UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q



~~Quarterly Report Pursuant to Section~~☒			QUARTERLY REPORT PURSUANT TO SECTION 13 orOR 15(d) ~~of the Securities Exchange Act of~~OF THE SECURITIES EXCHANGE ACT OF 1934

For the ~~quarter~~quarterly period ended: ~~December 30, 2017~~January 1, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-14041

HAEMONETICS CORPORATION

(Exact name of registrant as specified in its charter)


Massachusetts		04-2882273
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

125 Summer Street
Boston,	Massachusetts	02110
(~~State or other jurisdiction~~ Address of ~~incorporation or organization)~~ principal executive offices)		~~04-2882273~~ (~~I.R.S. Employer Identification No.)~~ Zip Code)

~~400 Wood Road, Braintree, MA 02184~~(781) 848-7100

(~~Address of principal executive offices)~~

Registrant’s telephone number, including area ~~code:~~ ~~(781) 848-7100~~code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Common stock, $.01 par value per share

HAE

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o



~~Yes~~ þ		No o

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).



~~Yes~~ þ		No o

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and ~~"emerging~~“emerging growth ~~company"~~company” in Rule 12b-2 of the Exchange Act.

Large accelerated filerþ

Accelerated filer o

☐

Non-accelerated filer o

~~(Do not check if a smaller reporting company)~~☐

Smaller reporting companyo

☐

Emerging growth companyo

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)



~~Yes~~ o		No þ

Yes ☐No x

The number of shares of $0.01 par value common stock outstanding as of February ~~2, 2018: 53,447,550~~4, 2022: 51,111,595

HAEMONETICS CORPORATION

INDEX



			PAGE
PART I. FINANCIAL INFORMATION

			~~PAGE~~
~~PART I. FINANCIAL INFORMATION~~

ITEM 1. Financial Statements

Unaudited Condensed Consolidated Statements of ~~(Loss)~~ Income and Comprehensive ~~(Loss)~~ Income - Three and Nine Months Ended ~~December 30, 2017~~January 1 , 202 2 and ~~December 31, 2016~~Dec ember 26, 2020			3
Unaudited Condensed Consolidated Balance Sheet - ~~December 30, 2017~~January 1 , 202 2 and ~~Audited~~ Consolidated Balance Sheet - April ~~1, 2017~~3, 2021			4
Unaudited Condensed Consolidated Statements of Stockholders’ Equity - Three and Nine Months Ended January 1 , 202 2 and Dec ember 26, 2020			5
Unaudited Condensed Consolidated Statements of Cash Flows - Nine Months Ended ~~December 30, 2017~~ January 1 , 202 2 and ~~December 31, 2016~~Dec ember 26, 2020			57
Notes to Unaudited Condensed Consolidated Financial Statements			68

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			1824

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk			3134

ITEM 4. Controls and Procedures			3235

PART II. OTHER INFORMATION			3336

ITEM 1. Legal Proceedings			3336

ITEM 1A. Risk Factors			3336

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds			3336

ITEM 3. Defaults upon Senior Securities			3337

ITEM 4. Mine Safety Disclosures			3437

ITEM 5. ~~[Removed and Reserved]~~Other Information			3437

ITEM 6. Exhibits			3538

SIGNATURES			3639

ITEM 1. FINANCIAL STATEMENTS

HAEMONETICS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF ~~(LOSS)~~ INCOME AND COMPREHENSIVE ~~(LOSS)~~ INCOME

(Unaudited in thousands, except per share data)

Three Months Ended Nine Months Ended
December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
Net revenues $ 234,043
$ 227,841
$ 670,371
$ 658,050
Cost of goods sold 122,748
126,762
362,849
361,667
Gross profit 111,295
101,079
307,522
296,383
Operating expenses:
Research and development 12,427
8,462
28,141
28,235
Selling, general and administrative 97,855
71,405
237,499
230,023
Total operating expenses 110,282
79,867
265,640
258,258
Operating income 1,013
21,212
41,882
38,125
Gain on divestiture —
—
8,000
—
Interest and other expense, net (806 ) (2,275 ) (3,562 ) (6,414 )
Income before provision for income taxes 207
18,937
46,320
31,711
Provision for income taxes 6,754
3,544
12,628
6,839
Net (loss) income $ (6,547 ) $ 15,393
$ 33,692
$ 24,872

Net (loss) income per share - basic $ (0.12 ) $ 0.30
$ 0.64
$ 0.48
Net (loss) income per share - diluted $ (0.12 ) $ 0.30
$ 0.63
$ 0.48

Weighted average shares outstanding
Basic 53,090
51,708
52,717
51,369
Diluted 53,090
52,103
53,285
51,671

Comprehensive (loss) income (6,350 ) 13,084
39,353
20,888


	Three Months Ended				Nine Months Ended
	January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020
Net revenues	$	259,769	$	240,371	$	728,194	$	645,434
Cost of goods sold	121,204		120,114		359,003		329,403
Gross profit	138,565		120,257		369,191		316,031
Operating expenses:
Research and development	10,037		7,501		33,591		22,014
Selling, general and administrative	80,726		65,641		247,722		191,504
Amortization of intangible assets	12,151		7,805		35,930		24,204
Gains on divestitures and sale of assets	—		(1,115)		(9,603)		(32,613)
Total operating expenses	102,914		79,832		307,640		205,109
Operating income	35,651		40,425		61,551		110,922
Interest and other expense, net	(4,263)		(3,051)		(13,249)		(10,612)
Income before provision for income taxes	31,388		37,374		48,302		100,310
Provision for income taxes	8,156		5,492		14,668		9,800
Net income	$	23,232	$	31,882	$	33,634	$	90,510

Net income per share - basic	$	0.45	$	0.63	$	0.66	$	1.79
Net income per share - diluted	$	0.45	$	0.62	$	0.65	$	1.77

Weighted average shares outstanding
Basic	51,094		50,789		51,024		50,634
Diluted	51,344		51,363		51,356		51,234

Comprehensive income	$	23,419	$	40,496	$	33,832	$	105,787

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

HAEMONETICS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(InUnaudited in thousands, except share data)


	January 1, 2022		April 3, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	236,877	$	192,305
Accounts receivable, less allowance of $2,382 at January 1, 2022 and $2,226 at April 3, 2021	154,980		127,555
Inventories, net	305,741		322,614
Prepaid expenses and other current assets	31,857		51,072
Total current assets	729,455		693,546
Property, plant and equipment, net	238,841		217,559
Intangible assets, less accumulated amortization of $362,637 at January 1, 2022 and $320,640 at April 3, 2021	323,951		365,483
Goodwill	468,199		466,444
Deferred tax asset	6,050		6,009
Other long-term assets	64,880		70,882
Total assets	$	1,831,376	$	1,819,923
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable and current maturities of long-term debt	$	144,064	$	17,016
Accounts payable	51,175		50,293
Accrued payroll and related costs	39,046		47,600
Other liabilities	121,126		138,586
Total current liabilities	355,411		253,495
Long-term debt, net of current maturities	633,118		690,592
Deferred tax liability	26,132		43,825
Other long-term liabilities	85,940		100,341
Total stockholders’ equity
Common stock, $0.01 par value; Authorized — 150,000,000 shares; Issued and outstanding — 51,111,046 shares at January 1, 2022 and 50,868,820 shares at April 3, 2021	511		509
Additional paid-in capital	566,963		602,727
Retained earnings	192,650		157,981
Accumulated other comprehensive loss	(29,349)		(29,547)
Total stockholders’ equity	730,775		731,670
Total liabilities and stockholders’ equity	$	1,831,376	$	1,819,923

December 30,
2017 April 1,
2017
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 251,591
$ 139,564
Accounts receivable, less allowance of $2,209 at December 30, 2017 and
$2,184 at April 1, 2017
146,718
152,683
Inventories, net 158,840
176,929
Prepaid expenses and other current assets 32,564
40,853
Total current assets 589,713
510,029
Property, plant and equipment, net 330,026
323,862
Intangible assets, less accumulated amortization of $240,851 at December 30, 2017 and $215,772 at April 1, 2017 163,946
177,540
Goodwill 211,086
210,841
Deferred tax asset 4,510
3,988
Other long-term assets 12,433
12,449
Total assets $ 1,311,714
$ 1,238,709
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable and current maturities of long-term debt $ 151,465
$ 61,022
Accounts payable 41,496
42,973
Accrued payroll and related costs 63,066
43,534
Other liabilities 68,151
63,650
Total current liabilities 324,178
211,179
Long-term debt, net of current maturities 118,702
253,625
Deferred tax liability 6,428
12,114
Other long-term liabilities 39,599
22,181
Total stockholders’ equity
Common stock, $0.01 par value; Authorized — 150,000,000 shares; Issued and outstanding — 53,388,089 shares at December 30, 2017 and 52,255,495 shares at April 1, 2017 534
523
Additional paid-in capital 525,877
482,044
Retained earnings 323,608
289,916
Accumulated other comprehensive loss (27,212 ) (32,873 )
Total stockholders’ equity 822,807
739,610
Total liabilities and stockholders’ equity $ 1,311,714
$ 1,238,709

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

HAEMONETICS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~STOCKHOLDERS’ EQUITY

(Unaudited in thousands)


	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares	Par Value
Balance, April 3, 2021	50,869	$	509	$	602,727	$	157,981	$	(29,547)	$	731,670
Employee stock purchase plan	39	—		2,210		—		—		2,210
Exercise of stock options	14	—		500		—		—		500
Issuance of restricted stock, net of cancellations	91	1		(1)		—		—		—
Cumulative effect of change in accounting standards	—	—		(61,156)		1,035		—		(60,121)
Share-based compensation expense	—	—		6,828		—		—		6,828
Net loss	—	—		—		(4,454)		—		(4,454)
Other comprehensive income	—	—		—		—		447		447
Balance, July 3, 2021	51,013	$	510	$	551,108	$	154,562	$	(29,100)	$	677,080

Exercise of stock options	28	1		1,069		—		—		1,070
Issuance of restricted stock, net of cancellations	19	—		—		—		—		—

Share-based compensation expense	—	—		5,979		—		—		5,979
Net income	—	—		—		14,856		—		14,856
Other comprehensive income	—	—		—		—		(436)		(436)
Balance, October 2, 2021	51,060	$	511	$	558,156	$	169,418	$	(29,536)	$	698,549
Employee stock purchase plan	36	—		1,999		—		—		1,999
Exercise of stock options	12	—		353		—		—		353
Issuance of restricted stock, net of cancellations	3	—		—		—		—		—

Share-based compensation expense	—	—		6,455		—		—		6,455
Net income	—	—		—		23,232		—		23,232
Other comprehensive income	—	—		—		—		187		187
Balance, January 1, 2022	51,111	$	511	$	566,963	$	192,650	$	(29,349)	$	730,775

Nine Months Ended
December 30,
2017 December 31,
2016
Cash Flows from Operating Activities:
Net income $ 33,692
$ 24,872
Adjustments to reconcile net income to net cash provided by operating activities:
Non-cash items:
Depreciation and amortization 66,267
67,531
Gain on divestiture (8,000 ) —
Stock-based compensation expense 7,360
6,608
Provision for losses on accounts receivable and inventory 514
11,398
Impairment of assets 218
3,413
Other non-cash operating activities 398
1,216
Change in operating assets and liabilities:
Change in accounts receivable 8,204
3,878
Change in inventories 17,460
(13,960 )
Change in prepaid income taxes 805
868
Change in other assets and other liabilities 17,747
(996 )
Change in accounts payable and accrued expenses 18,058
20,333
Net cash provided by operating activities 162,723
125,161
Cash Flows from Investing Activities:
Capital expenditures (55,696 ) (60,517 )
Proceeds from divestiture 9,000
—
Proceeds from sale of property, plant and equipment 1,627
1,773
Net cash used in investing activities (45,069 ) (58,744 )
Cash Flows from Financing Activities:
Repayment of term loan borrowings (45,054 ) (30,827 )
Proceeds from employee stock purchase plan 3,246
3,560
Proceeds from exercise of stock options 33,239
18,278
Net increase (decrease) in short-term loans 579
(40,975 )
Net cash used in financing activities (7,990 ) (49,964 )
Effect of exchange rates on cash and cash equivalents 2,363
(1,937 )
Net Change in Cash and Cash Equivalents 112,027
14,516
Cash and Cash Equivalents at Beginning of Period 139,564
115,123
Cash and Cash Equivalents at End of Period $ 251,591
$ 129,639
Supplemental Disclosures of Cash Flow Information:
Interest paid $ 5,684
$ 6,058
Income taxes paid $ 7,320
$ 5,724
Transfers from inventory to fixed assets for placement of Haemonetics equipment $ 5,424
$ 5,081

HAEMONETICS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited in thousands)


	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares	Par Value
Balance, March 28, 2020	50,323	$	503	$	553,229	$	78,512	$	(45,135)	$	587,109
Employee stock purchase plan	22	—		2,144		—		—		2,144
Exercise of stock options	28	1		1,192		—		—		1,193

Issuance of restricted stock, net of cancellations	298	3		(3)		—		—		—

Share-based compensation expense	—	—		6,167		—		—		6,167

Net income	—	—		—		10,527		—		10,527
Other comprehensive income	—	—		—		—		1,429		1,429
Balance, June 27, 2020	50,671	$	507	$	562,729	$	89,039	$	(43,706)	$	608,569
Exercise of stock options	2	—		67		—		—		67
Issuance of restricted stock, net of cancellations	30	—		—		—		—		—
Share-based compensation expense	—	—		5,952		—		—		5,952
Net income	—	—		—		48,101		—		48,101
Other comprehensive income	—	—		—		—		5,234		5,234
Balance, September 26, 2020	50,703	$	507	$	568,748	$	137,140	$	(38,472)	$	667,923
Employee stock purchase plan	22	—		1,868		—		—		1,868
Exercise of stock options	50	—		2,578		—		—		2,578
Issuance of restricted stock, net of cancellations	42	1		(1)		—		—		—
Share-based compensation expense	—	—		6,287		—		—		6,287
Net income	—	—		—		31,882		—		31,882
Other comprehensive income	—	—		—		—		8,614		8,614
Balance, December 26, 2020	50,817	$	508	$	579,480	$	169,022	$	(29,858)	$	719,152

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

HAEMONETICS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited in thousands)


	Nine Months Ended
	January 1, 2022		December 26, 2020
Cash Flows from Operating Activities:
Net income	$	33,634	$	90,510
Adjustments to reconcile net income to net cash provided by operating activities:
Non-cash items:
Depreciation and amortization	72,934		62,377
Amortization of fair value inventory step-up	5,295		—
Impairment of assets	5,144		1,028
Share-based compensation expense	19,262		18,406
Amortization of deferred finance costs	2,608		425
(Benefit) provision for losses on inventory	(280)		3,779
Gains on divestitures and sale of assets	(9,603)		(32,613)
Deferred tax benefit	1,999		(3,953)
Contingent consideration expense	10,272		—
Other non-cash operating activities	1,103		89
Change in operating assets and liabilities:
Change in accounts receivable	(28,736)		18,588
Change in inventories	11,589		(33,728)
Change in prepaid income taxes	4,400		1,181
Change in other assets and other liabilities	(6,010)		2,687
Change in accounts payable and accrued expenses	(19,398)		(21,518)
Net cash provided by operating activities	104,213		107,258
Cash Flows from Investing Activities:
Capital expenditures	(61,394)		(25,408)
Acquisition	(2,500)		(16,606)
Proceeds from divestitures	10,642		44,587
Proceeds from sale of property, plant and equipment	1,419		1,085
Net cash (used in) provided by investing activities	(51,833)		3,658
Cash Flows from Financing Activities:
Net (decrease) in short-term loans	—		(60,000)
Repayment of term loan borrowings	(13,125)		(13,125)
Proceeds from employee stock purchase plan	4,210		4,012
Proceeds from exercise of stock options	1,923		3,838
Other	8		(32)
Net cash used in financing activities	(6,984)		(65,307)
Effect of exchange rates on cash and cash equivalents	(824)		6,082
Net Change in Cash and Cash Equivalents	44,572		51,691
Cash and Cash Equivalents at Beginning of Period	192,305		137,311
Cash and Cash Equivalents at End of Period	$	236,877	$	189,002
Supplemental Disclosures of Cash Flow Information:


Non-Cash Investing and Financing Activities:
Transfers from inventory to fixed assets for placement of Haemonetics equipment	$	25,385	$	5,878

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

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Haemonetics Corporation ~~("Haemonetics"~~(“Haemonetics” or the ~~"Company"~~“Company”) presented herein have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) ~~in the United States~~ for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of ~~our~~the Company’s management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. All intercompany transactions have been eliminated. Operating results for the nine months ended ~~December 30, 2017~~January 1, 2022 are not necessarily indicative of the results that may be expected for the full fiscal year ending ~~March 31, 2018~~April 2, 2022 or any other interim period. ~~Operating results for~~The Company has assessed its ability to continue as a going concern. As of January 1, 2022, the ~~nine months ended December 31, 2016 include an overstatement of net income, which was determined~~Company has concluded that substantial doubt about its ability to be immaterial to all periods impacted. Absent this correction, our operating income and net income for the nine months ended December 31, 2016 would have been $0.9 million and $1.2 million lower, respectively, than the amount included in the accompanying consolidated statements of (loss) income and comprehensive (loss) income.continue as a going concern does not exist. These unaudited condensed consolidated financial statements should be read in conjunction with ~~our~~the audited consolidated financial statements and footnotes included in ~~our annual report~~the Annual Report on Form 10-K for the fiscal year ended April ~~1, 2017.~~3, 2021.

~~We consider~~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. ~~Refer to Note 11,~~ ~~Commitments and Contingencies~~ ~~for information pertaining to an event that occurred after the balance sheet date but prior to the issuance of the financial statements.~~Subsequent events have been evaluated as required. There were no ~~other~~material recognized or unrecognized subsequent events ~~identified.~~

~~2. RECENT ACCOUNTING PRONOUNCEMENTS~~

~~Standards Implemented~~

~~In March 2016, the Financial Accounting Standards Board issued ASU No. 2016-09,~~ ~~Compensation- Stock Compensation ("Topic 718"): Improvements to Employee Share-Based Payment Accounting. The purpose~~as of the update is to simplify several areas of the accounting for share-based payment transactions. We adopted ASU No. 2016-09 on a prospective basis in our first quarter of fiscal 2018; therefore, prior periods have not been adjusted. The adoption of ASU No. 2016-09 did not have a material effect on our financial position or ~~results of operations.~~

~~ASU No. 2016-09 allows a company to elect to account for award forfeitures as they occur or to continue to estimate forfeitures. We have elected to continue to estimate potential forfeitures.~~

In addition, ASU No. 2016-09 eliminates additional paid in capital pools and requires excess tax benefits and tax deficiencies to be recorded in the consolidated statement of operations when the awards vest or are settled. Amendments related to accounting for excess tax benefits resulted in an immaterial tax benefit for the three and nine months ended January 1, 2022.

2. RECENT ACCOUNTING PRONOUNCEMENTS

Standards Implemented

In December ~~30, 2017.~~ 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) Update No. 2019-12 — Income Taxes (Topic 740). The new guidance improves consistent application of and simplifies the accounting for income taxes by removing certain exceptions to the general principals in Topic 740. The Company adopted ASC Update No. 2019-12 effective April 4, 2021. The adoption did not have a material impact on the Company’s financial position or results of operations.

In ~~connection~~August 2020, the FASB issued ASC Update No. 2020-06 — Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40). The amendments simplify the ~~adoption~~complexity associated with applying U.S. GAAP for certain financial instruments with characteristics of ~~this new standard, we also recorded~~liabilities and equity. Update No. 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The Company early adopted ASC Update No. 2020-06 effective April 4, 2021 using the modified retrospective method, which resulted in a ~~cumulative-effect adjustment~~decrease of $61.2 million to additional paid-in capital, a decrease to non-current deferred tax liabilities of $20.0 million, and an increase of $80.3 million to non-current convertible notes, net, on the Condensed Consolidated Balance Sheets. Additionally, retained earnings was adjusted to remove amortization expense recognized in prior periods related to the debt discount and the convertible notes no longer have a debt discount that will be amortized, net of taxes. The impact to retained earnings ~~and deferred tax assets for certain off balance sheet federal and state net operating loss carry-forwards totaling $1.6 million~~on the Condensed Consolidated Balance Sheets as of April ~~1, 2017,~~4, 2021 is an increase of $1.0 million.

In July 2021, the FASB issued ASC Update No. 2021-05 — Leases (Topic 842). The new guidance requires a lessor to classify a lease with variable lease payments that do not depend on an ~~equal offsetting adjustment to~~index or rate as an operating lease at lease commencement if the ~~valuation allowance.~~

~~On December 22, 2017,~~lease would have been classified as a sales-type lease or a direct financing lease in accordance with the ~~Tax Cuts~~classification criteria of ASC 842 and ~~Jobs Act (the "Act”) was enacted~~the lessor would have otherwise recognized a day-one loss. The Company prospectively adopted ASC Update No. 2021-05 effective in the ~~United States.~~second quarter of fiscal year 2022. The Act reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. In December 2017, the Securities and Exchange Commission ("SEC") issued guidance under Staff Accounting Bulletin No. 118, ~~Income Tax Accounting Implications of the Tax Cuts and Jobs Act~~ ~~(“SAB 118”) directing taxpayers to consider the impact of the U.S. legislation as “provisional” when it does~~adoption did not have a material impact on the ~~necessary information available, prepared~~Company’s financial position or ~~analyzed (including computations) in reasonable detail to complete its accounting for the change in tax law. As~~results of December 30, 2017, we had not yet completed our accounting for the tax effects of the enactment of the Act, however, we have made a reasonable estimate of the effects on our existing deferred tax balances and one-time transition tax. Refer to Note 5, ~~Income Taxes, for additional information regarding this new tax legislation.~~

operations.

3.~~RESTRUCTURING~~

3. RESTRUCTURING

On an ongoing basis, ~~we review~~the Company reviews the global economy, the healthcare industry, and the markets in which ~~we compete~~it competes to identify opportunities for efficiencies, enhance commercial capabilities, align ~~our~~its resources and offer ~~our~~its customers better solutions. In order to realize these opportunities, ~~we undertake~~the Company undertakes restructuring-type activities to transform ~~our~~its business.

~~On November 1, 2017, we launched a Complexity Reduction Initiative~~

In July 2019, the Board of Directors of the Company approved the Operational Excellence Program (the ~~"2018 Program"~~“2020 Program”)~~, a company-wide restructuring~~ and delegated authority to the Company’s management to determine the detail of the initiatives that will comprise the program. During the first quarter of fiscal 2022, the Company revised the program ~~designed~~ to improve ~~operational performance~~product and service quality, reduce cost ~~freeing up resources~~principally in its manufacturing and supply chain operations and ensure sustainability while helping to ~~invest in accelerated growth. This program includes~~offset impacts from a ~~reduction~~previously announced customer loss, rising inflationary pressures and effects of ~~headcount and operating costs which will enable a more streamlined organizational structure. We expect~~the COVID-19 pandemic. The Company now expects to incur aggregate charges between ~~$50~~$95 million and ~~$60~~$105 million ~~associated with these actions,~~by the end of ~~which we expect $35 million to $40 million~~fiscal 2025. The majority of charges will ~~consist of~~result in cash outlays, including severance and other employee costs, and ~~the remainder will consist of other exit costs, primarily related to third party services. These charges, substantially all of which will result in cash outlays,~~ will be incurred as the specific actions required to execute on these initiatives are identified and ~~approved and are expected to continue through fiscal 2020.~~approved. During the three and nine months ended ~~December 30, 2017, we~~January 1, 2022, the Company incurred ~~$31.7~~$5.7 million and $20.2 million, respectively, of restructuring and ~~turnaround~~restructuring related costs ~~under this program.~~

During fiscal 2017, we launched a restructuring program (the "2017 Program") designed to reposition our organization and improve our cost structure. During the nine months ended December 30, 2017, we incurred $7.7 million of restructuring and turnaround costs under this program. There were no charges recorded during the three months ended December 30, 2017 under this program. During the three and nine months ended December ~~31, 2016, we~~26, 2020, the Company incurred ~~$4.1~~$3.1 million and ~~$22.9~~$11.1 million, respectively, of restructuring and ~~turnaround~~restructuring related costs under this program. Total cumulative charges under this ~~program. As of December 30, 2017, charges associated with the 2017 Program were substantially complete.~~program are $47.2 million.

The following table summarizes the activity for restructuring reserves related to the ~~2018~~2020 Program and ~~the 2017 Program~~prior programs for the nine months ended ~~December 30, 2017,~~January 1, 2022, substantially all of which relates to employee severance and other employee costs:


(In thousands)	2020 Program		Prior Programs		Total
Balance at April 3, 2021	$	575	$	437	$	1,012
Costs incurred, net of reversals	4,008		28		4,036
Payments	(1,988)		(33)		(2,021)
Balance at January 1, 2022	$	2,595	$	432	$	3,027

(In thousands) 2018 Program 2017 Program Total
Balance at April 1, 2017 $ —
$ 7,468
$ 7,468
Costs incurred, net of reversals 28,607
1,055
29,662
Payments (296 ) (5,405 ) (5,701 )
Balance at December 30, 2017 $ 28,311
$ 3,118
$ 31,429

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

Restructuring costs for the three months ended December 30, 2017 included as a component of selling, general and administrative expenses and research and development in the accompanying consolidated statements of (loss) income were $24.2 million and $4.3 million, respectively. Restructuring costs for the nine months ended December 30, 2017 included as a component of selling, general and administrative expenses and research and development in the accompanying consolidated statements of (loss) income were $25.1 million and $4.6 million, respectively.


	Three Months Ended				Nine Months Ended
(In thousands)	January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020
Cost of goods sold	$	(187)	$	(49)	$	2,276	$	218
Research and development	—		(2)		108		108
Selling, general and administrative expenses	108		(41)		1,652		574
	$	(79)	$	(92)	$	4,036	$	900

As of ~~December 30, 2017, we~~January 1, 2022, the Company had a ~~restructuring~~restructuring liability of ~~$31.4~~$3.0 million, of which ~~$24.6~~$2.6 million is ~~payable~~payable within the next twelve months.

In addition to the restructuring costs included in the table above, ~~during~~ the ~~three and nine months ended December 30, 2017, we~~Company also incurred costs ~~of $2.8 million and $9.9 million, respectively,~~ that do not constitute as restructuring under ASC 420, Exit and Disposal Cost Obligations, and which ~~we refer~~the Company instead refers to as ~~turnaround~~restructuring related costs. These costs ~~substantially all of which have been included as a component of selling, general and administrative expenses in the accompanying consolidated statements of (loss) income,~~ consist primarily of expenditures directly related to ~~our~~the restructuring actions and include program management costs associated with the implementation of outsourcing initiatives and ~~accelerated depreciation.~~recent accounting standards.

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


Restructuring costs	Three Months Ended				Nine Months Ended
(In thousands)	January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020
Plasma	$	(192)	$	(27)	$	2,507	$	454
Blood Center	—		66		3		240
Hospital	—		—		(91)		(18)
Corporate	113		(131)		1,617		224
Total	$	(79)	$	(92)	$	4,036	$	900

Restructuring related costs	Three Months Ended				Nine Months Ended
(In thousands)	January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020
Plasma	$	1,400	$	431	$	4,541	$	1,235
Blood Center	24		518		554		1,024
Hospital	127		4		292		14
Corporate	4,210		2,282		10,827		8,410
Total	$	5,761	$	3,235	$	16,214	$	10,683

Total restructuring and restructuring related costs	$	5,682	$	3,143	$	20,250	$	11,583

Restructuring costs Three Months Ended Nine Months Ended
(In thousands) December 30, 2017 December 31, 2016 December 30, 2017 December 31, 2016
Japan $ 52
$ (72 ) $ 163
$ 764
EMEA 869
198
894
3,209
North America Plasma 555
1
555
369
All Other 26,979
1,905
28,050
13,722
Total $ 28,455
$ 2,032
$ 29,662
$ 18,064

Turnaround costs Three Months Ended Nine Months Ended
(In thousands) December 30, 2017 December 31, 2016 December 30, 2017 December 31, 2016
Japan $ —
$ —
$ —
$ 2
EMEA (161 ) (5 ) (135 ) 76
North America Plasma 229
37
578
973
All Other 2,775
4,674
9,463
8,036
Total $ 2,843
$ 4,706
$ 9,906
$ 9,087

Total restructuring and turnaround costs $ 31,298
$ 6,738
$ 39,568
$ 27,151

4. ~~DIVESTITURE~~ACQUISITIONS

On January 17, 2021, the Company entered into an Agreement and Plan of Merger with Cardiva Medical, Inc. (“Cardiva”), an industry-leading manufacturer of vascular closure systems based in Santa Clara, California. In connection with this acquisition, which closed on March 1, 2021, the Company acquired 100% of the issued and outstanding shares of capital stock of Cardiva for total consideration of $489.8 million, which consisted of upfront payments in the aggregate of $465.5 million ($418.2 million net of cash acquired) and the fair value of contingent consideration of $24.3 million. The contingent consideration, which could total a maximum of $35.0 million, is payable over the next two years based on sales growth. The Company financed the acquisition through a combination of cash, borrowings under its revolving credit facility and an additional $150.0 million term loan under its existing credit facility.

Cardiva’s portfolio includes two catheter-based vascular access site closure devices. The VASCADE® vascular closure system is designed for “small-bore” femoral arterial and venous closure, generally used in interventional cardiology and peripheral vascular procedures. The VASCADE MVP® vascular closure system is designed for “mid-bore” multi-access femoral venous closure, generally used in electrophysiology procedures, and is the only U.S. Food and Drug Administration (“FDA”) approved closure device for use following cardiac ablation procedures requiring two or more access sites within the same vessel. The addition of the VASCADE portfolio to the Hospital business unit includes products with demonstrated benefits and enhances penetration into the large and growing interventional cardiology and electrophysiology markets.

Purchase Price Allocation

The Company accounted for the acquisition as a business combination, and in accordance with FASB ASC Topic 805, Business Combinations (Topic 805), recorded the assets acquired and liabilities assumed at their fair values as of the acquisition date. The fair value of assets acquired and liabilities assumed have been recognized based on management’s estimates and assumptions using the information regarding facts and circumstances that existed at the closing date. The assessment of fair value is preliminary and is based on information that was available at the time the consolidated financial statements were prepared. The accounting for income taxes remains preliminary, as the Company is finalizing additional information to complete its assessment. Measurement period adjustments will be recorded in the period in which they are determined, as if they had been completed at the acquisition date. The finalization of the Company’s purchase accounting assessment could result in changes in the valuation of assets acquired and liabilities assumed, which could be material. The final determination of the fair value of certain assets and liabilities will be completed within the measurement period as required by Topic 805. As of January 1, 2022, the valuation studies necessary to determine the fair market value of the assets acquired and liabilities assumed are completed.

The purchase price of $442.3 million, net of $47.3 million of cash acquired, consisted of the amounts presented below, which represent the preliminary determination of the fair value of the identifiable assets acquired and liabilities assumed:


(In thousands)	March 1, 2021
Accounts receivable	$	7,304
Inventories	18,765
Prepaid expenses and other current assets	850
Property, plant and equipment	1,186
Intangible assets	250,560
Goodwill	253,966
Other long-term assets	1,868
Total assets acquired	$	534,499
Accounts payable	3,292
Accrued payroll and related costs	58,211
Other liabilities	1,853
Deferred tax liability	27,102
Other long-term liabilities	1,772
Total liabilities assumed	$	92,230
Net assets acquired	$	442,269

The Company determined the identifiable intangible assets were completed technology, customer relationships, trademarks and in-process research and development (“IPR&D”). The fair values of intangible assets were based on valuation techniques with estimates and assumptions developed by the Company. Completed technology and IPR&D were valued using the excess earnings method. Customer relationships were valued using the distributor method. Trademarks were valued using the relief from royalty method. The cash flows used in the valuation of the intangible assets were based on estimates used to price the transaction. In developing the discount rates applied to the cash flow projections, the discount rates were benchmarked with reference to the implied rate of return from the transaction model and the weighted average cost of capital and then adjusted to reflect the relative risk of the asset.

The excess of the purchase price over the tangible assets, identifiable intangible assets and assumed liabilities was recorded as goodwill. As a result of the acquisition of Cardiva, the Company recognized goodwill of $254.0 million, which is attributable to the revenue and cash flow projections associated with completed technologies and the development of future technology that does not exist in the current IPR&D pipeline. The goodwill is not deductible for tax purposes and relates entirely to the Hospital reportable segment.

Intangible assets acquired consist of the following:


(In thousands)	Amount		Weighted-Average Amortization Period	Risk-Adjusted Discount Rates used in Purchase Price Allocation
Completed technology	$	213,290	13 years	13.5	%
Customer relationships	18,166		12 years	13.0	%
Trademarks	5,437		13 years	13.5	%
IPR&D	13,667		Indefinite	15.0	%
Total	$	250,560

The Company recorded a long-term deferred tax liability, net, of $27.1 million primarily related to definite-lived intangible assets which cannot be deducted for tax purposes, partially offset by deferred tax assets primarily related to net operating losses acquired.

Acquisition-Related Costs

The amount of acquisition-related costs incurred associated with the acquisition was $9.6 million for the fiscal year ending April ~~27, 2017, we~~3, 2021. The Company incurred acquisition costs related to legal and other professional fees in the amount of $6.6 million and an additional $3.0 million of debt financing costs and lender fees which were recognized in selling, general and administrative and as interest expense on the unaudited Condensed Consolidated Statements of Income and Comprehensive Income, respectively.

HAS Intellectual Property

In January 2021, the Company entered into an agreement to acquire certain intellectual property owned by HemoAssay Science and Technology (Suzhou) Co. Ltd., a China-incorporated company, and its affiliates (collectively, “HemoAssay”) underlying their HAS viscoelastic diagnostic devices, related assays and disposables. The Company previously entered into exclusive manufacturing and distribution agreements with HemoAssay pursuant to which it has exclusive rights to commercialize HemoAssay’s HAS devices in China. In connection with the transaction, the Company has agreed to pay up to $15.0 million to HemoAssay in contingent consideration based on certain developmental and manufacturing based milestones. During the nine months ended January 1, 2022, the Company made $2.5 million of milestone payments which were recorded within intangible assets on the Condensed Consolidated Balance Sheets. These products augment the Company’s portfolio of hemostasis analyzers within the Hospital business unit.

enicor GmbH

On April 1, 2020, the Company acquired all of the outstanding equity of enicor GmbH (“enicor”), the manufacturer of ClotPro®, a new generation whole blood coagulation testing system that is currently available in select European and Asia Pacific markets, for total consideration of $20.5 million, which consisted of upfront payments of $16.6 million and the fair value of contingent consideration of $3.9 million. The contingent consideration, which could total a maximum of $4.5 million, consists of payments related to the achievement of certain revenue and regulatory milestones. The acquisition of this viscoelastic diagnostic device augments the Company's portfolio of hemostasis analyzers within the Hospital business unit.

Purchase Price Allocation

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

The following amounts represent the determination of the fair value of the identifiable assets acquired and liabilities assumed for enicor completed during fiscal 2021:


(In thousands)	April 1, 2020

Inventory	$	634
Other current assets	685
Property, plant and equipment	289
Intangible assets	14,090
Goodwill	8,153
Total assets acquired	$	23,851
Other current liabilities	289
Deferred tax liability	3,036
Total liabilities assumed	$	3,325
Net assets acquired	$	20,526

The Company determined the identifiable intangible assets were completed technology, customer relationships and a trademark. The fair value of the intangible assets was estimated using the income approach, and the cash flow projections were discounted using a rate of 20%. The cash flows were based on estimates used to price the transaction, and the discount rates applied were benchmarked with reference to the implied rate of return from the transaction model and the weighted average cost of capital. The benefits of adding a viscoelastic diagnostic device to the Company’s portfolio of hemostasis analyzers within the Hospital business unit contributed to an acquisition price in excess of the fair value of net assets acquired for enicor, which resulted in the establishment of goodwill. In addition, the benefits of lower cost manufacturing and complementary sales channels also contributed to the establishment of goodwill for this acquisition. None of the goodwill is expected to be deductible for income tax purposes.

Intangible assets acquired consist of the following:


(In thousands)	Amount		Weighted-Average Amortization Period	Risk-Adjusted Discount Rates used in Purchase Price Allocation
Completed technology	$	13,441	10 Years	20	%
Customer relationships	347		10 Years	20	%
Trademark	302		10 Years	20	%
Total	$	14,090

Acquisition-Related Costs

The amount of acquisition-related costs incurred associated with the acquisition was $0.2 million for the nine months ended December 26, 2020.

5. DIVESTITURES

Fajardo, Puerto Rico Manufacturing Operations

On June 29, 2020, the Company sold ~~our SEBRA line~~its Fajardo, Puerto Rico, manufacturing operations to GVS, S.p.A (“GVS”), a leading provider of ~~benchtop~~advanced filtration solutions for critical applications for $15.1 million ($7.8 million, net of cash transferred). Under the terms of the agreement, Haemonetics retained all intellectual property rights to its proprietary blood filters currently manufactured at its Fajardo facility and ~~hand sealers to Machine Solutions Inc. because it was no longer aligned with our long-term strategic objectives.~~GVS acquired certain assets consisting primarily of property, plant and equipment, inventory and cash and has assumed certain related liabilities. In connection with this transaction, ~~we received~~the Company and GVS also entered into a long-term supply and development agreement that, among other things, grants GVS exclusive rights to manufacture and supply the blood filters currently produced at the Fajardo facility for Haemonetics. The Company also agreed to provide certain transition services to GVS, generally for a period of up to three months depending on the nature of the service.

As a result of this transaction, Haemonetics recognized a pre-tax impairment charge in its Blood Center business unit of $1.0 million in the first quarter of fiscal 2021 and an incremental loss of $0.4 million based on closing adjustments during the third quarter of fiscal 2021, as the carrying value of the assets and liabilities in the asset transfer exceeded the net of the $15.1 million of cash proceeds and an additional contingent liability of ~~$9.0~~$1.5 million. The disposal group consisted of $3.3 million of inventory, $7.2 million of fixed assets, $3.2 million of other liabilities, and $0.4 million of goodwill allocated based on fair value to the business.

U.S. Blood Donor Management Software

On July 1, 2020, the Company sold certain U.S. blood donor management software solution assets within its Blood Center business unit to the GPI Group (“GPI”) for an upfront cash payment of $14.0 million ($13.6 million, net of working capital adjustments) and up to $14.0 million in additional consideration contingent on the achievement of commercial milestones over the twelve month period immediately following the closing of the transaction. The disposal group consisted of $1.4 million of accounts receivable, $0.9 million of intangible assets, other liabilities of $1.8 million and ~~recorded~~$1.4 million of goodwill allocated based on fair value to the business. The Company recognized a ~~pre-tax~~ gain of ~~$8.0 million.~~$13.2 million associated with the transaction in fiscal 2021. During the first quarter of fiscal year 2022, the Company recognized an additional gain of $9.6 million for contingent consideration earned.

Inlog Holdings France

On September 18, 2020, the Company sold its wholly-owned subsidiary Inlog Holdings France SAS to Abénex Capital (“Abénex”), a private equity firm based in France for $30.5 million ($24.5 million, net of cash transferred). Inlog Holdings France SAS, through its subsidiary In Log SAS, develops and sells blood bank and hospital software solutions used predominantly in France and in several other countries outside of the U.S. The ~~proceeds were subject to a post-closing adjustment~~disposal group included $2.2 million of intangible assets, $2.2 million of accounts receivable, $0.3 million of other assets, $3.3 million of liabilities and $3.3 million of goodwill allocated based on ~~final asset values as determined during~~ the ~~90 day transition period. During~~fair value of the business which impacted both the Blood Center and Hospital business units. The Company recognized a gain of $20.0 million upon closing of the transaction in the second quarter of fiscal ~~2018, the 90 day transition period ended and there were no post-close adjustments necessary.~~2021.

The SEBRA portfolio included a suite of products which primarily include radio frequency sealers that are used to seal tubing as part of the collection of whole blood and blood components, particularly plasma.

5.6. INCOME TAXES

~~We conduct~~The Company conducts business globally and ~~report our~~reports its results of operations in a number of foreign jurisdictions in addition to the United States. ~~Our~~The Company’s reported tax rate ~~has been generally lower than~~is impacted by the ~~U.S. federal statutory rate~~jurisdictional mix of earnings in any given period as ~~the income tax rates in~~ the foreign jurisdictions in which ~~we operate are generally lower than~~it operates have tax rates that differ from the U.S. statutory tax rate. ~~Our~~

For the three and nine months ended January 1, 2022, the Company reported income tax expense of $8.2 million and $14.7 million, respectively, representing effective tax rates of 26.0% and 30.4%, respectively. The effective tax rate for the nine months ended January 1, 2022 includes discrete tax expense relating to stock compensation shortfalls of $0.9 million, with no discrete tax expense relating to stock compensation shortfalls recorded in the three months ended January 1, 2022.

For the three and nine months ended December 26, 2020, the Company reported income tax expense of $5.5 million and $9.8 million, respectively, representing effective tax rates of 14.7% and 9.8%, respectively. The effective tax rates for the three and nine months ended December ~~30, 2017 is higher than the statutory~~26, 2020 included discrete tax ~~rate primarily as a result~~benefits recognized from excess stock compensation deductions of ~~net discrete expense recorded in connection with U.S. tax reform, as discussed below.~~

~~During the three months ended December 30, 2017 and December 31, 2016, we reported an income tax provision of $6.8~~$1.0 million and ~~$3.5~~$5.1 million, respectively. ~~For~~The effective tax rates were also impacted by the jurisdictional mix of earnings including divestiture transactions. During the nine months ended December ~~30, 2017~~26, 2020, the Company sold its Fajardo, Puerto Rico manufacturing operations, certain U.S. blood donor management software solution assets, and ~~December 31, 2016, we reported an income~~its wholly-owned subsidiary, Inlog Holdings France SAS. The tax ~~provision of $12.6 million and $6.8 million, respectively. The change in our tax provision for both~~expense on divestitures, including the ~~three and nine months ended December 30, 2017 was primarily the result of U.S. tax reform, as discussed below, as well as changes~~associated valuation allowance impacts, were included in the jurisdictional mix of earnings and other foreign items. Our tax provision for nine months ended December 31, 2016 was impacted by a non-recurring discrete tax expense of $1.4 million related to a workforce reduction during the first quarter of fiscal 2017 in a foreign subsidiary where we were required to maintain certain levels of headcount for a multi-year period, which resulted in the establishment of a tax reserve.

As of December 30, 2017, we had not completed our accounting for the tax effects of the enactment of the Act, however, as described below, we have made a reasonable estimate of the effects on our existing deferred tax balances and the one-time transition tax. During the three and nine months ended December 30, 2017, we recognized a provisional amount of $5.4 million as our reasonable estimate of the impact of the provisions of the Act, which is included as a component of income tax expense in our consolidated statements of (loss) income. The $5.4 million is comprised of an increase to tax expense of $12.3 million for the net transition tax to be paid over eight years, partially offset by $6.9 million of additional benefits from the re-measurement of deferred tax assets. We will continue to refine our calculations as additional analysis is completed. In addition, our estimates may also be affected as we gain a more thorough understanding of the tax law.

~~Provisional amounts~~

As a result of the Act, we re-measured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. However, we are still analyzing certain aspects of the Act and refining our calculations, which could potentially affect the measurement of these balances or potentially give rise to changes in deferred tax amounts. In addition, certain of our deferred tax assets against which we had previously maintained a valuation allowance became more-likely-than-not realizable as a result of the source of income associated with the transition tax and changes in the tax law which resulted in net operating losses generated in future periods having an indefinite carryforward period (as we have existing indefinite lived deferred tax liabilities which can serve as a source of income for indefinite lived deferred tax assets). As we continue to analyze the Act and refine our calculations it could give rise to additional changes in our valuation allowance. The provisional benefit amount recorded related to the re-measurement of our deferred tax balance prior to the release of the valuation allowance on attributes utilized to offset the transition tax during the three and nine months ended December 30, 2017 was $6.9 million.

The one-time transition tax associated with the Act is based on our total post-1986 earnings and profits ("E&P") that we previously deferred from U.S. federal taxation. During the three and nine months ended December 30, 2017, we recorded a provisional amount for our one-time transition tax liability for our foreign subsidiaries of $22.7 million, resulting in an increase in income tax expense. The income tax expense increase was partially offset by the release of $10.4 million of valuation allowance on attributes utilized to offset the transition tax, resulting in a net provisional expense after utilization of foreign tax credits of $12.3 million. We have not yet completed our calculation of the total post-1986 E&P for our foreign subsidiaries or the tax pools of our foreign subsidiaries. Further, the transition tax is based in part on the amount of those earnings held in cash and other specified assets. This amount may change when we finalize the calculation of post-1986 foreign E&P previously deferred from U.S. federal taxation and finalize the amounts held in cash or other specified assets. We continue to provide for an additional withholding tax liability on the undistributed foreign earnings of certain foreign subsidiaries. No additional income taxes have been provided for any additional outside basis differences inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations. Determining the amount of unrecognized deferred tax liability related to any remaining undistributed foreign earnings not subject to the transition tax and additional outside basis difference in these entities (i.e., basis difference in excess of that subject to the one-time transition tax) is not practicable. We are still in the process of analyzing the impact of the Act on our indefinite reinvestment assertion.

We are in a three year cumulative loss position in the U.S. and, accordingly, maintain a valuation allowance against our U.S. deferred tax assets. Additionally, we also maintain a valuation allowance against certain other deferred tax assets primarily in Switzerland, Puerto Rico, Luxembourg and France which we have concluded are not more-likely-than-not realizable.

6.7. EARNINGS PER SHARE ~~(“EPS”)~~

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


	Three Months Ended				Nine Months Ended
(In thousands, except per share amounts)	January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020
Basic EPS
Net income	$	23,232	$	31,882	$	33,634	$	90,510
Weighted average shares	51,094		50,789		51,024		50,634
Basic income per share	$	0.45	$	0.63	$	0.66	$	1.79
Diluted EPS
Net income	$	23,232	$	31,882	$	33,634	$	90,510
Basic weighted average shares	51,094		50,789		51,024		50,634
Net effect of common stock equivalents	250		574		332		600
Diluted weighted average shares	51,344		51,363		51,356		51,234
Diluted income per share	$	0.45	$	0.62	$	0.65	$	1.77

Three Months Ended Nine Months Ended
(In thousands, except per share amounts) December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
Basic EPS
Net (loss) income $ (6,547 ) $ 15,393
$ 33,692
$ 24,872
Weighted average shares 53,090
51,708
52,717
51,369
Basic (loss) income per share $ (0.12 ) $ 0.30
$ 0.64
$ 0.48
Diluted EPS
Net (loss) income $ (6,547 ) $ 15,393
$ 33,692
$ 24,872
Basic weighted average shares 53,090
51,708
52,717
51,369
Net effect of common stock equivalents —
395
568
302
Diluted weighted average shares 53,090
52,103
53,285
51,671
Diluted (loss) income per share $ (0.12 ) $ 0.30
$ 0.63
$ 0.48

Basic earnings per share is calculated using ~~our~~the Company’s weighted-average outstanding common stock. Diluted earnings per share is calculated using ~~our~~its weighted-average outstanding common stock including the dilutive effect of stock awards as determined under the treasury stock method and the convertible senior notes as determined under the net share settlement method. From the time of the issuance of the convertible senior notes, the average market price of the Company's common shares has been less than the initial conversion price, and consequently no shares have been included in diluted earnings per share for the conversion value of the convertible senior notes. For the three months ended December 30, 2017, we recognized a net loss; therefore we excluded the impact of outstanding stock awards from the diluted loss per share calculation as their inclusion would have an anti-dilutive effect. For theand nine months ended ~~December 30, 2017,~~January 1, 2022, weighted average shares outstanding, assuming dilution, excludes the impact of ~~0.5~~0.9 million anti-dilutive shares. For the three and nine

months ended December ~~31, 2016,~~26, 2020, weighted average shares outstanding, assuming dilution, excludes the impact of ~~1.1~~0.4 million and ~~1.7~~0.6 million anti-dilutive shares, respectively.

7.8. REVENUE

The Company’s revenue recognition policy is to recognize revenues from product sales, software and services in accordance with ASC Topic 606, Revenue from Contracts with Customers. Revenue is recognized when obligations under the terms of a contract with a customer are satisfied; this occurs with the transfer of control of the Company’s goods or services. The Company considers revenue to be earned when all of the following criteria are met: it has a contract with a customer that creates enforceable rights and obligations; promised products or services are identified; the transaction price, or the consideration it expects to receive for transferring goods or providing services, is determinable and it has transferred control of the promised items to the customer. A promise in a contract to transfer a distinct good or service to the customer is identified as a performance obligation. A contract’s transaction price is allocated to each performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Some of the Company’s contracts have multiple performance obligations. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation based on the estimated standalone selling prices of the good or service in the contract. For goods or services for which observable standalone selling prices are not available, the Company uses an expected cost plus a margin approach to estimate the standalone selling price of each performance obligation.

As of January 1, 2022, the Company had $23.4 million of its 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 74% of this amount as revenue within the next twelve months and the remaining balance thereafter.

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the Condensed Consolidated Balance Sheets. The difference in timing between billing and revenue recognition primarily occurs in software licensing arrangements, resulting in contract assets and contract liabilities.

As of January 1, 2022 and April 3, 2021, the Company had contract assets of $5.5 million and $4.8 million, respectively. Contract assets are classified as other current assets and other long-term assets on the Condensed Consolidated Balance Sheets.

As of January 1, 2022 and April 3, 2021, the Company had contract liabilities of $24.4 million and $20.9 million, respectively. During the three and nine months ended January 1, 2022, the Company recognized $4.0 million and $17.2 million of revenue, respectively, that was included in the above April 3, 2021 contract liability balance.

9. INVENTORIES

Inventories are stated at the lower of cost or market and include the cost of material, labor and manufacturing overhead. Cost is determined using the first-in, first-out method.


(In thousands)	January 1, 2022		April 3, 2021
Raw materials	$	89,503	$	74,910
Work-in-process	18,281		23,111
Finished goods	197,957		224,593
Total inventories	$	305,741	$	322,614

10. LEASES

Lessee Activity

During fiscal 2021, the Company entered into a lease for manufacturing space in Clinton, PA. The Company’s current manufacturing operations in Leetsdale, PA will be relocated to the Clinton, PA facility. The lease term associated with the new manufacturing facility is 15 years and 7 months and includes two five year renewal options followed by one four year renewal option. During fiscal 2021, the Company recorded a right-of-use asset of $11.3 million and corresponding liabilities of $15.4 million upon commencement of the lease term in May 2020. In addition, the Company recorded a $4.1 million lease incentive receivable associated with this lease agreement which was received during fiscal 2021.

(In thousands) December 30,
2017 April 1,
2017
Raw materials $ 46,347
$ 52,052
Work-in-process 9,485
10,400
Finished goods 103,008
114,477
Total inventories $ 158,840
$ 176,929
Lessor Activity

Assets on the Company’s balance sheet classified as Haemonetics equipment primarily consist of medical devices installed at customer sites but owned by Haemonetics. These devices are leased to customers under contractual arrangements that typically include an operating or sales-type lease as well as the purchase and consumption of a certain level of disposable products. Sales-type leases are not significant. Contract terms vary by customer and may include options to terminate the contract or options to extend the contract. Where devices are provided under operating lease arrangements, a substantial majority of the entire lease revenue is variable and subject to subsequent non-lease component (disposable products) sales. The allocation of revenue between the lease and non-lease components is based on stand-alone selling prices. Operating lease revenue represents less than 3 percent of the Company’s total net sales.

8.~~CAPITALIZATION OF SOFTWARE DEVELOPMENT COSTS~~

~~For~~11. NOTES PAYABLE AND LONG-TERM DEBT

Convertible Senior Notes

In March 2021, the Company issued $500.0 million aggregate principal amount of 0% convertible senior notes due 2026 (the “2026 Notes”). The 2026 Notes are governed by the terms of the Indenture between the Company and U.S. Bank National Association, as trustee (the “Indenture”). The total net proceeds from the sale of the 2026 Notes, after deducting the initial purchasers’ discounts and debt issuance costs, ~~incurred~~were approximately $486.7 million. The 2026 Notes will mature on March 1, 2026, unless earlier converted, redeemed or repurchased.

During the third quarter of fiscal 2022, the conditions allowing holders of the 2026 Notes to convert have not been met. The 2026 Notes were therefore not convertible as of January 1, 2022 and were classified as long-term debt on the Company’s Condensed Consolidated Balance Sheets.

In accounting for the issuance of the 2026 Notes, the 2026 Notes were separated into liability and equity components. The Company estimated the liability and equity components of the 2026 Notes to be $416.4 million and $83.6 million respectively, at the issuance date. On April 4, 2021, the Company adopted ASC Update No. 2020-06 using the modified retrospective method, which resulted in a decrease of $61.2 million to additional paid-in capital, a decrease to non-current deferred tax liabilities of $20.0 million, and an increase of $80.3 million to non-current convertible notes, net, on the Condensed Consolidated Balance Sheets. Additionally, retained earnings was adjusted to remove amortization expense recognized in prior periods related to the ~~development~~debt discount and the convertible notes no longer have a debt discount that will be amortized, net of ~~software~~taxes. The impact to ~~be sold, leased or otherwise marketed, we apply~~retained earnings on the ~~provisions~~Condensed Consolidated Balance Sheets as of ~~ASC 985-20,~~ ~~Software - Costs~~April 4, 2021 is an increase of ~~Software~~$1.0 million.

As of January 1, 2022, the $500.0 million principal balance was netted down by $11.2 million of deferred financing costs.

Credit Facilities

On June 15, 2018, the Company entered into a credit agreement with certain lenders which provided for a $350.0 million term loan (the “Term Loan”) and a $350.0 million revolving loan (the “Revolving Credit Facility” and together with the Term Loan, as amended from time to ~~be Sold, Leased or Marketed, which specifies that costs incurred internally in researching and developing a computer software product should be charged to expense until technological feasibility has been established for~~time, the ~~product. Once technological feasibility~~“Credit Facilities”). The Credit Facilities expire on June 15, 2023. Interest on the Credit Facilities is established ~~all software costs should be capitalized until~~using LIBOR plus 1.13% - 1.75%, depending on the ~~product~~Company’s leverage ratio. Under the Credit Facilities, the Company is ~~available for general release~~required to ~~customers.~~

~~We capitalized $8.7~~maintain certain leverage and interest coverage ratios specified in the credit agreement as well as other customary non-financial affirmative and negative covenants. At January 1, 2022, $288.8 million ~~and $8.3 million in software development costs for ongoing initiatives during both~~was outstanding under the ~~nine months ended December 30, 2017 and December 31, 2016, respectively. At December 30, 2017 and April 1, 2017, we had a total~~Term Loan with an effective interest rate of ~~$71.4 million and $62.7~~1.9%. There were no borrowings outstanding on the Revolving Credit Facility. The Company also has $24.7 million of ~~capitalized software costs, respectively,~~uncommitted operating lines of ~~which $19.1 million and $12.7 million are related~~credit to ~~in-process software development initiatives, respectively. During the nine months ended December 30, 2017 and December 31, 2016,~~fund its global operations under which there were ~~$2.3~~no outstanding borrowings as of January 1, 2022.

The Company has required scheduled principal payments of $4.4 million during the remainder of fiscal 2022, $214.4 million during fiscal 2023 and ~~$4.5~~$70.0 million ~~capitalized costs placed into service, respectively.~~ during the first quarter of fiscal 2024.

The ~~costs capitalized for each project are included~~Company was in ~~intangible assets~~compliance with the leverage and interest coverage ratios specified in the ~~consolidated financial statements.~~Credit Facilities as well as all other bank covenants as of January 1, 2022.

~~9. PRODUCT WARRANTIES~~

We generally provide warranty on parts and labor for one year after the sale and installation of each device. We also warrant our disposables products through their use or expiration. We estimate our potential warranty expense based on our historical warranty experience and periodically assess the adequacy of our warranty accrual, making adjustments as necessary.

Nine Months Ended
(In thousands) December 30,
2017 December 31,
2016
Warranty accrual as of the beginning of the period $ 176
$ 420
Warranty provision 911
860
Warranty spending (723 ) (1,077 )
Warranty accrual as of the end of the period $ 364
$ 203

~~10. DERIVATIVES~~12. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

~~We manufacture, market~~The Company manufactures, markets and ~~sell our~~sells its products globally. During the three and nine months ended ~~December 30, 2017, 39.8%~~January 1, 2022, 35.6% and ~~38.7%~~36.8%, respectively, of ~~our~~the Company’s sales were generated outside the U.S., generally in foreign currencies. WeThe Company also ~~incur~~incurs certain manufacturing, marketing and selling costs in international markets in local currency.

Accordingly, ~~our~~ earnings and cash flows are exposed to market risk from changes in foreign currency exchange rates relative to the U.S. Dollar, ~~our~~the Company’s reporting currency. ~~We have~~The Company has a program in place that is designed to mitigate ~~our~~the exposure to changes in foreign currency exchange rates. That program includes the use of derivative financial instruments to minimize, for a period of time, the impact on ~~our~~its financial results from changes in foreign exchange rates. ~~We utilize~~The Company utilizes foreign currency forward contracts to hedge the anticipated cash flows from transactions denominated in foreign currencies, primarily the Japanese Yen and the Euro, and to a lesser extent the Swiss Franc, Australian Dollar, Canadian Dollar and the Mexican Peso. This does not eliminate the impact of the volatility of foreign exchange rates. However, because wethe Company generally ~~enter~~enters into forward contracts one year out, rates are fixed for a one-year period, thereby facilitating financial planning and resource allocation.

Designated Foreign Currency Hedge Contracts

All of ~~our~~the Company’s designated foreign currency hedge contracts as of ~~December 30, 2017~~January 1, 2022 and April ~~1, 2017~~3, 2021 were cash flow hedges under ASC 815, Derivatives and Hedging ("“ASC ~~815"~~815”). ~~We record~~The Company records the effective portion of any change in the fair value of designated foreign currency hedge contracts in other comprehensive income until the related third-party transaction occurs. Once the related third-party transaction occurs, ~~we reclassify~~the Company reclassifies the effective portion of any related gain or loss on the designated foreign currency hedge contracts to earnings. In the event the hedged forecasted transaction does not occur, or it becomes probable that it will not occur, wethe Company would reclassify the amount of any gain or loss on the related cash flow hedge to earnings at that time. WeThe Company had designated foreign currency hedge contracts outstanding in the contract amount of ~~$73.3~~$39.1 million as of ~~December 30, 2017~~January 1, 2022 and ~~$68.4~~$56.0 million as of April 3, 2021. At January 1, ~~2017. At December 30, 2017, losses~~2022, a gain of ~~$2.3~~$0.4 million, net of tax, will be reclassified to earnings within the next twelve months. Substantially all currency cash flow hedges outstanding as of ~~December 30, 2017~~January 1, 2022 mature within twelve months.

Non-Designated Foreign Currency Contracts

~~We manage our~~The Company manages its exposure to changes in foreign currency on a consolidated basis to take advantage of offsetting transactions and balances. ~~We use~~It uses foreign currency forward contracts as a part of ~~our~~its strategy to manage exposure related to foreign currency denominated monetary assets and liabilities. These foreign currency forward contracts are entered into for periods consistent with currency transaction exposures, generally one month. They are not designated as cash flow or fair value hedges under ASC 815. These forward contracts are marked-to-market with changes in fair value recorded to earnings. WeThe Company had non-designated foreign currency hedge contracts under ASC 815 outstanding in the contract amount of ~~$33.4~~$47.6 million as of ~~December 30, 2017~~January 1, 2022 and ~~$55.4~~$95.6 million as of April ~~1, 2017.~~3, 2021.

Interest Rate Swaps

On ~~December 21, 2012, we~~June 15, 2018, the Company entered into ~~two~~Credit Facilities which provided for a $350.0 million Term Loan and a $350.0 million Revolving Credit Facility. Under the terms of the Credit Facilities, interest is established using LIBOR plus 1.13% - 1.75%. As a result, the Company’s earnings and cash flows are exposed to interest rate risk from changes to LIBOR. Part of the Company’s interest rate risk management strategy includes the use of interest rate swaps to mitigate its exposure to changes in variable interest rates. The Company’s objective in using interest rate swaps is to add stability to interest expense and to manage and reduce the risk inherent in interest rate fluctuations.

In August 2018, the Company entered into 2 interest rate swap agreements (the ~~"Swaps"~~“Swaps”) to pay an average fixed rate of 2.80% on a total notional ~~amount~~value of ~~$250.0~~$241.9 million of debt. WeAs a result of the Swaps, 70% of the Term Loan previously exposed to interest rate risk from changes in LIBOR is now fixed at a rate of 4.05%. The Swaps mature on June 15, 2023. The Company designated the Swaps as cash flow hedges of variable interest rate risk associated with ~~$250.0~~$345.6 million of indebtedness. For the nine months ended ~~December 30, 2017 and the three and nine months ended December 31, 2016, we~~January 1, 2022, a gain of $4.9 million, net of tax, was recorded ~~nominal activity~~ in accumulated other comprehensive loss to recognize the effective portion of the fair value of

~~interest rate swaps~~ the Swaps that qualify as cash flow hedges. ~~No activity was recorded during~~

Trade Receivables

In the ~~three months ended December 30, 2017~~ordinary course of business, the Company grants trade credit to its customers on normal credit terms. In an effort to reduce its credit risk, the Company (i) establishes credit limits for all customers, (ii) performs ongoing credit evaluations of customers’ financial condition, (iii) monitors the payment history and aging of customers’ receivables, and (iv) monitors open orders against an individual customer’s outstanding receivable balance.

The Company’s allowance for credit losses is maintained for trade accounts receivable based on the expected collectability, the historical collection experience, the length of time an account is outstanding, the financial position of the customer and information provided by credit rating services. Effective March 29, 2020, the Company adopted Update No. 2016-13, Financial Instruments – Credit Losses (Topic 326) which requires consideration of events or circumstances indicating historic collection rates may not be indicative of future collectability. For example, potential adverse changes to customer liquidity from new macroeconomic events such as the ~~Swaps matured on August 1, 2017.~~COVID-19 pandemic must be taken into consideration. To date, the Company has not experienced significant customer payment defaults, or identified other significant collectability concerns as a result of the pandemic.

The following is a rollforward of the allowance for credit losses:


	Three Months Ended				Nine Months Ended
(In thousands)	January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020
Beginning balance	$	2,701	$	2,699	$	2,226	$	3,824
Credit (gain) loss	(305)		(95)		226		(838)
Write-offs	(14)		(79)		(70)		(461)
Ending balance	$	2,382	$	2,525	$	2,382	$	2,525

Fair Value of Derivative Instruments

The following table presents the effect of ~~our~~the Company’s derivative instruments designated as cash flow hedges and those not designated as hedging instruments under ASC 815 in ~~our consolidated statements~~its unaudited Condensed Consolidated Statements of ~~(loss) income~~Income and ~~comprehensive income~~Comprehensive Income for the nine months ended ~~December 30, 2017:~~January 1, 2022:


(In thousands)	Amount of (Loss) Gain Recognized in Accumulated Other Comprehensive Loss			Amount of (Loss) Gain Reclassified from Accumulated Other Comprehensive Loss into Earnings			Location in Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income	Amount of Gain (Loss) Excluded from Effectiveness Testing			Location in Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income	(In thousands)	Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Loss		Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings		Location in Condensed Consolidated Statements of Income and Comprehensive Income	Amount of Gain (Loss) Excluded from Effectiveness Testing		Location in Condensed Consolidated Statements of Income and Comprehensive Income
Designated foreign currency hedge contracts, net of tax	$	(2,338	)	$	(633	)	Net revenues, COGS, and SG&A	$	862		Interest and other expense, net	Designated foreign currency hedge contracts, net of tax	$	351	$	1,520	Net revenues, COGS and SG&A	$	(931)	Interest and other expense, net
Non-designated foreign currency hedge contracts	—			—				$	(1,076	)	Interest and other expense, net	Non-designated foreign currency hedge contracts	$	—	$	—		$	1,004	Interest and other expense, net
Designated interest rate swaps, net of tax	$	(64	)				Interest and other expense, net					Designated interest rate swaps, net of tax	$	1,488	$	(3,367)	Interest and other expense, net	$	—

WeThe Company did not have fair value hedges or net investment hedges outstanding as of ~~December 30, 2017~~January 1, 2022 or April ~~1, 2017.~~3, 2021. As of ~~December 30, 2017,~~January 1, 2022, no material deferred ~~tax assets~~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. ~~We determine~~The Company determines the fair value of ~~our~~its derivative instruments using the framework prescribed by ASC 820, Fair Value Measurements and Disclosures, by considering the estimated amount weit would receive or pay to sell or transfer these instruments at the reporting date and by taking into account current interest rates, currency exchange rates, current interest rate curves, interest rate volatilities, the creditworthiness of the counterparty for assets, and ~~our~~its creditworthiness for liabilities. In certain instances, wethe Company may utilize financial models to measure fair value. Generally, ~~we use~~it uses inputs that include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; other observable inputs for the asset or liability; and inputs derived principally from, or corroborated by, observable market data by correlation or other means. As of ~~December 30, 2017, we have~~January 1, 2022, the Company has classified ~~our~~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 ~~our~~its derivative instruments.

The following tables present the fair value of ~~our~~the Company’s derivative instruments as they appear in ~~our consolidated balance sheets~~its Condensed Consolidated Balance Sheets as of ~~December 30, 2017~~January 1, 2022 and April ~~1, 2017:~~3, 2021:


(In thousands)	Location in Condensed Consolidated Balance Sheets	As of		As of
		January 1, 2022		April 3, 2021
Derivative Assets:
Designated foreign currency hedge contracts	Other current assets	$	1,597	$	2,061
Non-designated foreign currency hedge contracts	Other current assets	127		104

		$	1,724	$	2,165
Derivative Liabilities:
Designated foreign currency hedge contracts	Other current liabilities	$	84	$	454
Non-designated foreign currency hedge contracts	Other current liabilities	82		349
Designated interest rate swaps	Other current liabilities	4,466		5,550
Designated interest rate swaps	Other long-term liabilities	622		4,301
		$	5,254	$	10,654

(In thousands) Location in
Balance Sheet As of As of
December 30, 2017 April 1, 2017
Derivative Assets:
Designated foreign currency hedge contracts Other current assets $ 335
$ 1,645
Non-designated foreign currency hedge contracts Other current assets 108
218
Designated interest rate swaps Other current assets —
64
$ 443
$ 1,927
Derivative Liabilities:
Designated foreign currency hedge contracts Other current liabilities $ 1,315
$ 894
Non-designated foreign currency hedge contracts Other current liabilities 146
72
$ 1,461
$ 966

Other Fair Value Measurements

Fair value is defined as the exit price that would be received from the sale of an asset or paid to transfer a liability, using assumptions that market participants would use in pricing an asset or liability. The fair value guidance establishes the following three-level hierarchy used for measuring fair value:

•Level 1 — Inputs to the valuation methodology are quoted market prices for identical assets or liabilities.

•Level 2 — Inputs to the valuation methodology are other observable inputs, including quoted market prices for similar assets or liabilities and market-corroborated inputs.

•Level 3 — Inputs to the valuation methodology are unobservable inputs based on management’s best estimate of inputs market participants would use in pricing the asset or liability at the measurement date, including assumptions about risk.

~~Our~~The Company’s money market funds carried at fair value are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices.

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 ~~December 30, 2017~~January 1, 2022 and April ~~1, 2017.~~3, 2021.


	As of January 1, 2022
(In thousands)	Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	93,192	$	—	$	—	$	93,192
Designated foreign currency hedge contracts	—		1,597		—		1,597
Non-designated foreign currency hedge contracts	—		127		—		127

	$	93,192	$	1,724	$	—	$	94,916
Liabilities
Designated foreign currency hedge contracts	$	—	$	84	$	—	$	84
Non-designated foreign currency hedge contracts	—		82		—		82
Designated interest rate swaps	—		5,088		—		5,088
Contingent consideration	—		—		38,377		38,377
	$	—	$	5,254	$	38,377	$	43,631

	As of April 3, 2021
	Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	49,699	$	—	$	—	$	49,699
Designated foreign currency hedge contracts	—		2,061		—		2,061
Non-designated foreign currency hedge contracts	—		104		—		104

	$	49,699	$	2,165	$	—	$	51,864
Liabilities
Designated foreign currency hedge contracts	$	—	$	454	$	—	$	454
Non-designated foreign currency hedge contracts	—		349		—		349
Designated interest rate swaps	—		9,851		—		9,851
Contingent Consideration	—		—		28,733		28,733
	$	—	$	10,654	$	28,733	$	39,387

Foreign currency hedge contracts - The fair value of foreign currency hedge contracts was measured using significant other observable inputs and valued by reference to over-the-counter quoted market prices for similar instruments. The Company does not believe that the fair value of these derivative instruments differs significantly from the amount that could be realized upon settlement or maturity, or that the changes in fair value will have a significant effect on its results of operations, financial condition or cash flows.

Interest rate swaps - The fair values of interest rate swaps are measured using the present value of expected future cash flows using market-based observable inputs, including credit risk and interest rate yield curves. The Company does not believe that the fair values of these derivative instruments differ significantly from the amounts that could be realized upon settlement or maturity, or that the changes in fair value will have a significant effect on its results of operations, financial condition or cash flows.

As of December 30, 2017
(In thousands) Level 1 Level 2 Total
Assets
Money market funds $ 164,409
$ —
$ 164,409
Designated foreign currency hedge contracts —
335
335
Non-designated foreign currency hedge contracts —
108
108
$ 164,409
$ 443
$ 164,852
Liabilities
Designated foreign currency hedge contracts $ —
$ 1,315
$ 1,315
Non-designated foreign currency hedge contracts —
146
146
$ —
$ 1,461
$ 1,461

As of April 1, 2017
Level 1 Level 2 Total
Assets
Money market funds $ 80,676
$ —
$ 80,676
Designated foreign currency hedge contracts —
1,645
1,645
Non-designated foreign currency hedge contracts —
218
218
Designated interest rate swaps —
64
64
$ 80,676
$ 1,927
$ 82,603
Liabilities

Designated foreign currency hedge contracts $ —
$ 894
$ 894
Non-designated foreign currency hedge contracts —
72
72
$ —
$ 966
$ 966
Contingent consideration - The fair value of contingent consideration liabilities is based on significant unobservable inputs, including management estimates and assumptions, and is measured based on the probability-weighted present value of the payments expected to be made. Accordingly, the fair value of contingent consideration has been classified as level 3 within the fair value hierarchy. The recurring level 3 fair value measurements of contingent consideration liabilities include the following significant unobservable inputs:

Fair Value at

Valuation

Unobservable

(In thousands)

January 1, 2022

Technique

Input

Range

Revenue-based payments

35,000

Discounted cash flow

Discount rate

2.2%

Projected year of payment

2022

Revenue-based payments

1,717

Discounted cash flow

Discount rate

8.5%

Projected year of payment

2022 - 2023

Regulatory-based payment

1,660

Discounted cash flow

Discount rate

4.9%

Probability of payment

0% - 100%

Projected year of payment

2022 - 2023

As of January 1, 2022, the remaining maximum potential contingent consideration that the Company could be required to pay is $39.1 million. During the nine months ended January 1, 2022, the Company increased the fair value of the contingent consideration related to the acquisition of Cardiva by $10.7 million, which was recorded as selling, general and administrative expenses within the unaudited Condensed Consolidated Statements of Income and Comprehensive Income. The fair value of contingent consideration associated with acquisitions was $38.4 million at January 1, 2022. As of January 1, 2022, $36.2 million was included in other liabilities and $2.2 million was included in other long-term liabilities on the condensed consolidated balance sheet.

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


(In thousands)
Balance at April 3, 2021	$	28,733
Change in fair value	10,272
Payments	(367)
Currency translation	(261)
Balance at January 1, 2022	$	38,377

Other Fair Value Disclosures

The Term Loan, ~~(which~~which is carried at amortized ~~cost),~~cost, accounts receivable and accounts payable approximate fair value. The fair ~~value.~~value of the 2026 Notes as of January 1, 2022 was $421.4 million, which was determined by using the market price on the last trading day of the reporting period.

~~11.~~13. COMMITMENTS AND CONTINGENCIES

The Company is a party to various ~~other~~ legal proceedings and claims arising out of the ordinary course of its business. ~~We believe that except for those matters described below,~~The Company believes there are no ~~other~~ proceedings or claims pending against usit the ultimate resolution of which could have a material adverse effect on ~~our~~the financial condition or results of operations. At each reporting period, ~~management~~the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under ASC 450, Contingencies, for all matters. Legal costs are expensed as incurred.

~~Litigation and Related Matters~~

~~Italian Employment Litigation~~

Our Italian manufacturing subsidiary is party to several actions initiated by former employees of our facility in Ascoli-Piceno, Italy. We ceased operations at the facility in fiscal 2014 and sold the property in fiscal 2017. These include actions claiming (i) working conditions and minimum salaries should have been established by either a different classification under their national collective bargaining agreement or a different agreement altogether, (ii) certain solidarity agreements, which are arrangements between the Company, employees and the government to continue full pay and benefits for employees who would otherwise be terminated in times of low demand, are void, and (iii) rights to payment of the extra time used for changing into and out of the working clothes at the beginning and end of each shift.

In addition, a union represented in the Ascoli plant filed an action claiming that the Company discriminated against it in favor of three other represented unions by (i) interfering with an employee referendum, (ii) interfering with an employee petition to recall union representatives from office, and (iii) excluding the union from certain meetings.

Finally, we have been added as defendants on claims filed against Pall Corporation prior to our acquisition of the plant in August 2012. These claims relate to agreements to "freeze" benefit allowances for a certain period in exchange for Pall's commitments on hiring and plant investment.

The total amount of damages claimed by the plaintiffs in these matters is approximately $4.8 million. During the second quarter of fiscal 2018, we proposed a settlement offer of $0.8 million, which resulted in charges of $0.4 million during that quarter. During the third quarter of fiscal ~~2018, substantially all~~2021, the Company received a subpoena from the U.S. Attorney’s Office for the District of Massachusetts. The subpoena requests certain documents regarding the plaintiffs involved in these claims accepted a settlement offer, which resulted in additional charges of $0.3 million. As of December 30, 2017, we have recorded a total liability of $1.1 million associated with these claims.

~~SOLX Arbitration~~

~~In July 2016, H2Equity, LLC, formerly known as Hemerus Medical, LLC (“Hemerus”), filed an arbitration claim for $17 million~~Company’s apheresis and autotransfusion devices and disposables, including documents relating to ~~milestone~~product complaints and ~~royalty payments allegedly owed as part of our acquisition of Hemerus' filter~~adverse event reporting, regulatory clearances and ~~storage solution business, referred to herein as "SOLX", in fiscal 2014.~~

Upon closing of the acquisition in April 2013, Haemonetics paid Hemerus a total of $24 million and agreed to a $3 million milestone payment due when the United States Food and Drug Administration ("FDA") approved a new indication for SOLX (the “24-Hour Approval”) using a filter acquired from Hemerus. We also agreed to make future royalty payments up to a cumulative maximum of $14 million based on the sale of products incorporating SOLX over a ten year period.

Due to performance issues with the Hemerus filter, we filed for and received the 24-Hour Approval using a Haemonetics filter. Accordingly, we did not pay Hemerus the $3 million milestone payment because the 24-Hour Approval was obtained using a Haemonetics filter, not a Hemerus filter. Additionally, we have not paid any royalties to date as we have not made any sales of products incorporating SOLX.

H2Equity’s July 2016 arbitration claim alleged, in part, that we owed H2Equity $3 million for the receipt of the 24-Hour Approval despite the use of a Haemonetics filter to obtain the approval and that we have failed to make commercially reasonable efforts to market and sell products incorporating SOLX. In January 2018, we entered into a settlement agreement with H2Equity that, together with corresponding settlement documents, provides for a release of H2Equity’s claims against theproduct design changes, among other matters. The Company in exchange for the payment of $0.4 million and transfer of SOLX-related intellectual property to H2Equity, along with the parties entry into a supply agreement providing for our supply to H2Equity of Haemonetics filters as used in the 24-Hour Approval.

~~Product Recall~~

In June 2016, we issued a voluntary recall of certain whole blood collection kits sold to our Blood Center customers in the U.S. The recall resulted from some collection sets' filters failing to adequately remove leukocytes from collected blood. As a result of the recall, our Blood Center customers may have conducted tests to confirm that the collected blood was adequately leukoreduced, sold the collected blood labeled as non-leukoreduced at a lower price or discarded the collected blood. During fiscal 2017, we recorded $3.7 million of charges associated with customer returns and inventory reserves and $3.4 million of charges associated with customer claims. We have an enforceable insurance policy in place which will provide coverage for a portion of the customer claims. During fiscal 2017, we recorded $2.9 million of insurance receivables associated with the $3.4 million of charges from customer claims.

~~As of December 30, 2017, we had recorded a cumulative total of $7.2 million of net charges associated~~is fully cooperating with this recall, which consisted of $3.7 million of charges associated with customer returns and inventory reserves and $8.5 million of other customer claims, partially offset by $5.0 million of insurance receivables.inquiry.

~~Other Matters~~

In February 2017, we informed a customer of our intent to exit an existing contract. The customer made a demand for $4.6 million, which consisted of $2.8 million in damages for non-performance under the contract and $1.8 million for the refund of two upfront payments that the customer had previously paid to us in connection with the development of a project. During the third quarter of fiscal 2018, we refunded the $1.8 million of upfront payments and entered into a settlement agreement for $2.3 million in connection with this matter. As of December 30, 2017, we reduced our liability to be reflective of this settlement amount.

~~12.~~14. SEGMENT AND ENTERPRISE-WIDE INFORMATION

~~We determine our~~

The Company determines its reportable segments by first identifying ~~our~~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. ~~Our~~The Company’s reporting structure aligns with its operating ~~segments are based primarily on geography. North America Plasma~~structure of three global business units and the information that is ~~a separate~~regularly reviewed by the Company’s chief operating ~~segment with dedicated segment management due the size and scale of the Plasma business unit. We aggregate components within an operating segment that have similar economic characteristics.~~decision maker.

The Company’s reportable segments are as follows:

~~Japan~~•Plasma

~~EMEA~~

~~North America Plasma~~

~~All Other~~

~~The Company has aggregated the Americas~~ •Blood Center ~~and~~

•Hospital ~~and Asia - Pacific operating segments into the All Other reportable segment based upon their similar operational and economic characteristics, including similarity of operating margin.~~

Management measures and evaluates the operating segments based on operating income. Management excludes certain corporate expenses from segment operating income. In addition, certain amounts that management considers to be non-recurring or non-operational are excluded from segment operating income because management evaluates the operating results of the segments excluding such items. These items include ~~restructuring~~integration and ~~turnaround~~transaction costs, deal amortization, restructuring and ~~asset impairments.~~restructuring related costs, impairments, accelerated device depreciation and related costs, costs related to compliance with the European Union Medical Device Regulation (“MDR”) and In Vitro Diagnostic Regulation (“IVDR”), unusual or infrequent and material litigation-related charges and gains and losses on dispositions and sale of assets. Although these amounts are excluded from segment operating income, as applicable, they are included in the reconciliations that follow. Management measures and evaluates the ~~Company's~~Company’s net revenues and operating income using internally derived standard currency exchange rates that remain constant from year to year; therefore, segment information is presented on this basis.

During the first quarter of fiscal 2018, management changed the cost reporting structure such that a portion of corporate expenses were reclassified into the operating segments. Accordingly, the prior year numbers have been updated to reflect this reclassification.

Selected information by ~~business~~reportable segment is presented below:


	Three Months Ended				Nine Months Ended
(In thousands)	January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020
Net revenues
Plasma	$	96,692	$	102,154	$	250,499	$	249,587
Blood Center	74,527		80,417		221,522		234,446
Hospital	82,100		52,334		235,609		148,927
Net revenues by business unit	253,319		234,905		707,630		632,960
Service (1)	5,436		4,972		15,655		15,396
Effect of exchange rates	1,014		494		4,909		(2,922)
Net revenues	$	259,769	$	240,371	$	728,194	$	645,434
(1) Reflects revenue for service, maintenance and parts

Three Months Ended Nine Months Ended
(In thousands) December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
Net revenues
Japan $ 18,161
$ 20,173
$ 50,557
$ 53,730
EMEA 47,481
49,857
134,275
141,531
North America Plasma 86,545
83,324
249,132
235,091
All Other 83,717
79,884
242,084
236,315
Net revenues before foreign exchange impact 235,904
233,238
676,048
666,667
Effect of exchange rates (1,861 ) (5,397 ) (5,677 ) (8,617 )
Net revenues $ 234,043
$ 227,841
$ 670,371
$ 658,050


	Three Months Ended				Nine Months Ended
(In thousands)	January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020
Segment operating income
Plasma	$	51,405	$	52,673	$	128,964	$	129,846
Blood Center	34,561		36,424		103,043		108,926
Hospital	35,072		22,430		97,898		61,672
Segment operating income	121,038		111,527		329,905		300,444
Corporate expenses (1)	(68,013)		(63,202)		(204,930)		(185,005)
Effect of exchange rates	5,807		4,286		15,553		8,644
Integration and transaction costs	(1,860)		—		(19,218)		(3,063)
Deal amortization	(12,151)		(7,805)		(35,930)		(24,204)
Restructuring and restructuring related costs	(5,682)		(3,143)		(20,250)		(11,583)
Impairment of assets and PCS2 related charges	(897)		(1,146)		(4,790)		(4,228)
MDR and IVDR costs	(2,453)		(1,207)		(7,171)		(2,696)
Litigation-related charges	(138)		—		(1,221)		—
Gains on divestitures and sale of assets	—		1,115		9,603		32,613
Operating income	$	35,651	$	40,425	$	61,551	$	110,922
(1) Reflects shared service expenses including quality and regulatory, customer and field service, research and development, manufacturing and supply chain, as well as other corporate support functions.

Three Months Ended Nine Months Ended
(In thousands) December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
Segment operating income
Japan $ 8,967
$ 9,514
$ 23,582
$ 24,687
EMEA 11,423
11,143
28,233
27,996
North America Plasma 31,740
23,125
88,026
74,443
All Other 31,551
27,422
89,289
85,538
Segment operating income 83,681
71,204
229,130
212,664
Corporate operating expenses (44,608 ) (36,339 ) (126,824 ) (124,398 )
Effect of exchange rates 2,755
(151 ) 1,656
(790 )
Restructuring and turnaround costs (31,298 ) (6,762 ) (39,568 ) (27,215 )
Deal amortization (6,506 ) (6,530 ) (19,501 ) (20,611 )
Legal charges (3,011 ) —
(3,011 ) —
Asset impairments —
(210 ) —
(1,525 )
Operating income $ 1,013
$ 21,212
$ 41,882
$ 38,125

~~Our products are organized into four categories for purposes of evaluating their growth potential: Plasma, Blood Center, Cell Processing and Hemostasis Management.~~ Management reviews revenue ~~trends~~ based on the reportable segments noted above. Although these ~~business units; however, no other financial information is currently available on this basis.~~reportable segments are primarily product-based, they differ from the Company’s product line revenues for Plasma products and services and Blood Center products and services. Specifically, the Blood Center reportable segment includes plasma products utilized for collection in blood centers primarily for transfusion purposes. Additionally, product line revenues also include service revenues which are excluded from the reportable segments.

Net revenues by ~~business unit~~product line are as follows:


	Three Months Ended				Nine Months Ended
(In thousands)	January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020
Plasma products and services	$	116,347	$	123,510	$	308,931	$	309,933
Blood Center products and services	59,440		62,787		177,118		182,687
Hospital products and services	83,982		54,074		242,145		152,814
Net revenues	$	259,769	$	240,371	$	728,194	$	645,434

Three Months Ended Nine Months Ended
(In thousands) December 30,
2017 December 31,
2016 December 30, 2017 December 31, 2016
Plasma $ 113,098
$ 108,655
$ 324,376
$ 309,868
Blood Center 74,227
76,354
211,502
221,567
Cell Processing 26,829
25,918
78,929
77,949
Hemostasis Management 19,889
16,914
55,564
48,666
Net revenues $ 234,043
$ 227,841
$ 670,371
$ 658,050

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


	Three Months Ended				Nine Months Ended
(In thousands)	January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020
United States	$	167,270	$	147,607	$	460,404	$	382,600
Japan	19,916		20,854		55,949		57,330
Europe	41,540		41,874		126,055		123,541
Asia	30,434		29,050		83,157		77,602
Other	609		986		2,629		4,361
Net revenues	$	259,769	$	240,371	$	728,194	$	645,434

Three Months Ended Nine Months Ended
(In thousands) December 30,
2017 December 31,
2016 December 30,
2017 December 31,
2016
United States $ 140,840
$ 136,759
$ 410,671
$ 393,302
Japan 17,664
22,319
49,312
58,949
Europe 42,189
38,892
118,544
116,865
Asia 30,733
27,749
85,504
83,125
Other 2,617
2,122
6,340
5,809
Net revenues $ 234,043
$ 227,841
$ 670,371
$ 658,050

~~13.~~15. ACCUMULATED OTHER COMPREHENSIVE LOSS

The components of Accumulated Other Comprehensive Loss are as follows:


(In thousands)	Foreign Currency		Defined Benefit Plans		Net Unrealized Gain/(Loss) on Derivatives		Total
Balance as of April 3, 2021	$	(21,528)	$	(560)	$	(7,459)	$	(29,547)
Other comprehensive income (loss) before reclassifications(1)	(3,488)		—		1,839		(1,649)
Amounts reclassified from Accumulated Other Comprehensive Income(1)	—		—		1,847		1,847
Net current period other comprehensive income (loss)	(3,488)		—		3,686		198
Balance as of January 1, 2022	$	(25,016)	$	(560)	$	(3,773)	$	(29,349)
(1) Presented net of income taxes, the amounts of which are insignificant.

(In thousands) Foreign Currency Defined Benefit Plans Net Unrealized Gain/Loss on Derivatives Total
Balance as of April 1, 2017 $ (29,835 ) $ (2,272 ) $ (766 ) $ (32,873 )
Other comprehensive income (loss) before reclassifications⁽¹⁾
7,430
—
(2,402 ) 5,028
Amounts reclassified from Accumulated Other Comprehensive Loss⁽¹⁾
—
—
633
633
Net current period other comprehensive income (loss) 7,430
—
(1,769 ) 5,661
Balance as of December 30, 2017 $ (22,405 ) $ (2,272 ) $ (2,535 ) $ (27,212 )

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

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with both our interim condensed consolidated financial statements and notes thereto which appear elsewhere in this Quarterly Report on Form 10-Q and our annual consolidated financial statements, notes thereto and the MD&A contained in our Annual Report on Form 10-K for the fiscal year ended April ~~1, 2017.~~3, 2021. The following discussion may contain forward-looking statements and should be read in conjunction with the “Cautionary Statement Regarding Forward-Looking Information” in this discussion.

~~Our Business~~

Introduction

Haemonetics Corporation is a global healthcare company dedicated to providing a suite of innovative ~~hematology~~medical products and solutions tofor customers to help them improve patient care and reduce the cost of healthcare. Our technology addresses important medical ~~markets, including~~markets: blood and plasma component collection, the surgical suite and hospital transfusion services. When used in this report, the terms “we,” “us,” “our”, “Haemonetics” and the “Company” mean Haemonetics Corporation.

~~Blood~~

We view our operations and its components (plasma, platelets, and red cells) have many vital and frequently life-saving clinical applications. Plasma is used for patients with major blood loss and is manufactured into biopharmaceuticals to treat a variety of illnesses, including immune diseases and coagulation disorders. Red cells treat trauma patients or patients undergoing surgery with high blood loss, such as open heart surgery or organ transplant. Platelets have many usesmanage our business in ~~patient care, including supporting cancer patients undergoing chemotherapy. Blood is essential to a modern healthcare system.~~

Haemonetics develops and markets a wide range of devices and solutions to serve our customers. We provide plasma collection systems and software which enable plasma fractionators to make life saving pharmaceuticals. We provide analytical devices for measuring hemostasis which enable healthcare providers to better manage their patients’ bleeding risk. Haemonetics makes blood processing systems and software which make blood donation more efficient and track life giving blood components. Finally, Haemonetics supplies systems and software which facilitate blood transfusions and cell processing.

~~Products~~

~~Our products are organized into four categories for purposes of evaluating and developing their growth potential:~~three principal reporting segments: Plasma, Blood Center ~~Cell Processing~~ and ~~Hemostasis Management.~~Hospital. For that purpose, “Plasma” includes plasma collection devices and disposables, plasma donor management software, and anticoagulant and saline sold to plasma customers. “Blood Center” includes blood collection and processing devices and disposables for red cells, platelets and whole ~~blood as well as related donor management software. “Cell Processing” includes surgical blood salvage systems, specialized blood cell processing systems, disposables~~blood. “Hospital”, which is comprised of Hemostasis Management, Cell Salvage, Transfusion Management and ~~blood transfusion management software. “Hemostasis Management”~~Vascular Closure products, includes devices and methodologies for measuring coagulation characteristics of blood, ~~such as our TEG~~^® ~~Hemostasis Analyzer.~~surgical blood salvage systems, specialized blood cell processing systems and disposables, blood transfusion management software and vascular closure devices.

We believe that Plasma and ~~Hemostasis Management~~Hospital have ~~the greatest~~ growth potential, while ~~Cell Processing innovation offers an opportunity to increase market share and expand into new segments.~~ Blood Center competes in challenging markets ~~which~~that require us to manage the business differently, including reducing costs, shrinking the scope of the current product line, and evaluating opportunities to exit unfavorable customer contracts. We are progressing toward a streamlined operating model with a management and cost structure that can bring about sustainable productivity improvement across the organization. Overall implementation of our new operating model began in fiscal 2017 and will continue into fiscal 2019.

~~Plasma~~

Built around our automated plasma collection devices and related disposables, our portfolio of products and services is designed to support multiple facets of plasma collector operations. We have a long-standing commitment to understanding our customers' collection and manufacturing processes. As a result, we aim to design equipment that is durable, dependable, and easy to use, and provide comprehensive training and support to our plasma collection customers.

~~Today, the vast majority of plasma collections worldwide are performed using automated collection technology because it is safer and more cost-effective. With our PCS~~^® (Plasma Collection System) brand automated plasma collection technology, more plasma can be collected during any one donation event because the other blood components are returned to the donor through the sterile disposable sets used for the plasma donation procedure.

We offer multiple products necessary for plasma collection and storage, including PCS brand plasma collection equipment and disposables, plasma collection containers and intravenous solutions. We also offer a portfolio of integrated information technology platforms for plasma customers to manage their donors, operations, and supply chain. Our software products automate the donor interview and qualification process, streamline the workflow process in the plasma center, provide the controls necessary to evaluate donor suitability, determine the ability to release units collected, and manage unit distribution. With our software solutions, plasma collectors can manage processes across the plasma supply chain, react quickly to business changes, and implement opportunities to reduce costs.

~~Blood Center~~

~~We offer automated blood component and manual whole blood collection systems to blood collection centers to collect blood products efficiently and cost effectively. We market the MCS~~^® (Multicomponent Collection System) brand apheresis equipment which is designed to collect specific blood components integrated from the donor. Utilizing the MCS automated platelet collection protocols, blood centers collect one or more therapeutic “doses” of platelets during a single donation. The MCS two-unit protocol or double red cell collection device helps blood collectors optimize the collection of red cells by automating the blood separation function, eliminating the need for laboratory processing, and enabling the collection of two units of red cells from a single donor thus maximizing the amount of red cells collected per eligible donor and helping to mitigate red cell shortages in countries where this problem exists. Blood collectors can also use the MCSsystem to collect one unit of red cells and a "jumbo" (double) unit of plasma, or one unit of red cells and one unit of platelets from a single donor. The MCS plasma protocol, which provides the possibility of collecting 600-800ml of plasma for either transfusion to patients or for use by the pharmaceutical industry, completes the comprehensive portfolio of different blood component collection options on this device.

Haemonetics also offers a portfolio of products for manual whole blood collection and processing. Haemonetics' portfolio of disposable whole blood collection and component storage sets offer flexibility in collecting a unit of whole blood and the subsequent production and storage of the red blood cell, platelet or plasma products, including options for in-line or dockable filters for leukoreduction of any blood component.

~~With the ACP~~^® (Automated Cell Processor) brand, Haemonetics offers a solution to automate the washing and freezing of red cell components. The automated red cell washing procedure removes plasma proteins within the red cell units to provide a safer product for transfusion to frequently transfused patients, neonates, or patients with a history of transfusion reactions. The automated glycerolization and deglycerolization steps are required to prepare red cells for frozen storage. Freezing the red cell units can expand the shelf life of these products up to 10 years. Customers utilize this technology to implement strategic red cell inventories for large scale catastrophes, storage of rare blood types, or enhanced inventory management.

Blood Center software solutions help blood center collectors improve efficiencies of blood collection and supply and help ensure donor safety. This includes solutions for blood drive planning, donor recruitment and retention, blood collection, component manufacturing and distribution. Our products SafeTrace^® ~~and El Dorado Donor~~^® donation and blood unit management systems span blood center operations and automate and track operations from the recruitment of the blood donor to the disposition of the blood product. Our Hemasphere^® ~~software solution provides support for more efficient blood drive planning, and Donor Doc® and e-Donor® software help to improve recruitment and retention.~~

~~Hospital~~

~~Cell Processing~~

Haemonetics offers a range of solutions that improve a hospital's systems for acquiring blood, storing it in the hospital, and dispensing it efficiently and correctly. Over the last few years, hospitals have become increasingly focused on of their need to control costs and improve patient safety by managing blood more effectively. Our products and integrated solution platforms help hospitals optimize performance of blood acquisition, storage, and distribution.

~~Cell Salvage~~

~~The Cell Saver~~^® system is a surgical blood salvage system targeted to procedures that involve mid to high-volume blood loss, such as cardiovascular or orthopedic surgeries. It has become the standard of care for these surgeries. The Cell Saver Elite^® ~~system is our most advanced autotransfusion option to minimize allogeneic blood use for surgeries with medium to high blood loss.~~

~~The OrthoPAT~~^® surgical blood salvage system is targeted to orthopedic procedures, such as hip and knee replacements, which involve slower, lower volume blood loss that often occurs well after surgery. The system is designed to remain with the patient following surgery, to recover blood and produce a washed red cell product for autotransfusion.

~~Transfusion Management~~

Our Transfusion Management solutions are designed to help provide safety, traceability and compliance from the hospital blood bank to the patient bedside and enable consistent care across the hospital network. The SafeTrace Tx^® ~~transfusion management software is considered the system of record for all hospital blood bank and transfusion information. BloodTrack~~^® blood management software is a modular suite of blood management and bedside transfusion solutions that combines software with hardware components that act as an extension of the hospital’s blood bank information system. The software is designed to work with storage devices, including the BloodTrack HaemoBank^® ~~blood storage device.~~

~~Hemostasis Management~~

~~We have two device platforms which we market to hospitals and laboratories as an alternative to less comprehensive blood tests: the TEG~~^® ~~5000 analyzer, which we acquired in the 2007 acquisition of Haemoscope Corporation, and the TEG~~^® 6s device, which we license from Cora Healthcare, Inc., a company established by Haemoscope's founders. Under the license from Cora Healthcare, we have exclusive perpetual rights to manufacture and commercialize TEG 6s in hospitals and hospital laboratories.

Both of our TEG systems are blood diagnostic instruments that measure a patient's hemostasis. This information enables caregivers to decide the best blood-related clinical treatment for the patient in order to minimize blood loss and reduce clotting risk. The TEG 5000 analyzer is approved for a broad set of indications in all of our markets. The TEG 6s and TEG Manager are approved for the same set of indications as the TEG 5000 in Europe, Australia and Japan. In the U.S., TEG 6s is approved for limited indications, including cardiovascular surgery and cardiology. We are pursuing a broader set of indications for the TEG 6s in the U.S., including trauma.

Recent Developments

~~Income Tax Reform~~Operational Excellence Program

On December 22, 2017, the Tax Cuts and Jobs Act (the "Act") was enacted in the United States. The Act reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. As of December 30, 2017, we had not yet completed our accounting for the tax effects of the enactment of the Act, however, we have made a reasonable estimate of the effects on our existing deferred tax balances and one-time transition tax. During the three and nine months ended December 30, 2017, we recognized a provisional amount of $5.4 million, which is included as a component of income tax expense in our consolidated statements of (loss) income. Please see the section entitled “Income Taxes” in this discussion for a more complete explanation of the reported impact of this change in legislation.

In addition to the reduction in the federal corporate tax rate and the one-time transition tax, which we have accounted for with provisional estimates as of December 30, 2017, we will also continue to analyze and monitor the other impacts of the Act that become effective for the Company in fiscal 2019 including the provisions related to Global Intangible Low Taxed Income, Foreign Derived Intangible Income, Base Erosion Anti-Abuse Tax, as well as other provisions which would limit the deductibility of future expenses.

~~NexSys PCS~~^TM

~~In July 2017, we received United States Food and Drug Administration ("FDA") 510(k) clearance for our NexSys PCS~~^TMplasmapheresis system (formerly referred to as PCS 300). We have begun limited production of the devices and we expect to pursue further regulatory clearances for additional enhancements to the overall product offering.

Our planned roll out of this new platform includes the placement of a significant number of new devices. Such placements will require meaningful capital expenditures and new customer contracts that reflect pricing and volumes appropriate to these investments. As of December 30, 2017, approximately 20,000 of our Haemonetics owned PCS2 devices ("PCS2") are placed with customers.

~~Divestiture~~

On April 27, 2017, we sold our SEBRA line of benchtop and hand sealers to Machine Solutions Inc. because it was no longer aligned with our long-term strategic objectives. In connection with this transaction, we received net proceeds of $9.0 million and recorded a pre-tax gain of $8.0 million. The proceeds received were subject to a post-closing adjustment based on final asset values as determined during the 90 day transition period. During the second quarter of fiscal ~~2018,~~2022, our Board of Directors approved the ~~90 day transition period ended and there were no post-close adjustments necessary.~~

revised Operational Excellence Program (the “2020 Program”). The SEBRA portfolio included a suite of products which primarily include radio frequency sealers that are used to seal tubing as part of the collection of whole blood and blood components, particularly plasma. The SEBRA product line generated approximately $6.5 million of revenue in our Plasma business unit in fiscal 2017.

~~Restructuring Initiative~~

~~On November 1, 2017, we launched a Complexity Reduction Initiative (the "2018 Program"), a company-wide restructuring~~revised program is designed to improve ~~operational performance~~product and service quality, reduce cost ~~freeing up resources~~principally in our manufacturing and supply chain operations and ensure sustainability while helping to ~~invest in accelerated growth. This program includes~~offset impacts from a ~~reduction~~previously announced customer loss, rising inflationary pressures and effects of ~~headcount and operating costs which will enable a more streamlined organizational structure.~~the COVID-19 pandemic. We now expect to incur aggregate charges between ~~$50~~$95 million and ~~$60~~$105 million ~~associated with these actions,~~by the end of ~~which we~~

~~expect $35~~fiscal 2025 and to achieve total gross savings of $115 million to ~~$40~~$125 million on an annualized basis once the program is completed. The majority of charges will ~~consist of~~result in cash outlays, including severance and other employee costs, and ~~the remainder will consist of other exit costs, primarily related to third party services. These charges, substantially all of which will result in cash outlays,~~ will be incurred as the specific actions required to execute on these initiatives are identified and ~~approved and are expected to continue through fiscal 2020. We expect savings from this program of approximately $80 million on an annualized basis once the program is completed.~~approved. During the three and nine months ended ~~December 30, 2017, we~~January 1, 2022, the Company incurred ~~$31.7~~$5.7 million and $20.2 million, respectively, of restructuring and ~~turnaround~~restructuring related costs under this program. During the three and

~~Product Recall~~

nine months ended December 26, 2020, the Company incurred $3.1 million and $11.1 million, respectively, of restructuring and restructuring related costs under this program. Total cumulative charges under this program are $47.2 million as of January 1, 2022.

CSL Contract Loss

In April 2021, CSL Plasma, Ltd. informed Haemonetics of its intent not to renew its supply agreement for the use of PCS2 plasma collection system devices and the purchase of disposable plasmapheresis kits (the “Supply Agreement”) following the expiration of the current term of the Supply Agreement in June ~~2016, we issued a voluntary recall~~2022. In fiscal year 2021, revenue under this Supply Agreement was $88.6 million, or 10.2% of ~~certain whole blood collection kits sold to our Blood Center customers in the U.S. The recall resulted from some collection sets' filters failing to adequately remove leukocytes from collected blood.~~total revenue. As a result of the recall, our Blood Center customers may have conducted tests to confirm that the collected blood was adequately leukoreduced, sold the collected blood labeled as non-leukoreduced at a lower price or discarded the collected blood. During fiscal 2017,this anticipated contract loss, we recorded ~~$3.7~~a $20.9 million one-time asset impairment charge relating to disposables manufacturing equipment and $5.0 million of ~~charges associated with customer returns and inventory reserves and $3.4 million~~additional expenses in the fourth quarter of ~~charges associated with customer claims. We have an enforceable insurance policy in place which will provide coverage for a portion~~fiscal 2021. In the first quarter of ~~the customer claims. During~~ fiscal ~~2017, we recorded $2.9 million of insurance receivables associated with the $3.4 million of charges from customer claims.~~

In January 2018, we entered into formal mediation with a group of customers responsible for substantially all of the total outstanding claims against us. Based upon the parameters of a proposed settlement for the outstanding customer claims that are subject to on-going negotiations,2022, we incurred an additional ~~$5.1~~$2.8 million of ~~charges.~~accelerated depreciation expense relating to disposables manufacturing equipment that is no longer in use. During the third quarter of fiscal 2022, we amended the Supply Agreement to allow CSL to continue to use our PCS2 devices and purchase disposables through December 2023. The ~~incremental charges were partially offset~~extension provides CSL the ability to utilize our devices and disposables in their collection centers on a non-exclusive basis, and we are working with them to quantify their volume requirements over the life of the agreement.

COVID-19

We continue to closely manage the impacts of the COVID-19 pandemic on our business, results of operations and financial condition. The progression of the COVID-19 pandemic during fiscal 2022 has significantly impacted our financial results. While the duration and additional implications remain uncertain, the full extent of the impact will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning COVID-19, the actions taken to contain it or treat its impact and the economic impact on local, regional, national and international markets.

Our priorities continue to be the safety of our employees and business continuity while continuing to invest in growth opportunities. Our manufacturing and supply chain remain operational without significant disruptions and we continue to operate in all of our markets.

Although the pace and timing of the recovery is uncertain, we remain confident in the long term strength of the end markets that we serve across our three business units. For additional information regarding the expected impacts to our business units and the various risks posed by ~~an additional $2.1 million~~the COVID-19 pandemic, refer to Results of ~~insurance receivables. Both~~Operations within the ~~additional charges~~MD&A contained in this Quarterly Report on Form 10-Q and ~~insurance receivables are included~~Risk Factors contained in ~~our results~~Item 1A of the Annual Report on Form 10-K for the fiscal year ended April 3, 2021.

Financial Summary


	Three Months Ended								Nine Months Ended
(In thousands, except per share data)	January 1, 2022			December 26, 2020			% Increase/ (Decrease)		January 1, 2022			December 26, 2020			% Increase/ (Decrease)
Net revenues	$	259,769		$	240,371		8.1	%	$	728,194		$	645,434		12.8	%
Gross profit	$	138,565		$	120,257		15.2	%	$	369,191		$	316,031		16.8	%
% of net revenues	53.3		%	50.0		%			50.7		%	49.0		%
Operating expenses	$	102,914		$	79,832		28.9	%	$	307,640		$	205,109		50.0	%
Operating income	$	35,651		$	40,425		(11.8)	%	$	61,551		$	110,922		(44.5)	%
% of net revenues	13.7		%	16.8		%			8.5		%	17.2		%
Interest and other expense, net	$	(4,263)		$	(3,051)		39.7	%	$	(13,249)		$	(10,612)		24.8	%
Income before provision for income taxes	$	31,388		$	37,374		(16.0)	%	$	48,302		$	100,310		(51.8)	%
Provision for income taxes	$	8,156		$	5,492		48.5	%	$	14,668		$	9,800		49.7	%
% of pre-tax income	26.0		%	14.7		%			30.4		%	9.8		%
Net income	$	23,232		$	31,882		(27.1)	%	$	33,634		$	90,510		(62.8)	%
% of net revenues	8.9		%	13.3		%			4.6		%	14.0		%
Net income per share - basic	$	0.45		$	0.63		(28.6)	%	$	0.66		$	1.79		(63.1)	%
Net income per share - diluted	$	0.45		$	0.62		(27.4)	%	$	0.65		$	1.77		(63.3)	%

Net revenues increased 8.1% and 12.8% during the three and nine months ended ~~December 30, 2017.~~

As of December 30, 2017, we had recorded a cumulative total of $7.2 million of net charges associated with this recall, which consisted of $3.7 million of charges associated with customer returns and inventory reserves and $8.5 million of other customer claims, partially offset by $5.0 million of insurance receivables.

~~Financial Summary~~

Three Months Ended Nine Months Ended
(In thousands, except per share data) December 30,
2017 December 31,
2016 % Increase/
(Decrease) December 30,
2017 December 31,
2016 % Increase/
(Decrease)
Net revenues $ 234,043
$ 227,841
2.7 % $ 670,371
$ 658,050
1.9 %
Gross profit $ 111,295
$ 101,079
10.1 % $ 307,522
$ 296,383
3.8 %
% of net revenues 47.6 % 44.4 % 45.9 % 45.0 %
Operating expenses $ 110,282
$ 79,867
38.1 % $ 265,640
$ 258,258
2.9 %
Operating income $ 1,013
$ 21,212
(95.2 )% $ 41,882
$ 38,125
9.9 %
% of net revenues 0.4 % 9.3 % 6.2 % 5.8 %
Interest and other expense, net $ (806 ) $ (2,275 ) (64.6 )% $ (3,562 ) $ (6,414 ) (44.5 )%
Income before provision for income taxes $ 207
$ 18,937
(98.9 )% $ 46,320
$ 31,711
46.1 %
Provision for income taxes $ 6,754
$ 3,544
90.6 % $ 12,628
$ 6,839
84.6 %
% of pre-tax income 3,262.8 % 18.7 % 27.3 % 21.6 %
Net (loss) income $ (6,547 ) $ 15,393
n/m
$ 33,692
$ 24,872
35.5 %
% of net revenues (2.8 )% 6.8 % 5.0 % 3.8 %
Net (loss) income per share - basic $ (0.12 ) $ 0.30
n/m
$ 0.64
$ 0.48
33.3 %
Net income per share - diluted $ (0.12 ) $ 0.30
n/m
$ 0.63
$ 0.48
31.3 %

~~Net revenues increased 2.7% and 1.9% for the three and nine months ended December 30, 2017,~~January 1, 2022, respectively, as compared towith the same periods of fiscal ~~2017.~~2021. Without the effect of foreign exchange, net revenues increased ~~1.1%~~7.9% and 1.4% for the three and nine months ended December 30, 2017, as compared to the same periods of fiscal 2017. Revenue increases in Plasma, Hemostasis Management and Cell Processing were partially offset by declines in our Blood Center business unit11.6% during the three and nine months ended ~~December 30, 2017.~~January 1, 2022, respectively, as compared with the same periods of fiscal 2021. Revenue increases in Hospital, primarily Vascular Closure, drove the overall increase in revenue during the three and nine months ended January 1, 2022.

Operating income decreased ~~for~~11.8% and 44.5% during the three and nine months ended ~~December 30, 2017,~~January 1, 2022, respectively, as compared towith the same period of fiscal ~~2017,~~2021, primarily due to increased spend related to the acquisition of Cardiva Medical, Inc. (“Cardiva”), including higher ~~restructuring~~transaction and ~~turnaround~~integration costs ~~incurred~~as well as increased intangible amortization expense, an increase in ~~connection with~~ the ~~2018 Program~~fair value of contingent consideration and increased ~~variable compensation. Operating income increased for~~freight costs. During the nine months ended ~~December 30, 2017, as compared~~January 1, 2022, costs driven by the amortization of the fair value inventory step-up related to ~~the same period of fiscal 2017, due to annualized savings resulting from the 2017 Program, favorable mix~~Cardiva, asset impairments and ~~the impact of inventory reserves and the Whole Blood filter recall recorded~~gains on divestitures during the prior ~~period.~~period also contributed to the decrease. The decrease during the three and nine months ended January 1, 2022, was partially offset by favorable volumes and product mix and productivity savings from the 2020 Program.

~~Management's~~

Management’s Use of Non-GAAP Measures

Management uses non-GAAP financial measures, in addition to financial measures in accordance with accounting principles generally accepted in the United States of America ("(“U.S. ~~GAAP"~~GAAP”), to monitor the financial performance of the business, make informed business decisions, establish budgets and forecast future results. These non-GAAP financial measures should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with U.S. GAAP. Constant currency growth, a non-GAAP financial measure, measures the change in revenue between the current and prior year periods using a constant currency conversion rate. We have provided this non-GAAP financial measure because we believe it provides meaningful information regarding our results on a consistent and comparable basis for the periods presented.

RESULTS OF OPERATIONS

Net Revenues by Geography


	Three Months Ended
(In thousands)	January 1, 2022		December 26, 2020		Reported growth		Currency impact		Constant currency growth (1)
United States	$	167,270	$	147,607	13.3	%	—	%	13.3	%
International	92,499		92,764		(0.3)	%	0.6	%	(0.9)	%
Net revenues	$	259,769	$	240,371	8.1	%	0.2	%	7.9	%

Three Months Ended
(In thousands) December 30,
2017 December 31,
2016 Reported growth Currency impact
Constant currency growth⁽¹⁾
United States $ 140,840
$ 136,759
3.0 % — % 3.0 %
International 93,203
91,082
2.3 % 3.8 % (1.5 )%
Net revenues $ 234,043
$ 227,841
2.7 % 1.6 % 1.1 %

⁽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. See ~~"Management's~~“Management’s Use of Non-GAAP Measures."”


	Nine Months Ended											Nine Months Ended
(In thousands)	December 30, 2017		December 31, 2016		Reported growth		Currency impact		Constant currency growth⁽¹⁾		(In thousands)	January 1, 2022		December 26, 2020		Reported growth		Currency impact		Constant currency growth (1)
United States	$	410,671	$	393,302	4.4	%	—	%	4.4	%	United States	$	460,404	$	382,600	20.3	%	—	%	20.3	%
International	259,700		264,748		(1.9	)%	1.0	%	(2.9	)%	International	267,790		262,834		1.9	%	3.0	%	(1.1)	%
Net revenues	$	670,371	$	658,050	1.9	%	0.5	%	1.4	%	Net revenues	$	728,194	$	645,434	12.8	%	1.2	%	11.6	%

Our principal operations are in the ~~U.S.,~~U.S, Europe, Japan and other parts of Asia. Our products are marketed in approximately 90 countries around the world through a combination of our direct sales force, independent distributors and agents. ~~Our~~During the three and nine months ended January 1, 2022 our revenue generated outside the ~~U.S.~~U.S. was ~~39.8%~~ 35.6% and ~~38.7%~~36.8%, respectively, of total net revenues, ~~for~~as compared with 38.6% and 40.7% during the three and nine months ended December ~~30, 2017, respectively, as compared to 40.0% and 40.2% for the three and nine months ended December 31, 2016,~~26, 2020, respectively. International sales are generally conducted in local currencies, primarily Japanese Yen, Euro, Chinese Yuan and Australian Dollars. Our results of operations are impacted by changes in foreign exchange rates, particularly in the value of the Yen, Euro and Australian Dollar relative to the U.S. Dollar. We have placed foreign currency hedges to mitigate our exposure to foreign currency fluctuations.

Please see the section entitled “Foreign Exchange” in this discussion for a more complete explanation of how foreign currency affects our business and our strategy for managing this exposure.

Net Revenues by Business Unit


	Three Months Ended
(In thousands)	January 1, 2022		December 26, 2020		Reported growth		Currency impact		Constant currency growth (1)
Plasma	$	96,460	$	101,934	(5.4)	%	(0.1)	%	(5.3)	%
Blood Center	75,692		80,920		(6.5)	%	0.8	%	(7.3)	%
Hospital (2)	82,273		52,651		56.3	%	(0.6)	%	56.9	%
Service	5,344		4,866		9.8	%	0.5	%	9.3	%
Net revenues	$	259,769	$	240,371	8.1	%	0.2	%	7.9	%

Three Months Ended
(In thousands) December 30,
2017 December 31,
2016 Reported growth Currency impact
Constant currency growth ⁽¹⁾
Plasma $ 113,098
$ 108,655
4.1 % 0.7 % 3.4 %
Blood Center 74,227
76,354
(2.8 )% 2.3 % (5.1 )%
Cell Processing 26,829
25,918
3.5 % 2.9 % 0.6 %
Hemostasis Management 19,889
16,914
17.6 % 1.9 % 15.7 %
Net revenues $ 234,043
$ 227,841
2.7 % 1.6 % 1.1 %
(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. See “Management’s Use of Non-GAAP Measures.”

^{(2)Hospital revenue includes Hemostasis Management revenue of $33.5 million and $28.5 million during the three months ended January 1, 2022 and December 26, 2020, respectively. Hemostasis Management revenue increased 17.5% in the third quarter of fiscal 2022, as compared with the same period of fiscal 2021. Without the effect of foreign exchange, Hemostasis Management revenue increased 18.4% in the third quarter of fiscal 2022, as compared with the same period of fiscal 2021. Hospital revenue also includes Vascular Closure revenue of $24.3 million for the three months ended January 1, 2022.}


	Nine Months Ended
(In thousands)	January 1, 2022		December 26, 2020		Reported growth		Currency impact		Constant currency growth (1)
Plasma	$	250,244	$	248,553	0.7	%	0.3	%	0.4	%
Blood Center	225,379		233,622		(3.5)	%	2.0	%	(5.5)	%
Hospital (2)	237,074		148,468		59.7	%	1.5	%	58.2	%
Service	15,497		14,791		4.8	%	3.1	%	1.7	%
Net revenues	$	728,194	$	645,434	12.8	%	1.2	%	11.6	%

(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. See ~~"Management's~~“Management’s Use of Non-GAAP Measures."”

Nine Months Ended
(In thousands) December 30,
2017 December 31,
2016 Reported growth Currency impact
Constant currency growth ⁽¹⁾
Plasma $ 324,376
$ 309,868
4.7 % 0.2 % 4.5 %
Blood Center 211,502
221,567
(4.5 )% 0.8 % (5.3 )%
Cell Processing 78,929
77,949
1.3 % 0.9 % 0.4 %
Hemostasis Management 55,564
48,666
14.2 % — % 14.2 %
Net revenues $ 670,371
$ 658,050
1.9 % 0.5 % 1.4 %

⁽¹⁾~~Constant currency growth, a non-GAAP financial measure, measures~~(2)Hospital revenue includes Hemostasis Management revenue of $97.2 million and $78.5 million during the ~~change in revenue between the current and prior year periods using a constant currency. See~~ ~~"Management's Use of Non-GAAP Measures."~~

~~Plasma~~

~~Plasma revenue increased 4.1% and 4.7% for the three and~~ nine months ended January 1, 2022 and December ~~30, 2017,~~26, 2020, respectively. Hemostasis Management revenue increased 23.8% in the first nine months of fiscal 2022, as compared towith the same ~~periods~~period of fiscal ~~2017.~~2021. Without the effect of foreign exchange, ~~plasma~~Hemostasis Management revenue increased 23.2% in the first nine months of fiscal 2022, as compared with the same period of fiscal 2021. Hospital revenue ~~increased 3.4% and 4.5%~~also includes Vascular Closure revenue of $66.8 million for the ~~three and~~ nine months ended ~~December 30, 2017, as compared to the same periods of fiscal 2017. This~~January 1, 2022.

Plasma

Plasma revenue ~~growth was primarily driven by an increase in sales of plasma disposables~~decreased 5.4% and ~~software~~increased 0.7% during the three and nine months ended December 30, 2017 due to continued strong performance in the U.S. This increase was partially offset by a decline in liquid solutions revenue and a decrease in equipment revenue resulting from the divestiture of our SEBRA product line.

We have continuing delays in the expansion of our liquid solutions production capacity that require us or our customers to continue to obtain alternative sources of supply. We expect purchases from these alternate sources to continue until we can complete the expansion and produce solutions at the necessary level. While these purchases continue, we will see a reduction in revenue from our liquid solutions business and increased costs to serve our customers.

~~Blood Center~~

~~Platelet~~

~~Platelet revenue declined by 1.2% and 4.6% for the three and nine months ended December 30, 2017,~~January 1, 2022, respectively, as compared towith the same periods of fiscal ~~2017.~~2021. Without the effect of foreign exchange, ~~platelet~~Plasma revenue decreased ~~5.5%~~5.3% and 5.8% for the three and nine months ended December 30, 2017, as compared to the same periods of fiscal 2017. The decrease during the three months ended December 30, 2017, excluding the impact of foreign exchange, was primarily due to declines in Europe and the continued market shift toward double dose collection techniques in Japan. The decrease during the nine months ended December 30, 2017, excluding the impact of foreign exchange, was primarily due to the impact of double dose collections in Japan, partially offset by order timing in the prior period.

Improved collection efficiencies that increase the yield of platelets per collection have resulted in flat markets for platelet usage and related disposables in Japan. Within these flat markets, the use of "double dose" collection methods and other alternative collection procedures have increased. In Japan, usage of double dose collections comprised approximately 48% of all platelets collected during the nine months ended December 30, 2017. We expect the shift toward double dose collection techniques to result in an overall decline in revenue during fiscal 2018.

~~Red Cell and Whole Blood~~

Red cell revenue decreased 10.6% and 11.0% for the three and nine months ended December 30, 2017, as compared to the same periods of fiscal 2017. Without the effect of foreign exchange, red cell revenue decreased 11.2% and 11.3% for the three and nine months ended December 30, 2017, as compared to the same periods of fiscal 2017. During fiscal 2016, the American Red Cross and two group purchasing organizations representing other U.S. blood collectors ("Blood Center GPOs") requested updated contracts for sole source supply on apheresis red cell collections. The American Red Cross contract resulted in our gaining 100% share of their apheresis red cell collection business and higher revenue volumes, but at lower prices. The impact of the price concessions began in the third quarter of fiscal 2016, while the achievement of 100% share of the American Red Cross' business occurred in the fourth quarter of fiscal 2017. Although price declines in this contract had a negative impact in the first half of fiscal 2018, the impact of these price declines moderated during the third quarter of fiscal 2018 after annualization of the final price concessions. The loss of a customer contract also contributed to the declineincreased 0.4% during the three and nine months ended January 1, 2022, respectively, as compared with the same periods of fiscal 2021. The decrease during the three months ended January 1, 2022, as compared with the same period of fiscal 2021 was primarily driven by a decline in plasma liquid solutions and a large stocking order in the prior period. The increase during the nine months ended January 1, 2022 was primarily driven by increase in volume of plasma disposables and increase in software revenue, partially offset by pricing adjustments and declines in plasma liquid solutions as a result of certain strategic exits within our liquid solutions business.

Although we continue to experience the negative impact of COVID-19 on our business, we believe the impacts on plasma collection are temporary and anticipate volumes to recover to pre-pandemic levels. However, the exact timing of the recovery remains uncertain and is expected to occur after the end of fiscal 2022. We remain confident in the strength of the plasma end market growth as the long-term global demand for plasma-derived pharmaceuticals is expected to continue.

In early April 2021, CSL Plasma, Ltd. informed us of its intent not to renew its supply agreement for the use of PCS2 plasma collection system devices and the purchase of disposable plasmapheresis kits following the expiration of the current term of the Supply Agreement in June 2022. In fiscal 2021, revenue under this Supply Agreement was $88.6 million. During the third quarter of fiscal 2022, we amended the Supply Agreement to allow CSL to continue to use our PCS2 devices and purchase disposables through December ~~30, 2017.~~2023. The extension provides CSL the ability to utilize our devices and disposables in their collection centers on a non-exclusive basis, and we are working with them to quantify their volume requirements over the life of the agreement.

~~Whole blood~~

Blood Center

Blood Center revenue ~~increased 0.8%~~decreased 6.5% and ~~0.5% for~~3.5% during the three and nine months ended ~~December 30, 2017,~~January 1, 2022, respectively, as compared towith the same periods of fiscal 2017. Without the effect of foreign exchange, whole blood revenue was flat for the three and nine months ended December 30, 2017, as compared to the same periods of fiscal 2017. Although we expect the demand for whole blood disposable products in the U.S. to continue to decrease in fiscal 2018 due to a sustained decline in transfusion rates and actions taken by hospitals to improve blood management techniques and protocols, we continued to see a moderation in the rate of decline of this market during the third quarter of fiscal 2018. We expect to see continued declines in transfusion rates and for the market to remain price-focused and highly competitive for the foreseeable future.

~~Software, Equipment and Other~~

~~Blood Center software, equipment and other revenue decreased 11.7% and 13.5% for the three and nine months ended December 30, 2017, as compared to the same periods of fiscal 2017.~~2021. Without the effect of foreign exchange, Blood Center ~~software, equipment and other~~ revenue decreased ~~13.8%~~7.3% and ~~14.2% for~~5.5% during the three and nine months ended ~~December 30, 2017,~~January 1, 2022, respectively, as compared towith the same periods of fiscal ~~2017. These decreases for both~~2021. The decrease during the three and nine months ended ~~December 30, 2017 were largely attributable to~~January 1, 2022 as compared with the same periods of fiscal 2021 was primarily driven by continued declines in whole blood disposables and the impact of previously discontinued customer contracts in North America as well as an apheresis stocking order ~~timing in Europe and Asia. A one-time sale of equipment to the American Red Cross~~ in the prior ~~period to support our increased share~~year period. The divestiture of ~~their apheresis red cell collection business~~certain blood donor management software solution assets in fiscal 2021 also contributed to the decline during the nine months ended ~~December 30, 2017.~~January 1, 2022, as compared with the same period of fiscal 2021.

~~Cell Processing~~

~~Cell Salvage~~

~~Cell Salvage revenue consists primarily~~We have not yet experienced the reversal of the ~~Cell Saver~~large stocking orders made by distributors and ~~OrthoPAT products. Cell Saver~~blood collectors during the first quarter of fiscal 2021 in response to the COVID-19 pandemic. The timing and magnitude of potential reversals in the future periods is likely to occur over an extended period of time as customers’ risk aversion returns to normal along with safety stock levels.

Hospital

Hospital revenue increased ~~7.0%~~56.3% and 59.7% during the three ~~months ended December 30, 2017~~ and ~~declined 1.4% during the~~ nine months ended December 30, 2017, as compared to the same periods of fiscal 2017. Without the effect of foreign exchange, Cell Saver revenue increased 3.3% during the three months ended December 30, 2017 and decreased 2.3% during the nine months ended December 30, 2017January 1, 2022, respectively, as compared with the same periods of fiscal ~~2017. The increase~~2021. Without the effect of foreign exchange, Hospital revenue increased 56.9% and 58.2% during the three months ended December 30, 2017 was primarily in Asia and the U.S. The decrease during the nine months ended December 30, 2017 was attributable to declines in Japan and Western Europe. OrthoPAT revenue decreased 35.5% and 30.8% for the three and nine months ended ~~December 30, 2017,~~January 1, 2022, respectively, as compared towith the same periods of fiscal ~~2017. Without~~2021. The increase during the ~~effect~~three and nine months ended January 1, 2022was primarily attributable to Vascular Closure revenue resulting from the acquisition of ~~foreign exchange, OrthoPAT~~Cardiva and an increase in TEG disposables revenue ~~decreased 37.3%~~in the U.S. The increase during the nine months ended January 1, 2022 also reflected the impact of the COVID-19 pandemic on the prior year period, partially offset by the divestiture of certain blood bank and ~~31.4%~~hospital software solution assets during the same period of fiscal 2021. We believe that the demand for our hospital products is inherently strong and that procedure volumes will continue to improve with a return to normal levels.

Gross Profit


	Three Months Ended								Nine Months Ended
(In thousands)	January 1, 2022			December 26, 2020			% Increase		January 1, 2022			December 26, 2020			% Increase
Gross profit	$	138,565		$	120,257		15.2	%	$	369,191		$	316,031		16.8	%
% of net revenues	53.3		%	50.0		%			50.7		%	49.0		%

Gross profit increased 15.2% and 16.8% during the three and nine months ended ~~December 30, 2017,~~January 1, 2022, respectively, as compared towith the same periods of fiscal 2017. Better blood management has reduced orthopedic blood loss and continues to impact demand for OrthoPAT. Recent trends in blood management, particularly the adoption of tranexamic acid to treat and prevent orthopedic post-operative blood loss, continue to lessen hospital use of OrthoPAT.

~~Transfusion Management~~

Transfusion Management software revenue includes BloodTrack, SafeTrace Tx and other hospital software. Transfusion Management software revenue increased 7.7% and 11.2% for the three and nine months ended December 30, 2017, as compared to the same periods of fiscal 2017. Without the effect of foreign exchange, Transfusion Management software revenue increased by 5.7% and 10.5% for the three and nine months ended December 30, 2017 as compared to the same periods of fiscal 2017, due to BloodTrack growth in the U.S. and Europe and SafeTrace Tx growth in the U.S.

~~Hemostasis Management~~

Revenue from our Hemostasis Management products increased 17.6% and 14.2% for the three and nine months ended December 30, 2017, as compared to the same periods of fiscal 2017. Without the effect of foreign exchange, Hemostasis Management revenue increased 15.7% and 14.2% for the three and nine months ended December 30, 2017, as compared to the same periods of fiscal 2017. The revenue increase was primarily attributable to the growth of TEG disposables, principally in the U.S. and China. The TEG 6s and TEG Manager are approved for the same set of indications as the TEG 5000 in Europe, Australia and Japan. In the U.S., TEG 6s is approved for limited indications, including cardiovascular surgery and cardiology. The release of TEG 6s continues to contribute significantly to the overall growth in Hemostasis Management in the U.S. and Europe. We are pursuing a broader set of indications for the TEG 6s in the U.S., including trauma.

~~Gross Profit~~

Three Months Ended Nine Months Ended
(In thousands) December 30,
2017 December 31,
2016 % Increase/
(Decrease) December 30,
2017 December 31,
2016 % Increase/
(Decrease)
Gross profit $ 111,295
$ 101,079
10.1 % $ 307,522
$ 296,383
3.8 %
% of net revenues 47.6 % 44.4 %
45.9 % 45.0 %

~~Gross profit increased 10.1% and 3.8% for the three and nine months ended December 30, 2017, as compared to the same periods of fiscal 2017.~~2021. Without the effect of foreign exchange, gross profit increased ~~6.9%~~14.4% and 3.3% for the three and nine months ended December 30, 2017, as compared to the same periods of fiscal 2017. Gross profit margin increased 320 and 90 basis points for the three and nine months ended December 30, 2017, as compared to the same periods of fiscal 2017. The increase in gross profit margin14.3% during the three and nine months ended ~~December 30, 2017 was primarily due to favorable mix in~~January 1, 2022, respectively, as compared with the ~~current year~~same periods ~~and the impact~~ of ~~inventory charges during the prior year periods.~~fiscal 2021. The ~~positive impact of foreign currency also contributed to the~~ increase during the three and nine months ended ~~December 30, 2017 while~~January 1, 2022 was primarily driven by the ~~Whole Blood filter recall incurred during~~addition of Vascular Closure, favorable volumes and product mix, lower expenses related to the ~~prior period contributed to~~COVID-19 pandemic, currency translation, and productivity savings from the 2020 Program. The increase was partially offset by recent divestitures in fiscal 2021 and inflationary pressures and higher freight costs in our global supply chain. The increase during the nine months ended ~~December 30, 2017. These increases were~~January 1, 2022 was also partially offset by ~~manufacturing challenges and~~pricing adjustments, the ~~impact~~amortization of the ~~divestiture~~fair value inventory step-up related to the acquisition of ~~SEBRA during the nine months ended December 30, 2017.~~Cardiva and asset impairments.

We continue to incur costs associated with inventory purchases from alternate sources as a result of delays in the expansion of our liquid solutions production capacity. We expect purchases from these alternate sources to continue until we can complete the expansion and produce solutions at the necessary level. Gross profit margin continues to be impacted by the inefficiency of underutilized productive capacity. We continue to seek opportunities to rationalize our manufacturing network.

Operating Expenses


	Three Months Ended								Nine Months Ended
(In thousands)	January 1, 2022			December 26, 2020			% Increase		January 1, 2022			December 26, 2020			% Increase/ (Decrease)
Research and development	$	10,037		$	7,501		33.8	%	$	33,591		$	22,014		52.6	%
% of net revenues	3.9		%	3.1		%			4.6		%	3.4		%
Selling, general and administrative	$	80,726		$	65,641		23.0	%	$	247,722		$	191,504		29.4	%
% of net revenues	31.1		%	27.3		%			34.0		%	29.7		%
Amortization of intangible assets	$	12,151		$	7,805		55.7	%	$	35,930		$	24,204		48.4	%
% of net revenues	4.7		%	3.2		%			4.9		%	3.8		%


Gains on divestitures and sale of assets	$	—		$	(1,115)		n/m		$	(9,603)		$	(32,613)		(70.6)	%
% of net revenues	—		%	(0.5)		%			(1.3)		%	(5.1)		%
Total operating expenses	$	102,914		$	79,832		28.9	%	$	307,640		$	205,109		50.0	%
% of net revenues	39.6		%	33.2		%			42.2		%	31.8		%

Three Months Ended Nine Months Ended
(In thousands) December 30,
2017 December 31,
2016
% Increase/
(Decrease)
December 30,
2017 December 31,
2016
% Increase/
(Decrease)
Research and development $ 12,427
$ 8,462
46.9 % $ 28,141
$ 28,235
(0.3 )%
% of net revenues 5.3 % 3.7 %
4.2 % 4.3 %
Selling, general and administrative $ 97,855
$ 71,405
37.0 % $ 237,499
$ 230,023
3.3 %
% of net revenues 41.8 % 31.3 %
35.4 % 35.0 %
Total operating expenses $ 110,282
$ 79,867
38.1 % $ 265,640
$ 258,258
2.9 %
% of net revenues 47.1 % 35.1 %
39.6 % 39.2 %

Research and Development

Research and development expenses increased ~~46.9% for~~33.8% and 52.6% during the three ~~months ended December 30, 2017~~ and ~~decreased 0.3% for the~~ nine months ended ~~December 30, 2017,~~January 1, 2022, respectively, as compared towith the same periods of fiscal ~~2017.~~2021. Without the effect of foreign exchange, research and development expenses increased ~~47.8%~~33.4% and ~~0.9% for~~51.5% during the three and nine months ended ~~December 30, 2017,~~January 1, 2022, respectively, as compared towith the same periods of fiscal ~~2017.~~2021. These increases were primarily due to increased spend related to investments in our Hospital Business unit, primarily driven by Vascular Closure, as well as costs related to compliance with the European Union Medical Device Regulation (“MDR”) and In Vitro Diagnostic Regulation (“IVDR”) requirements. The increase during three months ended December 30, 2017 was primarily driven by higher restructuring and turnaround costs associated with the 2018 Program and our continued investment of resources in clinical programs primarily for our Hemostasis Management business unit. During the nine months ended December 30, 2017, these increased costs were offset by reduced spending on certain software projects and several projects in our Blood Center business unit to better align with our long-term product plans.

~~Selling, General and Administrative~~

~~Selling, general and administrative expenses increased 37.0% and 3.3% for~~ the three and nine months ended ~~December 30, 2017,~~January 1, 2022, was partially offset by cost savings related to the 2020 Program.

Selling, General and Administrative

Selling, general and administrative expenses increased 23.0% and 29.4% during the three and nine months ended January 1, 2022, respectively, as compared towith the same periods of fiscal ~~2017.~~2021. Without the effect of foreign exchange, selling, general, and administrative expenses increased ~~34.7%~~23.1% and ~~3.3% for~~27.9% during the three and nine months ended ~~December 30, 2017,~~January 1, 2022, respectively, as compared with the same period of fiscal 2021. The increase during three and nine months ended January 1, 2022 was primarily due to spend related to the ~~same periods~~acquisition of ~~fiscal 2017. The~~Cardiva, including the increase ~~for~~in the fair value of contingent consideration. Higher freight costs also contributed to these increases, which were partially offset by cost savings related to the 2020 Program.

Amortization of Intangible Assets

We recognized amortization expense of $12.2 million and $35.9 million during the three and nine months ended ~~December 30, 2017 was primarily the result of higher restructuring~~January 1, 2022, respectively and ~~turnaround costs associated with the 2018 Program~~$7.8 million and ~~an increase in variable compensation expense. This increase was partially offset by annualized savings as a result of the prior year restructuring initiative.~~

~~Interest and Other Expense, Net~~

~~Interest expense from our term loan borrowings, which constitutes the majority of expense, decreased~~$24.2 million during the three and nine months ended December ~~30, 2017~~26, 2020, respectively. The increase was primarily driven by an increase in intangible assets resulting from recent acquisitions.

Gains on Divestitures

We recognized gains on divestitures of $9.6 million during the nine months ended January 1, 2022. We recognized gains on divestitures of $1.1 million and $32.6 million during the three and nine months ended December 26, 2020, respectively. Refer to Note 5, Divestitures, to the Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for additional information pertaining to these divestitures.

Interest and Other Expense, Net

Interest and other expenses increased 39.7% and 24.8% during the three and nine months ended January 1, 2022, respectively, as compared towith the ~~prior year period~~same periods of fiscal 2021. Without the effects of foreign exchange, interest and other expenses increased 40.6% and 24.0% during the three and nine months ended January 1, 2022, respectively, as compared with the same periods of fiscal 2021. The increase during the three and nine months ended January 1, 2022 was primarily driven by realized losses due to foreign currency and the amortization of deferred financing fees associated with our March 2021 issuance of $500 million in aggregate principal ~~payments~~amount of 0% convertible senior notes, partially offset by a reduction in interest expense from borrowings under our $350.0 million term loan and $350.0 million revolving loan due to lower borrowings. The effective interest rate on our term loan and ~~a reduction in our borrowings on our~~ revolving ~~credit line. The effective interest rate on total debt outstanding~~loan as of ~~December 30, 2017~~January 1, 2022 was ~~2.6%~~1.9%.

Income Taxes

We conduct business globally and report our results of operations in a number of foreign jurisdictions in addition to the United States. Our reported tax rate ~~has been generally lower than~~is impacted by the ~~U.S. federal statutory rate~~jurisdictional mix of earnings in any given period as ~~the income tax rates in~~ the foreign jurisdictions in which we operate ~~are generally lower than~~have tax rates that differ from the U.S. statutory tax rate. ~~Our~~

For the three and nine months ended January 1, 2022, we reported income tax expense of $8.2 million and $14.7 million, respectively, representing effective tax rates of 26.0% and 30.4%, respectively. The effective tax rate for the nine months ended January 1, 2022 includes discrete tax expense relating to stock compensation shortfalls of $0.9 million, with no discrete tax expense relating to stock compensation shortfalls recorded in the three months ended January 1, 2022.

For the three and nine months ended December 26, 2020, we reported income tax expense of $5.5 million and $9.8 million, respectively, representing effective tax rates of 14.7% and 9.8%, respectively. The effective tax rates for the three and nine months ended December ~~30, 2017 is higher than the statutory~~26, 2020 include discrete tax ~~rate primarily as a result~~benefits recognized from excess stock compensation deductions of ~~net discrete expense recorded in connection with U.S. tax reform, as discussed below.~~

~~During the three months ended December 30, 2017 and December 31, 2016, we reported an income tax provision of $6.8~~$1.0 million and ~~$3.5 million, respectively. For the nine months ended December 30, 2017 and December 31, 2016, we reported an income tax provision of $12.6 million and $6.8~~$5.1 million, respectively. The ~~change in our~~effective tax ~~provision for both the three and nine months ended December 30, 2017 was primarily the result of U.S. tax reform, as discussed below, as well as changes in~~rates were also impacted by the jurisdictional mix of earnings and other foreign items. Our tax provision for nine months ended December 31, 2016 was impacted by a non-recurring discrete tax expense of $1.4 million related to a workforce reduction during the first quarter of fiscal 2017 in a foreign subsidiary where we were required to maintain certain levels of headcount for a multi-year period, which resulted in the establishment of a tax reserve.

During the third quarter of fiscal 2018, the Tax Cuts and Jobs Act was enacted in the United States. The Act reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. As of December 30, 2017, we had not completed our accounting for the tax effects of enactment of the Act, however, we were able to make a reasonable estimate of the effects on our existing deferred tax balances and the one-time transition tax.including divestiture transactions. During the three and nine months ended December ~~30, 2017, we recognized a provisional amount of $5.4 million, which is included as a component of income~~26, 2020, the Company sold its Fajardo, Puerto Rico manufacturing operations, certain U.S. blood donor management software solution assets, and its wholly-owned subsidiary Inlog Holdings France SAS. The tax expense on divestitures, including the associated valuation allowance impacts, were included in ~~our consolidated statements of (loss) income. The $5.4 million is comprised of an increase to tax expense of $12.3 million for~~ the ~~net transition tax to be paid over eight years, partially offset by $6.9 million of additional benefits from the re-measurement of deferred tax assets.~~

~~As a result~~computation of the ~~Act, we re-measured certain deferred~~annual effective tax assets and liabilities based on the rates at which they are anticipated to reverse in the future, which is generally 21%. In addition, certain of our deferred tax assets against which we had previously maintained a valuation allowance became more-likely-than-not realizable as a result of the source of income associated with the transition tax and changes in the tax law which resulted in net operating losses generated in future periods having an indefinite carryforward period (as we have existing indefinite lived deferred tax liabilities which can serve as a source of income for indefinite lived deferred tax assets). The provisional benefit amount recorded related to the re-measurement of our deferred tax balance prior to the release of the valuation allowance on attributes utilized to offset the transition tax during the three and nine months ended December 30, 2017 was $6.9 million.rate.

The one-time transition tax associated with the Act is based on our total post-1986 earnings and profits ("E&P") for which we have previously deferred from U.S. federal taxation. During the three and nine months ended December 30, 2017, we recorded a provisional amount for our one-time transition tax liability of $22.7 million for our foreign subsidiaries, resulting in an increase to income tax expense. The income tax expense increase was partially offset by the release of a valuation allowance of $10.4 million on tax attributes to offset the transition tax, resulting in a net provisional expense after utilization of foreign tax credits of $12.3 million during the three and nine months ended December 30, 2017.

Liquidity and Capital Resources

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


(Dollars in thousands)	January 1, 2022		April 3, 2021
Cash & cash equivalents	$	236,877	$	192,305
Working capital	$	374,044	$	440,051
Current ratio	2.1		2.7
Net debt(1)	$	(540,305)	$	(515,303)
Days sales outstanding (DSO)	54		51
Inventory turnover	1.3		1.2

(Dollars in thousands) December 30,
2017 April 1,
2017
Cash & cash equivalents $ 251,591
$ 139,564
Working capital $ 265,535
$ 298,850
Current ratio 1.8
2.4
Net debt⁽¹⁾
$ (18,576 ) $ (175,083 )
Days sales outstanding (DSO) 57
60
Disposable finished goods inventory turnover 4.8
4.2

⁽¹⁾Net debt position is the sum of cash and cash equivalents less total debt.

On November 1, 2017, we launched the 2018 Program. Under this restructuring initiative, we expect to incur aggregate charges between $50 million and $60 million, of which we expect $35 million to $40 million will consist of severance and other employee costs and the remainder will consist of other exit costs, primarily related to third party services. These charges, substantially all of which will result in cash outlays, will be incurred as the specific actions required to execute on these initiatives are identified and approved and are expected to continue through fiscal 2020. During both the three and nine months ended December 30, 2017, we incurred $31.7 million of restructuring and turnaround costs under this program.

During fiscal 2017, we launched the 2017 Program, a restructuring initiative designed to reposition our organization and improve our cost structure. During the nine months ended December 30, 2017, we incurred $7.7 million of restructuring and turnaround costs under this program. There were no charges recorded during the three months ended December 30, 2017 under this program. As of December 30, 2017, charges associated with the 2017 Program were substantially complete.

Our primary sources of liquidity are cash and cash equivalents, internally generated cash flow from ~~operations~~operations, our revolving credit line that expires in the first quarter of fiscal 2024 and proceeds from employee stock option ~~exercises. Although cash flow from operations could be negatively impacted by continued declines in our Blood Center business, we~~exercises. We believe these sources are sufficient to fund our cash requirements over at least the next twelve months. Our expected cash outlays relate primarily to acquisitions, investments, capital expenditures, including the ~~NexSys PCS,~~build out of our new manufacturing facility in Clinton, PA, cash payments under our credit agreement and restructuring initiatives.

In March 2021, the ~~loan agreement, restructuring~~Company issued $500.0 million aggregate principal amount of 0% convertible senior notes due 2026, or the 2026 Notes. The 2026 Notes are governed by the terms of the Indenture between the Company and ~~turnaround initiatives~~U.S. Bank National Association, as trustee. The total net proceeds from the sale of the 2026 Notes, after deducting the initial purchasers’ discounts and ~~other acquisitions.~~debt issuance costs, were approximately $486.7 million. The 2026 Notes will mature on March 1, 2026, unless earlier converted, redeemed or repurchased. The 2026 Notes have an effective interest rate of 0.5% as of January 1, 2022.

~~Debt~~

As of ~~December 30, 2017,~~January 1, 2022, we had ~~$251.6~~$236.9 million in cash and cash equivalents, ~~substantially all~~the majority of which is held in the U.S. or in countries from which it can be ~~freely~~ repatriated to the U.S. ~~We currently have~~On June 15, 2018, we entered into a five-year credit agreement ~~("Credit Agreement") with certain lenders (together, “Lenders”)~~ which ~~provides~~provided for a ~~$475.0~~$350.0 million term loan ~~("Term Loan")~~ and a ~~$100.0~~$350.0 million revolving loan ~~("Revolving Credit Facility" and together~~(together with the ~~Term Loan,~~term loan, as amended from time to time, the ~~"Credit Facilities"~~“Credit Facilities”). Interest ~~is based~~ on the ~~Adjusted~~term loan and revolving loan is established using LIBOR plus ~~a range of 1.125% to 1.500%~~1.13% - 1.75%, depending on ~~achievement of~~our leverage ratio. Under the Credit Facilities, we are required to maintain certain leverage and interest coverage ratios ~~and~~specified in the credit agreement as well as other customary ~~credit terms which include financial~~non-financial affirmative and negative covenants. The ~~Credit Facilities mature on July~~Company and its lenders agreed to increase the maximum consolidated leverage ratio the Company is required to maintain for the four consecutive quarters immediately following the closing of the Cardiva acquisition to 4.25:1.0, after which the maximum consolidated leverage ratio the Company is required to maintain will revert to 3.5:1.0.

As of January 1, ~~2019. At December 30, 2017, $270.3~~2022, $288.8 million was outstanding under the ~~Term Loan and~~term loan with an effective interest rate of 1.9%. There were no ~~amount was~~borrowings outstanding on the ~~Revolving Credit Facility.~~revolving loan. We also ~~have $46.4~~had $24.7 million of uncommitted operating lines of credit to fund our global operations under which there ~~are~~were no outstanding borrowings as of ~~December 30, 2017.~~January 1, 2022.

~~During the three and nine months ended December 30, 2017, we paid $16.6 million and $45.1 million, respectively, in scheduled principal repayments for the Term Loan. We have~~

The Company has scheduled principal payments of ~~$16.6~~$4.4 million and $214.4 million required during the remainder of fiscal ~~2018. We were~~2022 and during fiscal 2023, respectively. The Company was in compliance with the leverage and interest coverage ratios specified in the ~~Credit Agreement~~credit agreement as well as all other bank covenants as of ~~December 30, 2017.~~January 1, 2022.

During the second quarter of fiscal 2022, our Board of Directors approved a revised 2020 Program. We now estimate that we will incur aggregate charges between $95 million and $105 million in connection with the 2020 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 and nine months ended January 1, 2022, we incurred $5.7 million and $20.2 million, respectively, of restructuring and restructuring related costs under this program.

Cash Flows


	Nine Months Ended
(In thousands)	January 1, 2022		December 26, 2020
Net cash provided by (used in):
Operating activities	$	104,213	$	107,258
Investing activities	(51,833)		3,658
Financing activities	(6,984)		(65,307)
Effect of exchange rate changes on cash and cash equivalents(1)	(824)		6,082
Net change in cash and cash equivalents	$	44,572	$	51,691

Nine Months Ended
(In thousands) December 30,
2017 December 31,
2016 Increase/
(Decrease)
Net cash provided by (used in):
Operating activities $ 162,723
$ 125,161
$ 37,562
Investing activities (45,069 ) (58,744 ) 13,675
Financing activities (7,990 ) (49,964 ) 41,974
Effect of exchange rate changes on cash and cash equivalents⁽¹⁾
2,363
(1,937 ) 4,300
Net increase in cash and cash equivalents $ 112,027
$ 14,516

⁽¹⁾The balance sheet is affected by spot exchange rates used to translate local currency amounts into U.S. Dollars. In accordance with U.S. GAAP, we have removed the effect of foreign currency throughout our cash flow statement, except for its effect on our cash and cash equivalents.

Net cash provided by operating activities ~~increased~~decreased by ~~$37.6~~$3.0 million during the nine months ended ~~December 30, 2017,~~January 1, 2022, as compared towith the nine months ended December ~~31, 2016.~~26, 2020. The ~~increase~~decrease in cash provided by operating activities was primarily the result of higher working capital due to ~~a working capital inflow resulting from~~lower collections of accounts receivable, partially offset by an increase in accrued restructuring and turnaround reserves associated with the 2018 Program, a decrease in inventories and, to a lesser extent, a decrease in accounts receivable. The decrease in inventories was due to an inventory build of our PCS2 devices in the prior year period and the placement of those devices in fiscal 2018, as well as, the strategic management of inventory levels for this platform of devices in fiscal 2018 in anticipation of the launch of the new devices. Netnet income, as adjusted for depreciation, amortization and ~~amortization, also contributed to~~other non-cash charges compared with the ~~increase in cash provided by operating activities.~~prior period.

Net cash used in investing activities ~~decreased~~increased by ~~$13.7~~$55.5 million during the nine months ended ~~December 30, 2017,~~January 1, 2022, as compared towith the nine months ended December ~~31, 2016.~~ 26, 2020. The ~~decrease~~increase in cash used in investing activities was primarily the result of ~~the proceeds received related to the divestiture of our SEBRA product line and a reduction~~an increase in capital expenditures ~~due to~~in the ~~timing of spend, which we expect will occur in during the fourth quarter of fiscal 2018~~current year and lower proceeds received from various divestitures during fiscal ~~2019.~~2021 as compared to fiscal 2022, partially offset by decreased acquisition spend.

Net cash used in financing activities ~~decreased~~increased by ~~$42.0~~$58.3 million during the nine months ended ~~December 30, 2017,~~January 1, 2022, as compared towith the nine months ended December ~~31, 2016,~~26, 2020, primarily due to a ~~reduction~~repayment of the revolving credit facility in borrowings on our Revolving Credit Facility of $40.0 million in the prior period and higher proceeds received from the exercise of stock options during the current period. This decrease was partially offset by an increase in principal repayments on our Term Loan during the nine months ended December 30, 2017 as compared to the prior period.fiscal 2021.

~~Stock Repurchase Program~~

Concentration of Credit Risk

Concentrations of credit risk with respect to trade accounts receivable are generally limited due to our large number of customers and their diversity across many geographic areas. ACertain markets and industries, however, can expose us to concentrations of credit risk. For example, in the Plasma business unit, sales are concentrated with several large customers. As a result, accounts receivable extended to any one of these biopharmaceutical customers can be significant at any point in time. In addition, a portion of our trade accounts receivable outside the ~~United States, however,~~U.S. include sales to government-owned or supported healthcare systems in several countries, which are subject to payment delays and local economic conditions. Payment is dependent upon the financial stability and creditworthiness of those ~~countries'~~countries’ national economies.

We have not incurred significant losses on receivables. We continually evaluate all receivables for potential collection risks associated with the availability of government funding and reimbursement practices. If the financial condition of customers or the ~~countries'~~countries’ healthcare systems deteriorate such that their ability to make payments is uncertain, allowances may be required in future periods.

Inflation

We ~~do not believe~~experienced rising inflationary pressures in our global supply chain that ~~inflation~~ had ~~a significant~~an impact on our results of operations ~~for~~during the periods presented. Historically, we believe we have been able to mitigate the effects of inflation by improving our manufacturing and purchasing efficiencies, by increasing employee productivity, and by adjusting the selling prices of products.nine months ended January 1, 2022. We continue to monitor ~~inflation~~inflationary pressures generally and raw materials indices that may affect our procurement and production costs. Increases in the price of petroleum derivatives could result in corresponding increases in our costs to procure plastic raw materials. We expect the inflationary pressures we have experienced in our global supply chain to continue into fiscal 2023. Historically, we have been able to mitigate the effects of inflation by improving our manufacturing and purchasing efficiencies, by increasing employee productivity and by adjusting the selling prices of products.

Foreign Exchange

During the three and nine months ended ~~December 30, 2017, approximately 39.8%~~January 1, 2022, 35.6% and ~~38.7%~~36.8%, respectively, of our sales were generated outside the U.S., generally in foreign currencies, yet our reporting currency is the U.S. Dollar. We also incur certain manufacturing, marketing and selling costs in international markets in local currency. Our primary foreign currency exposures relate to sales denominated in Euro, Japanese Yen, Chinese Yuan and Australian Dollars. We also have foreign currency exposure related to manufacturing and other operational costs denominated in Swiss Francs, Canadian Dollars, Mexican Pesos and Malaysian Ringgit. The Yen, Euro, Yuan and Australian Dollar sales exposure is partially mitigated by costs and expenses for foreign operations and sourcing products denominated in foreign currencies.

Since our foreign currency denominated Yen, Euro, Yuan and Australian Dollar sales exceed the foreign currency denominated costs, whenever the U.S. Dollar strengthens relative to the Yen, Euro, Yuan or Australian Dollar, there is an adverse effect on our results of operations and, conversely, whenever the U.S. Dollar weakens relative to the Yen, Euro, Yuan or Australian Dollar, there is a positive effect on our results of operations. For Swiss Francs, Canadian Dollars Mexican Pesos and Malaysian Ringgit our primary cash flows relate to product costs or costs and expenses of local operations. Whenever the U.S. Dollar strengthens relative to these foreign currencies, there is a positive effect on our results of operations. Conversely, whenever the U.S. Dollar weakens relative to these currencies, there is an adverse effect on our results of operations.

We have a program in place that is designed to mitigate our exposure to changes in foreign currency exchange rates. That program includes the use of derivative financial instruments to minimize, for a period of time, the unforeseen impact on our financial results from changes in foreign exchange rates. We utilize forward foreign currency contracts to hedge the anticipated cash flows from transactions denominated in foreign currencies, primarily Japanese Yen and Euro, and to a lesser extent Swiss Francs, Australian Dollars, Canadian Dollars and Mexican Pesos. This does not eliminate the volatility of foreign exchange rates, but because we generally enter into forward contracts one year out, rates are fixed for a one-year period, thereby facilitating financial planning and resource allocation. These contracts are designated as cash flow hedges. The final impact of currency fluctuations on the results of operations is dependent on the local currency amounts hedged and the actual local currency results.

Recent Accounting Pronouncements

~~Standards to be Implemented~~

~~Revenue from Contracts with Customers (Topic 606)~~

~~In May 2014, the Financial Accounting Standards Board (FASB) issued ASU No. 2014-09,~~ ~~Revenue from Contracts withCustomers (Topic 606). ASU No. 2014-09 stipulates~~There are currently no recent accounting pronouncements that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, an entity should apply the following steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. ASU No. 2014-09 will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within those reporting periods. Early adoption is permitted for annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period.

~~In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606):~~ ~~Principal versusAgent Considerations (Reporting Revenue Gross versus Net)~~. The purpose of ASU No. 2016-08 is to clarify the guidance on principal versus agent considerations. It includes indicators that help to determine whether an entity controls the specified good or service before it is transferred to the customer and to assist in determining when the entity satisfied the performance obligation and as such, whether to recognize a gross or a net amount of consideration in their consolidated statement of operations. The effective date and transition requirements are consistent with ASU No. 2014-09.

~~In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606):~~ ~~IdentifyingPerformance Obligations and Licensing~~. The guidance clarifies that entities are not required to assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract. ASU No. 2016-10 also addresses how to determine whether promised goods or services are separately identifiable and permits entities to make a policy election

to treat shipping and handling costs as fulfillment activities. In addition, it clarifies key provisions in Topic 606 related to licensing. The effective date and transition requirements are consistent with ASU No. 2014-09.

We have established a cross-functional implementation team consisting of representatives from all of our business units and regions. During fiscal 2017, we began analyzing the impact of the standard on our contract portfolio by reviewing a representative sample of our contracts to identify potential differences that would result from applying the requirements of the new standard. The implementation team has apprised both management and the audit committee of project status on a recurring basis.

We will adopt the new standard on April 1, 2018 using the modified retrospective approach. We have not finalized our assessment of the impact of Topic 606, however we believe our recognition of software revenue will be the most impacted. Software revenue accounts for approximately 8.5% of our total revenue. We continue to analyze performance obligations, variable consideration and disclosures. Additionally, we are monitoring updates issued by the FASB. Upon adopting Topic 606, we will provide additional disclosures in the notes to the consolidated financial statements, specifically related to disaggregated revenue, contract balances and performance obligations. In the fourth quarter of fiscal 2018, we will provide global training to our finance team on Topic 606 and perform a simulation of our new accounting processes and procedures to prepare for adoption of Topic 606. We will require new internal controls to address risks associated with applying the five-step model. Additionally, we will establish monitoring controls to identify new contracts and arrangements that could impact our current accounting assessment. During the fourth quarter of fiscal 2018, we expect to ~~substantially complete our~~have a material impact ~~assessment and initiate efforts to redesign impacted processes, policies and controls.~~

~~Other Recent Accounting Pronouncements~~

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). ASU No. 2016-02 is intended to increase the transparency and comparability among organizations by recognizing lease asset and lease liabilities on the balance sheet, including those previously classified as operating leases under current U.S. GAAP, and disclosing key information about leasing arrangements. ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and is applicable to us in fiscal 2020. Earlier adoption is permitted. The impact of adopting ASU No. 2016-02 on our financial position and results of ~~operations is being assessed by management.~~operations.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flow (Topic 230). The guidance reduces diversity in how certain cash receipts and cash payments are presented and classified in the consolidated statements of cash flows. The guidance is effective for annual periods beginning after December 15, 2017, and is applicable to us in fiscal 2019. Early adoption is permitted. The adoption of ASU 2016-15 is not expected to have a material effect on our consolidated financial statements.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740). The guidance requires companies to recognize the income tax effects of intercompany sales and transfers of assets, other than inventory, in the income statement as income tax expense (or benefit) in the period in which the transfer occurs. The guidance is effective for annual periods beginning after December 15, 2017, and is applicable to us in fiscal 2019. Early adoption is permitted for all entities as of the beginning of an annual reporting period. The impact of adopting ASU No. 2016-16 on our financial position and results of operations is being assessed by management.

In March 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715). The guidance revises the presentation of net periodic pension cost and net periodic post-retirement benefit cost. The guidance is effective for annual periods beginning after December 15, 2018, and is applicable to us in fiscal 2020. Early adoption is permitted for all entities as of the beginning of an annual reporting period. The impact of adopting ASU No. 2017-07 is not expected to have a material effect on our consolidated financial statements.

In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation: Scope of Modification Accounting (Topic 718). The guidance clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. The guidance is effective for annual periods beginning after December 15, 2017, and is applicable to us in fiscal 2019. Early adoption is permitted for all entities as of the beginning of an annual reporting period. The impact of adopting ASU No. 2017-09 is not expected to have a material effect on our consolidated financial statements.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities (Topic 815). The new guidance will make more financial and non-financial hedging strategies eligible for hedge accounting as well as amend the presentation and disclosure requirements and change how companies assess effectiveness. The guidance is effective for annual periods beginning after December 15, 2018, and is applicable to us in fiscal

2020. Early adoption is permitted for all entities as of the beginning of an annual reporting period. The impact of adopting ASU No. 2017-12 on our financial position and results of operations is being assessed by management.

Cautionary Statement Regarding Forward-Looking Information

~~Statements~~

Certain statements that we make from time to time, including statements contained in this Quarterly Report on Form 10-Q and incorporated by reference into this report, ~~as well as oral~~constitute “forward looking-statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.Forward-looking statements ~~we make which are prefaced with~~do not relate strictly to historical or current facts and reflect management’s assumptions, views, plans, objectives and projections about the future. Forward-looking statements may be identified by the use of words such as “may,” “will,” ~~“expect,~~“should,” ~~“anticipate,~~“could,” ~~“continue,~~“would,” ~~“estimate,~~“expects,” ~~“project,~~“plans,” ~~“intend,~~“anticipates,” ~~“designed,~~“believes,” “estimates,” “projects,” “predicts,” “foresees,” “potential” and other words of similar ~~expressions, are intended to identify forward looking statements regarding events, conditions,~~meaning in conjunction with, among other things: discussions of future operations; expected operating results and financial ~~trends that may affect our future plans~~performance; impacts of ~~operations, business~~the COVID-19 pandemic; the Company’s strategy ~~results~~for growth; product development, commercialization and anticipated performance and benefits; regulatory approvals; impacts of ~~operations,~~acquisitions or dispositions; market position and ~~financial position. These~~expenditures.

Because forward-looking statements are based on ~~our~~ current beliefs, expectations and ~~estimates as~~assumptions regarding future events, they are subject to ~~prospective events~~uncertainties, risks and ~~circumstances about~~changes that are difficult to predict and many of which ~~we can give no firm assurance. Further,~~are outside of the Company’s control. Investors should realize that if underlying assumptions prove inaccurate, or known or unknown risks or uncertainties materialize, the Company’s actual results and financial condition could vary materially from expectations and projections expressed or implied in its forward-looking statements. Investors are therefore cautioned not to rely on these forward-looking statements.

The following are some important factors that could cause our actual results to differ from our expectations in any forward-looking ~~statement speaks only as~~statements. For further discussion of these and other factors, see Item 1A. Risk Factors in our most recent Annual Report on Form 10-K.

•The effect of the ~~date~~ongoing COVID-19 pandemic, or outbreaks of communicable diseases, on our business, financial conditions and results of operations, including the time it will take for vaccines to be broadly distributed and accepted in the U.S. and the rest of the world, and the effectiveness of such vaccines in slowing or stopping the spread of COVID-19 and mitigating the economic effects of the pandemic;

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

•Demand for and market acceptance risks for new and existing products, including material reductions in purchasing from or loss of a significant customer;

•Product quality or safety concerns, leading to product recalls, withdrawals, regulatory action by the FDA (or similar non-U.S. regulatory agencies), reputational damage, declining sales or litigation;

•Security breaches of our information technology systems or our products, which could impair our ability to conduct business or compromise sensitive information of the Company or its customers, suppliers and other business partners, or of customers’ patients;

•Pricing pressures resulting from trends toward healthcare cost containment, including the continued consolidation among healthcare providers and other market participants;

•The continuity, availability and pricing of plastic and other raw materials, finished goods and components used in the manufacturing of our products (including those purchased from sole-source suppliers) and the related continuity of our manufacturing, sterilization, supply and distribution;

•Our ability to develop, manufacture and market new products and technologies successfully and in a timely manner and the ability of our competitors and other third parties to develop products or technologies that render our products or technologies noncompetitive or obsolete;

•Our ability to obtain the anticipated benefits of restructuring programs that we have or may undertake, including the Operational Excellence Program;

•The potential that the expected strategic benefits and opportunities from our acquisition of Cardiva and any other planned or completed acquisition or divestiture by the Company may not be realized or may take longer to realize than expected;

•The impact of enhanced requirements to obtain regulatory approval in the U.S. and around the world and the associated timing and cost of product approval;

•Our ability to comply with established and developing U.S. and foreign legal and regulatory requirements, including FCPA, MDR/IVDR and similar laws in other jurisdictions, as well as U.S. and foreign export and import restrictions and tariffs;

•Our ability to meet our debt obligations and raise additional capital when desired on terms reasonably acceptable to us;

•The potential impact of our convertible senior notes and related capped call transactions;

•Our ability to execute and realize anticipated benefits from our investments in emerging economies;

•The potential effect of foreign currency fluctuations and interest rate fluctuations on our net sales, expenses, and resulting margins;

•The impact of changes in U.S. and international tax laws;

•Our ability to protect intellectual property and the outcome of patent litigation;

•Costs and risks associated with product liability and other litigation claims;

•Our ability to retain and attract key personnel; and

•Market conditions impacting our stock price and/or share repurchase programs we may enter into from time to time, and the possibility that such ~~statement is made, and we undertake no obligation to update any forward-looking statement to reflect events~~share repurchase programs may be delayed, suspended or ~~circumstances after the date on which such statement is made. As~~discontinued.

Investors should understand that it is not possible to predict ~~every new factor that may emerge, forward-looking statements~~or identify all such factors and should not ~~be relied upon as a prediction of our actual future financial condition or results.~~

~~These forward-looking statements, like any forward-looking statements, involve~~consider the risks described above and uncertainties that could cause actual results to differ materially from those projected or anticipated. Factors that may influence or contribute to the inaccuracy of the forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation, demand for whole blood and blood components, changes in executive management, changes in operations, restructuring and turnaround plans, the impact of the Tax Cuts and Jobs Act, asset revaluations to reflect current business conditions, asset sales, technological advances in the medical field and standards for transfusion medicine and our ability to successfully offer products that incorporate such advances and standards, product quality, market acceptance, regulatory uncertainties, including in the receipt or timing of regulatory approvals, the effect of economic and political conditions, the impact of competitive products and pricing, blood product reimbursement policies and practices, foreign currency exchange rates, changes in customers’ ordering patterns including single-source tenders, the effect of industry consolidation as seen in the plasma and blood center markets, the effect of communicable diseases and the effect of uncertainties in markets outside the U.S. (including Europe and Asia) in which we operate and other risks detailed under Part II, Item 1A. Risk Factors ~~included in this report, if any, as well as those described~~ in our Annual Report on Form 10-K ~~for the fiscal year ended April 1, 2017.~~to be a complete statement of all potential risks and uncertainties. The ~~foregoing list should~~Company does not undertake to publicly update any forward-looking statement that may be ~~construed~~made from time to time, whether as ~~exhaustive.~~a result of new information or future events or developments.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure relative to market risk is due to foreign exchange risk and interest rate risk.

Foreign Exchange Risk

See the section above entitled Foreign Exchange for a discussion of how foreign currency affects our business. It is our policy to minimize, for a period of time, the unforeseen impact on our financial results of fluctuations in foreign exchange rates by using derivative financial instruments known as forward contracts to hedge anticipated cash flows from forecasted foreign currency denominated sales and costs. We do not use the financial instruments for speculative or trading activities.

We estimate the change in the fair value of all forward contracts assuming both a 10% strengthening and weakening of the U.S. Dollar relative to all other major ~~currencies.~~currencies. In the event of a 10% strengthening of the U.S. Dollar, the change in fair value of all forward contracts would result in a ~~$3.3~~$3.2 million increase in the fair value of the forward contracts; whereas a 10% weakening of the U.S. Dollar would result in a ~~$3.2~~$3.5 million ~~decrease~~decrease of the fair value of the forward contracts.

Interest Rate Risk

Our exposure to changes in interest rates is associated with borrowings onunder our Credit ~~Agreement,~~Facilities, all of which is variable rate debt. Total ~~outstanding~~outstanding debt under our Credit Facilities as ~~December 30, 2017~~of January 1, 2022 was ~~$270.3~~$288.8 million with an interest rate of ~~2.6%~~ 1.9% based on prevailing LIBOR rates. An increase of 100 basis points in LIBOR rates would result in additional annual interest expense of ~~$2.7 million.~~$0.9 million. On ~~December~~August 21, ~~2012,~~2018, we entered into two interest rate swap agreements to effectively convert ~~$250.0~~$241.9 million of borrowings under our Credit Facilities from a variable rate to a fixed rate. ~~The~~These interest rate swaps ~~matured on August 1, 2017.~~are intended to mitigate the exposure to fluctuations in interest rates and qualify for hedge accounting treatment as cash flow hedges.

ITEM 4.CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We conducted an evaluation, as of ~~December 30, 2017,~~January 1, 2022, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively) regarding the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15 of the ~~Securities~~ Exchange ~~Act of 1934 (the “Exchange Act”). Because the material weakness in our internal control over financial reporting for inventory~~Act. Based upon that ~~existed as of April 1, 2017 has not yet been fully remediated,~~evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures ~~were not~~are effective as of ~~December 30, 2017.~~January 1, 2022.

~~We have advised our audit committee of this deficiency~~Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting ~~and~~during the ~~fact~~three months ended January 1, 2022 that ~~this deficiency constitutes a material weakness. A material weakness in internal control over financial reporting is a deficiency,~~have materially affected, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis by our internal controls.

~~Because a material weakness was determined~~are reasonably likely to exist, we performed additional procedures to ensure our consolidated financial statements included in this quarterly report on Form 10-Q are presented fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States.

~~We have undertaken steps to strengthen our controls over accounting for inventory, including:~~

~~Increasing oversight by our management in the calculation and reporting of certain inventory balances;~~

~~Enhancing policies and procedures relating to account reconciliation and analysis; and~~

~~Strengthening communication and information flows between the inventory operations department and the corporate controller's group.~~

~~As we continue to evaluate and work to improve~~materially affect, our internal control over financial reporting, management may determine that it is necessary to take additional measures to address control deficiencies or may determine that it is necessary to modify the remediation plan described below. The operation of the control change will need to be observed for a period of time before management is able to conclude that the material weakness has been remediated. If not remediated, this material weakness could result in a material misstatement to our consolidated financial statements. Management continues to monitor implementation of its remediation plan and timetable and believes the efforts described below will effectively remediate the material weaknesses.reporting.

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-a5(f). The Company’s internal control system was designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the preparation and fair presentation of published financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

~~Changes in Internal Controls~~

Except as noted in the preceding paragraphs, there has not been any change in our system of internal control over financial reporting during the quarter ended December 30, 2017 that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

Information with respect to this Item may be found in Note ~~11,~~ 13, Commitments and Contingencies to the Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

~~Item 1A.~~ ~~Risk Factors~~

~~Except as set forth below and in “Part II,~~ Item 1A. Risk ~~Factors” of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, there~~Factors

There are no material changes from the Risk Factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended April ~~1, 2017.~~3, 2021.

Our stock repurchase program could affect the price of our common stock and increase volatility and may be suspended or terminated at any time, which may result in a decrease in the trading price of our common stock.

On February 6, 2018, we announced that our Board of Directors authorized the repurchase of up to $260 million of our outstanding common stock through March 30, 2019. Under the stock repurchase program, the Company is authorized to repurchase, from time to time, outstanding shares of common stock in accordance with applicable laws both on the open market and in privately negotiated transactions. The actual timing, number and value of shares repurchased will be determined by the Company at its discretion and will depend on a number of factors, including market conditions, applicable legal requirements and compliance with the terms of loan covenants. The stock 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. Repurchases pursuant to our stock repurchase program could affect our stock price and increase its volatility. The existence of a stock repurchase program could also cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our common stock. There can be no assurance that any stock repurchases will enhance stockholder value because the market price of our common stock may decline below the levels at which we repurchased shares of common stock. Although our stock repurchase program is intended to enhance long-term stockholder value, short-term stock price fluctuations could reduce the program’s effectiveness.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The Company has an Employee Stock Purchase Plan (the “Purchase Plan”) under which a maximum of 3,200,000 shares (subject to adjustment for stock splits and similar changes) of common stock may be purchased by eligible employees. Substantially all of our full-time employees are eligible to participate in the Purchase Plan.None.

The Company previously filed a registration statement on Form S-8 covering the offering of up to 1,400,000 shares of our common stock pursuant to the Purchase Plan. In January 2018, the Company discovered that it inadvertently failed to register on Form S-8 the remaining 1,800,000 shares of common stock available under the Purchase Plan, which our shareholders had authorized for issuance under the Purchase Plan in July 2016. As a result, 45,661 shares have been issued to eligible employees under the Purchase Plan that were not registered on Form S-8. Specifically, the Company on April 30, 2017 sold 470 shares to eligible employees at a price of $28.18 per share and on October 31, 2017 sold 45,191 shares to eligible employees at a price of $36.32 per share, for an aggregate purchase price of approximately $1.7 million. No commissions or other fees were paid in connection with the sales of these shares. The proceeds of these sales were used for general working capital purposes.

The Company has determined that the offer and sale of these shares were not exempt from registration under the Securities Act, and on February 5, 2018 the Company filed a Form S-8 with the Commission to register the 1,800,000 additional shares of common stock issuable under the Purchase Plan. Nonetheless, the Company may be subject to civil and other penalties by regulatory authorities as a result of the failure to register, and the previously outstanding unregistered shares may be subject to rescission rights equal to the purchase price paid for such shares plus interest from the date of purchase. Based on the Company’s current stock price, we do not expect that shareholders will exercise such rescission rights and, if such rescission rights were exercised, we do not believe that any liability for such rescission would be material to our consolidated financial position, results of operations or cash flows.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. ~~[Removed and Reserved]~~Other Information

Not applicable.

Item 6. Exhibits



3.1	Restated Articles of Organization of the Company, reflecting Articles of Amendment dated August 23, 1993, August 21, 2006, July 26, 2018 and July 25, 2019 (filed as Exhibit 3.1 to the Company’s Form 8-K dated July 29, 2019 and incorporated herein by reference).

3.2	By-Laws of the Company, as amended through June 29, 2020 (filed as Exhibit 3.1 to the Company’s Form 8-K dated June 30, 2020 and incorporated herein by reference).

10.1*	Fourteenth Amendment to lease dated July 17, 1990, made as of November 11, 2021 by and between Buncher Company and the Company for property located in Leetsdale, Pennsylvania (1).

10.2*	CFO Retention and Transition Agreement, dated as of November 8, 2021, by and between the Company and William P. Burke (2).





31.1*		Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002, of Christopher A. Simon, President and Chief Executive Officer of the ~~Company~~Company.

31.2*		Certification pursuant to Section 302 of Sarbanes-Oxley of 2002, of William Burke, Executive Vice President, Chief Financial Officer of the ~~Company~~Company.

32.1**		Certification Pursuant to 18 United States Code Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Christopher A. Simon, President and Chief Executive Officer of the ~~Company~~Company.

32.2**		Certification Pursuant to 18 United States Code Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of William Burke, Executive Vice President, Chief Financial Officer of the ~~Company~~Company.

101**		The following materials from Haemonetics Corporation on Form 10-Q for the quarter ended ~~December 30, 2017,~~January 1, 2022 formatted in inline Extensible Business Reporting Language (XBRL); includes: (i) Condensed Consolidated Statements of ~~(Loss)~~ Income and Comprehensive ~~(Loss)~~ Income, (ii) Condensed Consolidated Balance Sheets, (iii) Condensed Consolidated Statements of Cash Flows, and (iv) Notes to Condensed Consolidated Financial Statements.

104*	Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101).

~~_____________________________~~





*						Document filed with this report.

**						~~In accordance~~Document furnished with ~~Rule 406T~~this report.

(1)						Certain portions of ~~Regulation S-T,~~this exhibit are considered confidential and have been omitted as permitted under SEC rules and regulations.

(2)						Agreement, plan or arrangement related to the ~~XBRL-related information in Exhibit 101 to this Form 10-Q is deemed not filed~~compensation of officers or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act, is deemed not filed for the purposes of section 18 of the Exchange Act, and otherwise is not subject to liability under these sections.directors.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			HAEMONETICS CORPORATION
February 8, 2022			By:	/s/ Christopher A. Simon
			��	Christopher A. Simon, President and Chief Executive Officer
				(Principal Executive Officer)

February 8, 2022			~~HAEMONETICS CORPORATION~~By:
~~2/6/2018~~	~~By:~~	~~/s/ Christopher Simon~~
		~~Christopher Simon,~~ ~~President and Chief Executive Officer~~
		~~(Principal Executive Officer)~~

~~2/6/2018~~	~~By:~~	/s/ William Burke
				William Burke, Executive Vice President, Chief Financial Officer
				(Principal Financial Officer)



	December 30, 2017			April 1, 2017
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	251,591		$	139,564
Accounts receivable, less allowance of $2,209 at December 30, 2017 and $2,184 at April 1, 2017	146,718			152,683
Inventories, net	158,840			176,929
Prepaid expenses and other current assets	32,564			40,853
Total current assets	589,713			510,029
Property, plant and equipment, net	330,026			323,862
Intangible assets, less accumulated amortization of $240,851 at December 30, 2017 and $215,772 at April 1, 2017	163,946			177,540
Goodwill	211,086			210,841
Deferred tax asset	4,510			3,988
Other long-term assets	12,433			12,449
Total assets	$	1,311,714		$	1,238,709
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable and current maturities of long-term debt	$	151,465		$	61,022
Accounts payable	41,496			42,973
Accrued payroll and related costs	63,066			43,534
Other liabilities	68,151			63,650
Total current liabilities	324,178			211,179
Long-term debt, net of current maturities	118,702			253,625
Deferred tax liability	6,428			12,114
Other long-term liabilities	39,599			22,181
Total stockholders’ equity
Common stock, $0.01 par value; Authorized — 150,000,000 shares; Issued and outstanding — 53,388,089 shares at December 30, 2017 and 52,255,495 shares at April 1, 2017	534			523
Additional paid-in capital	525,877			482,044
Retained earnings	323,608			289,916
Accumulated other comprehensive loss	(27,212		)	(32,873		)
Total stockholders’ equity	822,807			739,610
Total liabilities and stockholders’ equity	$	1,311,714		$	1,238,709



(In thousands)	2018 Program			2017 Program			Total
Balance at April 1, 2017	$	—		$	7,468		$	7,468
Costs incurred, net of reversals	28,607			1,055			29,662
Payments	(296		)	(5,405		)	(5,701		)
Balance at December 30, 2017	$	28,311		$	3,118		$	31,429



(In thousands)	Location in Balance Sheet	As of		As of
(In thousands)	Location in Balance Sheet	December 30, 2017		April 1, 2017
Derivative Assets:
Designated foreign currency hedge contracts	Other current assets	$	335	$	1,645
Non-designated foreign currency hedge contracts	Other current assets	108		218
Designated interest rate swaps	Other current assets	—		64
		$	443	$	1,927
Derivative Liabilities:
Designated foreign currency hedge contracts	Other current liabilities	$	1,315	$	894
Non-designated foreign currency hedge contracts	Other current liabilities	146		72
		$	1,461	$	966



	As of December 30, 2017
(In thousands)	Level 1		Level 2		Total
Assets
Money market funds	$	164,409	$	—	$	164,409
Designated foreign currency hedge contracts	—		335		335
Non-designated foreign currency hedge contracts	—		108		108
	$	164,409	$	443	$	164,852
Liabilities
Designated foreign currency hedge contracts	$	—	$	1,315	$	1,315
Non-designated foreign currency hedge contracts	—		146		146
	$	—	$	1,461	$	1,461

	As of April 1, 2017
	Level 1		Level 2		Total
Assets
Money market funds	$	80,676	$	—	$	80,676
Designated foreign currency hedge contracts	—		1,645		1,645
Non-designated foreign currency hedge contracts	—		218		218
Designated interest rate swaps	—		64		64
	$	80,676	$	1,927	$	82,603
Liabilities
Designated foreign currency hedge contracts	$	—	$	894	$	894
Non-designated foreign currency hedge contracts	—		72		72
	$	—	$	966	$	966