What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-07 compared with 2024-08-08 · 126 added, 77 removed, 226 unchanged (47% of the section changed)

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Recent Developments

Accelerated Share Repurchase

In August 2024, in accordance with our previously-announced three-year share repurchase program, we entered into an accelerated share repurchase agreement (“ASR”) with Citibank N.A.

(“Citibank”) to repurchase $75.0 million of our common stock.

Pursuant to the terms of the ASR, in August 2024, we paid Citibank $75.0 million in cash and received an initial delivery of 0.8 million shares of our common stock based on a closing market price on the New York Stock Exchange on August 28, 2024 of $75.08.

This initial delivery of shares represented approximately 80% of the notional amount of the ASR.

The ASR was completed in October 2024, subsequent to the end of the second quarter of fiscal 2025, and 0.2 million additional shares were delivered upon settlement.

As of September 28, 2024, the total remaining authorization for repurchases of our common stock under the share repurchase program was $150.0 million.

Issuance of Convertible Senior Notes

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Bank National Association, as trustee.

The total net proceeds from the sale of the 2029 Notes, after deducting the initial purchasers’ discounts and debt issuance costs, were $682.8 million, of which $230.0 million was used to repay the entirety of the balance on the revolving credit facility under the Company’s current credit agreement, $185.5 million was used to repurchase a portion of our existing 0% convertible senior notes due 2026 and $88.2 million was used to complete capped call transactions, with the remaining proceeds available for working capital and other general purposes.

The 2029 Notes will mature on June 1, 2029, unless earlier converted, redeemed or repurchased.

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Acquisition of 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, pursuant to which, among other things, the Company agreed to acquire all of the issued and outstanding common shares of Attune Medical.

On April 1, 2024, the Company completed its acquisition of Attune Medical for total consideration of $186.2 million, which included an upfront cash payment of $160.7 million, or $149.2 million net of cash acquired, the fair value of contingent consideration of $25.0 million, and $0.5 million of estimated working capital adjustments.

The Company’s purchase price is subject to customary working capital and certain other adjustments as of the closing of the transaction and additional contingent consideration based on sales growth over the next three years, which is uncapped, and the achievement of certain other

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

On April 1, 2024, we completed our acquisition of Advanced Cooling Therapy, Inc., d/b/a Attune Medical (“Attune Medical”) for total consideration of $187.7 million, which included an upfront cash payment of $162.0 million, or $150.5 million net of cash acquired, the fair value of contingent consideration of $25.3 million, and $0.4 million of working capital adjustments.

The contingent consideration is based on sales growth over the next three years, which is uncapped, and the achievement of certain other milestones.

We financed the acquisition through a combination of cash on hand and borrowings under its senior unsecured revolving credit facility.

Attune Medical's ensoETM technology is designed for use across a range of medical conditions involving patient cooling or warming, including treatment in electrophysiology, critical care, neurocritical care, trauma, burn surgery, spine surgery, and cancer surgery, among others.

The Company’s addition of the Esophageal Protection product line through its acquisition of Attune Medical expands the Hospital business unit’s presence in electrophysiology and complements its Vascular Closure product line within Interventional Technologies, which is included in the Hospital reportable segment.

The addition of our Esophageal Protection product line through this acquisition expands our Hospital business unit’s presence in electrophysiology and complements its Vascular Closure product line within Interventional Technologies, which is included in the Hospital reportable segment.

Acquisition of 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.

On December 12, 2023, we completed our acquisition of OpSens Inc.

(“OpSens”) for total consideration of approximately $254.5 million, or $243.9 million, net of cash acquired.

We 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.

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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.

The addition of OpSens expands our Hospital business unit portfolio in the interventional cardiology market and is included in the Hospital reportable segment.

Financial Summary

Three Months Ended

(In thousands, except per share data) June 29,

Three Months Ended Six Months Ended

(In thousands, except per share data) September 28,

2024 September 30,

2023 % Increase/ (Decrease) September 28,

2024 September 30,

2023 % Increase/ (Decrease)

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% of net revenues 15.0 % 11.1 % 13.4 % 14.1 %

Interest and other income (expense), net $ 6,957 $ (2,069) n/m

Interest and other expense, net $ (6,993) $ (2,471) 183.0 % $ (36) $ (4,540) (99.2) %

Income before provision for income taxes $ 44,704 $ 32,832 36.2 % $ 91,417 $ 84,422 8.3 %

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Net income per share - diluted $ 0.66 $ 0.48 37.5 % $ 1.40 $ 1.28 9.4 %

Net revenue s increased 8.0% during the three months ended June 29, 2024 as compared with the same period of fiscal 2024.

