What changed in this filing

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Item 1. Financial Statements

2025-02-06 compared with 2024-11-07 · 182 added, 161 removed, 707 unchanged (33% of the section changed)

3 unchanged sentences

(Unaudited in thousands, except per share data)

Three Months Ended Six Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended Nine Months Ended

2024 December 30,

2023 December 28,

2024 December 30,

Net revenues $ 348,542 $ 336,250 $ 1,030,225 $ 965,765

21 unchanged sentences

(Unaudited in thousands, except share data)

September 28,

2024 March 30,

1 unchanged sentence

Cash and cash equivalents $ 320,846 $ 178,800

Accounts receivable, less allowance for credit losses of $ 5,912 at September 28, 2024 and $ 5,695 at March 30, 2024

Accounts receivable, less allowance for credit losses of $ 5,986 at December 28, 2024 and $ 5,695 at March 30, 2024

211,949 206,562

3 unchanged sentences

Property, plant and equipment, net 286,107 311,362

Intangible assets, less accumulated amortization of $ 484,517 at September 28, 2024 and $ 455,213 at March 30, 2024

Intangible assets, less accumulated amortization of $ 311,596 at December 28, 2024 and $ 455,213 at March 30, 2024

465,615 406,117

16 unchanged sentences

Authorized — 150,000,000 shares;

Issued and outstanding — 50,381,127 shares at September 28, 2024 and 50,787,859 shares at March 30, 2024

Issued and outstanding — 50,235,051 shares at December 28, 2024 and 50,787,859 shares at March 30, 2024

Additional paid-in capital 569,629 634,627

30 unchanged sentences

Balance, September 28, 2024 50,381 $ 504 $ 544,375 $ 368,536 $ ( 34,564 ) $ 878,851

Employee stock purchase plan 49 — 3,035 — — 3,035

Exercise of stock options 12 — 1,266 ( 761 ) — 505

Shares repurchased, including excise tax ( 209 ) ( 2 ) 12,761 ( 12,867 ) — ( 108 )

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

Tax withholding on employee equity awards ( 1 ) — ( 22 ) ( 172 ) — ( 194 )

Share-based compensation expense — — 8,214 — — 8,214

Net income — — — 37,494 — 37,494

Other comprehensive loss — — — — ( 20,937 ) ( 20,937 )

Balance, December 28, 2024 50,235 $ 502 $ 569,629 $ 392,230 $ ( 55,501 ) $ 906,860

Common Stock Additional

19 unchanged sentences

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

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

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

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

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

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

Net income — — — 31,241 — 31,241

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

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

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

2 unchanged sentences

(Unaudited in thousands)

Six Months Ended

September 28,

2024 September 30,

Nine Months Ended

2024 December 30,

Cash Flows from Operating Activities:

31 unchanged sentences

Term loan redemption ( 262,500 ) —

Proceeds from revolving facility — 110,000

Payments on revolving facility ( 50,000 ) —

6 unchanged sentences

Other financing activities ( 222 ) ( 814 )

Net cash provided by (used in) financing activities 258,888 ( 7,770 )

Net cash provided by financing activities 260,268 101,659

Effect of exchange rates on cash and cash equivalents ( 3,455 ) ( 484 )

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All intercompany transactions have been eliminated.

Operating results for the six months ended September 28, 2024 are not necessarily indicative of the results that may be expected for the full fiscal year ending March 29, 2025 or any other interim period.

Operating results for the nine months ended December 28, 2024 are not necessarily indicative of the results that may be expected for the full fiscal year ending March 29, 2025 or any other interim period.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the Annual Report on Form 10-K for the fiscal year ended March 30, 2024.

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 as of or for the six months ended September 28, 2024.

Subse quent events have been evaluated as required.

There were no material recognized or unrecognized subsequent events as of or for the nine months ended December 28, 2024, except for those discussed in Note 3, Acquisitions, Divestitures and Strategic Investments .

RECENT ACCOUNTING PRONOUNCEMENTS

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

ASC Update No.

ASC Upda te No.

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

ACQUISITIONS AND STRATEGIC INVESTMENTS

In November 2024, the FASB issued ASC Update No.

2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40).

ASC Update No.

2024-03 requires detailed cost and expense information disaggregated in the financial statement notes.

The updated guidance is effective for fiscal years beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

ASC Update No.

2024-03 is applicable to Haemonetics beginning with the fiscal 2028 Annual Report on Form 10-K and the Company is currently evaluating the impact to its interim and annual report disclosures.

ACQUISITIONS, DIVESTITURES AND STRATEGIC INVESTMENTS

A cquisitions

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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 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.

Purchase Price Allocation

1 unchanged sentence

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 Condensed Consolidated Financial Statements were prepared.

The most significant open item is the accounting for income taxes as the Company is awaiting additional information to complete its assessment of these matters.

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

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

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

The preliminary purchase price of $ 176.2 million, net of $ 11.5 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:

The purchase price of $ 176.2 million, net of $ 11.5 million of cash acquired, consists of the amounts presented below, which represent the final determination of the fair value of the identifiable assets acquired and liabilities assumed:

(In thousands) April 1, 2024

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

Divestiture of the Whole Blood Product Line

On December 3, 2024, the Company announced that it had entered into a definitive agreement to sell its Whole Blood product line and related assets within its Blood Center business unit to GVS, S.p.A (“GVS”), a manufacturer of filter solutions for applications in the healthcare and life sciences sectors.

The divested assets include the Company’s complete portfolio of proprietary whole blood collection, processing and filtration solutions, along with the Company’s manufacturing facility in Covina, California where certain of these products are produced, and related equipment and assets located at the Company’s manufacturing facility in Tijuana, Mexico.

On January 13, 2024, subsequent to the third quarter ended December 28, 2024, the Company completed the transaction with GVS for total cash consideration of up to $ 67.8 million, which includes $ 45.3 million upfront and up to $ 22.5 million in contingent consideration, based on sales growth over the next three years and the achievement of certain other milestones.

As the related assets are considered held for sale as of December 28, 2024, the Company has reclassified $ 34.7 million of inventory, $ 7.3 million of property, plant and equipment, $ 4.5 million of goodwill and $ 0.5 million of accrued liabilities to Prepaid expenses and other current assets and other current liabilities in the Condensed Consolidated Balance Sheets, which were previously included in the Blood Center reportable segment.

Strategic Investments

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

As of September 28, 2024, the Compan y has made total investments in Vivasure Medical LTD (“Vivasure”) of € 35 million.

As of December 28, 2024, the Compan y has made total investments in Vivasure Medical LTD (“Vivasure”) of € 35 million.

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

In addition, the Compan y made certain other strategic investments totaling $ 14.0 million and $ 7.6 million during fiscal 2025 and 2024, r espectively.

The Company’s strategic investments are classified as other long-term assets on the Company’s Condensed Consolidated Balance Sheets and the Company has not recorded any adjustments to the carrying value of our strategic investments during three and six months ended September 28, 2024 and September 30, 2023.

As of September 28, 2024, the Company had $ 30.5 million of transaction price allocated to remaining performance obligations related to executed contracts with an original duration of one year or more.

The Company’s strategic investments are classified as other long-term assets on the Company’s Condensed Consolidated Balance Sheets and the Company has not recorded any material adjustments to the carrying value of the Company’s strategic investments during three and nine months ended December 28, 2024 and December 30, 2023.

As of December 28, 2024, the Company had $ 33.3 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 75 % of this amount as revenue within the next twelve months and the remaining balance thereafter.

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

As of September 28, 2024 and March 30, 2024, the Company had contract liabilities of $ 36.7 million and $ 31.2 million, respectively.

During the three and six months ended September 28, 2024, the Company recognized $ 8.5 million and $ 21.8 million of revenue, respectively, that was included in the above March 30, 2024 contract liability balance.

As of December 28, 2024 and March 30, 2024, the Company had contract liabilities of $ 35.6 million and $ 31.2 million, respectively.

During the three and nine months ended December 28, 2024, the Company recognized $ 4.9 million and $ 26.7 million of revenue, respectively, that was included in the above March 30, 2024 contract liability balance.

Contract liabilities are classified as other current liabilities on the Condensed Consolidated Balance Sheet.

As of September 28, 2024 and March 30, 2024, the Company’s contract assets were immaterial.

As of December 28, 2024 and March 30, 2024, the Company’s contract assets were immaterial.

RESTRUCTURING

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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 $ 85.0 million and $ 90.0 million by the end of fiscal 2025 under the program.

The Company expects to incur aggregate charges of approximately $ 85.0 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 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.

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

Total cumulative charges under this progra m are $ 81.1 million.

During the three and nine months ended December 28, 2024, the Company incurred $ 1.9 million and $ 6.0 million , respectively, of restructuring and restructuring related costs under this program.

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

Total cumulative charges under this progra m are $ 83.0 million through December 28, 2024.

Portfolio Rationalization Initiatives

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

In the three and six months ended September 28, 2024, the Company incurred $ 4.7 million and $ 9.4 million, respectively, of restructuring and restructuring related costs related to these portfolio rationalization initiatives.

The following table summarizes the activ ity for restructuring reserves related to the portfolio rationalization initiatives and the 2020 Pr ogram for the six months ended September 28, 2024, which relates to employee severance, other employee costs and inventory reserves:

In the three and nine months ended December 28, 2024, the Company incurred $ 3.1 million and $ 12.5 million of expenses, respectively, of restructuring and restructuring related costs in connection with these portfolio rationalization initiatives.

In both the three and nine months ended December 30, 2023, the Company incurred $ 7.8 million of restructuring and related costs related to these portfolio rationalization initiatives.

The following table summarizes the activ ity for restructuring reserves related to the portfolio rationalization initiatives and the 2020 Pr ogram for the nine months ended December 28, 2024, which relates to employee severance, other employee costs, inventory reserves and lease termination fees:

(In thousands) Portfolio Rationalization 2020 Program Total

3 unchanged sentences

Payments ( 10,837 ) ( 652 ) ( 11,489 )

Balance at September 28, 2024

Non-cash adjustments ( 8,616 ) — ( 8,616 )

Balance at December 28, 2024

$ 4,152 $ 466 $ 4,618

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

Three Months Ended Six Months Ended

(In thousands) September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended Nine Months Ended

(In thousands) December 28,

2024 December 30,

2023 December 28,

2024 December 30,

Cost of goods sold $ 3,027 $ 7,065 $ 11,158 $ 7,329

2 unchanged sentences

Total $ 3,515 $ 7,968 $ 12,929 $ 8,043

As of September 28, 2024, the Company had a restr ucturing liability of $ 14.8 million , all of which is paya ble within the next twelve months.

As of December 28, 2024, the Company had a restructuring liability of $ 4.6 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 that do not constitute restructuring costs under ASC 420, Exit and Disposal Cost Obligations, and which the Company instead refers to as restructuring related costs.

1 unchanged sentence

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

Restructuring costs Three Months Ended Six Months Ended

(In thousands) September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Restructuring costs Three Months Ended Nine Months Ended

(In thousands) December 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023

Plasma $ 77 $ 33 $ 284 $ ( 164 )

3 unchanged sentences

Total $ 3,515 $ 7,968 $ 12,929 $ 8,043

Restructuring related costs Three Months Ended Six Months Ended

(In thousands) September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Restructuring related costs Three Months Ended Nine Months Ended

(In thousands) December 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023

Plasma $ 37 $ 72 $ 263 $ 315

8 unchanged sentences

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

For the three and six months ended September 28, 2024, the Company reported income tax expense of $ 10.9 million and $ 19.2 million, respectively, 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.

For the three and nine months ended December 28, 2024, the Company reported income tax expense of $ 12.4 million and $ 31.6 million, respectively, representing effective tax rates of 24.9 % and 22.4 %.

The effective tax rate for the nine months ended December 28, 2024 includes $ 3.3 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 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.

On August 26, 2024, the U.S.

Tax Court issued a decision in Varian Medical Systems, Inc.

Commissioner.

The decision related to the Tax Cuts and Jobs Act Transition Tax on unrepatriated earnings of applicable foreign subsidiaries.

The Company is still evaluating the impact and whether to file a protective refund claim with the U.S.

Internal Revenue Service.

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

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

The decrease in the reported tax rate for the three months ended December 28, 2024, compared to the same period in fiscal 2024, relates primarily to the decrease in non-deductible acquisition-related expenses.

The decrease in the reported tax rate for the nine months ended December 28, 2024, compared to the same period in fiscal 2024, relates primarily to increased discrete tax benefits year-over-year and decreased non-deductible acquisition-related expenses.

EARNINGS PER SHARE

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

Three Months Ended Six Months Ended

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

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended Nine Months Ended

(In thousands, except per share amounts) December 28,

2024 December 30,

2023 December 28,

2024 December 30,

Net income $ 37,494 $ 31,241 $ 109,698 $ 97,191

9 unchanged sentences

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

For the three and six months ended September 28, 2024, weighted average shares outstanding, assuming dilution, excludes the impact of $ 0.8 million anti-dilutive shares for both periods.

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

For the three and nine months ended December 28, 2024, weighted average shares outstanding, assuming dilution, excludes the impact of $ 0.8 million anti-dilutive shares for both periods.

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

Share Repurchase Program

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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 August 2024, the Company entered into an accelerated share repurchase agreement (“ASR”) with Citibank N.A.

(“Citibank”) to repurchase $ 75.0 million of the Company’s common stock.

Pursuant to the terms of the ASR, in August 2024, the Company paid Citibank $ 75.0 million in cash and received an initial delivery of 0.8 million shares of the Company's 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 the Company's common stock under the share repurchase program was $ 150.0 million.

In October 2024, 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.

(“Citibank”) in August 2024.

The total number of shares repurchased under the ASR was 1.0 million at an average price per share upon final settlement of $ 74.36 .

As of December 28, 2024, the total remaining authorization for repurchases of the Company's common stock under the share repurchase program was $ 150.0 million.

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

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

(In thousands) September 28,

(In thousands) December 28,

2024 March 30,

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Total inventories $ 359,614 $ 317,202

In the third quarter of fiscal 2025, the Company announced the divestiture of its Whole Blood product line within its Blood Center business unit and all related assets and liabilities were recognized as held for sale.

The related inventory has a value of $ 34.7 million, which has been reclassified to Prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets.

PROPERTY, PLANT AND EQUIPMENT

(In thousands) September 28,

(In thousands) December 28,

2024 March 30,

8 unchanged sentences

Property, plant and equipment, net $ 286,107 $ 311,362

During the three and six months ended September 28, 2024, depreciation expense was $ 15.0 million and $ 29.6 million, respectively.

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

During the three and nine months ended December 28, 2024, depreciation expense was $ 15.2 million and $ 44.8 million, respectively.

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

The related property, plant and equipment has a gross value of $ 39.8 million and a net carrying value of $ 7.3 million, which has been reclassified to Prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets.

In the first quarter of fiscal 2025, the Company received $ 19.9 million of cash upon the sale of a manufacturing facility and related assets that previously met held for sale criteria, which resulted in a gain of $ 14.1 million that was recorded in selling, general and administrative expenses on the Condensed Consolidated Statements of Income.

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

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

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

GOODWILL AND INTANGIBLE ASSETS

3 unchanged sentences

$ 29,043 $ 33,484 $ 502,555 $ 565,082

Assets held for sale — ( 4,475 ) — ( 4,475 )

Purchase accounting adjustments — — ( 19,248 ) ( 19,248 )

1 unchanged sentence

Currency translation — ( 268 ) ( 5,367 ) ( 5,635 )

Carrying amount as of September 28, 2024

Carrying amount as of December 28, 2024

$ 29,043 $ 28,741 $ 547,482 $ 605,266

1 unchanged sentence

This resulted in the Company revising its estimate of the net deferred tax liability recorded as of the acquisition date.

Refer to Note 3, Acquisitions and Strategic Investments, for additional information regarding the acquisitions of OpSens and Attune Medical.

The gross carrying amount of intangible assets and the related accumulated amortization as of September 28, 2024 and March 30, 2024 is as follows:

Refer to Note 3, Acquisitions, Divestitures and Strategic Investments, for additional information regarding the acquisitions of OpSens and Attune Medical.

The related goodwill of $ 4.5 million has been reclassified to Prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets.

The gross carrying amount of intangible assets and the related accumulated amortization as of December 28, 2024 and March 30, 2024 is as follows:

(In thousands) Gross Carrying

1 unchanged sentence

Amortization Net

As of September 28, 2024

As of December 28, 2024

Developed technology $ 505,323 $ 146,898 $ 358,425

22 unchanged sentences

During fiscal 2025, the Company acquired Attune Medical and recorded $ 96.1 million of developed technology, $ 7.8 million of customer contracts and related relationships and $ 1.9 million of trade name intangibles based on the purchase accounting valuation.

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

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

In the first quarter of fiscal 2025, the Company announced the commercialization of MVP XL and moved the related in-process research and development intangible asset to developed technologies and commenced amortization.

In the second quarter of

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

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

The related intangible assets are fully amortized and have a net book value of zero .

The gross intangible assets value is $ 185.6 million.

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

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

During the three and six months ended September 28, 2024, amortization expense was $ 14.2 million and $ 28.7 million, respectively.

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

During the three and nine months ended December 28, 2024, amortization expense was $ 13.9 million and $ 42.6 million, respectively.

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

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

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Notes payable and long-term debt consisted of the following:

(In thousands) September 28, 2024 March 30, 2024

(In thousands) December 28, 2024 March 30, 2024

Convertible notes $ 982,731 $ 494,813

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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, which was recorded in Interest and other income (expense), net on the Condensed Consolidated Statements of Income.

During the second quarter of fiscal 2025, the conditions allowing holders of the 2026 Notes to convert have not been met.

The 2026 Notes were therefore not convertible as of September 28, 2024 and were classified as long-term debt on the Company’s Condensed Consolidated Balance Sheets.

As of September 28, 2024, the $ 300.0 million principal balance 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.

During the third quarter of fiscal 2025, the conditions allowing holders of the 2026 Notes to convert have not been met.

The 2026 Notes were therefore not convertible as of December 28, 2024 and were classified as long-term debt on the Company’s Condensed Consolidated Balance Sheets.

As of December 28, 2024, the $ 300.0 million principal balance was netted down by $ 1.9 million of remaining debt issuance costs, resulting in a net convertible note payable of $ 298.1 million.

Interest expense related to the 2026 Notes was $ 0.4 million and $ 1.4 million for the three and nine months ended December 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 %.

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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, with a portion of funds used to repay the entirety of the balance on the revolving credit facility under the Company’s second amended and restated credit agreement, to repurchase a portion of the Company’s 2026 Notes and to complete capped call transactions in connection with the issuance of the 2029 Notes, as described further below.

The Company intends to use the remainder of the proceeds for future cash requirements, which may include additional repurchases of the 2026 Notes from time to time following the offering, or the repayment at maturity of the 2026 Notes.

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, with a portion of funds used to repay the entirety of the balance on the revolving credit facility under the Company’s second amended and restated credit agreement, to repurchase a portion of the Company’s 2026 Notes, to complete capped call transactions in connection with the issuance of the 2029 Notes, as described further below, with the remaining proceeds available for other working capital requirements.

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

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If a make-whole adjustment event, as described in the Indenture, occurs and a holder elects to convert its 2029 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 the second quarter of fiscal 2025, the conditions allowing holders of the 2029 Notes to convert have not been met.

The 2029 Notes were therefore not convertible as of September 28, 2024 and were classified as long-term debt on the Company’s consolidated balance sheets.

During the third quarter of fiscal 2025, the conditions allowing holders of the 2029 Notes to convert have not been met.

The 2029 Notes were therefore not convertible as of December 28, 2024 and were classified as long-term debt on the Company’s consolidated balance sheets.

The 2029 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 June 5, 2027 and on or before the 50th 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 2029 Notes to be redeemed, plus accrued and unpaid interest to, but excluding the redemption date.

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As a result of the issuance of the 2029 Notes, the Company recorded debt issuance costs of $ 17.2 million, which will be amortized to interest expense over the contractual term of the 2029 Notes at an effective interest rate of 3.0 %.

As of September 28, 2024, the $ 700.0 million principal balance 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.

As of December 28, 2024, the $ 700.0 million principal balance was netted down by $ 15.4 million of remaining debt issuance costs, resulting in a net convertible note payable of $ 684.6 million.

Interest expense related to the 2029 Notes was $ 5.2 million and $ 12.1 million for the three and nine months ended December 28, 2024, respectively, which includes nominal interest expense and the amortization of the debt issuance costs.

In connection with the issuance of the 2029 Notes, the Company entered into capped call transactions with certain counterparties (“Capped Calls”).

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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, were 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”).

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.

Loans under the 2024 Revised Credit Facilities 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.

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.

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The Company applied modification accounting for the credit facility refinancing, which resulted in the capitalization of an additional $ 5.9 million in lender fees and third-party costs.

During the three and six months ended September 28, 2024, the Company recognized $ 4.9 million and $ 12.0 million, respectively, of interest expense and amortization of debt issuance costs related to its credit facilities.

At September 28, 2024, $ 248.4 million was outstanding under the term loan with an effective interest rate of 6.7 %, which was netted down by the $ 5.9 million of remaining debt discount, resulting in a net note payable of $ 242.5 million.

The Company has scheduled principal payments of $ 6.3 million required during the 12 months following September 28, 2024.

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 was in compliance with the consolidated net leverage and interest coverage ratios specified in the 2024 Revised Credit Facilities as well as all other bank covenants as of September 28, 2024.

During the three and nine months ended December 28, 2024, the Company recognized $ 4.6 million and $ 16.6 million, respectively, of interest expense and amortization of debt issuance costs related to its credit facilities.

At December 28, 2024, $ 246.9 million was outstanding under the term loan with an effective interest rate of 6.1 %, which was netted down by the $ 5.6 million of remaining debt discount, resulting in a net note payable of $ 241.3 million.

The Company has scheduled principal payments of $ 6.3 million required during the 12 months following December 28, 2024.

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

The Company also had $ 18.0 million of uncommitted operating lines of credit to fund its global operations under which there were no outstanding borrowings as of December 28, 2024.

The future aggregate amount of debt maturities are as follows:

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The Company manufactures, markets and sells its products globally.

During both the three and six months ended September 28, 2024, 25.9 % of the Company’s sales were generated outside the U.S.

During the three and nine months ended December 28, 2024, 26.1 % and 26.0 %, respectively, of the Company’s sales were generated outside the U.S.

in local currencies.

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Designated Foreign Currency Hedge Contracts

All of the Company’s designated foreign currency hedge contracts as of September 28, 2024 and March 30, 2024 were cash flow hedges under ASC 815, Derivatives and Hedging (“ASC 815”).

All of the Company’s designated foreign currency hedge contracts as of December 28, 2024 and March 30, 2024 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.

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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 $ 30.8 million as of September 28, 2024 and $ 74.0 million as of March 30, 2024.

At September 28, 2024, a loss of $ 1.3 million, net of tax, will be reclassified to earnings within the next twelve months.

All currency cash flow hedges outstanding as of September 28, 2024 mature within twelve months.

The Company had designated foreign currency hedge contracts outstanding in the contract amount of $ 45.5 million as of December 28, 2024 and $ 74.0 million as of March 30, 2024.

At December 28, 2024, a loss of $ 1.1 million, net of tax, will be reclassified to earnings within the next twelve months.

Substantially all currency cash flow hedges outstanding as of December 28, 2024 mature within twelve months.

Non-Designated Foreign Currency Contracts

4 unchanged sentences

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

The Company had non-designated foreign currency hedge contracts under ASC 815 outstanding in the contract amount of $ 38.0 million as of September 28, 2024 and $ 39.9 million as of March 30, 2024.

The Company had non-designated foreign currency hedge contracts under ASC 815 outstanding in the contract amount of $ 82.7 million as of December 28, 2024 and $ 39.9 million as of March 30, 2024.

Interest Rate Swaps

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Loans under the 2024 Revised Credit Facilities bear interest at an annual rate equal to the 1-month USD Term SOFR, plus an applicable rate ranging from 1.125 % to 1.750 % based on the Company’s consolidated net leverage ratio.

As a result of the amendment and extension in September 2024, the two modified interest rate swaps (the “Swaps”) have an average blended fixed interest rate of 3.31 % plus the applicable rate on approximately 80 % of the notional value of the unsecured term loan, until their maturity in April 2029.

The Company has determined both of the Swaps are effective and qualify for hedge accounting treatment.

The Company held the following interest rate swaps as of September 28, 2024:

Hedged Item Original Notional Amount Notional Amount as of September 28, 2024

As a result of the amendment and extension in September 2024, the two modified interest rate swaps have an average blended fixed interest rate of 3.31 % plus the applicable rate on approximately 80 % of the notional value of the unsecured term loan, until their maturity in April 2029.

The Company has determined both of these interest rate swaps are effective and qualify for hedge accounting treatment.

The Company held the following interest rate swaps as of December 28, 2024:

Hedged Item Original Notional Amount Notional Amount as of December 28, 2024

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

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Total $ 205,800 $ 205,800 $ 5,806

For the six months ended September 28, 2024, the Company recorded a loss of $ 2.1 million, net of tax, in accumulated other comprehensive loss to recognize the effective portion of the fair value of the swaps that qualify as cash flow hedges.

For the nine months ended December 28, 2024, the Company recorded a gain of $ 3.4 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

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

Three Months Ended Six Months Ended

(In thousands) September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Three Months Ended Nine Months Ended

(In thousands) December 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023

Beginning balance $ 5,912 $ 5,044 $ 5,695 $ 4,932

Credit loss 123 653 339 833

Write-offs 14 ( 33 ) 1 ( 69 )

Write-offs (recoveries) ( 49 ) 28 ( 48 ) ( 40 )

Ending balance $ 5,986 $ 5,725 $ 5,986 $ 5,725

7 unchanged sentences

Fair Value of Derivative Instruments

The following table presents the effect of the Company’s derivative instruments designated as cash flow hedges and those not designated as hedging instruments under ASC 815 in its unaudited Condensed Consolidated Statements of Income and Comprehensive Income for the six months ended September 28, 2024:

Derivative Instruments Amount of Gain Recognized

Derivative Instruments Amount of Gain (Loss) Recognized

in Accumulated Other Comprehensive Loss Amount of Gain (Loss) Reclassified

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Designated interest rate swaps, net of tax $ 3,353 $ 37 Interest and other expense, net $ —

The Company did not have fair value hedges or net investment hedges outstanding as of September 28, 2024 or March 30, 2024.

As of September 28, 2024, no material deferred taxes were recognized for designated foreign currency hedges.

The Company did not have fair value hedges or net investment hedges outstanding as of December 28, 2024 or March 30, 2024.

As of December 28, 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.

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

As of September 28, 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 Condensed Consolidated Balance Sheets as of September 28, 2024 and March 30, 2024:

As of December 28, 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 Condensed Consolidated Balance Sheets as of December 28, 2024 and March 30, 2024:

(In thousands) Location in Condensed Consolidated

Balance Sheets As of As of

September 28, 2024 March 30, 2024

December 28, 2024 March 30, 2024

Derivative Assets:

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Non-designated foreign currency hedge contracts Other current liabilities 347 536

Designated interest rate swaps Other long-term liabilities 1,781 —

$ 1,566 $ 931

Fair Value Measured on a Recurring Basis

Financial assets and financial liabilities measured at fair value on a recurring basis consist of the following as of September 28, 2024 and March 30, 2024.

As of September 28, 2024

Financial assets and financial liabilities measured at fair value on a recurring basis consist of the following as of December 28, 2024 and March 30, 2024.

As of December 28, 2024

(In thousands) Level 1 Level 2 Level 3 Total

Money market funds $ 170,773 $ — $ — $ 170,773

Designated foreign currency hedge contracts — 1,186 — 1,186

Non-designated foreign currency hedge contracts — 71 — 71

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Fair Value at Valuation Unobservable

(In thousands) September 28, 2024 Technique Input Range

(In thousands) December 28, 2024 Technique Input Range

Revenue-based payments $ 17,179 Monte Carlo Simulation Model Discount rate 6.3 %

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Projected year of payment 2028

The fair value of contingent consideration associated with the Attune Medical acquisition was $ 26.3 million at September 28, 2024.

As of September 28, 2024, $ 8.0 million was included in other current liabilities and $ 18.3 million was included in other long-term liabilities on the Condensed Consolidated Balance Sheets.

The fair value of contingent consideration associated with the Attune Medical acquisition was $ 23.1 million at December 28, 2024.

As of December 28, 2024, $ 1.7 million was included in other current liabilities and $ 21.4 million was included in other long-term liabilities on the Condensed Consolidated Balance Sheets.

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

4 unchanged sentences

Change in fair value ( 2,167 )

Balance at September 28, 2024

Balance at December 28, 2024

Other Fair Value Disclosures

The fair values of the 2026 Notes and 2029 No tes were $ 277.7 million and $ 701.7 million as o f September 28, 2024, respectively, which were determined by using the market price on the last trading day of the reporting period and are considered as level 2 in the fair value hierarchy.

The fair values of the 2026 Notes and 2029 No tes were $ 282.0 million and $ 688.9 million as o f December 28, 2024, respectively, which were determined by using the market price on the last trading day of the reporting period and are 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 fa ir value.

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In fiscal 2024, the Company recorded cumulative charges of $ 6.8 million related to inventory, returns and customer claims associated with this recall.

Substantially all outstanding claims have been paid as of September 28, 2024.

Substantially all outstanding claims have been paid as of December 28, 2024.

ACCUMULATED OTHER COMPREHENSIVE LOSS

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Net current period other comprehensive income (loss) ( 21,943 ) — 2,074 ( 19,869 )

Balance as of September 28, 2024 $ ( 33,420 ) $ 1,748 $ ( 2,892 ) $ ( 34,564 )

Balance as of December 28, 2024 $ ( 60,217 ) $ 1,748 $ 2,968 $ ( 55,501 )

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

SEGMENT AND ENTERPRISE-WIDE INFORMATION

The Company determines its reportable segments by first identifying its operating segments, and then by assess i ng 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 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.

8 unchanged sentences

Selected information by reportable segment is presented below:

Three Months Ended Six Months Ended

(In thousands) September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended Nine Months Ended

(In thousands) December 28,

2024 December 30,

2023 December 28,

2024 December 30,

Net revenues (1)

7 unchanged sentences

Prior periods were conformed to current presentation.

Three Months Ended Six Months Ended

(In thousands) September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended Nine Months Ended

(In thousands) December 28,

2024 December 30,

2023 December 28,

2024 December 30,

Segment operating income

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Digital transformation costs ( 4,620 ) ( 3,415 ) ( 15,823 ) ( 10,712 )

PCS2 related charges — ( 552 ) — ( 411 )

Write downs of certain assets and PCS2 related charges ( 4,000 ) ( 210 ) ( 4,000 ) ( 621 )

MDR and IVDR costs ( 1,008 ) ( 1,433 ) ( 3,125 ) ( 4,587 )

5 unchanged sentences

Net revenues by business unit are as follows:

Three Months Ended Six Months Ended

(In thousands) September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended Nine Months Ended

(In thousands) December 28,

2024 December 30,

2023 December 28,

2024 December 30,

Plasma $ 134,224 $ 147,641 $ 408,695 $ 430,056

14 unchanged sentences

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

Three Months Ended Six Months Ended

(In thousands) September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended Nine Months Ended

(In thousands) December 28,

2024 December 30,

2023 December 28,

2024 December 30,

United States $ 257,665 $ 250,804 $ 762,628 $ 724,222

5 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements