counterparties (“Capped Calls”). The Capped Calls each have an initial strike price of approximately $ 175.34 per share, subject to certain adjustments, which corresponds to the initial conversion price of the 2026 Notes. The Capped Calls have initial cap prices of $ 250.48 per share, subject to certain adjustments. The Capped Calls are expected to partially offset the potential dilution to the Company’s common stock upon any conversion of the 2026 Notes, with such offset subject to a cap based on the cap price. The Capped Calls cover, subject to anti-dilution adjustments, approximately 2.85 million shares of the Company’s common stock. For accounting purposes, the Capped Calls are separate transactions, and not part of the 2026 Notes. As these transactions meet certain accounting criteria, the Capped Calls are recorded in stockholders’ equity and are not accounted for as derivatives. 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 credit facility (together with the term loan, as amended from time to time, the “2018 Credit Facilities”) that were each scheduled to mature on June 15, 2023. On July 26, 2022, the Company entered into an amended and restated credit agreement with certain lenders to refinance the 2018 Credit Facilities and extend their maturity date through June 2025. The amended and restated credit agreement provides for a $ 280.0 million senior unsecured term loan, the proceeds of which have been used to settle the balance of the term loan under the 2018 Credit Facilities, and a $ 420.0 million senior unsecured revolving credit facility (together, the “2022 Revised Credit Facilities”). Loans under the 2022 Revised Credit Facilities bear interest at an annual rate equal to the Adjusted Term SOFR Rate (as specified in the amended and restated credit agreement), which is subject to a floor of 0 %, plus an applicable rate ranging from 1.125 % to 1.750 % based on the Company’s consolidated net leverage ratio (as specified in the amended and restated credit agreement) at the applicable measurement date. Adjusted Term SOFR Rate loans are also subject to a credit spread adjustment of 0.10 % per annum. The revolving credit facility carries an unused fee that ranges from 0.125 % to 0.250 % annually based on the Company’s consolidated net leverage ratio at the applicable measurement date. Under the 2022 Revised Credit Facil ities, the Company is required to maintain certain leverage and interest coverage ratios specified in the amended and restated credit agreement as well as other customary non-financial affirmative and negative covenants. The Company applied modification accounting for the credit facility refinancing. For the term loan under the 2022 Revised Credit Facilities, for fiscal 2023, the Company recognized interest expense of $ 0.5 million for third party fees incurred and capitalized $ 0.2 million of lender fees related to the term loan. For fiscal 2023, the Company capitalized $ 1.1 million of lender 79 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) fees and third-party costs incurred in the refinancing related to the revolving credit facility under the 2022 Revised Credit Facilities. At March 30, 2024, $ 262.5 million was outstanding under the term loan with an effective interest rate of 6.9 % and $ 50.0 million in outstanding borrowings under the revolving credit facility with an effective interest rate of 6.8 %. Borrowings under the revolving credit facility during fiscal 2024 were to fund the OpSens acquisition. The Company also had $ 18.7 million of uncommitted operating lines of credit to fund its global operations under which there were no outstanding borrowings as of March 30, 2024. Under the 2022 Revised Credit Facilities, the Company is required to maintain a consolidated leverage ratio not to exceed 3.5 :1.0 and a consolidated interest coverage ratio not to be less than 4.0 :1.0 during periods when the 2022 Revised Credit Facilities are outstanding. In addition, the Company is required to satisfy these covenants, on a pro forma basis, in connection with any new borrowings (including any letter of credit issuances) on the revolving credit facility as of the time of such borrowings. The Consolidated Interest Coverage Ratio is calculated as the consolidated EBITDA divided by consolidated interest expense while the Consolidated Net Leverage ratio is calculated as consolidated total debt minus liquidity, divided by consolidated EBITDA. Consolidated EBITDA includes EBITDA adjusted by non-recurring and unusual transactions specifically as defined in the 2022 Revised Credit Facilities. The 2022 Revised Credit Facilities also contain usual and customary non-financial affirmative and negative covenants that include certain restrictions with respect to subsequent indebtedness, liens, loans and investments (including acquisitions), financial reporting obligations, mergers, consolidations, dispositions, dissolutions or liquidation, asset sales, affiliate transactions, change of its business, capital expenditures, share repurchase and other restricted payments. These covenants are subject to exceptions and qualifications set forth in the credit agreement. Any failure to comply with the financial and operating covenants of the 2022 Revised Credit Facilities would prevent the Company from being able to borrow additional funds and would constitute a default, which could result in, among other things, the amounts outstanding including all accrued interest and unpaid fees, becoming immediately due and payable. In addition, the 2022 Revised Credit Facilities include customary events of default, in certain cases subject to customary cure periods. As of March 30, 2024, the Company was in compliance with the covenants. In April 2024, subsequent to the fiscal year ended March 30, 2024, the Company entered into a second amended and restated credit agreement with certain lenders to refinance the 2022 Revised Credit Facilities and extend their maturity date through April 2029. The second amended and restated credit agreement provides for a $ 250.0 million senior unsecured term loan, the proceeds of which, along with $ 12.5 million of cash on hand, have been used to retire the balance of the term loan under the 2022 Revised Credit Facilities, and a $ 750.0 million senior unsecured revolving credit facility (together, the “2024 Revised Credit Facilities”), which constitutes a $ 330.0 million increase from the revolving credit facility under the 2022 Revised Credit Facilities. Loans under the 2024 Revised Credit Facilities will initially bear interest at an annual rate equal to the Adjusted Term SOFR Rate (as specified in the second amended and restated credit agreement), which is subject to a floor of 0.0 %, plus an applicable rate ranging from 1.125 % to 1.750 % based on the Company’s consolidated net leverage ratio (as specified in the second amended and restated credit agreement) at the applicable measurement date. Adjusted Term SOFR Rate loans are also subject to a credit spread adjustment of 0.0 % per annum. The revolving credit facility carries an unused fee that ranges from 0.125 % to 0.250 % annually based on the Company’s consolidated net leverage ratio at the applicable measurement date. The 2024 Revised Credit Facilities mature on April 30, 2029. The principal amount of the term loan under the 2024 Revised Credit Facilities amortizes quarterly through the maturity date at a rate of 2.5 % for the first three years following the closing date, 5.0 % for the fourth year following the closing date and 7.5 % for the fifth year following the closing date, with the unpaid balance due at maturity. As of April 30, 2024, the outstanding balance under the revolving credit facility was $ 230.0 million, which increased from the end of fiscal 2024, primarily due to borrowings associated with the acquisition of Attune Medical on April 1, 2024. Under the 2024 Revised Credit Facilities, the Company is required to maintain a consolidated leverage ratio not to exceed 4.0 :1.0 or, on up to two occasions during the term of the facility, 4.5 :1.0 for the four consecutive fiscal quarters ended immediately following acquisitions meeting certain criteria specified in the agreement. 80 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Commitment Fee Pursuant to the 2022 Revised Credit Facilities, the Company is required to pay, on the last day of each calendar quarter, a commitment fee on the unused portion of the revolving credit facility. The commitment fee is subject to a pricing grid based on the Company’s consolidated leverage ratio. The commitment fee ranges from 0.125 % to 0.250 %. The current commitment fee on the undrawn portion of the revolving credit facility is 0.175 %. The commitment fees noted above did not change pursuant to the 2024 Revised Credit Facilities. Debt Issuance Costs and Interest Expenses associated with the issuance of the term loan were capitalized and are amortized to interest expense over the life of the senior unsecured term loan using the effective interest method. As of March 30, 2024, the $ 262.5 million term loan balance was netted down by the $ 0.5 million of remaining debt discount, resulting in a net note payable of $ 262.0 million. Interest expense was $ 19.5 million, $ 13.0 million and $ 5.8 million for fiscal 2024, 2023 and 2022, respectively. Accrued interest associated with the outstanding debt is included as a component of other current liabilities in the accompanying consolidated balance sheets. As of both March 30, 2024 and April 1, 2023, the Company had an insignificant amount of accrued interest associated with the outstanding debt. The future aggregate amount of debt maturities, adjusted for the impact of the Company’s debt refinancing in April 2024 as discussed above, are as follows: Fiscal year (In thousands) 2025 $ 17,341 2026 $ 507,924 2027 $ 6,325 2028 $ 12,575 2029 $ 18,825 Thereafter $ 430,519 13. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS The Company manufactures, markets and sells its products globally. For the fiscal year ended March 30, 2024, 25.9 % of the Company’s sales were generated outside the U.S. in local currencies. The Company also incurs certain manufacturing, marketing and selling costs in international markets in local currency. Accordingly, earnings and cash flows are exposed to market risk from changes in foreign currency exchange rates relative to the U.S. Dollar, the Company’s reporting currency. The Company has a program in place that is designed to mitigate the exposure to changes in foreign currency exchange rates. That program includes the use of derivative financial instruments to minimize, for a period of time, the impact on its financial results from changes in foreign exchange rates. The Company utilizes foreign currency forward contracts to hedge the anticipated cash flows from transactions denominated in foreign currencies, primarily Japanese Yen and Euro, and to a lesser extent Swiss Franc and Mexican Peso. This does not eliminate the impact of the volatility of foreign exchange rates. However, because the Company generally enters into forward contracts one year out, rates are fixed for a one-year period, thereby facilitating financial planning and resource allocation. 81 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Designated Foreign Currency Hedge Contracts All of the Company’s designated foreign currency hedge contracts as of March 30, 2024 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. Once the related third-party transaction occurs, the Company reclassifies the effective portion of any related gain or loss on the designated foreign currency hedge contracts to earnings. In the event the hedged forecasted transaction does not occur, or it becomes probable that it will not occur, the Company 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 $ 74.0 million as of March 30, 2024 and $ 51.8 million as of April 1, 2023. At March 30, 2024, a gain of $ 2.8 million, net of tax, will be reclassified to earnings within the next twelve months. All currency cash flow hedges outstanding as of March 30, 2024 mature within twelve months. Non-Designated Foreign Currency Contracts The Company manages its exposure to changes in foreign currency on a consolidated basis to take advantage of offsetting transactions and balances. It uses foreign currency forward contracts as a part of its strategy to manage exposure related to foreign currency denominated monetary assets and liabilities. These foreign currency forward contracts are entered into for periods consistent with currency transaction exposures, generally one month. They are not designated as cash flow or fair value hedges under ASC 815. 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 $ 39.9 million as of March 30, 2024 and $ 44.7 million as of April 1, 2023. Interest Rate Swaps Part of the Company’s interest rate risk management strategy includes the use of interest rate swaps to mitigate its exposure to changes in variable interest rates. The Company’s objective in using interest rate swaps is to add stability to interest expense and to manage and reduce the risk inherent in interest rate fluctuations. On June 15, 2018, the Company entered into the 2018 Credit Facilities which provided for a $ 350.0 million term loan and a $ 350.0 million revolving credit facility. In August 2018, the Company entered into two interest rate swap agreements to pay an average fixed rate of 2.80 % plus the applicable rate on a total notional value of $ 241.9 million of debt, or 70 % of the notional value of the unsecured term loan. As a result of the Company’s refinancing of the 2018 Credit Facilities in July 2022, as discussed below, the 2018 interest rate swaps were amended in September 2022 to align with the Term Secured Overnight Financing Rate (“SOFR”) rate rather than LIBOR (the “Amended Swaps”). In order to avoid dedesignation, the Company elected certain practical expedients under ASC 848. As a result, the Company’s earnings and cash flows are exposed to interest rate risk from changes to SOFR. The Amended Swaps matured on June 15, 2023. On July 26, 2022, the Company entered into an amended and restated credit agreement to refinance the 2018 Credit Facilities and extend their maturity date through June 2025. The 2022 Revised Credit Facilities include a $ 280.0 million senior unsecured term loan and a $ 420.0 million senior unsecured revolving credit facility. Loans under the 2022 Revised Credit Facilities bear interest at an annual rate equal to the 1-month USD Term SOFR plus 0.10 % and an applicable rate ranging from 1.125 % to 1.750 % based on the Company’s consolidated net leverage ratio. In September 2022, the Company entered into four additional interest rate swaps, which when combined with the Amended Swaps, resulted in an average blended fixed interest rate of 3.57 % plus the applicable rate on 70 % of the notional value of the unsecured term loan until mid-June 2023 and 4.12 % plus the applicable rate thereafter on 80 % of the notional value until the maturity date in June 2025. 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. 82 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The Company held the following interest rate swaps as of March 30, 2024: Hedged Item Original Notional Amount Notional Amount as of March 30, 2024 Designation Date Effective Date Termination Date Fixed Interest Rate Estimated Fair Value Assets (Liabilities) (In thousands) 1-month USD Term SOFR 109,900 106,400 9/23/2022 6/15/2023 6/15/2025 4.08 % 900 1-month USD Term SOFR 109,900 105,000 9/23/2022 6/15/2023 6/15/2025 4.15 % 835 Total $ 219,800 $ 211,400 $ 1,735 For fiscal 2024, the Company recorded a gain of $ 2.2 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. Trade Receivables In the ordinary course of business, the Company grants trade credit to its customers on normal credit terms. In an effort to reduce its credit risk, the Company (i) establishes credit limits for all customers, (ii) performs ongoing credit evaluations of customers’ financial condition, (iii) monitors the payment history and aging of customers’ receivables and (iv) monitors open orders against an individual customer’s outstanding receivable balance. The Company’s allowance for credit losses is maintained for trade accounts receivable based on the expected collectability, the historical collection experience, the length of time an account is outstanding, the financial position of the customer and information provided by credit rating services. The Company has not experienced significant customer payment defaults, or identified other significant collectability concerns. The following is a roll forward of the allowance for credit losses: Twelve Months Ended (In thousands) March 30, 2024 April 1, 2023 April 2, 2022 Beginning balance $ 4,932 $ 2,475 $ 2,226 Credit loss 840 2,623 359 Write-offs ( 77 ) ( 166 ) ( 110 ) Ending balance $ 5,695 $ 4,932 $ 2,475 Other Fair Value Measurements Fair value is defined as the exit price that would be received from the sale of an asset or paid to transfer a liability, using assumptions that market participants would use in pricing an asset or liability. The fair value guidance establishes the following three-level hierarchy used for measuring fair value: • Level 1 — Inputs to the valuation methodology are quoted market prices for identical assets or liabilities. • Level 2 — Inputs to the valuation methodology are other observable inputs, including quoted market prices for similar assets or liabilities and market-corroborated inputs. • Level 3 — Inputs to the valuation methodology are unobservable inputs based on management’s best estimate of inputs market participants would use in pricing the asset or liability at the measurement date, including assumptions about risk. The Company’s money market funds carried at fair value are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. 83 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 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 consolidated statements of income and comprehensive income for the fiscal year ended March 30, 2024. Derivative Instruments Amount of Gain Recognized in Accumulated Other Comprehensive Loss Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings Location in Consolidated Statements of Income and Comprehensive Income Amount of Gain Excluded from Effectiveness Testing Location in Consolidated Statements of Income and Comprehensive Income (In thousands) Designated foreign currency hedge contracts, net of tax $ 2,764 $ 3,502 Net revenues, COGS and SG&A $ 1,973 Interest and other expense, net Non-designated foreign currency hedge contracts — — $ 1,510 Interest and other expense, net Designated interest rate swaps, net of tax $ 2,148 $ ( 5 ) Interest and other expense, net The Company did not have fair value hedges or net investment hedges outstanding as of March 30, 2024 or April 1, 2023. As of March 30, 2024, 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. The Company determines the fair value of its derivative instruments using the framework prescribed by ASC 820, Fair Value Measurements and Disclosures , by considering the estimated amount it would receive or pay to sell or transfer these instruments at the reporting date and by taking into account current interest rates, currency exchange rates, current interest rate curves, interest rate volatilities, the creditworthiness of the counterparty for assets, and its creditworthiness for liabilities. In certain instances, the Company may utilize financial models to measure fair value. Generally, the Company uses inputs that include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; other observable inputs for the asset or liability; and inputs derived principally from, or corroborated by, observable market data by correlation or other means. As of March 30, 2024, 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 consolidated balance sheets as of March 30, 2024 and April 1, 2023: (In thousands) Location in Balance Sheet As of March 30, 2024 As of April 1, 2023 Derivative Assets: Designated foreign currency hedge contracts Other current assets $ 1,353 $ 1,401 Non-designated foreign currency hedge contracts Other current assets 154 302 Designated interest rate swaps Other current assets 1,673 1,110 Designated interest rate swaps Other long-term assets 62 — $ 3,242 $ 2,813 Derivative Liabilities: Designated foreign currency hedge contracts Other current liabilities $ 395 $ 24 Non-designated foreign currency hedge contracts Other current liabilities 536 58 Designated interest rate swaps Other long-term liabilities — 1,807 $ 931 $ 1,889 84 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 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 March 30, 2024 and April 1, 2023. As of March 30, 2024 (In thousands) Level 1 Level 2 Level 3 Total Assets Money market funds $ 43,073 $ — $ — $ 43,073 Designated foreign currency hedge contracts — 1,353 — 1,353 Non-designated foreign currency hedge contracts — 154 — 154 Designated interest rate swaps — 1,735 — 1,735 $ 43,073 $ 3,242 $ — $ 46,315 Liabilities Designated foreign currency hedge contracts $ — $ 395 $ — $ 395 Non-designated foreign currency hedge contracts — 536 — 536 $ — $ 931 $ — $ 931 As of April 1, 2023 Level 1 Level 2 Level 3 Total Assets Money market funds $ 132,341 $ — $ — $ 132,341 Designated foreign currency hedge contracts — 1,401 — 1,401 Non-designated foreign currency hedge contracts — 302 — 302 Designated interest rate swaps — 1,110 — 1,110 $ 132,341 $ 2,813 $ — $ 135,154 Liabilities Designated foreign currency hedge contracts $ — $ 24 $ — $ 24 Non-designated foreign currency hedge contracts — 58 — 58 Designated interest rate swaps — 1,807 — 1,807 Contingent consideration — — 863 863 $ — $ 1,889 $ 863 $ 2,752 Foreign currency hedge contracts - The fair value of foreign currency hedge contracts was measured using significant other observable inputs and valued by reference to over-the-counter quoted market prices for similar instruments. The Company does not believe that the fair value of these derivative instruments differs significantly from the amount that could be realized upon settlement or maturity, or that the changes in fair value will have a significant effect on its results of operations, financial condition or cash flows. Interest rate swaps - The fair values of interest rate swaps are measured using the present value of expected future cash flows using market-based observable inputs, including credit risk and interest rate yield curves. The Company does not believe that the fair values of these derivative instruments differ significantly from the amounts that could be realized upon settlement or maturity, or that the changes in fair value will have a significant effect on its results of operations, financial condition or cash flows. Contingent consideration - The fair value of contingent consideration liabilities is based on significant unobservable inputs, including management estimates and assumptions, and is measured based on the probability-weighted present value of the payments expected to be made. Accordingly, the fair value of contingent consideration has been classified as level 3 within the fair value hierarchy. 85 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Other Fair Value Disclosures The fair value of the 2026 Notes as of March 30, 2024 was $ 460.1 million, which was determined by using the market price on the last trading day of the reporting period and is considered as level 2 in the fair value hierarchy. The senior unsecured term loan (which is carried at amortized cost), accounts receivable and accounts payable approximate fair value. 14. RETIREMENT PLANS Defined Contribution Plans The Company has a Savings Plus Plan (the “401k Plan”) that allows its U.S. employees to accumulate savings on a pre-tax basis. In addition, matching contributions are made to the 401k Plan based upon pre-established rates. The Company’s matching contributions amounted to approximately $ 8.1 million, $ 6.9 million and $ 6.3 million in fiscal 2024 , 2023 and 2022, respectively. Upon the Company’s Board of Directors’ approval, additional discretionary contributions can also be made. No discretionary contributions were made for the 401k Plan in fiscal 2024 , 2023, or 2022. Some of the Company’s subsidiaries also have defined contribution plans, to which both the employee and the employer make contributions. The employer contributions to these plans totaled $ 0.7 million, $ 0.6 million and $ 0.6 million in fiscal 2024 , 2023 and 2022, respectively. Defined Benefit Plans ASC Topic 715, Compensation — Retirement Benefits , requires an employer to: (a) recognize in its statement of financial position an asset for a plan’s over-funded status or a liability for a plan’s under-funded status; (b) measure a plan’s assets and its obligations that determine its funded status as of the end of the employer’s fiscal year (with limited exceptions); and (c) recognize changes in the funded status of a defined benefit post retirement plan in the year in which the changes occur. Accordingly, the Company is required to report changes in its funded status in comprehensive loss on its consolidated statement of stockholders’ equity and consolidated statement of comprehensive income. Benefits under these plans are generally based on either career average or final average salaries and creditable years of service as defined in the plans. The annual cost for these plans is determined using the projected unit credit actuarial cost method that includes actuarial assumptions and estimates that are subject to change. Some of the Company’s foreign subsidiaries have defined benefit pension plans covering substantially all full time employees at those subsidiaries. Net periodic benefit costs for the plans in the aggregate include the following components: (In thousands) 2024 2023 2022 Service cost $ 1,316 $ 1,453 $ 1,714 Interest cost on benefit obligation 684 409 242 Expected return on plan assets ( 264 ) ( 180 ) ( 88 ) Actuarial (gain) loss ( 180 ) 19 189 Amortization of unrecognized prior service cost ( 215 ) ( 180 ) ( 175 ) Plan settlements — ( 330 ) ( 184 ) Totals $ 1,341 $ 1,191 $ 1,698 86 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The activity under those defined benefit plans are as follows: (In thousands) March 30, 2024 April 1, 2023 Change in Benefit Obligation: Benefit Obligation, beginning of year $ ( 25,465 ) $ ( 30,410 ) Service cost ( 1,316 ) ( 1,453 ) Interest cost ( 684 ) ( 409 ) Benefits paid 2,253 748 Actuarial (loss) gain ( 2,392 ) 3,675 Employee and plan participants contribution ( 3,423 ) ( 1,599 ) Plan settlements 34 1,775 Foreign currency changes ( 1,330 ) 2,208 Benefit obligation, end of year $ ( 32,323 ) $ ( 25,465 ) Change in Plan Assets: Fair value of plan assets, beginning of year $ 18,463 $ 17,447 Company contributions 1,584 1,436 Benefits paid ( 1,788 ) ( 593 ) Gain on plan assets 238 105 Employee and plan participants contribution 3,368 1,670 Plan settlements — ( 1,647 ) Foreign currency changes ( 14 ) 45 Fair value of plan assets, end of year $ 21,851 $ 18,463 Funded Status * $ ( 10,472 ) $ ( 7,002 ) Unrecognized net actuarial gain ( 1,288 ) ( 3,757 ) Unrecognized prior service cost ( 969 ) ( 1,133 ) Net amount recognized $ ( 12,729 ) $ ( 11,892 ) * Substantially all of the unfunded status is non-current One of the benefit plans is funded by benefit payments made by the Company through the purchase of reinsurance contracts that do not qualify as plan assets under ASC Topic 715. Accordingly, that plan has no assets included in the information presented above. The total asset value associated with the reinsurance contracts was $ 7.0 million and $ 7.1 million at March 30, 2024 and April 1, 2023, respectively. The total liability for this plan, which is included in the table above, was $ 7.8 million and $ 7.5 million as of March 30, 2024 and April 1, 2023, respectively. The accumulated benefit obligation for all plans was $ 30.1 million and $ 25.2 million for fiscal 2024 and 2023, respectively. There were no plans where the plan assets were greater than the accumulated benefit obligation as of March 30, 2024 and April 1, 2023. 87 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The components of the change recorded in the Company’s accumulated other comprehensive loss related to its defined benefit plans, net of tax, are as follows (in thousands): Balance as of April 3, 2021 $ ( 560 ) Actuarial gain 2,532 Prior service cost $ ( 194 ) Plan settlements ( 159 ) Balance as of April 2, 2022 $ 1,619 Actuarial gain 2,695 Prior service cost 46 Plan settlements ( 285 ) Balance as of April 1, 2023 $ 4,075 Actuarial loss ( 2,157 ) Prior service credit ( 170 ) Balance as of March 30, 2024 $ 1,748 The Company expects to amortize $ 0.2 million from accumulated other comprehensive loss to net periodic benefit cost during fiscal 2025. The weighted average rates used to determine the net periodic benefit costs and projected benefit obligations were as follows: 2024 2023 2022 Discount rate 2.05 % 2.43 % 1.38 % Rate of increased salary levels 1.86 % 1.94 % 1.81 % Expected long-term rate of return on assets 0.94 % 0.87 % 0.69 % Assumptions for expected long-term rate of return on plan assets are based upon actual historical returns, future expectations of returns for each asset class and the effect of periodic target asset allocation rebalancing. The results are adjusted for the payment of reasonable expenses of the plan from plan assets. The Company has no other material obligation for post-retirement or post-employment benefits. The Company’s investment policy for pension plans is to balance risk and return through a diversified portfolio to reduce interest rate and market risk. Maturities are managed so that sufficient liquidity exists to meet immediate and future benefit payment requirements. ASC Topic 820, Fair Value Measurements and Disclosures , provides guidance for reporting and measuring the plan assets of the Company’s defined benefit pension plan at fair value as of March 30, 2024. Using the same three-level valuation hierarchy for disclosure of fair value measurements as described in Note 13, Financial Instruments and Fair Value Measurements , all of the assets of the Company’s plan are classified within Level 2 of the fair value hierarchy because the plan assets are primarily insurance contracts. Expected benefit payments for both plans are estimated using the same assumptions used in determining the Company’s benefit obligation at March 30, 2024. Benefit payments will depend on future employment and compensation levels, average years employed and average life spans, among other factors, and changes in any of these factors could significantly affect these estimated future benefit payments. Estimated future benefit payments are as follows: 88 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In thousands) Fiscal 2025 $ 1,598 Fiscal 2026 $ 1,551 Fiscal 2027 $ 1,537 Fiscal 2028 $ 1,841 Fiscal 2029 $ 2,431 Fiscal 2030-2034 $ 12,355 The Company’s contributions for fiscal 2025 are expected to be consistent with the current year. 15. COMMITMENTS AND CONTINGENCIES The Company is a party to various legal proceedings and claims arising out of the ordinary course of its business. The Company believes that, except for those matters described below, there are no other proceedings or claims pending against it the ultimate resolution of which could have a material adverse effect on its financial condition or results of operations. At each reporting period, management evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under ASC 450, Contingencies, for all matters. Legal costs are expensed as incurred. During the third quarter of fiscal 2021, the Company received a subpoena from the U.S. Attorney’s Office for the District of Massachusetts. The subpoena requested certain documents regarding the Company’s apheresis and autotransfusion devices and disposables, including documents relating to product complaints and adverse event reporting, regulatory clearances and product design changes, among other matters. The Company has fully cooperated with this inquiry. On August 16, 2022, the U.S. Department of Justice (“DOJ”) filed a motion on behalf of the United States and 31 states reflecting their decision to not i ntervene in the underlying qui tam action captioned United States ex rel. Berthelot et al. v. Haemonetics Corp., 1:20-cv-11062-ADB, pending in the U .S. District Court for the District of Massachusetts, indicating that the DOJ had completed its investigative activity based on then available information. The qui tam case was unsealed by order dated August 18, 2022. 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. During fiscal 2024, the Company recorded an additional loss contingency related to this matter, which did not have a material impact on its consolidated financial statements. 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. The Company removed the case to the United States District Court for the Northern District Illinois. See Mary Crumpton v. Haemonetics Corporation, Case No. 1:21-cv-1402 . In her complaint, the plaintiff asserts that between June 2017 and August 2018 she donated plasma at a center operated by one of the Company’s customers, that the center required her to scan her 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 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. 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. In the third quarter of fiscal 2024, the parties requested preliminary court approval of a final settlement agreement, which was granted in February 2024, and the Company recorded an immaterial additional loss contingency related to settlement administration, resulting in an accrual of $ 8.7 million within Other current liabilities in its consolidated balance sheets. In March 2024, notice of the settlement was mailed to class members and the parties are now awaiting the complete administration of the settlement through the third-party administrator. During the fourth quarter of fiscal 2024, a complaint was filed in the U.S. District Court for the District of Delaware by Knoninklijke Philips N.V. and IP2IPO Innovations, Ltd. (together, the “Plaintiffs”) against OpSens, OpSens Medical, Inc., a wholly-owned subsidiary of OpSens, and Haemonetics (1:24-cv-00206-CFC). The complaint alleges, inter alia, that OpSens’ interventional cardiology systems, including its OptoWire and OptoMonitor technology, infringe a single patent held by the 89 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Plaintiffs and seeks both injunctive relief and damages. The Company believes it has valid and meritorious defenses to the complaint and plans to vigorously defend against the complaint if and when served. 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 March 30, 2024 , 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. 16. CAPITAL STOCK Stock Plans The Haemonetics Corporation 2019 Long-Term Incentive Compensation Plan (the “2019 Equity Plan”) was approved and became effective on July 25, 2019 (the “Effective Date”). The 2019 Equity Plan permits the award of incentive stock options, non-qualified stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units (including performance-based restricted stock units) and other awards to the Company’s key employees, non-employee directors and certain consultants and advisors of the Company and its subsidiaries. The 2019 Equity Plan is administered by the Compensation Committee of the Board of Directors (the “Committee”), which consists of four independent members of the Company’s Board of Directors, and is the successor to the Haemonetics Corporation 2005 Long-Term Incentive Compensation Plan, as amended (the “2005 Equity Plan”). Upon the Effective Date, no further awards were granted under the 2005 Equity Plan; however, each outstanding award under the 2005 Equity Plan will remain outstanding under that plan and continue to be governed under its terms and any applicable award agreement. The 2019 Equity Plan initially had a share reserve of 2,700,000 new shares of common stock, plus the number of shares of common stock reserved for issuance under the 2005 Plan that remained available for grant under the 2005 Plan as of July 25, 2019, an aggregate of 5,759,433 shares as of the Effective Date. On August 4, 2023, the 2019 Equity Plan was amended and restated to increase the number of shares available for issuance under the Plan by 2,966,231 additional shares, from 1,975,970 shares to 4,942,201 shares of common stock, subject to adjustment as provided by the terms of the 2019 Equity Plan, as amended and restated. Under the 2019 Equity Plan, as amended and restated, any shares that are subject to the award of stock options or SARs will be counted against the authorized share reserve as one share for every one share issued and any shares that are subject to awards other than stock options, SARs or cash awards will be counted against the authorized share reserve as 2.76 shares for every one share granted. Shares of common stock subject to outstanding grants under the 2005 Equity Plan as of the Effective Date that terminate, expire, or are otherwise canceled without having been exercised will be added to the share reserve at the applicable 2019 Equity Plan ratios. The total shares available for future grant under the 2019 Equity Plan, as amended and restated and giving effect to the applicable adjustment provisions, were 5,340,447 as of March 30, 2024. Share-Based Compensation Compensation cost related to share-based transactions is recognized in the consolidated financial statements based on fair value. The total amount of share-based compensation expense, which is recorded on a straight line basis, is as follows: (In thousands) 2024 2023 2022 Selling, general and administrative expenses $ 23,662 $ 21,903 $ 20,694 Research and development 3,106 2,364 2,537 Cost of goods sold 1,564 1,316 1,128 $ 28,332 $ 25,583 $ 24,359 90 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Stock Options Options are granted to purchase common stock at prices as determined by the Committee, but in no event shall such exercise price be less than the fair market value of the common stock at the time of the grant. Options generally vest in equal installments over a four year period for employees and one year from grant for non-employee directors. Options expire not more than 7 years from the date of the grant. The grant-date fair value of options, adjusted for estimated forfeitures, is recognized as expense on a straight line basis over the requisite service period, which is generally the vesting period. Forfeitures are estimated based on historical experience. A summary of stock option activity for the fiscal year ended March 30, 2024 is as follows: Options Outstanding Weighted Average Exercise Price per Share Weighted Average Remaining Life (years) Aggregate Intrinsic Value ($000’s) Outstanding at April 1, 2023 1,150,194 $ 64.21 3.55 $ 27,481 Granted 179,696 89.09 Exercised ( 234,913 ) 32.65 Forfeited/Canceled ( 27,973 ) 83.46 Outstanding at March 30, 2024 1,067,004 $ 74.86 3.68 $ 16,820 Exercisable at March 30, 2024 561,037 $ 77.88 2.36 $ 8,555 Vested or expected to vest at March 30, 2024 983,780 $ 74.98 3.59 $ 15,663 The total intrinsic value of options exercised was $ 12.4 million, $ 1.9 million and $ 1.7 million during fiscal 2024 , 2023 and 2022, respectively. As of March 30, 2024, there was $ 10.3 million of total unrecognized compensation cost related to non-vested stock options. This cost is expected to be recognized over a weighted average period of 2.5 years. The fair value was estimated using the Black-Scholes option-pricing model based on the closing stock price at the grant date and the weighted average assumptions specific to the underlying options. Expected volatility assumptions are based on the historical volatility of the Company’s common stock over the expected term of the option. The risk-free interest rate was selected based upon yields of U.S. Treasury issues with a term equal to the expected life of the option being valued. The expected life of the option was estimated with reference to historical exercise patterns, the contractual term of the option and the vesting period. The assumptions utilized for option grants during the periods presented are as follows: 2024 2023 2022 Volatility 45.3 % 45.0 % 41.9 % Expected life (years) 5.1 5.0 4.9 Risk-free interest rate 3.5 % 2.9 % 0.8 % Dividend yield 0.0 % 0.0 % 0.0 % Grant-date fair value per Option $ 39.46 $ 24.86 $ 20.97 Restricted Stock Units Restricted Stock Units (“RSUs”) generally vest in equal installments over a three or four year period for employees and one year from grant for non-employee directors. The grant-date fair value of RSUs, adjusted for estimated forfeitures, is recognized as expense on a straight-line basis over the requisite service period, which is generally the vesting period. The fair market value of RSUs is determined based on the market value of the Company’s shares on the date of grant. 91 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) A summary of RSU activity for the fiscal year ended March 30, 2024 is as follows: Shares Weighted Average Grant Date Fair Value Unvested at April 1, 2023 381,308 $ 63.94 Granted 141,031 89.21 Vested ( 166,193 ) 67.14 Forfeited ( 18,138 ) 71.45 Unvested at March 30, 2024 338,008 $ 72.52 The weighted-average grant-date fair value of RSUs granted and total fair value of RSUs vested are as follows: 2024 2023 2022 Grant-date fair value per RSU $ 89.21 $ 59.36 $ 56.96 Fair value of RSUs vested $ 67.14 $ 70.24 $ 79.60 As of March 30, 2024, there was $ 15.7 million of total unrecognized compensation cost related to non-vested restricted stock units. This cost is expected to be recognized over a weighted average period of 2.0 years. Performance Share Units The grant date fair value of Performance Share Units (“PSUs”), adjusted for estimated forfeitures, is recognized as expense on a straight line basis from the grant date through the end of the performance period. The value of these PSUs is generally based on relative total shareholder return which equals total shareholder return for the Company as compared with total shareholder return of the PSU comparison group, measured over a three year performance period. The PSUs comparison group consists of the Standard and Poor's (“S&P”) MidCap 400 Index. Depending on the Company’s relative performance during the performance period, a recipient of the award is entitled to receive a number of ordinary shares equal to a percentage, ranging from 0 % to 200 %, of the award granted. If the Company’s total shareholder return for the performance period is negative, then any share payout will be capped at 100 % of the target award, regardless of the Company’s performance relative to the its comparison group. As a result, the Company may issue up to 739,600 shares related to outstanding performance-based awards. A summary of PSU activity for the fiscal year ended March 30, 2024 is as follows: Shares Weighted Average Grant Date Fair Value Unvested at April 1, 2023 323,987 $ 87.35 Granted (1) 54,558 128.83 Forfeited ( 8,745 ) 88.20 Unvested at March 30, 2024 369,800 $ 94.26 (1) Includes the adjustment of 59,091 shares for awards granted in fiscal 2021, based on actual relative total shareholder return of 0% The Company uses the Monte Carlo model to estimate the probability of satisfying the performance criteria and the resulting fair value of PSU awards with market conditions. The assumptions used in the Monte Carlo model for PSUs granted during each fiscal year were as follows: 2024 2023 2022 Expected stock price volatility 48.20 % 52.22 % 49.23 % Peer group stock price volatility 40.29 % 47.43 % 45.75 % Correlation of returns 59.93 % 65.45 % 65.06 % 92 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The weighted-average grant-date fair value of PSUs granted is as follows: 2024 2023 2022 Grant-date fair value per PSU $ 128.83 $ 84.96 $ 72.52 As of March 30, 2024, there was $ 18.1 million of total unrecognized compensation cost related to non-vested performance share units. This cost is expected to be recognized over a weighted average period of 1.7 years. Employee Stock Purchase Plan The Company has an Employee Stock Purchase Plan (the “Purchase Plan”) under which a maximum of 3,200,000 shares (subject to adjustment for stock splits and similar changes) of common stock may be purchased by eligible employees. Substantially all of its full-time employees are eligible to participate in the Purchase Plan. The Purchase Plan provides for two “purchase periods” within each of its fiscal years, the first commencing on November 1 of each year and continuing through April 30 of the next calendar year, and the second commencing on May 1 of each year and continuing through October 31 of such year. Shares are purchased through an accumulation of payroll deductions (of not less than 2 % or more than 15 % of compensation, as defined) for the number of whole shares determined by dividing the balance in the employee’s account on the last day of the purchase period by the purchase price per share for the stock determined under the Purchase Plan. The purchase price for shares is the lower of 85 % of the fair market value of the common stock at the beginning of the purchase period, or 85 % of such value at the end of the purchase period. The fair values of shares purchased under the Employee Stock Purchase Plan are estimated using the Black-Scholes single option-pricing model with the following weighted average assumptions: 2024 2023 2022 Volatility 28.6 % 44.9 % 55.6 % Expected life (months) 6 6 6 Risk-free interest rate 5.4 % 2.9 % 0.1 % Dividend Yield 0.0 % 0.0 % 0.0 % The weighted average grant date fair value of the six-month option inherent in the Purchase Plan was approximately $ 20.27 , $ 18.10 and $ 20.77 during fiscal 2024 , 2023 and 2022, respectively. 17. ACCUMULATED OTHER COMPREHENSIVE LOSS The following is a roll-forward of the components of accumulated other comprehensive loss, net of tax, for the years ended March 30, 2024 and April 1, 2023: (In thousands) Foreign currency Defined benefit plans Net Unrealized Gain (Loss) on Derivatives Total Balance, April 2, 2022 $ ( 27,919 ) $ 1,619 $ 346 $ ( 25,954 ) Other comprehensive (loss) income before reclassifications ( 6,016 ) 2,456 4,269 709 Amounts reclassified from accumulated other comprehensive loss (1) — — ( 5,136 ) ( 5,136 ) Net current period other comprehensive (loss) income ( 6,016 ) 2,456 ( 867 ) ( 4,427 ) Balance, April 1, 2023 $ ( 33,935 ) $ 4,075 $ ( 521 ) $ ( 30,381 ) Other comprehensive (loss) income before reclassifications ( 4,339 ) ( 2,327 ) 4,912 ( 1,754 ) Amounts reclassified from accumulated other comprehensive loss (1) — — ( 3,497 ) ( 3,497 ) Net current period other comprehensive (loss) income ( 4,339 ) ( 2,327 ) 1,415 ( 5,251 ) Balance, March 30, 2024 $ ( 38,274 ) $ 1,748 $ 894 $ ( 35,632 ) (1) Presented net of income taxes, the amounts of which are insignificant. 93 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 18. SEGMENT AND ENTERPRISE-WIDE INFORMATION The Company determines its reportable segments by first identifying its operating segments, and then by assessing whether any components of these segments constitute a business for which discrete financial information is available and where segment management regularly reviews the operating results of that component. The Company’s reporting structure aligns with its operating structure of three global business units and the information that is regularly reviewed by the Company’s chief operating decision maker. The Company’s reportable and operating segments are as follows: • Plasma • Blood Center • Hospital Management measures and evaluates the operating segments based on operating income. Management excludes certain corporate expenses from segment operating income. In addition, certain amounts that management considers to be non-recurring or non-operational are excluded from segment operating income because management evaluates the operating results of the segments excluding such items. These items include 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 and write downs, 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. Management measures and evaluates the Company’s net revenues and operating income using internally derived standard currency exchange rates that remain constant from year to year; therefore, segment information is presented on this basis. Selected information by reportable segment is presented below: (In thousands) 2024 2023 2022 Net revenues Plasma $ 565,399 $ 500,489 $ 351,945 Blood Center 278,959 289,365 294,541 Hospital 445,982 378,206 321,580 Net revenues by business unit 1,290,340 1,168,060 968,066 Service (1) 21,631 21,424 20,811 Effect of exchange rates ( 2,916 ) ( 20,824 ) 4,319 Total net revenues $ 1,309,055 $ 1,168,660 $ 993,196 (1) Reflects revenue for service, maintenance and parts. 94 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In thousands) 2024 2023 2022 Segment operating income Plasma $ 309,791 $ 278,580 $ 183,131 Blood Center 109,556 132,107 136,691 Hospital 184,177 154,416 129,783 Segment operating income 603,524 565,103 449,605 Corporate expenses (1) ( 325,016 ) ( 355,089 ) ( 281,476 ) Effect of exchange rates ( 1,971 ) 8,419 18,993 Amortization of acquired intangible assets ( 32,031 ) ( 32,640 ) ( 47,414 ) Amortization of fair value inventory step-up ( 3,347 ) — — Integration and transaction costs ( 11,249 ) 411 ( 21,604 ) Restructuring costs ( 14,089 ) ( 657 ) ( 4,230 ) Restructuring related costs ( 9,499 ) ( 10,892 ) ( 24,594 ) Digital transformation costs ( 15,667 ) ( 4,536 ) — Write downs of certain in-process intangible assets and PCS2 related charges ( 5,095 ) 616 ( 5,732 ) MDR and IVDR costs ( 5,588 ) ( 9,854 ) ( 11,033 ) Litigation-related charges ( 6,670 ) ( 5,230 ) ( 1,368 ) Impairment of intangible assets ( 10,419 ) — — Gains on divestiture and sale of assets 2,000 382 9,603 Operating income $ 164,883 $ 156,033 $ 80,750 (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. Net revenues by business unit are as follows: (In thousands) 2024 2023 2022 Plasma $ 565,944 $ 496,923 $ 351,347 Apheresis 204,086 200,546 221,878 Whole Blood 72,058 79,416 76,634 Blood Center 276,144 279,962 298,512 Interventional Technologies 174,285 126,717 93,827 Hemostasis Management 159,139 138,854 127,379 Other 111,938 106,160 101,598 Hospital 445,362 371,731 322,804 Net business unit revenues 1,287,450 1,148,616 972,663 Service 21,605 20,044 20,533 Total net revenues $ 1,309,055 $ 1,168,660 $ 993,196 (In thousands) 2024 2023 2022 Depreciation and amortization Plasma $ 45,712 $ 41,612 $ 28,314 Blood Center 13,391 13,927 32,489 Hospital 38,112 37,768 36,944 Total depreciation and amortization (excluding impairment charges) $ 97,215 $ 93,307 $ 97,747 95 Table of Contents HAEMONETICS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (In thousands) March 30, 2024 April 1, 2023 Long-lived assets (1) Plasma $ 211,121 $ 202,075 Blood Center 54,262 68,395 Hospital 45,979 40,415 Total long-lived assets $ 311,362 $ 310,885 (1) Long-lived assets are comprised of property, plant and equipment. Selected information by operating regions is presented below: (In thousands) March 30, 2024 April 1, 2023 Long-lived assets (1) United States $ 246,473 $ 251,812 Japan 1,597 997 Europe 15,310 14,587 Rest of Asia 26,728 26,263 Other 21,254 17,226 Total long-lived assets $ 311,362 $ 310,885 (1) Long-lived assets are comprised of property, plant and equipment. (In thousands) 2024 2023 2022 Net revenues United States $ 970,007 $ 842,897 $ 639,322 Japan 58,087 61,295 75,562 Europe 160,142 156,680 163,520 Rest of Asia 107,536 104,135 110,802 Other 13,283 3,653 3,990 Total net revenues $ 1,309,055 $ 1,168,660 $ 993,196 96 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.