Without the effects of foreign exchange, net revenues increased 8.7% during the three months ended June 29, 2024, as compared with the same period of fiscal 2024.

Revenue increases in our Hospital businesses, primarily related to recent acquisitions as well as volume and price benefits, drove the overall increase in revenue during the three months ended June 29, 2024.

Operating income de creased 25.9% during the three months ended June 29, 2024 as compared with the same period of fiscal 2024.

The decrease during the three months ended June 29, 2024 was primarily due to transaction and integration costs related

to recent acquisitions, continuous growth investments, increased amortization of acquired intangible assets and increased freight costs, partially offset by operating leverage.

Net revenues increased 8.6% and 8.3% during the three and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024.

Without the effects of foreign exchange, net revenues increased 8.7% during both the three and six months ended September 28, 2024, as compared with the same periods of fiscal 2024.

Revenue increases in our Hospital businesses, primarily related to recent acquisitions as well as volume and price benefits, drove the overall increases in revenue during the three and six months ended September 28, 2024.

Operating income in creased 46.4% and 2.8% during the three and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024.

The increase during the three months ended September 28, 2024 was primarily due to operating leverage, partially offset by operating costs related to recent acquisitions and increased amortization of acquired intangible assets.

The increase for the six months ended September 28, 2024 was primarily due to operating leverage and the gains realized on the sale of a manufacturing facility in the first quarter of fiscal 2025, partially offset by operating, transaction and integration costs related to recent acquisitions and increased amortization of acquired intangible assets.

Management’s Use of Non-GAAP Measures

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Three Months Ended

(In thousands) June 29,

(In thousands) September 28,

2024 September 30,

2023 Reported growth Currency impact Constant currency growth (1)

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Net revenues $ 345,511 $ 318,183 8.6 % (0.1) % 8.7 %

Six Months Ended

(In thousands) September 28,

2024 September 30,

2023 Reported growth Currency impact Constant currency growth (1)

United States $ 504,963 $ 473,418 6.7 % — % 6.7 %

International 176,720 156,097 13.2 % (1.8) % 15.0 %

Net revenues $ 681,683 $ 629,515 8.3 % (0.4) % 8.7 %

(1) Constant currency growth, a non-GAAP financial measure, measures the change in revenue between the current and prior year periods using a constant currency.

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Our products are marketed in approximately 90 countries around the world through a combination of our direct sales force and independent distributors and agents.

During the three months ended June 29, 2024 our revenue generated outside the U.S.

was 26.0% of total net revenues, as compared with 23.9% during the three months ended July 1, 2023.

During both the three and six months ended September 28, 2024, our revenue generated outside the U.S.

was 25.9% of total net revenues, as compared with 25.7% and 24.8%, respectively, during the three and six months ended September 30, 2023.

International sales are generally conducted in local currencies, primarily Japanese Yen, Euro and Chinese Yuan.

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Three Months Ended

(In thousands) June 29,

(In thousands) September 28,

2024 September 30,

2023 Reported growth Currency impact Constant currency growth (1)

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$ 345,511 $ 318,183 8.6 % (0.1) % 8.7 %

Six Months Ended

(In thousands) September 28,

2024 September 30,

2023 Reported growth Currency impact Constant currency growth (1)

Plasma $ 274,471 $ 282,415 (2.8) % — % (2.8) %

Apheresis 103,426 104,139 (0.7) % (2.0) % 1.3 %

Whole Blood 31,347 34,723 (9.7) % (0.1) % (9.6) %

Blood Center 134,773 138,862 (2.9) % (1.4) % (1.5) %

Interventional Technologies (2)

124,967 76,161 64.1 % (0.3) % 64.4 %

Blood Management Technologies (3)

147,472 132,077 11.7 % (0.2) % 11.9 %

Hospital 272,439 208,238 30.8 % (0.3) % 31.1 %

Net revenues (4)

$ 681,683 $ 629,515 8.3 % (0.4) % 8.7 %

(1) Constant currency growth, a non-GAAP financial measure, measures the change in revenue between the current and prior year periods using a constant currency.

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Prior periods were conformed to current presentation.

Plasma revenue decreased 2.7% during the three months ended June 29, 2024 as compared with the same period of fiscal 2024.

Without the effects of fo reign exchange, Plasma revenue decreased 2.6% during the three months ended June 29, 2024 as compared with the same period of fiscal 2024.

The decrease during the three months ended June 29, 2024 was primarily driven by lower sales volumes in North America relating to a previously announced customer transition and a temporary plasma center outage at one of our customers.

During the third quarter of fiscal 2022, we amended our supply agreement with CSL, which CSL had previously notified us of its intent not to renew and was initially set to expire in June 2022, to allow CSL to continue to use our PCS2 plasma collection system devices and purchase disposable plasmapheresis kits on a non-exclusive basis through December 2023.

During the third quarter of fiscal 2023, we further amended our supply agreement with CSL to extend the term through December 2025.

CSL has a minimum purchase commitment under the non-exclusive supply agreement of approximately $85 million in fiscal 2025.

Blood Center revenue decreased 4.3% during the three months ended June 29, 2024 as compared with the same period of fiscal 2024.

Without the effects of foreign exchange, Blood Center revenue decreased 2.1% during the three months ended June 29, 2024 as compared with the same period of fiscal 2024.

The decrease during the three months ended June 29, 2024 was primarily driven by declines in our Whole Blood business.

Hospital revenue increased 30.7% during the three months ended June 29, 2024 as compared with the same period of fiscal 2024.

Without the effects of foreign exchange, Hospital revenue increased 31.3% during the three months ended June 29, 2024 as compared with the same period of fiscal 2024.

The increase during the three months ended June 29, 2024 was primarily attributable to the product lines within the Interventional Technologies franchise with benefits from Sensor Guided Technologies and Esophageal Protection that were recently acquired, as well as growth in Vascular Closure.

Three Months Ended

(In thousands) June 29,

Pla sma revenue decreased 3.0% and 2.8% during the three and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024.

Without the effects of foreign exchange, Plasma revenue decreased 3.0% and 2.8% during the three and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024.

The decreases during the three and six months ended September 28, 2024 were primarily driven by lower sales volumes in North America, primarily relating to the previously announced customer transition of CSL Plasma, whose non-exclusive supply agreement with the Company is scheduled to expire in December 2025.

We anticipate sales of approximately $100.0 million to CSL in fiscal 2025.

The decrease for the six months ended September 28, 2024 was also due to a temporary plasma center outage at one of our customers.

Blood Center revenue decreased 1.6% and 2.9% during the three and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024.

Without the effects of foreign exchange, Blood Center revenue decreased 0.9% and 1.5% during the three and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024.

The decreases during the three and six months ended September 28, 2024 were primarily driven by declines in our Whole Blood business.

Hospital revenue increased 30.9% and 30.8% during the three and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024.

Without the effects of foreign exchange, Hospital revenue increased 30.8% and 31.1% during the three and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024.

The increases during the three and six months ended September 28, 2024 were primarily attributable to the product lines within the Interventional Technologies franchise with benefits from Sensor Guided Technologies and Esophageal Protection that were recently acquired, as well as growth in Vascular Closure as well as Blood Management Technologies.

Three Months Ended Six Months Ended

(In thousands) September 28,

2024 September 30,

2023 % Increase September 28,

2024 September 30,

2023 % Increase

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% of net revenues 54.2 % 53.6 % 53.2 % 53.7 %

Gross profit increased 4.6% for the three months ended June 29, 2024 as compared with the same period of fiscal 2024.

Without the effects of foreign exchange, gross profit increased 5.8% during the three months ended June 29, 2024 as compared with the same period of fiscal 2024.

The increase during the three months ended June 29, 2024 was driven by increased revenues in the Hospital business and volume and mix, partially offset by amortization of fair value inventory step-up and restructuring costs related to portfolio rationalization initiatives.

Gross profit increased 9.9% and 7.3% for the three and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024.

Without the effects of foreign exchange, gross profit increased 13.2% and 9.5% during the three and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024.

The increases during the three and six months ended September 28, 2024 were driven by increased revenues in the Hospital business and volume, mix and price, partially offset by restructuring costs related to portfolio rationalization initiatives, foreign exchange, amortization of fair value inventory step-up related to the Attune Medical acquisition.

Operating Expenses

Three Months Ended

(In thousands) June 29,

Three Months Ended Six Months Ended

(In thousands) September 28,

2024 September 30,

2023 % Increase/

(Decrease) September 28,

2024 September 30,

2023 % Increase

Research and development $ 16,530 $ 12,665 30.5 % $ 30,979 $ 25,313 22.4 %

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Research and Development

Research and development expenses increased 14.2% during the three months ended June 29, 2024, as compared with the same period of fiscal 2024.

Without the effects of foreign exchange, research and development expenses increased 14.2% during the three months ended June 29, 2024 as compared with the same period of fiscal 2024.

The increase during the three months ended June 29, 2024 was due to increased headcount as a result of recent acquisitions.

Research and development expenses increased 30.5% and 22.4% during the three and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024.

Without the effects of foreign exchange, research and development expenses increased 30.7% and 22.5% during the three and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024.

The increases during the three and six months ended September 28, 2024 were primarily due to increased headcount as a result of recent acquisitions.

Selling, General and Administrative

Selling, general and administrativ e expenses increased 15.8% during the three months ended June 29, 2024 as compared with the same period of fiscal 2024.

Without the effects of foreign exchange, selling, general, and administrative expenses increased 15.2% during th e three months ended June 29, 2024 as compared with the same period of fiscal 2024 .

The increase during the three months ended June 29, 2024 was primarily driven by transaction, integration and operating costs related to recent acquisitions, as well as increased headcount, partially offset by gains realized on the sale of a manufacturing facility.

Selling, general and administrativ e expenses decreased 7.3% during the three months ended September 28, 2024 and increased 3.1% during the six months ended September 28, 2024, as compared with the same periods of fiscal 2024.

Without the effects of foreign exchange, selling, general, and administrative expenses decreased 6.6% during the three months ended September 28, 2024 and increased 3.2% during th e six months ended September 28, 2024, as compared with the same periods of fiscal 2024 .

The decrease during the three months ended September 28, 2024 was driven by decreased performance-based compensation as well as decreases in impairment of intangible assets and litigation-related charges compared to the prior year period, partially offset by operating costs related to recent acquisitions and increased headcount.

The increase during the six months ended September 28, 2024 was primarily driven by transaction, integration and operating costs related to recent acquisitions, increased headcount and restructuring costs related to portfolio rationalization initiatives, partially offset by gains

realized on the sale of a manufacturing facility in the first quarter of fiscal 2025 and the decreases in impairment of intangible assets compared to the prior year period.

Amortization of Acquired Intangible Assets

We recognized amortization expense related to our acquired intangible assets of $12.5 million during the three months ended June 29, 2024 and $7.5 million during the three months ended July 1, 2023 .

The increase was related to the amortization of the intangible assets acquired in conjunction with the recent acquisitions of OpSens and Attune Medical.

Interest and Other Income (Expense), Net

Interest and other income in creased $9.0 million during the three months ended June 29, 2024, as compared with the same period of fiscal 2024.

The increase during three months ended June 29, 2024 was driven by the net gain on the repurchase of convertible notes during the first quarter of fiscal 2025, partially offset by higher interest incurred on our term loan and revolving credit facilities as compared with the same period of fiscal 2024.

We recognized amortization expense related to our acquired intangible assets of $12.3 million and $24.7 million during the three and six months ended September 28, 2024, respectively, and $7.2 million and $14.7 million during the three and six months ended September 30, 2023, respectively .

The increases were primarily related to the amortization of the intangible assets acquired in conjunction with the recent acquisitions of OpSens and Attune Medical.

Interest and Other Expense, Net

Interest and other expense in creased by $4.5 million during the three months ended September 28, 2024 and decreased $4.5 million during the six months ended September 28, 2024 , as compared with the same periods of fiscal 2024.

The increase during the three months ended September 28, 2024, as compared with the prior year period, was primarily driven by interest expense and amortization of deferred financing costs on the 2029 Notes issued in fiscal 2025, partially offset by foreign exchange.

The decrease during the six months ended September 28, 2024 was primarily driven by the net gain on the repurchase of convertible notes during the first quarter of fiscal 2025, partially offset by i nterest expense on the 2029 Notes issued in fiscal 2025 as well as higher interest incurred on our revolving credit facilities, as compared with the same period of fiscal 2024.

We conduct business globally and report our results of operations in a number of foreign jurisdictions in addition to the United States.

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Our effective tax rate is adversely impacted by non-deductible expenses including executive compensation and transaction costs.

For the three months ended June 29, 2024, the Company reported income tax expense of $8.3 million, representing an effective tax rate of 17.9%.

The effective tax rate for the three months ended June 29, 2024 includes $3.6 million of discrete tax benefit, primarily related to stock compensation windfalls.

For the three and six months ended September 28, 2024, the Company reported income tax expense of $10.9 million and $19.2 million, representing effective tax rates of 24.3% and 21.0%.

The effective tax rate for the three months ended September 28, 2024, which includes an immaterial discrete tax benefit.

The effective tax rate for the six months ended September 28, 2024 includes $3.6 million of discrete tax benefit, primarily related to stock compensation windfalls.

The discrete benefit also includes other items such as provision to return differences.

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

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

The decrease in the reported tax rates for the three months ended June 29, 2024, compared to the same period in fiscal 2024, relates primarily to increased discrete tax benefits year-over-year, partially offset by unfavorable impact of jurisdictional mix of earnings and non-deductible acquisition-related expenses.

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

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

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

The increase in the reported tax rate for the three months ended September 28, 2024, compared to the same period in fiscal 2024, relates primarily to the unfavorable impact of the jurisdictional mix of earnings and non-deductible acquisition-related expenses.

The decrease in the reported tax rate for the six months ended September 28, 2024, compared to the same period in fiscal 2024, relates primarily to increased discrete tax benefits year-over-year, partially offset by the unfavorable impact of jurisdictional mix of earnings and non-deductible acquisition-related expenses.

Liquidity and Capital Resources

The following table contains certain key performance indicators we believe depict our liquidity and cash flow position:

(Dollars in thousands) June 29,

(Dollars in thousands) September 28,

2024 March 30,

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Our e xpected cash outlays relate primarily to acquisitions, investments, capital expenditures, including enhancements to our North American manufacturing facilities, share repurchases, portfolio rationalization initiatives and cash principal and interest payments under our revised credit agreements.

As of June 29, 2024, we had $344.4 million in cash and cash equivalents, the majority of which is held in the U.S.

As of September 28, 2024, we had $299.3 million in cash and cash equivalents, the majority of which is held in the U.S.

or in countries from which it can be repatriated to the U.S.

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As the repurchase of the 2026 Notes met the criteria for extinguishment accounting, $1.9 million of unamortized debt issuance costs were allocated to the repurchase, resulting in a net gain of $12.6 million.

As of June 29, 2024, the $300.0 million remaining principal balance on the 2026 Notes was netted down by $2.6 million of remaining debt issuance costs, resulting in a net convertible note payable of $297.4 million.

Interest expense related to the 2026 Notes was $0.7 million for the three months ended June 29, 2024, which is entirely attributable to the amortization of the debt issuance costs.

As of September 28, 2024, the $300.0 million remaining principal balance on the 2026 Notes was netted down by $2.3 million of remaining debt issuance costs, resulting in a net convertible note payable of $297.7 million.

Interest expense related to the 2026 Notes was $0.4 million and $1.0 million for the three and six months ended September 28, 2024, respectively, which is entirely attributable to the amortization of the debt issuance costs.

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

As of September 28, 2024, the $700.0 million principal balance of the 2029 Notes was netted down by $16.2 million of remaining debt issuance costs, resulting in a net convertible note payable of $683.8 million.

Interest expense related to the 2029 Notes was $5.2 million and $6.9 million for the three and six months ended September 28, 2024, respectively, which includes nominal interest expense and the amortization of the debt issuance costs.

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

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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.

At June 29, 2024, $248.4 million was outstanding under the term loan with an effective interest rate of 6.8%.

There were no outstanding borrowings under the revolving credit facilities at June 29, 2024, as the Company paid all outstanding borrowings during the first quarter of fiscal 2025.

The Company also had $17.6 million of uncommitted operating lines of credit to fund its global operations under which there were no outstanding borrowings as of June 29, 2024.

At September 28, 2024, $248.4 million was outstanding under the term loan with an effective interest rate of 6.7%.

There were no outstanding borrowings under the revolving credit facilities at September 28, 2024.

The Company also had $19.8 million of uncommitted operating lines of credit to fund its global operations under which there were no outstanding borrowings as of September 28, 2024.

The Company has scheduled principal payments of $3.1 million required during the remainder of fiscal 2025 related to its term loan.

During fiscal 2022, our Board of Directors approved a revised Operational Excellence Program.

We estimate that we will incur aggregate charges between $85 million and $95 million in connection with the Operational Excellence Program.

We estimate that we will incur aggregate charges between $85.0 million and $90.0 million by the end of fiscal 2025 under the program in connection with the Operational Excellence Program.

These charges, the majority of which will result in cash outlays, including severance and other employee costs, will be incurred as the specific actions required to execute these initiatives are identified and approved and are expected to be substantially completed by the end of fiscal 2025.

During the three months ended June 29, 2024, we incurred $2.4 million of restructuring and restructuring related costs under this program.

Three Months Ended

(In thousands) June 29,

During the three and six months ended September 28, 2024, the Company incurred $1.7 million and $4.1 million , respectively, of restructuring and restructuring related costs under this program.

Six Months Ended

(In thousands) September 28,

2024 September 30,

Net cash provided by (used in):

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GAAP, we have eliminated the effect of foreign currency throughout our cash flow statement, except for its effect on our cash and cash equivalents.

Net cash used in operating activities increased by $46.5 million during the three months ended June 29, 2024, as compared with the three months ended July 1, 2023.

The increase in cash used in operating activities was primarily due to the timing of accounts payable payments, decreased net income when considering certain non-cash items, increased inventory balances and a payment in connection with a previously disclosed legal settlement.

Net cash used in investing activities increased by $123.9 million during the three months ended June 29, 2024, as compared with the three months ended July 1, 2023.

Net cash provided by operating activities decreased by $96.8 million during the six months ended September 28, 2024, as compared with the six months ended September 30, 2023.

The decrease in cash provided by operating activities was primarily due to the timing of accounts payable payments, increased inventory balances and a payment in connection with a previously disclosed legal settlement.

Net cash used in investing activities increased by $122.2 million during the six months ended September 28, 2024, as compared with the six months ended September 30, 2023.

The increase in cash used in investing activities was primarily the result of the acquisition of Attune Medical, partially offset by the proceeds from the sales of property, plant and equipment.

Net cash provided by financing activities increased by $334.3 million during the three months ended June 29, 2024, as compared with the three months ended July 1, 2023, primarily due to the issuance the 2029 Notes, partially offset by the repurchase of a portion of the 2026 Notes, capped call transactions, payments on the revolving credit facility and debt issuance costs.

Net cash provided by financing activities increased by $266.7 million during the six months ended September 28, 2024, as compared with the six months ended September 30, 2023, primarily due to the issuance the 2029 Notes, partially offset by the repurchase of a portion of the 2026 Notes, capped call transactions, share repurchases, payments on the revolving credit facility and debt issuance costs.

Concentration of Credit Risk

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Foreign Exchange

During the three months ended June 29, 2024, 26.0% of our sales were generated outside the U.S., generally in foreign currencies, yet our reporting currency is the U.S.

During both the three and six months ended September 28, 2024, 25.9% of our sales were generated outside the U.S., generally in foreign currencies, yet our reporting currency is the U.S.

We also incur certain manufacturing, marketing and selling costs in international markets in local currency.

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For further discussion of these and other factors, see Item 1A.

Risk Factors in our most recent Annual Report on Form 10-K (as supplemented by Item 1A of Part II of this Quarterly Report on Form 10-Q).

“Risk Factors” in our most recent Annual Report on Form 10-K (as supplemented by Part II, Item 1A.

“Risks Factors” of our Quarterly Report on Form 10-Q for the first quarter ended June 29, 2024).

• Our ability to achieve our long-term strategic and financial-improvement goals;

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Investors should understand that it is not possible to predict or identify all such factors and should not consider the risks described above and in Item 1A.

Risk Factors in our Annual Report on Form 10-K (as supplemented by Item 1A of Part II of this Quarterly Report on Form 10-Q) to be a complete statement of all potential risks and uncertainties.

“Risk Factors” in our Annual Report on Form 10-K (as supplemented by Part II, Item 1A.

“Risk Factors” of our Quarterly Report on Form 10-Q for the first quarter ended June 29, 2024) to be a complete statement of all potential risks and uncertainties.

The Company does not undertake to publicly update any forward-looking statement that may be made from time to time, whether as a result of new information or future events or developments.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis