Haemonetics Annual Report 2011

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FY2011 Annual Report · Haemonetics

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2011 A nnuAl report

Integrated solutions for
blood management

Product line diversity

Geographic diversity

Consumable sales create
recurring revenue stream

Software Solutions
$67M

Plasma
$227M

Platelet
$156M

Equipment
$58M

Diagnostics
$19M

OrthoPAT
$36M

Surgical
$67M

Red Cell
$47M

Software
Solutions
10%

Equipment
8%

Consumables
82% of sales

North America
$317M

Europe
$188M

Japan
$110M

Asia
$61M

Welcome

compAny profile

Haemonetics began its odyssey of
success in 1971 with devices and consumables
which changed the way blood was collected
and processed at plasma and blood collection
centers, as well as in the surgical suite. As we
created virtually every market we’ve entered,
Haemonetics has earned a reputation for
innovation, technical expertise, quality and
operational excellence. As industry needs have
changed, we have evolved from a medical
device company focused on blood processing
systems to our current position as The Global
Leader in Blood Management Solutions.
In our expanded leadership role,

Haemonetics helps plasma fractionators, blood
collectors, and hospitals improve healthcare
and lower costs by optimizing the collection,
processing and use of scarce blood resources.
The Company’s broad product offerings
includes blood collection and separation
technologies, surgical blood salvage systems
and diagnostic products for enhanced blood
management in surgery. The Company also
markets information technology platforms and

consulting services to help manage the blood
supply chain in commercial plasma centers,
blood centers, and hospitals as well as to audit
and improve blood management practices.
Our mission is to leverage our devices,

information technology platforms, and consulting
services to advance the safety, quality and
availability of the world’s blood supply, while
improving patient care and lowering healthcare
costs. So as healthcare systems around the
world seek to ensure the best patient care at
optimal cost, our vision for blood management
is both timely and relevant. This vision has
reinforced our reputation and brand leadership
in the transfusion industry.

Haemonetics is publicly traded under
the symbol “HAE” on the New York Stock
Exchange. We employ more than 2,300
people in 21 countries and market in over 80
countries. Over 80% of revenues come from
single-use consumables used with our devices.
Approximately half our revenues are derived
from North America.

A legacy of innovation
and commitment to
our beneficiaries

In 1971, Haemonetics founder Jack Latham had a
vision to bring together a commitment to quality
and customer service with innovation in building
a company to produce blood fractionation
devices. As Haemonetics celebrates its 40th
anniversary, we remember Latham, who died at
the age of 95 in 2003, and continue to grow our
company based on his key corporate values.

Latham began his company by manufacturing

and selling one perfectly designed component
for a new blood collection device: a centrifuge
disposable called the “Latham Bowl” that
could automate the separation of blood. He
constructed his company’s values on the belief
that blood was a medical drug that needed to be
respected and missteps in that regard caused
considerable harm to patients. At the core of
these values was his commitment to protecting
patient’s safety.

The Latham Bowl technology merged expert
engineering with the ground-breaking scientific
discoveries of Dr. Edwin Cohn, a protein
chemist and Harvard Medical School professor,
who in the 1930s, pioneered techniques for
fractionating blood to isolate the serum albumin
protein from plasma, a discovery that led to a
revolution in the blood community. Latham knew
the dangers patients can experience with whole
blood transfusion, understood the potential of
transfused fractionated blood products to help
minimize those risks, and trusted his device
would make this possible on a large scale for
the benefit of patients everywhere. With that
drive, he laid the foundation of what would
become Haemonetics Corp.

“Right from the start we have striven to
maintain excellence in the quality of everything
we ship,” Latham wrote in an address to
employees during the early 1980s. “And we
have striven equally hard to maintain excellence
in the quality of our service. It will always be
imperative that we make and do everything right
the first time.”

Since the early days of Latham toiling in
his workshop, Haemonetics has carried on
his legacy with a commitment to innovation
and to its customers and their beneficiaries
that has grown this company into a $677
million global business that employs 2,300
people worldwide.

In the years since Haemonetics’ first devices

were manufactured and began changing
the lives of patients around the country, the
company has experienced three major growth
periods. In 1972, looking to expand significantly
the customer base of blood banks, then CEO
Gordon Kingsley demonstrated an intrepid
spirit when he embarked upon a European
tour to blood banks in England, Germany,
France, Sweden, The Netherlands and Italy.
Haemonetics’ global market was launched, and
in a very short time, the international division
of the company would make up 25 percent of
its business.

Always focusing on innovation, in 1975,

Haemonetics made its next major step in
its future direction with the launch of the
Cell Saver® product, a device that helped
change surgery forever, because it allowed
a patient’s own red blood cells, lost during

2006 and 2010 Haemonetics acquired Infonale,
Haemoscope, Altivation, Neoteric and Global
Med, forever changing its previous device
legacy and positioning the company to become
THE Global Leader in Blood Management
Solutions for its customers. Today, as it enters
its fifth decade, Haemonetics is poised to
transform the practice of blood management
globally. Every stop along the blood supply
chain can benefit from enhanced systems
that result in improved patient outcomes and
reduced costs, all while maintaining the utmost
respect and value for this most precious of

Today, as it enters its fifth
decade, Haemonetics is poised
to transform the practice of
blood management globally.

resources. Cutting-edge, fully integrated
technology platforms are driving this evolution
along with data-driven analysis and critical
strategic thinking, and Haemonetics is at the
helm, providing the superior product delivery
and expert consultation services to achieve
this transformation around the world.

“I know this vision is what’s right for this
industry,” says current CEO Brian Concannon.
“I know it in my heart.”

and after surgery, to be cleaned and prepared
for transfusion back into the patient. At this
juncture, Haemonetics expanded its service
beyond selling blood collection devices just to
blood banks to selling surgical blood salvage
devices to hospitals. This growth into the
hospital market expanded Haemonetics’ scope
to include the entire continuum of blood—from
the arm of the donor to the arm of the patient—
which in later years would lead to a major shift
in the company’s growth strategy.

While the next two decades of Haemonetics

were marked by mergers with other corporations
and a bold and successful move to buy back
the company—a process completed in 1985—
these years were also defined by rapid growth
and development.
A strategic acquisition in 2001 opened
a new door into the world of software
applications. An integrated solution selling
approach working with our commercial plasma
customers shed the light on an advanced
partnership approach whereby the company
began to evolve from a maker and seller
of medical devices to one that helped its
customers develop comprehensive solutions
to improving their overall operations. Between

thereby allowing them to choose the solutions
that best fit their needs… solutions that
Haemonetics can provide. We’ll talk more about
this in a moment.

For several years now, we have told you
about our two strategies: leverage the business
to improve profitability and expand the business
by leveraging our core competencies. These
strategies have served us well and are the
compass that continues to guide us today.

Despite the economic challenges we faced

and the headwind of one additional week in
fiscal 10, we saw solid revenue growth of 5%
led primarily by acquisitions and growth in the
emerging markets. Emerging markets represents
a $100 million business that continues to grow
double digits. We successfully completed the
integration of the four acquisitions we made in
fiscal 10, led by the largest acquisition, Global
Med Technologies. Our software solutions
business at almost $70 million in revenue is an
important enabler of our blood management
solutions as customers seek ways to access
their blood use information. The strategic
acquisitions that we have made to build out this
important capability are now paying dividends.

Haemonetics has developed a
unique suite of blood management
solutions that can be customized
to meet the specific needs of our
customers.”

Our commitment to improved profitability
also remains unchanged. Adjusted gross and
operating margins increased 20 and 70 basis
points respectively. We leveraged 5% revenue
growth to 9% adjusted operating income growth,
and $3.27 in adjusted earnings per share, a 15%
increase, representing 8 straight years of double
digit growth in adjusted earnings per share.
Our cash position also remains strong.
We drove $93 million in free cash flow in
the year before funding $15 million in cash
transformation costs. We also completed a $50
million share repurchase. We finished fiscal 11
with nearly $200 million in cash. Our strong
cash position provides us with the flexibility
to pursue further strategic acquisitions
that strengthen our market leading blood
management position.

Brian Concannon
President & CEO

Sh a reh o lder le tter

The global ouTlook for many of the world
economies began to improve in 2010, but this
improvement is relative depending on where one
sits. For Haemonetics, it is really a tale of two
cities. For the second year in a row, we witnessed
declines in the demand for blood and blood
products, driven by weaker demand for elective
surgeries. This clearly had a negative impact on
our business. However, our customers continue
to look for ways to drive savings in light of this
pressure, while improving clinical outcomes
for the patients they serve. This had a positive
impact on our business because Haemonetics has
developed a unique suite of blood management
solutions that can be customized to meet the
specific needs of our customers.

Today, 197 customers have implemented
Haemonetics’ IMPACT® program, our branded
approach to implementing blood management
solutions. As the only company in the world
that serves both the demand side of blood—
hospitals—and the supply side of blood—blood
centers—we are able to serve the entire blood
supply chain and address the problems that
challenge our customers today. We are well
positioned to help our customers understand
their blood needs by providing them with better
visibility to blood management information,

Eight years ago, we began this journey with our
number one objective being to create shareholder
value. During this time, we have achieved
compounded annual growth rates of 9% in
revenue, 19% in adjusted operating income,
and 18% in adjusted earnings per share. These
are impressive trends for any company, especially
one leading a transformation of an industry
during one of the most turbulent economic times
in recent history. We have set high standards for
ourselves and our commitment to this objective
remains unchanged.

Our BlOOd ManageMent VisiOn
Our blood management vision was founded
in the success of our Plasma business. The
acquisition of 5D in December, 2001 provided
us with the capability to provide our customers
with the software solutions they required
to better understand their business and to
implement the changes necessary to optimize
their operations. Five years ago, Haemonetics
Plasma market share was approximately 40%.
Today, our market share exceeds 70%. Our
success was based on our ability to analyze our
customers’ business to better understand their

challenges, and to address these challenges
by implementing customized solutions using
software, services, and devices and disposables
in combination.

This success led us to believe that we could

do the same for our blood center and hospital
customers. Clearly, this represents a more
complex environment. Undeterred, we set a
path to build out the necessary requirements
focused on providing our customers with
the information technology, devices and
disposables, and services that would reduce
costs, enhance patient safety, and improve
clinical outcomes. This was a bold step
forward but worth the effort. Today, we have
the broadest portfolio of blood management
products available in the industry.

We have made great progress with the
internal development of products and we will
launch our newest cell salvage device, the Cell
Saver® Elite,™ in fiscal 12. We have made a
number of key, strategic acquisitions that have
broadened our portfolio of products, such as the
TEG® analyzer and BloodTrack® software suite.
And the acquisition of Global Med Technologies
provided us with the final pieces necessary to

Shareholder let ter

Consider a future where blood
is stored and maintained at
the point of care in hospitals,
where the use of that blood
is electronically recorded and
transmitted to the blood center
supplying the blood, and where
billing and resupply are based
on the electronic exchange of
data between the hospital and
blood center.”

build out the “information highway” between
our blood centers and hospitals.

our customers in ways that will enhance their
business well into the future.

Consider a future where blood is stored and

The first of these is our Automated Whole

maintained at the point of care in hospitals,
where the use of that blood is electronically
recorded and transmitted to the blood center
supplying the blood, and where billing and
resupply are based on the electronic exchange
of data between the hospital and blood center.
Consider as well a donor who is electronically
thanked for the donation they provided that
saved a life, where that donor is then asked
to electronically sign up to donate again at a
mobile drive convenient to them, and where
the blood products collected at that mobile
drive are determined based on the current blood
inventories electronically monitored by the
blood center for the hospitals they serve.
That future is within our grasp and

Haemonetics is taking the steps to build these
capabilities for our customers today. It is a
bold vision! But the end is in sight. We have
developed or acquired the necessary pieces
to implement our vision. And we will not
stop there. Today, we continue to develop
additional products and services that will serve

Blood Collector, which will be a suite of
products designed to automate the current
manual collection of whole blood. This is a
large market opportunity where we have a
minimal presence today. We intend to enter
this market late in fiscal 13 with an “entry
level” floor automation product suite focused
on data capture and enhanced collection, which
will impact the work flows and quality of
both the data and blood products from mobile
collections. Development of our automated
whole blood collector is concluding this quarter
and it will remain an experimental device until
the completion of the NDA of our whole blood
disposable in 2014. We will continue to review
options that will allow us to bring this suite of
products to market as rapidly as possible.

We also continue to make good progress
with regard to blood typing, the next product
under development that will allow us to expand
our position in blood management. On the
basis of lab results, we now believe that we
will be able to achieve our goal of forward and

Financial highlights

Cash flow from operations

strong balance sheet funds growth

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debt

Cash / short term investments

reverse ABO and RhD typing and screening for
adverse anti-bodies in less than 10 minutes. A
device to demonstrate the accuracy and speed
of testing will be completed in July of this year
to be used in a definitive feasibility trial in a
clinical setting, head to head with existing FDA
approved technologies. A read out of our results
is planned for early October. As we move from
the lab into a clinical setting, we are actively
reviewing our options for commercializing this
truly revolutionary device.

Our BlOOd ManageMent sOlutiOns
are WOrking
Now that you’ve had a glimpse of the future,
let’s take a moment to reflect on what we
are doing today to help our customers better
manage their blood management needs. At
the beginning of fiscal 10, we launched our
IMPACT program, which is our branded
selling approach to bringing customized blood
management solutions to our customers. We
have enjoyed great success with this approach
over the last two years.

At the end of fiscal 11, 197 accounts are
engaged in our IMPACT program, and these

accounts are enjoying the benefit of reduced
costs associated with blood, enhanced patient
safety, and improved clinical outcomes.
You will see testimonials from some of
our customers throughout this report. And
Haemonetics has also benefited as well. Of
the 197 accounts, 115 are North American
Patient accounts and these accounts combined
are growing 25% year over year. Clearly this
represents a win-win for Haemonetics
and our customers.

We expanded the IMPACT program into

Europe at the beginning of this fiscal year. At
the end of fiscal 11, Europe had 62 customers
engaged in the IMPACT program with equally
impressive results. These 62 accounts grew 14%
over prior year.

We have also take steps to further automate

our IMPACT program with the launch of our
web based IMPACT™ Online software in
late fiscal 10. IMPACT Online is a web-based
business intelligence portal that provides
customers access to their own blood use
information in a friendly, easy to use format
that allows these customers to track and
monitor results, ensure efficiency, adjust

Shareholder let ter

Eight years of growth

strong operating and gross margin growth
over 8 years

8 Year Compounded annual growth

23%

21%

18%

15%

12%

2003

2011

revenue

gross Profit

Operating
income

ePs

gross Margin

Operating Margin

60%

50%

40%

30%

20%

10%

Finally, I want to thank our shareholders and
our customers for the support and confidence
you have shown in Haemonetics. I also want
to thank our Board of Directors for the strong
leadership and guidance that they continue to
provide. And I want to thank our employees
who have shown tremendous courage and
willingness to change as we have transformed
your company into The Blood Management
Company.™ We still have much work left to
do but we have the right team in place to get
the job done. That is why I believe that our
brightest years still lie ahead of us.

Sincerely,

Brian P. Concannon
President & CEO

Haemonetics has developed
a unique suite of blood
management solutions that
can be customized to meet the
specific needs of our customers.”

processes rapidly, and plan for the future. We
will also continue to enhance this product. With
the release of version 3.0 this past April, the
IMPACT Online portal now provides customers
with benchmarking dashboards, enhanced drill-
down capabilities, and additional infection and
complication metrics.

We Must COntinue tO innOV ate
We have made great progress but there still is
much work to do. Our first 40 years have seen
us invent new technologies and create new
markets in apheresis and cell salvage. We have
transformed ourselves from a niche medical
device manufacturer to the leading blood
management company in the world today. The
next phase of our history will see us leverage
that strength and experience in working with
our customers to further transform their blood
management practices.

We will focus on the future but we must
also take care of our customers’ needs today. In
addition to launching the Cell Saver Elite, our
next generation cell salvage device, we are also
working on enhancements to our OrthoPAT®
and cardioPAT® products, several improvements

to our Plasma and Platelet platforms, and we
are currently implementing and will shortly go
live with the first installation of a new donor
management software product for community
blood banks. While we focus on the future,
we will not lose sight of the present and the
obligations we have to serve our customers’
needs as they are defined today.

As the leader in our space, this is something

that we embrace. Our focus on transformation
is planned to generate revenue growth rates that
will accelerate from mid-single digits today to
double digits as we enter the whole blood market.
We expect to continue to improve profitability
expanding both gross and operating margins over
the next five years, giving us confidence that we
will enjoy double digit compound average growth
rates for operating income and earnings per share
in the range of 12-15%. This is consistent with
our past performance.

Before closing, I want to take this opportunity

to welcome Rich Meelia back to our board
of directors serving as our Chairman. His
exceptional leadership, proven record of driving
transformational change in healthcare, and his
past experience at Haemonetics makes him
the ideal person to lead our board during this
important time in our history.

Our vision

tranSform blood management

blood and blood producTs are
precious commodities and are often crucial
to survival for the patients who need them.
Patients who receive blood transfusions or
who rely on plasma-derived pharmaceuticals
depend on a variety of complex factors all
working in concert: availibility of blood donors,
effective and efficient collection processes at
mobile blood drives and collection centers, and
skill in matching the correct blood-type and
having the right kind and the right amount of
blood available in the hospital when needed.
errors or missteps at any juncture in this
process can lead to injury and infection or
worse, as well as unnecessary costs. the need
for expert blood management along the entire
blood supply chain is critical to our system of
health care delivery.

Haemonetics is the industry leader in blood
management. For over 40 years, we have
led innovation in this field, developing and
marketing the very first tools for fractionating
blood into its most useable components at
the time of donation. in the years since our
founding, we have continued to innovate as
well as acquire the best in blood devices and
technologies to maintain and strengthen our
leadership position, continually looking toward
how to improve the management of blood on a
global basis.

in the past two years, we have continued
to invest significantly in core technologies and
have made several strategic acquisitions that
have enabled us to further develop our vision
to transform blood management. We work
closely with customers to significantly improve

We will continue to innovate and
develop new technologies to serve our
customers’ blood management needs for
the future. that’s what they expect from
The Blood Management Company…”
— Brian P. Concannon,
President and CEO

Our company firmly believes that blood is a
meaningful opportunity and one which hospitals
are now rightfully focused. We know that
when blood is managed and used effectively,
patients have better outcomes and hospitals
save money. that is why we are so committed
to working with our customers to transform the
practice of blood management.

the way blood is collected, transported and
stored, and ultimately distributed to the
patient in the hospital. With the integration
of the most advanced blood and plasma
collection devices, blood tracking, storage,
and management software and hardware,
and individually tailored and data-driven
consultative services, Haemonetics develops
systems and solutions that manage blood
and plasma at every step in the blood supply
chain, from donor to patient.

Our commitment is to improve patient safety

and reduce costs for our clients. these are
both accomplished simultaneously. good blood
management results in improved efficiencies,
fewer complications with transfusion and
therefore fewer infections and shorter hospital
stays, which saves costs while improving quality.

achieving our vision

integrated Soluti onS

aT haemoneTics, we learn from our
customers. as our customers integrate our
products and services to fundamentally
change and improve their businesses, our
own understanding of how to transform blood
management will evolve to the benefit of our
customers. Core to our mission is improving
patient safety and reducing health care costs.
By working closely with our customers to help
them achieve those same goals, we advance
our own mission.

We accomplish this by listening to what our
customers need and then developing powerful
integrated solutions to meet those needs.
We start with iMPaCt Consulting, a
diagnostic approach that analyzes individual
data points within a customer’s practice to
gauge where improvements can be made. We

then develop a tailored solution that aligns
directly to those data points and employs
the appropriate set of integrated hardware,
software, and consultative services that improve
and can ultimately transform their blood
management processes.

in our efforts to fundamentally transform

blood management, we are creating an
unbroken link from blood donor to patient.
We think of this as “arm to arm”® blood
management and Haemonetics is the global
leader in offering solutions for enhancing and
improving every step in this chain. Haemonetics’
suite of powerful tools is creating that link.
We have the broadest product offerings in
the industry from the MCs® brand system
of apheresis that offers protocol flexibility to
optimize collections from the ever-shrinking

While we focus on the future, we
will not lose sight of the present and
the obligations we have to serve
our customers’ needs as they are
defined today.”
— Brian P. Concannon
President and CEO

implemented at several leading hospitals. We
also provide our clients with tools to monitor the
impact of their implementations and continue
to work with them to improve their patient
outcomes.

With every improvement our customers make

in their blood collection, storage, or transfusion
processes, we continue to learn and improve our
own approaches and thus advance our mission
to transform blood management.

donor pool to an integrated software platform
that uses barcode scanning to track a unit of
blood across the entire blood supply chain from
collection to the surgical suite to the patient.
the result is a blood supply that meets demand
without waste, improves patient safety and
lowers costs for every participant along the
entire blood continuum.

Finally, we are continually researching new
acquistion opportunities to expand and enhance
what we can offer to our customers. We also
continue to develop products internally, and
to leverage existing products into expanded
uses. an example from this past year is the
iMPaCt Online portal, a web based information
technology platform to track blood use,
related outcomes and best practices in blood
management that has been successfully

maintaining tr uSt

Patients prescribed a plasma-derived biopharmaceutical trust
their lives to that medicine. these drugs must be of the highest
quality and available when patients need them. Haemonetics
delivers comprehensive full-service plasma collection solutions
that maintain this crucial supply of plasma.

our full suiTe of products and services
provides robust capabilities to efficiently
manage and support the processes employed
in the collection of plasma for production of the
plasma-derived drugs.

incorporating powerful software tools for

supply chain management, customer order
entry, integrated donor Management systems,
along with excellent customer service,
Haemonetics helps to ensure an uninterrupted
supply of these life-saving blood products.

Plasma collectorsPlasma management:Plasma collectorsPlasma management:Our customers trust the integrity of their
relationship with Haemonetics. We work together
to identify opportunities to improve the collection
process and develop solutions that meet their
needs today and tomorrow. they can count on us.”
— Steve Swenson, Vice President and

General Manager, Global Plasma Business

Donor Management System (DMS®)
Software
dMs™ is Haemonetics system of record in
plasma collection centers. By linking our Plasma
donor Management system to the customer’s
enterprise resource planning software,
Haemonetics automates the ordering, shipping,
inventory management, and payment for the
products used by plasma collection companies.

Comprehensive solutions

PCS®2 with EXPRESS™ software
the new standard in plasma donation systems,
used to automate separation of plasma from
other blood components and return those
components to the donor. eXPress is a new
software for the PCs2 with an intelligent algorithm
that contributes to a reduction in overall donation
time and an improved donor experience.
GHX® HealthCare Supply Chain Solutions
Our use of gHX automates transaction
communications with our trading partners to
simplify supply chain management. this saves
cost, reduces errors, and results in a reliable
supply of plasma disposables.

optimizing op portuni ty

the first stop in the blood supply chain is the blood collection
center. developing solutions for these customers has been
at the historical core of Haemonetics’ business. Forty years
ago, our company was founded on engineering and marketing
devices that improved blood collection.

Today, we continue to enhance this mainstay
of our business. While hospitals are increasingly
implementing blood management practices
and managing within tightening budgets,
blood centers are faced with the challenge of
collecting blood products as efficiently and
cost-effectively as possible.

Haemonetics offers comprehensive

solutions to blood collection centers to respond
to this changing environment. incorporating
iMPaCt Consulting, Haemonetics works
closely with blood centers to understand
individual needs and concerns. using a wealth
of powerful software tools and consulting
services, Haemonetics helps blood centers
align their collection practices with market
demand. this enables blood centers to more
effectively collect those blood types that are
most needed as well as specific components—

such as red cells and platelets. We help centers
convert donors from whole blood collection to
apheresis collection, which separates whole
blood into its useful components directly as
the blood donor is connected to the device.
We also offer blood centers consulting services
that show these customers how to align their
collection program with the changing needs of
hospital customers, improve their operational
efficiency, and contain costs and retain their
existing donor base while continuing to attract
new donors.

throughout our entire history, Haemonetics

has understood the fundamental importance
of safe and efficient blood collection and is
committed to helping blood centers improve
and maintain their crucial role in ensuring a safe
blood supply. Our mission to transform blood
management begins here.

Blood collectorsblood ManageMent:We help our blood centers be part of the solution.
While the demand for blood is down, we work with our
blood centers bringing customized blood management
solutions to their hospital customers while also
supporting their blood collection optimization.”

— Jan Conneely, Vice President,
North America Donor Sales

improvemenT in acTion in 2010, Haemonetics demonstrated our commitment to
enhancing the process of blood collection by helping one of our blood center customers
in Billings, Montana execute the transition from conducting mulitple blood drives in
remote areas that resulted in a limited number of useable collections to a more effective
system of fewer drives in more densely populated areas that yielded more units of blood
types that were needed most. this blood center is now operating more effectively and in
a manner that delivers a more useable, cost effective product to their area hospitals.

integrated solutions

IMPACT Consulting
Haemonetics is committed to understanding
our clients’ needs, developing individually
tailored solutions and making blood centers
more efficient.
MCS Apheresis
Haemonetics technology that separates whole
blood into blood components.
ACP215 Processing
an automated cell processing system that
enables blood collectors and hospitals to freeze
red cells, and then thaw them when needed so
that they can maintain a frozen blood reserve.

Recruitment Programs
Haemonetics offers a broad array of
recruitment training programs to help blood
centers recruit and retain enthusiastic drive
sponsors as well as those donors that have the
blood types most in demand.
Hemasphere,® eDonor,® Surround,™
ElDorado® Donor, DonorDoc,® and
EdgeBlood™
Haemonetics software that blood centers use
to optimize blood collection and collection
processes, donor management, lab processes,
and traceability of patient transfusions.

enSuring Safet y

Blood Management starts and finishes
at the hospital. Our vision transforms
supply chain effectiveness along the entire
continuum as well blood use practices
within the hospital.

driven by Two main goals—to improve
patient safety and to help our customers
save money—Haemonetics offers a range of
blood management solutions that significantly
improve the hospital’s systems for acquiring
blood, storing it in the hospital, and dispensing
it efficiently and correctly.

Central to this suite of products is the
Bloodtrack platform, a highly sophisticated
set of hardware and software that incorporates
barcode-scanning technology to track a unit of
blood throughout the hospital from its arrival to
the moment it is transfused into a patient. Bar-
coded units are stored in a smart refrigerator
in the hospital called a Hemosafe.™ the coded
unit is entered into an electronic inventory that
monitors the date of its arrival, thus ensuring

that each unit’s expiration date is recorded.
When a unit is needed for transfusion, it is
matched to a barcode on a patient id band
around the recipient patient’s wrist. a handheld
scanner matches barcodes and signals an alert
when there are problems. it also records the
transfusion and integrates that information back
to the electronic inventory.

this continuous electronic checkpoint system

has many benefits, most critical being patient
safety. With this system, fewer mistakes are made
in blood-type matching, which results in better
outcomes and fewer complications and infections
for patients. Healthier patients have shorter
hospital stays, which results in significant costs
savings to the hospital. Waste is reduced by
precise matching with additional savings realized

Hospitalsblood ManageMent:Hospitalsblood ManageMent:through the Bloodtrack suites’ efficiency, as the
electronic scanning is much quicker and more
accurate than the manual checks it replaces.
remote allocation is another benefit of
the Bloodtrack system. Bloodtrack software
allows for unmatched units of blood to be
ordered directly at the point of care, scanned,
and distributed on an as-needed basis. this
cost-effective process eliminates the practice
of surgeons holding multiple units of blood for
individual patients just in case they are needed,
units that are often then discarded. the result
is that less blood is wasted and less time is
taken handling units of blood that go unused,
creating considerable savings to the hospital.

Finally, because Bloodtrack software
efficiently and accurately tracks blood units

improvemenT in acTion Puget sound Blood Center in seattle,
Washington, is using our iMPaCt Program and integrated Bloodtrack
system, to transfer blood units to area hospitals more efficiently. With
this system, a surgeon orders blood on an as needed basis. this cost-
effective process is eliminating the wasteful practice of surgeons putting
multiple units of blood on hold for individual patients, units that are then
often discarded.

to patients, it provides a cross-check for the
patient’s record, monitors the number and
types of units used in a particular hospital,
and provides data that can help inform both
the collection practices of the blood center
and the acquisition and usage trends of the
hospital. this enables both facilities to improve
efficiency over time.

Improvement In ActIon Five years ago, we were a device-oriented
company. since then, we have transformed
ourselves into a solutions-oriented company.
We want to better understand how we can
help our customers.”

— Mikael Gordon

President, Global Markets

integrated solutions

IMPACT Program
data-driven consulting program to optimize
hospital blood management needs.
IMPACT Online
Our blood management business intelligence
web portal.
BloodTrack Suite
software and hardware that incorporates bar code
technology to track blood units through the entire
process from hospital inventory management to
storage and transport to transfusion.

Hemosafe
integrated with the Bloodtrack suite, Hemosafe
is a blood storage and distribution solution
placed in hospitals designed to strictly monitor
and record blood units as they are prescribed.
TEG 5000
the most complete Hemostatis Management
system.
Cell Salvage
suite of blood salvage solutions designed to
meet all pre-, inter-, and post-operation needs.

HospitalsHospitalsblood ManageMent:blood ManageMent:Blood management

rea lizi ng a viSion

in fiscal year 2011, haemoneTics realized
its vision to transform blood management by
creating a complete link between blood donor
and patient. leveraging powerful, integrated
hardware and software tools along with
expert consulting and data-driven analysis,
Haemonetics provides solutions that enable
blood collection centers, plasma collection
centers, and hospitals to acquire and manage
blood and blood components more effectively
resulting in increased patient safety and
reduced costs.

and This is only The beginning.
Haemonetics’ growth and expansion over
the past five years from a dedicated device
company into a comprehensive blood
management solutions company provides the
foundation for unlimited growth potential for the
future. With demand expanding across asia and
in europe, Haemonetics’ proven success will
have great appeal. in fiscal year 2011, 53.1%
of consolidated net revenues were generated
through sales to non-u.s. customers. With
improved health care becoming accessible to
more people throughout eastern europe, China,
russia and other emerging markets the need for
blood products is also rising and Haemonetics is
responding to these blood management needs.

Haemonetics has a vision to be the global leader
in blood management solutions. We are realizing
that vision with our customers every day.

Haemonetics has always aspired to act in the best interests of
our customers, employees, shareholders, and communities.
as the global leader in blood management solutions, our
mission is to enhance the quality of patient care while reducing
costs and preserving one of our most precious, natural
resources, blood. in alignment with our mission, our culture is
one of continuous improvement, quality leadership, and ethical
behavior. in essence, corporate social responsibility is already
embedded in our mission and our culture.

corporate Social reSponSi bility

governance and eThics

global giving

Haemonetics is committed to operating to the
highest standards of corporate governance
and ethics. We routinely review our governance
practices against our peers and other publicly
traded companies. Our efforts have taken hold.
as shareholders look to “safe haven” companies
in which to invest in these volatile markets,
Haemonetics gets high marks for governance.
While governance metrics are mostly qualitative,
shareholders rate governance highly when
deciding whether to invest in a company.

Corporate philanthropy has been a part of
Haemonetics’ business philosophy for years. in
2007, the Company formalized its global giving
program with the launch of the Haemonetics’
Charitable Fund. during 2010, a committee
consisting of a cross-section of employees from
multiple countries and functions coordinated
charitable activities on a global basis.
Haemonetics’ Charitable Fund is strategically
focused on healthcare interests and groups
serving the communities where we have offices.
We’ve also continued our longstanding program
of making matching contributions to employees’
charitable contributions including a recent
outpouring of support to Japanese colleagues
and customers following the natural disasters.

environmenT

employee relaTions

at Haemonetics we believe that finding ways
to conserve resources isn’t just good for the
environment, it’s good business. in addition to
incorporating mainstream “green” initiatives into
our operations, we are committed to investing
time and effort into areas where, over time, we
can make a meaningful contribution. Our efforts
to improve our environment often deliver added
benefits: they reduce costs and improve quality.

With people as one of our core assets,
Haemonetics is committed to providing
a safe, respectful work environment that
fosters growth. We are a global company that
embraces diversity and recognizes the unique
strengths of every employee. We were an early
adopter of non-traditional work arrangements
like telecommuting and job sharing, and our
corporate headquarters has an on-site child
care program.

board of direcTors

lawrence Best
Chairman, OXO Capital LLC
Formerly Executive Vice President and
Chief Financial Officer, Boston Scientific

Paul Black
Formerly Chief Operating Officer,
Cerner Corporation

Brian Concannon
President and Chief Executive Officer,
Haemonetics

susan Bartlett Foote
Retired Professor, University of Minnesota

ronald gelbman
Formerly Member of Executive Committee and
Worldwide Chairman of the Health Systems and
Diagnostics Group, Johnson & Johnson

Pedro granadillo
Formerly Senior Vice President, Eli Lilly

Mark kroll, Ph.d.
Formerly Senior Vice President and Chief
Technology Officer of the Cardiac Rhythm
Management Division, St. Jude Medical, Inc.

ronald Merriman
Formerly Vice Chairman, KPMG

richard Meelia
Chairman, President and CEO, Covidien
Healthcare

leaderShip

operaTing commiTTee

Peter allen
Chief Marketing Officer

Phillip Brancazio
VP, Global Manufacturing

remi Corlin
President, Asia Pacific

Joseph Forish
VP, Human Resources

Mikael gordon
President, Global Markets

lionel Hadjadjeba
VP and General Manager ELA Distribution

susan Hanlon
VP, Finance

keiko Hattori
President, Japan

Michael kelly
President, North America and
Global Plasma Business

Christopher lindop
CFO and VP, Business Development

tom Marcinek
President, Haemonetics Software Solutions

Warren nighan
VP, Worldwide Quality and Regulatory Affairs

James O’shaughnessy
General Counsel and Chief Compliance Officer

stephen swenson
VP and General Manager,
Global Plasma Business

Jonathan White
VP, Global Research and Development

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended April 2, 2011

Commission file number 1-14041

HAEMONETICS CORPORATION

(Exact name of registrant as specified in its charter)

Massachusetts
(State or other jurisdiction of
incorporation or organization)

400 Wood Road,
Braintree, Massachusetts 02184-9114
(Address of principal executive offices)

04-2882273
(I.R.S. Employer
Identification No.)

(781) 848-7100
(Registrant’s telephone number)

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

(Title of Each Class)

(Name of Exchange on Which Registered)

Common stock, $.01 par value per share

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the

Securities Act. Yes ¥

No n

Indicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or 15(d) of the

Act. Yes n

No ¥

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) (2.) has been subject to the filing requirements for at least the past
90 days. Yes ¥

No n

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 ¥

No n

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained

herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this form 10-K. ¥

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,
or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting
company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ¥ Accelerated filer n

Smaller reporting company n

Non-accelerated filer n
(Do not check if a smaller reporting company)

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

Act.). Yes n

No ¥

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant

(assuming for these purposes that all executive officers and directors are “affiliates” of the registrant) as of October 2,
2010, the last business day of the registrant’s most recently completed second fiscal quarter was $1,355,592,693 (based on
the closing sale price of the registrant’s common stock on that date as reported on the New York Stock Exchange).

The number of shares of $.01 par value common stock outstanding as of April 30, 2011 was 25,681,603.

Portions of the definitive proxy statement for our Annual Meeting of Shareholders to be held on July 21, 2011 are

incorporated by reference in Part III of this report.

Documents Incorporated By Reference

TABLE OF CONTENTS

Item 1.

Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(A) General History of the Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(B) Financial Information about Industry Segments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(C) Narrative Description of the Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(D) Financial Information about Foreign and Domestic Operations and Export Sales . . . . .
Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1B. Unresolved Staff Comments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2.
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 3.
Item 4.
(Removed and Reserved) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters, and Issuer

Purchases of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selected Consolidated Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 6.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of

Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7A. Quantitative and Qualitative Disclosures about Market Risk . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8.
Changes in and Disagreements with Accountants on Accounting and Financial
Item 9.
Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9A. Control and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Number

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Item 1. Business

(A) General History of the Business

Haemonetics was founded in 1971 as a medical device company — a pioneer and market leader in

developing and manufacturing automated blood component collection devices and surgical blood salvage
devices. In 1983, we were acquired by American Hospital Supply Corporation (“AHS”), which was then
acquired by Baxter Travenol Laboratories, Inc. (“Baxter”). In December 1985, a group of investors, which
included Haemonetics employees, purchased the Company from Baxter. In May 1991, we completed an initial
public offering and to this day remain an independent company with products and services marketed in more
than 80 countries around the world.

Haemonetics devices help ensure a safe and adequate blood supply and assist blood centers and hospitals
in their efforts to operate efficiently and in compliance with regulatory requirements. Our customers are blood
and plasma collectors, hospitals and health care providers globally.

Several years ago, we recognized that devices were not enough. Our customers told us of the varied

challenges they were facing. Collection centers needed to attract more donors. Hospitals needed to manage
blood more efficiently and effectively. At Haemonetics, we understood immediately that we needed to
transform our business to serve these needs.

We altered our mission from providing blood collection and salvage devices to delivering blood

management solutions. We looked at every step in the process, from what factors attract people to donate to
how blood is tracked until it is transfused into a patient. We recognized that our customers needed solutions
that helped them run their business more efficiently and that improved donor satisfaction on one end, and
patient outcomes on the other.

We embarked on a strategy to expand our markets and product portfolio to offer more comprehensive
blood management solutions to our customers. Through internal product development and external acquisi-
tions, we have significantly expanded our product offerings. We now offer devices and related consumables,
information technology software platforms, and consulting services. By better understanding our customers’
needs, we are creating comprehensive blood management solutions for blood collectors and healthcare systems
around the world.

(B) Financial Information about Industry Segments

We report revenues for multiple product lines under four global product categories: plasma, blood center,
hospital, and software solutions. “Plasma” markets plasma collection devices and consumables. “Blood center”
markets blood collection and processing devices and consumables. “Hospital” markets surgical blood salvage
and blood demand diagnostic devices and consumables, and blood distribution systems. The “software
solutions” product category consists of information technology platforms and consulting services.

Although we address our customer constituents through multiple product lines, we manage our business
as one operating segment: the design, manufacture, implementation, support and marketing of blood manage-
ment solutions. Our chief operating decision-maker uses consolidated financial results to make operating and
strategic decisions. Design and manufacturing processes, as well as economic characteristics and the regulatory
environment in which we operate, are largely the same for all product lines.

The financial information required for the business segment is included herein in Note 15 of the financial

statements, entitled Segment, Geographic and Customer Information.

(i) Products and Solutions

Haemonetics is committed to helping our customers create and maintain a safe and efficient blood supply
chain. Blood and its components have several vital — frequently life-saving — clinical applications. Plasma is
manufactured into pharmaceuticals to treat a variety of illnesses and hereditary disorders such as hemophilia;

red cells treat trauma patients or patients undergoing surgery with high blood loss, such as open heart surgery
or organ transplant; and platelets treat cancer patients undergoing chemotherapy.

Specifically, we develop and market a wide range of systems used with plasma and blood donors to
automate the collection and processing of blood into its components: plasma, platelets, and red cells. We also
develop and market a variety of systems to hospitals that automate the cleaning and reinfusion of a surgical
patient’s blood during surgery, automate the tracking and distribution of blood in the hospital, and enhance
blood diagnostics. We also market information technology platforms to promote efficient and compliant
operations for all of our customer groups. Finally, we market consulting services to reduce costs and improve
operating efficiencies in blood management.

PLASMA CATEGORY OF PRODUCTS AND SOLUTIONS

The Plasma Collection Market for Fractionation

Human plasma is collected and processed by pharmaceutical companies into therapeutic and diagnostic
products that aid in the treatment of immune diseases and coagulation disorders. Plasma is also used to aid
patients with extreme blood loss such as trauma victims. Automated plasma collection technology allows for
the safe and efficient collection of plasma. There are approximately 22 million liters of plasma obtained from
automated collections worldwide annually. We market plasma collection devices, but do not make plasma-
derived pharmaceuticals.

Many bio-pharmaceutical companies are vertically integrated in all components of their business and thus

are now collecting and fractionating the plasma required to manufacture their pharmaceuticals. This vertical
integration paved the way for highly efficient plasma supply chain management and the plasma industry
leverages information technology to manage operations from the point of plasma donation to fractionation to
the production of the final product.

Automated Plasma Collection Systems PCS (reported as “plasma” product line)

Until Haemonetics introduced automated plasma collection technology in the 1980s, plasma for fraction-

ation was collected manually. Manual collection was time-consuming, labor-intensive, produced relatively poor
yields, and posed risk to donors. Today, the vast majority of plasma collections worldwide are performed using
automated collection technology because it is safer and cost-effective. With PCS brand automated collection
technology, more plasma can be collected during any one donation event because the other blood components
are returned to the donor through sterile disposable sets used for the blood donation procedure.

Haemonetics offers “one stop shopping” to our plasma collection customers, enabling them to source

from us the full range of products necessary for their plasma collection operations. We offer consulting
services that help our customers develop business solutions to support process excellence, donor recruitment,
and business design.

To implement those solutions, we offer a full range of products, including PCS brand plasma collection

equipment and consumables, plasma collection containers, intravenous solutions, and tubing sealers necessary
for plasma collection and storage. We market a protocol for our PCS system that shortens the donation process
which allows our customers to improve the efficiency of their collections.

We also offer a robust portfolio of integrated information technology platforms for plasma customers to
manage their donors, operations, and supply chain. eQue» Automated Interview and Assessment automates the
donor interview and qualification process. eLynx» Workflow Optimization streamlines the workflow process in
the plasma center. Donor Management System (DMS) provides plasma collection centers with the controls
necessary to continually assess and evaluate donor suitability, determine the release-ability of units collected,
and manage unit distribution. With our information technology platforms, plasma collectors are better able to
manage processes across the plasma supply chain, react quickly to business changes, and identify opportunities
to reduce costs.

BLOOD CENTER CATEGORY OF PRODUCTS AND SOLUTIONS

The Blood Collection Market for Transfusion

There are millions of blood donations throughout the world every year that produce blood products for

transfusion to surgical, trauma, or chronically ill patients. In the U.S. alone, approximately 15 million units of
blood are collected each year. Patients typically receive only blood components necessary to treat a particular
clinical condition: for example, red cells to surgical patients, platelets to cancer patients, and plasma to trauma
victims.

Platelet therapy is frequently used to alleviate the effects of bone marrow suppression, a condition in
which bone marrow is unable to produce a sufficient quantity of platelets. Bone marrow suppression is most
commonly a side effect of chemotherapy. Platelet therapy is also used for patients with bleeding disorders.
Physicians who prescribe platelet therapy will commonly turn to “single donor” platelet products (i.e., enough
platelets collected from one donor, during an automated collection, to constitute a transfusible dose) to
minimize a patient’s exposure to multiple donors and possible blood-borne diseases.

Red cells are frequently transfused to patients to replace blood lost during surgery. Red cells are also

transfused to patients with blood disorders, such as sickle cell anemia or aplastic anemia.

Plasma, in addition to its role in creating life saving pharmaceuticals, is frequently transfused to trauma

victims and to replace blood volume lost during surgery.

Worldwide demand for blood is expected to continue to rise modestly as the population ages and more

patients have need for and access to medical therapies that require blood transfusions. Furthermore, highly
populated emerging markets countries are advancing their healthcare coverage and as greater numbers of
people gain access to more advanced medical treatment, additional demand for blood components, plasma-
derived drugs and surgical procedures increases directly. This increasing demand for blood is partially offset
by the development of less invasive, lower blood loss procedures. Recently, the economy has also had an
effect on the demand for blood, as fewer surgeries are performed. We expect the worldwide market for blood
components to return to growing modestly in the low single digits.

Most donations worldwide are non-automated procedures (also referred to as manual or whole blood

donations). In this process, whole blood is collected from the donor and then transported to a central
laboratory where it is separated into its constituent parts: red cells, platelets and plasma. Haemonetics has a
multi-year strategy to enter the whole blood market with new and differentiated solutions, including an
automated whole blood collector. We don’t meaningfully participate in this market today, as we don’t offer
collection kits. We do offer blood centers integrated information technology solutions that allow blood centers
to effectively manage their operations.

Haemonetics is a leader in automated blood collections. While this share of the market is smaller, we

believe that today it is a more effective way of collecting and distributing blood products. In this procedure,
whole blood does not need to be transferred to a central laboratory for separation. Instead, the blood separation
process is automated and occurs in “real-time” while a person is donating blood. In this separation method,
only the specific blood component targeted is collected, and the remaining components are returned to the
blood donor. Automated blood component collection allows significantly more of the targeted blood
component to be collected during a donation event.

We believe automation improves blood collection safety and efficiency, as well as regulatory compliance.

In the U.S., automated collection systems annually collect more than 1.6 million red cell units and
approximately 1.8 million platelet units (called “single donor” platelets). In many countries, blood collection is
controlled by a single, usually governmental, organization. However, the United States does not have a single
centralized blood collection system. While the American Red Cross collects about 40% of the nation’s blood,
the remainder of the U.S. blood supply is procured from more than 100 other blood collection agencies. In
addition, blood demand comes from over 4,000 hospitals throughout the United States. This decentralization
of blood collection and the significant number of hospitals using blood makes it difficult to predict blood
demand, adequately supply the right blood components, and effectively manage the blood supply chain.

Integrated information technology and blood management systems like the kind offered by Haemonetics are
beginning to have an impact on the management of blood collection centers as blood collectors respond to
demands for efficient blood supply chain management, seek to lower costs, and respond to ever-increasing
regulatory restrictions.

Haemonetics’ Automated Blood Collection Systems (reported as “blood center” product line)

We market the MCS» brand apheresis system which collects specific blood components and returns to the

donor the unwanted components.

The MCS system, as an automated platelet collection system, collects one or more therapeutic “doses” of

platelets during a single donation by a volunteer blood donor. As noted above, platelets derived from a non-
automated donation of whole blood (also called a manual collection) must be “pooled” together with platelets
from 4-7 other donor’s platelets to make a single therapeutically useful dose because platelets are a very small
portion of whole blood volume.

Our MCS brand system can also help blood collectors optimize the collection of red cells by automating

the blood separation function, eliminating the need for laboratory processing, enabling the collection of two
transfusible doses of red cells from a single donor thus minimizing red cell shortages. We call this our
two-unit protocol or double red cell collection.

In addition to the two-unit protocol, blood collectors can use the MCS brand system to collect either 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, or they may leukoreduce the two-unit red cell collections. Leukoreduction is the removal of
potentially harmful white blood cells from the collected red cells to prevent or mitigate adverse reactions by
the patient who receives the product. Leukoreduction has been adopted in many countries worldwide and an
estimated 80% of all red cells in the U.S. are now leukoreduced.

Another Haemonetics system that is helping manage the supply of red cells is the ACP» 215 automated

cell processing system, which allows blood collectors and hospitals to freeze and thaw red cells in order to
maintain a frozen blood reserve. Red cells can be stored in a refrigerator for up to 42 days and can be stored
frozen for up to 10 years. Blood reserves are often maintained to enable a hospital to respond adequately to
large-scale emergencies where many people contemporaneously require blood transfusions or to treat patients
who require transfusions of very rare blood types. Our blood processing systems can also remove plasma from
red cells for patients who need specially treated blood.

Better balancing of demand with supply will also mitigate shortages. Our information technology
platforms span blood center operations and automate and track operations from the recruitment of the blood
donor to the disposition of the blood product. The eDonorTM platform is a web based product that manages
donor recruitment and retention. The Hemasphere» platform supports our customers’ key partners — organiza-
tions running blood drives — to manage the mobile blood drive process. Our Donor Doc software automates
the interview and assessment process prior to a person donating. The eLynx» software optimizes the workflow
processes in the donor center. SafeTrace» and the new El Dorado Donor» products are donation and blood
unit management systems. The SurroundTM software supports laboratory testing management. We also offer
products developed for the European market: SapanetTM, a software suite designed for workflow management
and quality control in blood centers and laboratories; and EdgebloodTM and EdgeTrack, integrated software
applications that manage activities of a transfusion center from blood donations to traceability of patient
transfusions. Combined, these platforms help blood collectors to improve safety, regulatory compliance, and
efficiency and to manage processes across the blood supply chain.

Haemonetics offers consulting services that leverage our experience in blood banking, lean manufacturing,

and Six Sigma to recommend new approaches to business process excellence. Our internal use of business
practice improvement tools spawned requests from our U.S. customer base to seek our training of their
selected staff with the intent to develop expertise in problem solving and solution creation skills. Our
consulting services address donor recruitment, operations, blood collection, quality control, and more.

HOSPITAL CATEGORY OF PRODUCTS AND SOLUTIONS

The Transfusion Market for Hospitals

Loss of blood is common in open heart, trauma, transplant, vascular, and orthopedic procedures, and the

need for transfusion of oxygen-carrying red cells to make up for lost blood volume is routine. Prior to the
introduction of our technology, patients were exclusively transfused with blood from volunteer donors. Donor
blood (also referred to as “allogeneic blood”) carries various potential risks including (1) risk of transfusion
with the wrong blood type (the most common cause of transfusion-related death), (2) risk of transfusion
reactions including death, but more commonly chills, fevers or other side effects that can prolong a patient’s
recovery, and (3) risk of transfusion of blood with a blood-borne disease or infectious agent.

As a result of numerous blood safety initiatives, today’s blood transfusions are extremely safe, especially

in developed and resourced health care systems. However, transfusions are not risk free. Surgical blood salvage
(also known as autotransfusion) reduces or eliminates a patient’s need for blood donated from others and
ensures that the patient receives the safest blood possible — his or her own.

Surgical blood salvage involves the collection of a patient’s own blood during and after surgery, for
reinfusion to that patient. In surgical blood salvage, blood is suctioned from a wound site, processed and
washed through a centrifuge-based system which yields concentrated red cells available for transfusion back to
the patient. This process occurs in a sterile, closed-circuit, single-use consumable set which is fitted into an
electromechanical device. We market our surgical blood salvage products to hospital-based medical specialists,
primarily cardiovascular, orthopedic, and trauma surgeons, or to surgical suite service providers.

Information technology has become increasingly important in hospital management as administrators

strive to provide the best patient care at optimal costs. Despite this trend, there are limited platforms which
help hospitals assess and improve blood management practices, track blood within their own hospital systems,
or manage the costs of blood. Likewise, there are limited platforms to help hospitals predict demand for their
blood suppliers, the blood collection agencies, and link the blood supply chain from donor to patient. As
regulations continue to increase and as hospitals struggle with increasing costs, we believe information
technology for blood supply chain management will play an important role in hospital administration.

Haemonetics’ Hospital Solutions

Over the last few years, hospitals have become more aware of their need to control costs and improve

patient safety by managing blood more effectively. Our consulting services, products, and integrated technol-
ogy platforms help hospitals optimize performance on blood acquisition, storage, and distribution.

Our TEG» Thromobelastograph Hemostasis Analyzer is a blood diagnostic instrument which measures a

patient’s hemostasis or the ability to form and maintain blood clots. By understanding a patient’s clotting
ability, clinicians can better plan for the patient’s care, deciding in advance whether to start or discontinue use
of certain drugs or, if a transfusion is likely, whether to use donated blood or surgical blood salvage. Such
planning supports the best possible clinical outcome, which can lead to lower hospital costs through reduced
adverse transfusion reactions, shorter intensive care unit and hospital stays, and exploratory surgeries. The
TEG system is comprised of an electromechanical device, single use containers and reagents.

Clinicians may decide to use surgical blood salvage as an alternative to transfusion of donor blood. Our

surgical blood salvage systems allow for the recovery, segregation and washing of red cells from blood lost by
a patient during or after surgery. These red cells are then available to transfuse back to the patient if needed.
The Cell Saver» brand system is a surgical blood salvage system targeted to procedures that involve rapid,
high volume blood loss, such as cardiovascular surgeries. It has become the standard of care for high blood-
loss surgeries. The newer cardioPAT» brand system is a surgical blood salvage system targeted to open heart
surgeries when there is less blood loss at surgery, but where the blood loss continues post-surgery. The system
is designed to remain with the patient following surgery, to recover blood and produce a washed red cell
product for autotransfusion. We have introduced the Quick-Connect feature for the cardioPAT system, which
permits customers to utilize the processing set selectively, depending on the patient’s need.

The OrthoPAT» surgical blood salvage system is targeted to procedures, such as orthopedic, that involve
slower, lower volume blood loss that often occurs well after surgery. The system is designed to operate both
during and after surgery to recover and wash the patient’s red cells to prepare them for reinfusion. We have
introduced the Quick-Connect feature for the OrthoPAT system, which permits customers to utilize the
processing set selectively, depending on the patient’s need.

Also included in our hospital product line is the SmartSuction» product. This product is an advanced
suction system for removal of blood and debris from the surgical field. The system is used in conjunction with
surgical blood salvage.

Our software products help hospitals track and safely deliver stored blood products. SafeTrace TX, a

software product which manages blood product inventory, performs patient cross-matching and manages
transfusion. In addition, our BloodTrack» suite of solutions manages control of blood products from the
hospital blood center through to the transfusion to the patient. “Smart” refrigerators located in operating suites,
emergency rooms, and other parts of the hospital dispense blood units with just-in-time control and automated
tracking for efficient documentation. With our more robust offerings, hospitals are better able to manage
processes across the blood supply chain and identify increased opportunities to reduce costs and enhance
processes.

Our IMPACTTM Online web-based software platform, which monitors and measures improvements in a
hospital’s blood management practices, provides hospitals with a baseline view of their blood management
metrics and helps monitor transfusion rates. If needed by a customer, we also offer business consulting
solutions to support process excellence, donor recruitment, business design, and blood management efforts. We
also provide blood management assessment tools to hospitals that enable our customers to monitor their
progress in order to continually improve their performance.

Software Solutions

Enhancing the power of our products are the integrated software solutions that track and monitor blood
units along all points in the supply chain, , including blood drive and donor management, blood processing,
blood distribution, and transfusion management. For our plasma customers, we also provide information
technology platforms for managing administrative functions and distribution at plasma fractionation facilities.
While each Haemonetics information technology platform can be used as a “stand-alone,” the mission to
provide ‘arm to arm’ blood management solutions is executed by the integration of these platforms. What’s
more, the ability to evaluate data based on the integration of these systems allows customers to continually
improve their systems. These systems provide the backbone of Haemonetics overall commitment to improving
blood management systems nationally and globally.

Through our services group, we offer business consulting solutions to support process excellence, donor
recruitment, business design, and blood management efforts. We also provide blood management assessment
tools to hospitals.

When combining our software solutions with our devices, we meet our goal to give customers powerful

tools for improving blood management while driving growth of our consumables. For example, a hospital may
use our consulting services to analyze its blood management practices and recommend changes in practice.
Then, the hospital can leverage our devices to predict blood demand, manage blood inventory, and reduce
demand for donated blood. Finally, the hospital can use our IMPACTTM Online blood management business
intelligence portal to monitor the results of its new practices. The positive patient impact and reduced costs
from this integrated blood management approach can be significant. Likewise, by understanding best practices,
blood demand, and discreet patient needs, hospitals can more frequently deploy our devices to ensure best
patient care.

Each of our products, platforms, and services can be marketed individually. However, as our blood
management solutions vision is to offer integrated closed loop solutions for blood supply chain management,
our software solutions — that is, information technology platforms and consulting services — can be integrated
with the devices and sold through our plasma, blood center, and hospital sales forces.

Our integrated product portfolios are as follows:

Plasma Products

Blood Center Products

Hospital Products

Information Management

— eQueTM Automated donor
interview system and
database
— eLynx» Donor workflow
optimization software
— DMS Blood component
collection donor
management
— CaPS Secure plasma
donor payment systems
— Business dashboards

Devices/consumables

— PCS» Portable plasma
collection and processing
system
— ExpressTM Plasma
collection software
enhancement
— SEBRA» shakers
— SEBRA» sealers

Consulting Services

— Six Sigma
— Lean manufacturing
— Business solutions

— Donor DocTM Automated
donor interview system and
database
— eDonor» Blood donor
scheduling software and
services
— Hemasphere» Blood
center process
management software
— SafeTrace» Blood donor
information management
system
— eLynx platform
— SapanetTM Laboratory
quality management
system
— IMPACTTM Business
consulting, advisory
services
— EdgebloodTM Transfusion
traceability management
system
— SurroundTM Intelligent
laboratory management
software
— El Dorado Donor» Blood
collection center
management software
— MCS» Mobile collection
system
— Cymbal» Automated
blood collection system
— ACP» Automated cell
processing system
— SEBRA shakers
— SEBRA sealers

— Six Sigma
— Lean manufacturing
— Donor recruitment
— Automation NationTM
Consulting services for
blood collectors
— Collection optimization
software validation

— SafeTrace TX»
Transfusion management
system and software
— BloodTrack ManagerTM
Repository for blood unit
movement records
— BloodTrack» Enquiry
— BloodTrack» Advisor
— IMPACTTM Online
— EdgecellTM Tissue, organ
and cell bank management
system
— EdgelabTM Laboratory
management system for
hospitals

— Cell Saver» Autologous
blood recovery system
— OrthoPAT» Peri-and
post-operative blood
salvage system
— cardioPAT» Blood
salvage for cardiovascular
surgeries
— SmartSuction» Surgical
suite blood loss
management system
— TEG» Computerized
blood testing and analyzing
device
— BloodTrack» Blood and
transfusion management
software
— Six Sigma
— Lean manufacturing
— Blood use optimization
software validation

(ii) Revenue Detail

We discuss our revenues using the following categories:

(cid:129) Disposables (also referred to as consumables, these revenues include the sale of single-use collection

sets for blood component collection and processing and surgical blood salvage, plus the fees for the use
of our equipment);

(cid:129) Software solutions (software sales and consulting services), including Haemonetics software solutions

business; and

(cid:129) Equipment & other (includes the sale of devices, repairs performed under preventive maintenance

contracts or emergency service visits, spare parts sales, and various service and training programs).

During fiscal year 2011, net revenues increased 4.8% over fiscal year 2010. Excluding the effect of the

extra week in fiscal year 2010, net revenues for fiscal year 2011 increased 6.7%.

Sales of disposable products accounted for approximately 81.5% of net revenues in fiscal year 2011 and

86.0% of net revenues in fiscal year 2010. Sales of our disposable products were 0.6% lower in fiscal year
2011 than in fiscal year 2010, which were 8.4% higher than in fiscal 2009. Without the effects of foreign
exchange, which increased 0.1% and 2.4% during fiscal year 2011 and 2010, respectively, disposable net
revenues decreased 0.7% and increased 6.0% during fiscal year 2011 and 2010, respectively. The decrease in
fiscal year 2011 is due to reduced collections resulting from slowed growth in plasma, as well as a reduced
demand for automated red cell collection and surgical disposable products driven by both competitive
pressures and market conditions resulting in fewer surgeries. This decrease was offset by continued strong
sales in our emerging markets for platelets and increased revenue resulting from new adoption and continued
penetration of our diagnostic product line. These increases to disposable net revenue were primary drivers for
the increase during 2010.

Software solutions accounted for approximately 9.9% and 5.6% of net revenues in fiscal year 2011 and
2010, respectively. The software solutions increase during fiscal year 2011 was driven primarily by software
services revenues associated with the acquisition of Global Med, which occurred on March 31, 2010.

Sales of equipment & other accounted for approximately 8.6% of net revenues in fiscal year 2011 and
approximately 8.4% of net revenues in fiscal year 2010. The increase in equipment revenue during fiscal year
2011 was driven by acquisition related growth from the SEBRA products, which we acquired in September
2009, and growth in our emerging markets. Irrespective of the increases noted, equipment sales continue to be
adversely impacted by restricted hospital capital spending and macro economic trends impacting health care
funding across most of our markets.

(iii) Marketing/Sales/Distribution

We market and sell our products to commercial plasma collectors, blood systems and independent blood

centers, hospitals and hospital service providers, and national health organizations through our own direct sales
force (including full-time sales representatives and clinical specialists) as well as independent distributors.
Sales representatives target the primary decision-makers within each of those organizations.

In fiscal year 2011, for the eleventh consecutive year, we received the Omega NorthFace ScoreBoard
Award for exemplary service to customers. This award is presented to the highest-ranked organizations based
on customer ratings of performance against customer expectations in areas such as phone support, on-site
operations, technical services, and training.

(iv) United States

In fiscal year 2011 and 2010, approximately 46.9% and 47.1%, respectively, of consolidated net revenues

were generated in the U.S., where we primarily use a direct sales force to sell our products.

(v) Outside the United States

In fiscal year 2011 and 2010, approximately 53.1% and 52.9%, respectively, of consolidated net revenues

were generated through sales to non-U.S. customers. Our direct sales force in Europe and Asia includes full-
time sales representatives and clinical specialists based in the United Kingdom, Germany, France, Sweden, the
Netherlands, Italy, Austria, Hong Kong, Canada, Japan, Switzerland, Czech Republic, China, Taiwan, and
Belgium. We also use various distributors to market our products in Russia, South America, the Middle East,

Africa, and the Far East. Additionally, we have established offices with marketing personnel who work with
our distributors in Russia, Lebanon, India and Brazil.

(vi) Research, Development and Engineering

Our research, development and engineering (“RD&E”) centers in the United States and Switzerland
ensure that protocol variations are incorporated to closely match local customer requirements. Resulting from
the integration of our Global Med Technologies, Inc. acquisition, our Haemonetics Software Solutions operates
at El Dorado Hills, California, USA, Global Med’s headquarters, and Limonest, France. In addition, our
Haemonetics Software Solutions also maintains development operations in Edmonton, Alberta, Canada.

Customer collaboration is also an important part of our technical strength and competitive advantage.
These collaboration customers and transfusion experts provide us with ideas for new products and applications,
enhanced protocols, and potential test sites as well as objective evaluations and expert opinions regarding
technical and performance issues.

The development of blood component separation products and extracorporeal blood typing and screening
systems has required us to maintain technical expertise in various engineering disciplines, including mechan-
ical, electrical, software, and biomedical engineering and material science. Innovations resulting from these
various engineering efforts enable us to develop systems that are faster, smaller, and more user-friendly, or that
incorporate additional features important to our customer base.

Our expenditures for RD&E were $32.7 million for fiscal year 2011 (4.8% of net revenues) and

$26.4 million for fiscal year 2010 (4.1% of net revenues). With the exception of the capitalization of software
development costs (see Note 17), all RD&E costs are expensed as incurred. We expect to continue to invest
resources in RD&E.

In fiscal year 2011, RD&E resources were allocated to supporting a next generation surgical blood
salvage device, an automated whole blood collection system, and several other projects to enhance our current
product portfolio. We also continued to invest in research into nanotechnology applications in the blood typing
and screening field.

(vii) Manufacturing

Our principal manufacturing operations (equipment, disposables, and solutions) are located in Braintree,

Massachusetts; Leetsdale, Pennsylvania; Union, South Carolina; Bothwell, Scotland; Niles, Illinois; Signy,
Switzerland; and Draper, Utah.

In general, our production activities occur in controlled settings or “clean room” environments. Each step
of the manufacturing and assembly process is quality checked, qualified, and validated. Critical process steps
and materials are documented to ensure that every unit is produced consistently and meets performance
requirements.

Plastics are the principal component of our disposable products. Contracts with our suppliers help
mitigate some of the short-term effects of price volatility in this market. However, increases in the price of
petroleum derivatives could result in corresponding increases in our costs to procure plastic raw materials.

Some component sets manufacturing is performed by outside contractors according to our specifications.

We maintain important relationships with two Japanese manufacturers that produce finished consumables in
Singapore, Japan, and Thailand. Certain parts and components are purchased from various single sources. If
necessary, we believe that, in most cases, alternative sources of supply could be identified and developed
within a relatively short period of time. Nevertheless, an interruption in supply could temporarily interfere with
production schedules and affect our operations. All of our other equipment and disposable manufacturing sites
are certified to the ISO 13485 standard and to the Medical Device Directive allowing placement of the CE
mark of conformity.

Each blood processing machine is designed in-house and assembled from components that are either
manufactured by us or by others to our specifications. The completed instruments are programmed, calibrated,

and tested to ensure compliance with our engineering and quality assurance specifications. Inspection checks
are conducted throughout the manufacturing process to verify proper assembly and functionality. When
mechanical and electronic components are sourced from outside vendors, those vendors must meet detailed
qualification and process control requirements.

(viii)

Intellectual Property

We consider our intellectual property rights to be important to our business. We rely on patent, trademark,

copyright, and trade secret laws, as well as provisions in our agreements with third parties to protect our
intellectual property rights. We hold patents in the United States and many international jurisdictions on some
of our machines, processes, disposables and related technologies. These patents cover certain elements of our
systems, including protocols employed in our equipment and certain aspects of our processing chambers and
disposables. Our patents may cover current products, products in markets we plan to enter, or products in
markets we plan to license, or the patents may be defensive in that they are directed to technologies not
currently embodied in our current products. We also license patent rights from third parties that cover
technologies that we use or plan to use in our business. To maintain our competitive position, we rely on the
technical expertise and know-how of our personnel and on our patent rights. We pursue an active and formal
program of invention disclosure and patent application in both the United States and foreign jurisdictions. We
own various trademarks that have been registered in the United States and certain other countries.

Our policy is to obtain patent and trademark rights in the U.S. and foreign countries where such rights
are available and we believe it is commercially advantageous to do so. However, the standards for international
protection of intellectual property vary widely. We cannot assure that pending patent and trademark
applications will result in issued patents and registered trademarks, that patents issued to or licensed by us will
not be challenged or circumvented by competitors, or that our patents will not be found to be invalid.

(ix) Competition

We created most of our technologies and have established a record of innovation and market leadership in

each of the areas in which we compete. Although we compete directly with others, no other company offers
the complete range of integrated solutions designed to meet customers’ needs across the entire blood supply
chain.

To remain competitive, we must continue to develop and acquire cost-effective new products, information

technology platforms, and business services. We believe that our ability to maintain a competitive advantage
will continue to depend on a combination of factors. Some factors are largely within our control such as
reputation, regulatory approvals, patents, unpatented proprietary know-how in several technological areas,
product quality, safety and cost effectiveness and continual and rigorous documentation of clinical perfor-
mance. Other factors are outside of our control, including regulatory standards, medical standards and the
practice of medicine.

In the automated plasma collection market, we principally compete with Fenwal, Inc. on the basis of
quality, ease of use, services and technical features of systems, and on the long-term cost-effectiveness of
equipment and disposables. Fenwal, Inc. is an independent company founded in March 2007 when Texas
Pacific Group and Maverick Capital acquired the Transfusion Therapies division of Baxter Healthcare Group.
In China, the market is populated by local producers of a product that is intended to be similar to ours.
Recently, those competitors have expanded to markets beyond China, including Russia, Cuba, and Iran.

In March, 2011, Terumo Medical Corporation, a local competitor company in the Japanese automated
plasma and platelet collection markets, announced it would acquire Caridian BCT (formerly Gambro BCT).
Caridian BCT is one of our major competitors in automated platelet collection. Another major competitor in
this area is Fenwal. In the automated platelet collection business, competition is based on continual
performance improvement, as measured by the time and efficiency of platelet collection and the quality of the
platelets collected. Each of these companies has taken a different technological approach in designing their
systems for automated platelet collection. In the platelet collection market, we also compete with whole blood
collections from which pooled platelets are derived.

In the automated red cell collection market, we also compete against Caridian BCT and Fenwal. However,

it is important to note that only about 5% of the 40 million units of red cells collected worldwide and about
10% of the 15 million units of red cells collected in the U.S. annually are collected via automation today by
these three companies combined. So, we more often compete with traditional manual methods of deriving red
cells by collecting and separating whole blood. We compete on the basis of total cost, process control, product
quality, and inventory management.

In the cell processing market, competition is based on level of automation, labor-intensiveness, and
system type (open versus closed). Open systems may be weaker in good manufacturing process compliance.
Moreover, blood processed through open systems has a 24 hour shelf life. We have an open system cell
processor as well as a closed system cell processor which gives blood processed through it a 14 day shelf life.
We compete with Caridian BCT’s open systems.

Within our hospital business, in the diagnostics market, the TEG Thrombelastograph Hemostasis Analyzer

is used primarily in the surgical arena. One direct competitor, Rotem, is a competitor for us in Europe and in
the United States. In fiscal year 2011, Rotem received 510(k) clearance for its device and selected reagents in
the U.S. Other competitive technologies include standard coagulation tests that measure various aspects of
hemostasis.

In the high blood loss surgical blood salvage market, competition is based on reliability, ease of use,
service, support, and price. Each manufacturer’s technology is similar, and our Cell Saver competes principally
with Medtronic, Fresenius, and Sorin Biomedica. Our cardioPAT system is the only washed surgical blood
salvage device designed to recover red cells for transfusion where blood loss continues post operatively in
heart surgery.

In the orthopedic surgical blood salvage market, we compete against non-automated processing systems
whose end product is an unwashed red blood cell unit for transfusion to the patient. The OrthoPAT system is
the only system that washes the blood and operates perioperatively. It is designed specifically for use in
orthopedic surgeries where a patient often bleeds more slowly, bleeds less, and continues to bleed long after
surgery.

In the software market, we compete with MAK Systems, Mediware, and “home grown” applications.

These companies provide software to blood and plasma collectors and to hospitals for managing donors,
collections, and blood units. None of these companies competes in other Haemonetics markets.

Our technical staff is highly skilled, but many competitors have substantially greater financial resources

and larger technical staffs at their disposal. There can be no assurance that competitors will not direct
substantial efforts and resources toward the development and marketing of products competitive with those of
Haemonetics.

(x) Seasonality

Net revenues have historically been higher in the second half of our fiscal year, reflecting principally the

seasonal buying patterns of our customers. This has proven true in our last five fiscal years.

(xi) Significant Customers

The Japan Red Cross Society (JRC) represented 14.2% and 14.3% of our net revenues in fiscal year 2011

and 2010, respectively.

(xii) Government Regulation

The products we manufacture and market are subject to regulation by the Center of Biologics Evaluation

and Research (“CBER”) and the Center of Devices and Radiological Health (“CDRH”) of the United States
Food and Drug Administration (“FDA”), and other non-United States regulatory bodies.

All medical devices introduced to the United States market since 1976 are required by the FDA, as a
condition of marketing, to secure either a 510(k) pre-market notification clearance or an approved Pre-market

Approval Application (“PMA”). In the United States, software used to automate blood center operations and
blood collections and to track those components through the system are considered by FDA to be medical
devices, subject to 510(k) pre-market notification. Intravenous solutions (blood anticoagulants and solutions
for storage of red blood cells) marketed by us for use with our automated systems requires us to obtain from
CBER an approved New Drug Application (“NDA”) or Abbreviated New Drug Application (“ANDA”). A
510(k) pre-market clearance indicates FDA’s agreement with an applicant’s determination that the product for
which clearance is sought is substantially equivalent to another legally marketed medical device. The process
of obtaining a 510(k) clearance involves the submission of clinical data and supporting information. The
process of obtaining NDA approval for solutions is likely to take much longer than 510(k) approvals because
the FDA review process is more complicated.

The FDA’s Quality System regulations set forth standards for our product design and manufacturing
processes, require the maintenance of certain records and provide for inspections of our facilities. There are
also certain requirements of state, local and foreign governments that must be complied with in the
manufacturing and marketing of our products. We maintain customer complaint files, record all lot numbers of
disposable products, and conduct periodic audits to assure compliance with FDA regulations. We place special
emphasis on customer training and advise all customers that device operation should be undertaken only by
qualified personnel.

The FDA can ban certain medical devices; detain or seize adulterated or misbranded medical devices;
order repair, replacement or refund of these devices; and require notification of health professionals and others
with regard to medical devices that present unreasonable risks of substantial harm to the public health. The
FDA may also enjoin and restrain certain violations of the Food, Drug and Cosmetic Act and the Safe Medical
Devices Act pertaining to medical devices, or initiate action for criminal prosecution of such violations.

We are also subject to regulation in the countries outside the United States in which we market our

products. The member states of the European Union (EU) have adopted the European Medical Device
Directives, which create a single set of medical device regulations for all EU member countries. These
regulations require companies that wish to manufacture and distribute medical devices in EU member
countries to obtain CE Marking for their products. Outside of the EU, many of the regulations applicable to
our products are similar to those of the FDA. However, the national health or social security organizations of
certain countries require our products to be registered by those countries before they can be marketed in those
countries.

We have complied with these regulations and have obtained such registrations. Federal, state and foreign

regulations regarding the manufacture and sale of products such as ours are subject to change. We cannot
predict what impact, if any, such changes might have on our business.

We are also subject to various environmental, health and general safety laws, directives and regulations

both in the U.S. and abroad. Our operations, like those of other medical device companies, involve the use of
substances regulated under environmental laws, primarily in manufacturing and sterilization processes. We
believe that sound environmental, health and safety performance contributes to our competitive strength while
benefiting our customers, shareholders and employees.

(xiii) Environmental Matters

Failure to comply with international, federal and local environmental protection laws or regulations could

have an adverse impact upon our business or could require material capital expenditures. We continue to
monitor changes in U.S. and international environmental regulations that may present a significant risk to the
business, including laws or regulations relating to the manufacture or sale of products using plastics. Action
plans are developed to mitigate identified risks.

(xiv) Employees

As of April 2, 2011, we employed the full-time equivalent of 2,201 persons assigned to the following
functional areas: manufacturing, 861; sales and marketing, 452; general and administrative, 372; research,

development, and engineering, 246; and quality control and field service, 270. We consider our employee
relations to be satisfactory.

(xv) Availability of Reports and Other Information

All of our corporate governance materials, including the Principles of Corporate Governance, the Business
Conduct Policy and the charters of the Audit, Compensation, and Nominating and Governance Committees are
published on the Investor Relations section of our website at http://www.haemonetics.com/site/content/
investor/corp_gov.asp. On this web site the public can also access, free of charge, our annual, quarterly and
current reports and other documents filed or furnished to the Securities and Exchange Commission, or SEC, as
soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

(D) Financial Information about Foreign and Domestic Operations and Export Sales

The financial information required by this item is included herein in Note 15 of the financial statements,

entitled Segment, Geographic and Customer Information. Sales to the Japanese Red Cross accounted for
14.2% of net revenues in fiscal year 2011. No other customer accounted for more than 10% of our net
revenues. For more information concerning significant customers, see the subheading of Note 2 of the financial
statements entitled, Concentration of Credit Risk and Significant Customers.

Cautionary Statement Regarding Forward-Looking Information

Statements contained in this report, as well as oral statements we make which are prefaced with the
words “may,” “will,” “expect,” “anticipate,” “continue,” “estimate,” “project,” “intend,” “designed,” and similar
expressions, are intended to identify forward looking statements regarding events, conditions, and financial
trends that may affect our future plans of operations, business strategy, results of operations, and financial
position. These statements are based on our current expectations and estimates as to prospective events and
circumstances about which we can give no firm assurance. Further, any forward-looking statement speaks only
as of the date on which such statement is made, and we undertake no obligation to update any forward-looking
statement to reflect events or circumstances after the date on which such statement is made. As it is not
possible to predict every new factor that may emerge, forward-looking statements 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 risks and uncertainties that could cause actual results to differ materially
from those projected or anticipated. Such risks and uncertainties include technological advances in the medical
field and our standards for transfusion medicine and our ability to successfully implement products that
incorporate such advances and standards, product demand and market acceptance of our products, regulatory
uncertainties, the effect of economic and political conditions, the impact of competitive products and pricing,
the impact of industry consolidation, foreign currency exchange rates, changes in customers’ ordering patterns,
the effect of industry consolidation as seen in the plasma market, the effect of communicable diseases, the
effect of uncertainties in markets outside the U.S. (including Europe and Asia) in which we operate and such
other risks described under Item 1A. Risk Factors included in this report. The foregoing list should not be
construed as exhaustive.

Item 1A. Risk Factors

Set forth below are the risks that we believe are material to our investors. This section contains forward-

looking statements. You should refer to the explanation of the qualifications and limitations on forward-
looking statements beginning on page 13 and 46.

If we are unable to successfully expand our product lines through internal research & development and

acquisitions, our business may be materially and adversely affected. Continued growth of our business
depends on our maintaining a pipeline of profitable new products and successful improvements to our existing
products. This requires accurate market analysis and carefully targeted application of intellectual and financial
resources toward technological innovation or acquisition of new products. The creation and adoption of
technological advances is only one step. We must also efficiently develop the technology into a product which

confers a competitive advantage, represents a cost effective solution or provides improved clinical outcomes.
The risks of missteps and set backs are an inherent part of the innovation and development processes in the
medical device industry.

If we are unable to successfully grow our business through marketing partnerships and acquisitions, our

business may be materially and adversely affected. Promising partnerships and acquisitions may not be
completed for reasons such as competition among prospective partners or buyers, our inability to reach
satisfactory terms, or the need for regulatory approvals. Any acquisition that we complete may be dilutive to
earnings and require that we invest significant resources. We may not be able to successfully integrate an
acquired business into our existing business, make such businesses profitable, or realize anticipated market
growth or cost savings. The economic environment may constrain our ability to access the capital needed for
acquisitions and other capital investments.

As a medical device manufacturer we are subject to a number of laws and regulations. Non-compliance
with those laws or regulations could adversely affect our financial condition and results of operations. The
manufacture, distribution and marketing of our products are subject to regulation by the FDA and other
non-United States regulatory bodies. We must obtain specific regulatory clearance prior to selling any new
product or service, a process which is costly and time consuming. Our operations are also subject to
continuous review and monitoring by the FDA and other regulatory authorities. Failure to substantially comply
with applicable regulations could subject our products to recall or seizure by government authorities, or an
order to suspend manufacturing activities. As well, if our products were determined to have design or
manufacturing flaws, this could result in their recall or seizure. Either of these situations could also result in
the imposition of fines.

As a majority of our revenue comes from outside the United States, we are subject to export and import
restrictions, local regulatory authorities and the laws and medical practices in foreign jurisdictions. Export
of U.S. technology or goods manufactured in the United States to some jurisdictions requires special
U.S. export authorization or local market controls that may be influenced by factors, including political
dynamics, outside our control. Regulations relating to the use of certain materials in the manufacture of our
products could also require us to convert our production to alternate material(s), which may be more costly or
less effective.

Many of our competitors have significantly greater financial and other resources. Their greater financial

resources may allow them to more rapidly develop new technologies and more quickly address changes in
customer requirements. Although no one company competes with us across our full line of products, we face
competition in each of our product lines. Our ability to remain competitive depends on a combination of
factors. Certain factors are within our control such as reputation, regulatory approvals, patents, unpatented
proprietary know-how in several technological areas, product quality, safety, cost effectiveness and continued
rigorous documentation of clinical performance. Other factors are outside of our control such as regulatory
standards, medical standards, reimbursement policies and practices, and the practice of medicine.

Loss of a significant customer could adversely affect our business. The Japan Red Cross Society (JRC)

is a significant customer that represented 14.2% of our revenues in fiscal year 2011. Because of the size of
this relationship we could experience a significant reduction in revenue if the JRC decided to significantly
reduce its purchases from us for any reason including a desire to rebalance its purchases between vendors, or
if we are unable to obtain and maintain necessary regulatory approvals in Japan. We also have a concentration
of credit risk due to our outstanding accounts receivable balances with the JRC.

Additionally, certain other markets and industries can expose us to concentration risk. For example, in our
commercial plasma business, customers are relatively large in size. Because of the size of the relationship, we
could experience a significant reduction in revenue if one or more customers did not renew their contracts.

As a global corporation, we are exposed to fluctuations in currency exchange rates, which could

adversely affect our cash flows and results of operations.
substantial portion of our operations and we intend to continue expanding our presence in international

International revenues and expenses account for a

markets. In fiscal year 2011, our international revenues accounted for 53.1% of our total revenues. The
exposure to fluctuations in currency exchange rates takes different forms. Reported revenues for sales, as well
as manufacturing and operational costs, denominated in foreign currencies by our international businesses,
when translated into U.S. dollars for financial reporting purposes, fluctuate due to exchange rate movement.
Fluctuations in exchange rates could adversely affect our profitability in U.S. dollars of products and services
sold by us into international markets, where payment for our products and services and related manufacturing
and operational costs is made in local currencies.

We are subject to the risks associated with communicable diseases. A significant outbreak of a disease
could reduce the demand for our products and affect our ability to provide our customers with products and
services. An eligible donor’s willingness to donate is affected by concerns about their personal health and
safety. Concerns about communicable diseases (such as pandemic flu, SARS, or HIV) could reduce the
number of donors, and accordingly reduce the demand for our products for a period of time. A significant
outbreak of a disease could also affect our employees’ ability to work, which could limit our ability to produce
product and service our customers.

There is a risk that the Company’s intellectual property may be subject to misappropriation in some
countries. Certain countries, particularly China, do not enforce compliance with laws that protect intellectual
property (“IP”) rights with the same degree of vigor as is available under the U.S. and European systems of
justice. Further, certain of the Company’s IP rights are not registered in China, or if they were, have since
expired. This may permit others to produce copies of products in China that are not covered by currently valid
patent registrations. There is also a risk that such products may be exported from China to other countries.

We sell our products in certain emerging economies. Emerging economies, such as Brazil, Russia, India

and China, have less mature product regulatory systems, and can have more volatile financial markets. In
addition, government controlled health care systems’ willingness or ability to invest in our products and
systems may abruptly change due to changing government priorities or funding capacity. Our ability to sell
products in these economies is dependent upon our ability to hire qualified employees or agents to represent
our products locally, and our ability to obtain the necessary regulatory approvals in a less mature regulatory
environment. If we are unable to retain qualified representatives or maintain the necessary regulatory
approvals, we will not be able to continue to sell products in these markets. We are exposed to a higher degree
of financial risk, if we extend credit to customers in these economies.

In many of the international markets in which we do business, including certain parts of Europe, South

America, the Middle East, Russia and Asia, our employees, agents or distributors offer to sell our products in
response to public tenders issued by various governmental agencies. There is additional risk in selling our
products through agents or distributors, particularly in public tenders. If they misrepresent our products, do not
provide appropriate service and delivery, or commit a violation of local or U.S. law, our reputation could be
harmed, and we could be subject to fines, sanctions or both.

We have a complex international supply chain. Any disruption to one or more of our suppliers’

production or delivery of sufficient volumes of subcomponents conforming to our specifications could disrupt
or delay our ability to deliver finished products to our customers. For example, we purchase components in
Asia for use in manufacturing in the United States and Scotland. We also regularly ship finished goods from
Scotland to Europe and Asia.

Plastics are the principal component of our disposables, which are the main source of our revenues.
Increases in the price of petroleum derivatives could result in corresponding increases in our costs to procure
plastic raw materials. Increases in the costs of other commodities may affect our procurement costs to a lesser
degree.

The technologies that cover our products are the subject of active patent prosecution. There is a risk
that one or more of our products may be determined to infringe a patent held by another party. If this were to
occur we may be subject to an injunction or to payment of royalties, or both, which may adversely affect our
ability to market the affected product(s). In addition, competitors may patent technological advances which
may give them a competitive advantage or create barriers to entry.

Our products are made with materials which are subject to regulation by governmental agencies.
Environmental regulations may prohibit the use of certain compounds in products we market and sell into
regulated markets. If we are unable to substitute suitable materials into our processes, our manufacturing
operations may be disrupted. In addition, we may be obligated to disclose the origin of certain materials used
in our products, including but not limited to metals mined from locations which have been the site of human
rights violations.

We are entrusted with sensitive personal information relating to surgical patients, blood donors,

employees and other persons in the course of operating our business and serving our customers. Government
agencies require that we implement measures to ensure the integrity and security of such personal data and, in
the event of a breach of protocol, that we inform affected individuals. If our systems were not properly
designed or implemented, or should suffer a breach of security or an intrusion (e.g., “hacking”) by
unauthorized persons, the Company’s reputation could be harmed, and it could incur costs and liabilities to
affected persons and enforcement agencies.

We operate in an industry susceptible to significant product liability claims. These claims may be
brought by individuals seeking relief on their own behalf or purporting to represent a class. In addition,
product liability claims may be asserted against us in the future based on events we are not aware of at the
present time.

Item 1B. Unresolved Staff Comments

None

Item 2. Properties

Our main facility, which the Company owns, is located on 14 acres in Braintree, Massachusetts. This

facility is located in a light industrial park and was constructed in the 1970s. The building is approximately
180,000 square feet, of which 70,000 square feet are devoted to manufacturing and quality control operations,
35,000 square feet to warehousing, 72,000 square feet for administrative and research, development and
engineering activities and 3,000 square feet available for expansion. See Note 8 to the financial statements for
details of our mortgage on the Braintree facility.

On property adjacent to the Braintree facility the Company leases 43,708 square feet of additional office
space. This facility is used for sales, marketing, finance, legal, and other administrative services. Annual lease
expense for this facility is $570,025.

The Company leases an 81,929 square foot facility in Leetsdale, Pennsylvania. This facility is used for
warehousing, distribution and manufacturing operations supporting our plasma business. Annual lease expense
is $346,994 for this facility. The Company is also leasing a temporary facility of 28,309 square feet in
Leetsdale, Pennsylvania to accommodate expanded distribution until we can manufacture in our new facility in
Draper, Utah.

The Company leases 99,931 square feet in Draper, Utah. This facility is used for the manufacturing of

SEBRA whole blood equipment and the distribution of both SEBRA and plasma disposable products.
Beginning in fiscal year 2012, this facility will also manufacture plasma disposables identical to the production
in Leetsdale, PA. Annual lease expense is $471,594.

The Company owns a facility in Bothwell, Scotland used to manufacture disposable components for
European customers. The original facility is approximately 22,200 square feet. An addition of 18,000 square
feet was added in early fiscal year 2006. This expansion provided additional office space and 13,500 square
feet of warehouse replacing space previously leased for this purpose.

The Company leases 26,264 square feet of office space in Signy, Switzerland. This facility is used for
sales, marketing, finance and other administrative services. Annual lease expense for this space is $765,420.

The Company leases 6,214 square feet of space in Tokyo, Japan for sales, marketing, finance and other

administrative offices. Annual lease expense is $820,932.

The Company owns a facility in Union, South Carolina. This facility is used for manufacture of sterile

solutions to support our blood center and plasma businesses. The facility is approximately 69,300 square feet.

The Company also leases a 55,000 square foot facility in Stoughton, Massachusetts. This facility is used

for warehousing and distribution of products. The annual lease expense is $261,250.

Haemonetics Software Solutions, which develops and markets software for the hospital, blood center, and

plasma businesses, retains three leases. The first is 25,856 square feet of office space in Edmonton, Alberta,
Canada. Annual lease expense is $317,169. The second is 17,624 square feet of office space in Rosemont,
Illinois. Annual lease expense is $436,241. This facility was closed in December 2010. The third is
15,000 square feet of office space in El Dorado Hills, California. Annual lease expense is $204,000.

The Company also leases 22,346 square feet of space in Plaisir, France, to warehouse our products. The

annual lease expense for this space is $247,514.

Arryx Inc., which performs research for the Company, leases 10,830 square feet of office and laboratory

space in Chicago, Illinois. Annual lease expense is $207,122.

Haemoscope Corporation, which performs research and manufacturing for the Company, leases
16,478 square feet of office and manufacturing space in Niles, Illinois. Annual lease expense is $138,059.

The Company also leases sales, marketing, service, and distribution facilities in Japan, Europe (Austria,

Belgium, Czech Republic, France, Germany, Italy, Sweden, Switzerland, the Netherlands, and United
Kingdom), Lebanon, Russia, China, Hong Kong, Taiwan, and Brazil to support our international business.

Item 3. Legal Proceedings

We are presently engaged in various legal actions, and although our ultimate liability cannot be
determined at the present time, we believe that any such liability will not materially affect our consolidated
financial position or our results of operations.

Our products are relied upon by medical personnel in connection with the treatment of patients and the

collection of blood from donors. In the event that patients or donors sustain injury or death in connection with
their condition or treatment, we, along with others, may be sued, and whether or not we are ultimately
determined to be liable, we may incur significant legal expenses. In addition, such litigation could damage our
reputation and, therefore, impair our ability to market our products or to obtain professional or product liability
insurance or cause the premiums for such insurances to increase. We carry product liability coverage. While
we believe that the aggregate current coverage is sufficient, there can be no assurance that such coverage will
be adequate to cover liabilities which may be incurred. Moreover, we may in the future be unable to obtain
product and professional liability coverage in amounts and on terms that we find acceptable, if at all.

In order to aggressively protect our intellectual property throughout the world, we have a program of
patent disclosures and filings in markets where we conduct significant business. While we believe this program
is reasonable and adequate, the risk of loss is inherent in litigation as different legal systems offer different
levels of protection to intellectual property, and it is still possible that even patented technologies may not be
protected absolutely from infringement.

We believe our competitor Fenwal has produced, and continues to produce, a red cell consumable kit

which infringes a Haemonetics patent. For the past five years, we have been pursuing a patent infringement
lawsuit against Fenwal, the details of which are summarized below. After the Court of Appeals for the Federal
Circuit reversed the trial court’s decision on claims construction, vacating the injunction and damages
previously awarded to Haemonetics, the case was remanded to the trial court for further proceedings.

In December 2005 we filed a lawsuit against Baxter Healthcare SA and Fenwal Inc. in Massachusetts federal
district court, seeking an injunction and damages from Baxter’s infringement of a Haemonetics patent, through the
sale of Baxter’s ALYX brand automated red cell collection system, a competitor of our automated red cell
collection systems. In March 2007, Baxter sold the division which marketed the ALYX product to private investors,
TPG, and Maverick Capital, Ltd. The new company which resulted from the sale was renamed Fenwal.

In January 2009, a jury found that the Fenwal ALYX system infringed Haemonetics’ patent. Ultimately,

the trial court awarded us a total of $18 million in damages and ordered Fenwal to stop selling the ALYX
consumable by December 1, 2010 and pay Haemonetics a 10% royalty on ALYX consumable net sales from
January 30, 2009 until December 1, 2010.

Fenwal took three actions in response to this judgment. First, Fenwal appealed these rulings to the United
States Court of Appeals for the Federal Circuit. Second, Fenwal modified the ALYX disposable in an effort to
avoid the injunction. Third, Fenwal asked the Patent and Trademark Office to re-examine the validity of our patent.

On June 2, 2010, the Court of Appeals reversed the trial court’s claim construction and accordingly,
vacated the original jury verdict finding infringement, and remanded the case to the trial court for further
proceedings. We continue to believe the ALYX consumable kit infringes our patent even under the Court of
Appeals’ claim construction.

In response to Fenwal’s modification of their disposable, we filed a second related patent infringement

action in December 2009 in the same Massachusetts federal trial court as the first case described above.

On May 28, 2010 the Patent and Trademark Office reexamined the patent which is the subject of the two

cases described above, and determined that the patent is valid, contrary to Fenwal’s assertions.

On September 20, 2010, Haemonetics filed a patent infringement action in Germany, against Fenwal and

its German subsidiary, for Fenwal’s infringement of a Haemonetics patent related to the Haemonetics patent
described above. On December 1, 2010, Fenwal filed an action to invalidate the Haemonetics patent which is
the subject of this infringement action.

In April 2008, our subsidiary Haemonetics Italia, Srl. and two of its employees were found guilty by a
court in Milan, Italy of charges arising from allegedly improper payments made under a consulting contract
with a local physician and in pricing products supplied under a tender from a public hospital. In parallel
proceedings concluded contemporaneously in Genoa, Italy, the same parties were entirely exonerated of all
charges. Both matters involved several other individuals and companies and arose in 2004 and 2005,
respectively. When the matters first arose, our Board of Directors commissioned independent legal counsel to
conduct investigations on its behalf. Based upon its evaluation of counsel’s report, the Board concluded that
no disciplinary action was warranted in either case. All Haemonetics parties appealed the guilty verdicts. On
March 3, 2010 the first-level appeals court affirmed these verdicts. We are evaluating this decision and
considering our options for further appeal. The Milan ruling, and its affirmation, has not impacted the
Company’s business in Italy to date. A third proceeding was referred by the Milan court for hearing in
Bergamo, Italy. There have been evidentiary hearings, but no material developments in that case.

Item 4.

(Removed and Reserved)

Executive Officers of the Registrant

The information concerning our Executive Officers is as follows. Executive officers are elected by and
serve at the discretion of our Board of Directors. There are no family relationships between any director or
executive officer and any other director or executive officer of Haemonetics Corporation.

PETER ALLEN (age 52) joined our Company in 2003 as President, Donor Division. Mr. Allen was
appointed Chief Marketing Officer for Haemonetics in 2008. Prior to joining Haemonetics, Mr. Allen was Vice
President of The Aethena Group, a private equity firm providing services to the global healthcare industry.
From 1998 to 2001, he held various positions including Vice President of Sales and the Oncology Business at
Syncor International, a provider of radiopharmaceutical and comprehensive medical imaging services.
Previously, he held executive level positions in sales, marketing and operations in DataMedic, Inc., Enterprise
Systems, Inc./HBOC, and Robertson Lowstuter, Inc. Mr. Allen has also worked in sales and marketing at
American Hospital Supply Corporation and Baxter International, Inc.

PHILLIP J. BRANCAZIO (age 58) joined our Company in July 2009 as Vice President, Global

Manufacturing. Prior to Haemonetics, Mr. Brancazio was Vice President of Manufacturing for Watson
Pharmaceuticals, a generic drug manufacturer from 2004 — 2009. From 1999 to 2003 he worked with DPT

Laboratories, a contract manufacturing company, servicing the pharmaceutical industry, as Vice President of
Manufacturing. Mr. Brancazio worked for Bristol Myers Squibb from 1976 to 1999. He held positions of
increasing responsibility in Quality, Production, and Supply Chain, and Vice President of Manufacturing.
Mr. Brancazio has a BS in Microbiology with a Minor in Chemistry from Texas A&M University, and an
MBA from University of North Carolina, Greensboro.

BRIAN CONCANNON (age 53) joined our Company in 2003 as President, Patient Division and was
promoted to President, Global Markets, in 2006. In 2007, Mr. Concannon was promoted to Chief Operating
Officer. In April 2009, Mr. Concannon was promoted to President and Chief Executive Officer and elected to
the Haemonetics Board of Directors. Immediately prior to joining the Company, Mr. Concannon was President,
Northeast Region, Cardinal Health Medical Products and Services where he was employed since 1998. From
1985 to 1998, he was employed by American Hospital Supply Corporation, Baxter Healthcare Corp. and
Allegiance Healthcare in a series of sales and operations management positions of increasing responsibility.

JOSEPH FORISH (age 58) joined our Company in 2005 as Vice President, Human Resources. Prior to

joining Haemonetics, Mr. Forish held various global human resources leadership roles, including Vice
President, Corporate Human Resources for Rohm and Haas Company. Prior to that, Mr. Forish was Vice
President, Human Resources for the ConvaTec Division of Bristol-Myers Squibb Company.

MIKAEL GORDON (age 56) joined our Company in 2007 as President, Europe and was promoted to

President, Global Markets in February 2009. Prior to joining Haemonetics, Mr. Gordon was Regional
Executive Manager North & West Europe for GE Healthcare Clinical Systems. From 1997 to 2007 he held
various executive positions as Vice President IT, VP Laboratory Products, VP Strategic Planning and VP
Global Sales within Amersham Biosciences until the company was acquired by General Electric in 2004.
Mr. Gordon has broad international business experience in the healthcare environment and has lived several
years outside his home country. Mr. Gordon has a B.Sc. from the Stockholm School of Economics and is a
Swedish national.

SUSAN HANLON (age 43) joined our Company in 2002 as Vice President and Corporate Controller. In
2004, she was promoted to Vice President Planning and Control, and in 2008, Ms. Hanlon was promoted to
Vice President Finance. She presently has responsibility for Controllership, Financial Planning, Tax, and
Treasury. Prior to joining Haemonetics, Ms. Hanlon was a partner with Arthur Andersen LLP in Boston.

MICHAEL KELLY (age 47) joined Haemonetics in July of 2010 as President, North America & Global
Plasma. Prior to joining Haemonetics, Mr. Kelly was Senior Vice President and General Manager, Infection
Prevention, for CareFusion Corporation from 2008 to 2010. From 1999 to 2008, Mr. Kelly served at Cardinal
Health in a variety of General Management, Marketing, Business Development, and Sales positions. In 1991,
he began his career with Baxter Healthcare as a sales representative. Mr. Kelly graduated from The Ohio State
University, Columbus, OH with a Bachelor of Science in Business Administration and an MBA.

CHRISTOPHER LINDOP (age 53) joined our Company in January of 2007 as Vice President and Chief

Financial Officer. In 2007, Mr. Lindop also assumed responsibility for business development. Mr. Lindop is
also responsible for our Software Solutions business. Prior to joining Haemonetics, Mr. Lindop was Chief
Financial Officer at Inverness Medical Innovations, a global developer of advanced consumer and professional
diagnostic products from 2003 to 2006. Prior to this, he was Partner in the Boston offices of Ernst & Young
LLP and Arthur Andersen LLP.

WARREN NIGHAN (age 42) joined our Company in November of 2010 as Vice President of Worldwide

Quality & Regulatory Affairs. Mr. Nighan previously served as Vice President Quality & Regulatory for St.
Jude Medical in Minneapolis, Minnesota from 2009 to 2010. Prior to that, Mr. Nighan was the Worldwide
Vice President of Quality for Covidien from 1999 to 2008. Mr. Nighan holds a Bachelors degree in Nursing
from Northeastern University.

DR. JONATHAN WHITE (age 51) joined our Company in 2008 as Vice President, Research and
Development. Dr. White joined Haemonetics from Pfizer, where he held a number of roles including Chief
Information Officer, and where he was employed from 1998 to 2008. From 1992 to 1998, he was a
management consultant at McKinsey and Company in New York. Dr. White is a Fellow of the Royal College

of Surgery in England. He completed his qualifications as a neurosurgeon and worked in both clinical and
academic medical settings. In addition, he holds a Masters degree in Computer Science from Cambridge in
England, and a Masters degree in Business Administration from INSEAD in France.

PART II

Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of

Equity Securities

Our common stock is listed on the New York Stock Exchange under the symbol HAE. The following
table sets forth for the periods indicated the high and low sales prices of such common stock, which represent
actual transactions as reported by the New York Stock Exchange.

First
Quarter

Second
Quarter

Third
Quarter

Fourth
Quarter

Fiscal year ended April 2, 2011:
Market price of Common Stock:

High . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Low . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$60.65
$52.58

$59.01
$50.50

$64.83
$53.11

$66.70
$57.73

Fiscal year ended April 3, 2010:
Market price of Common Stock:

High . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Low . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$58.92
$46.89

$60.23
$52.01

$57.60
$51.40

$59.57
$52.40

There were approximately 308 holders of record of the Company’s common stock as of April 30, 2011.
The Company has never paid cash dividends on shares of its common stock and does not expect to pay cash
dividends in the foreseeable future.

The following graph compares the cumulative 5-year total return provided to shareholders on

Haemonetics Corporation’s common stock relative to the cumulative total returns of the S&P 500 index and
the S&P Health Care Equipment index. An investment of $100 (with reinvestment of all dividends) is assumed
to have been made in our common stock and in each of the indexes on 3/31/2006 and its relative performance
is tracked through 3/31/2011.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Haemonetics Corporation, The S&P 500 Index
And The S&P Health Care Equipment Index

Haemonetics Corporation

S&P 500

S&P Health Care Equipment

200

150

100

S
R
A
L
L
O
D

3/06

3/07

3/08

3/09

3/10

3/11

* $100 invested on 3/31/06 in stock or index, including reinvestment of dividends.

Fiscal year ended March 31.

Haemonetics Corporation

100.00

92.08

117.35

108.49

112.57

129.09

S&P 500

S&P Health Care Equipment

100.00

111.83

106.15

100.00

108.60

112.38

65.72

77.24

98.43

113.83

107.82

109.40

3/06

3/07

3/08

3/09

3/10

3/11

The stock price performance included in this graph is not necessarily indicative of future stock price

performance.

Item 6. Selected Consolidated Financial Data

Haemonetics Corporation and Subsidiaries Five-Year Review

2011

2010

2009
(In thousands, except per share and employee data)

2008

2007

Summary of Operations
Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . $676,694
321,485
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . .

$645,430
307,949

$597,879
289,709

$516,440
258,715

$449,607
222,307

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . .

355,209

337,481

308,170

257,725

227,300

Operating expenses:
Research, development and engineering. . . . . . .
Selling, general and administrative . . . . . . . . . .
Contingent consideration income. . . . . . . . . . . .
Asset impairments . . . . . . . . . . . . . . . . . . . . . .
Cost to equity. . . . . . . . . . . . . . . . . . . . . . . . . .
In process research and development . . . . . . . . .
Arbitration & settlement income . . . . . . . . . . . .

32,656
213,899
(1,894)
—
—
—
—

26,376
214,483
(2,345)
15,686
—
—
—

Total operating expenses . . . . . . . . . . . . . . . . . .

244,661

254,200

Operating income . . . . . . . . . . . . . . . . . . . . . . .
Other income (expense), net . . . . . . . . . . . . . . .

Income before provision for income taxes . . . . .
Provision for income taxes . . . . . . . . . . . . . . . .

110,548
(467)

110,081
30,101

83,281
(2,010)

81,271
22,901

23,859
198,744
—
—
—
—
—

222,603

85,567
(565)

85,002
25,698

24,322
163,116
—
—
—
—
—

187,438

70,287
7,015

77,302
25,322

23,884
137,073
—
—
225
9,073
(5,700)

164,555

62,745
9,591

72,336
23,227

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 79,980

$ 58,370

$ 59,304

$ 51,980

$ 49,109

Income per share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Diluted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Weighted average number of shares . . . . . . . . .
Common stock equivalents . . . . . . . . . . . . . . . .
Weighted average number of common and

3.19
3.12
25,077
519

$
$

2.29
2.24
25,451
612

$
$

2.34
2.27
25,389
784

$
$

2.01
1.94
25,824
922

$
$

1.84
1.78
26,746
903

common equivalent shares. . . . . . . . . . . . . . .

25,596

26,063

26,173

26,746

27,649

2011

2010

2009

2008

2007

Financial and Statistical Data:
Working capital . . . . . . . . . . . . . . . . . . . . . . . . $340,160
Current ratio. . . . . . . . . . . . . . . . . . . . . . . . . . .
4.1
Property, plant and equipment, net
. . . . . . . . . . $155,528
Capital expenditures . . . . . . . . . . . . . . . . . . . . . $ 46,669
Depreciation and amortization . . . . . . . . . . . . . . $ 48,145
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . $833,264
Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
4,879
Stockholders’ equity . . . . . . . . . . . . . . . . . . . . . $686,136
Return on average equity . . . . . . . . . . . . . . . . .
Debt as a % of stockholders’ equity . . . . . . . . .
Employees(a) . . . . . . . . . . . . . . . . . . . . . . . . . .
Net revenues per employee . . . . . . . . . . . . . . . . $

2,201
307

12.5%
0.7%

$250,888
2.9
$154,313
$ 56,304
$ 43,236
$760,928
$ 20,520
$593,124

$289,530
4.1
$137,807
$ 56,379
$ 36,462
$649,693
$
6,038
$539,884

$261,757
3.7
$116,484
$ 57,790
$ 31,197
$608,950
$ 12,363
$494,188

$321,654
4.9
$ 90,775
$ 40,438
$ 27,504
$572,735
$ 28,876
$479,648

10.3%
3.5%

11.5%
1.1%

10.5%
2.5%

10.7%
6.0%

2,327
277

2,016
297

1,875
275

1,826
246

(a) Reflects the addition of Global Med employees at the end of fiscal year 2011 and 2010.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(A) Our Business

Our medical device systems automate the collection and processing of donated blood; assess likelihood for
blood loss; and salvage and process blood from surgery patients. These systems include devices and single-use,
proprietary disposable sets (“disposables”) that operate only with our specialized devices. Specifically, our
plasma and blood center systems allow users to collect and process only the blood component(s) they target —
plasma, platelets, or red blood cells — increasing donor and patient safety as well as collection efficiencies. Our
blood diagnostics system assesses hemostasis (a patient’s clotting ability) to aid clinicians in assessing the cause
of bleeding resulting in overall reductions in blood product usage. Our surgical blood salvage systems allow
surgeons to collect the blood lost by a patient in surgery, cleanse the blood, and make it available for transfusion
back to the patient. Our blood tracking systems automate the distribution of blood products in the hospital.

We also market information technology platforms that are used by blood and plasma collectors to
eliminate previously manual functions. These platforms improve the safety and efficiency of blood collection
logistics, mobile drive management and donor recruitment, and blood processing and distribution. We market
information technology platforms for hospitals to dispense and track blood inventory in the hospital. These
platforms improve the efficiency of hospital transfusion systems and automate manual processes. We also
market a blood management dashboard that allows hospital customers to mine their own data stored in
disparate systems to assess their blood management practices, and implement change quickly.

Our business services products include blood management, Six Sigma, and LEAN manufacturing
consulting, which support our customers’ needs for regulatory compliance and operational efficiency in the
blood supply chain.

We either sell our devices to customers (resulting in equipment revenue) or place our devices with
customers subject to certain conditions. When the device remains our property, the customer has the right to
use it for a period of time as long as the customer meets certain conditions we have established, which, among
other things, generally include one or more of the following:

(cid:129) Purchase and consumption of a minimum level of disposables products;

(cid:129) Payment of monthly rental fees; and

(cid:129) An asset utilization performance metric, such as performing a minimum level of procedures per month

per device.

Our disposable revenue stream, which includes the sales of disposables and fees for the use of our
equipment, accounted for approximately 81.5% of our net revenues for fiscal year 2011, 86.0% of our net
revenues for fiscal year 2010, and 85.7% of our net revenues for fiscal year 2009.

(B) Product Categories

Although we manage our business as one operating segment, we address our customer constituents through

four global product categories: plasma, blood center, hospital, and software solutions. Each of our products,
platforms, and services can be marketed individually. However, as our blood management solutions vision is to
offer integrated closed loop solutions for blood supply chain management, our software solutions — that is,
information technology platforms and consulting services — can be integrated with the devices and sold through
our plasma, blood center, and hospital sales forces. Our integrated product portfolios are as follows:

Plasma Products and Solutions

Our plasma products include systems to collect plasma, which is then fractionated and made into bio-

pharmaceuticals. Our plasma solutions include information technology platforms and consulting services that
support improved operational efficiency and regulatory compliance. We market our plasma products primarily to
for-profit global plasma collectors which are frequently owned by large bio-pharmaceutical companies and often
pay a fee for donations. In addition, not for profit organizations like the Japan Red Cross utilize our products.

Plasma Systems:

Our PCS brand systems automate the collection of plasma from donors who are most often paid a fee for

their donation. The collected plasma is then processed into therapeutic pharmaceuticals. Automated plasma
collection, or plasmapheresis, is a safe and cost-effective procedure.

Plasma Solutions:

Plasma was the first transfusion market we entered with information technology platforms. As a result,
we have a robust portfolio of information technology platforms for plasma customers. Our plasma information
technology platforms span the plasma supply chain and include products that manage registration, donor
processing, laboratory processing, back office functions, supply chain management, and distribution. Our
products include: eQue Automated Interview and Assessment, eLynx Workflow Optimization, DMS Donor
Management System, and the CaPS Cash Payment System. With our information technology platforms, plasma
collectors are better able to manage processes across the plasma supply chain, react quickly to business
dynamics, and identify increased opportunities to reduce costs. For consulting services, we offer customers
business solutions to support process excellence, donor recruitment, and business design.

Blood Cemter Products and Solutions

Our blood center products include systems to collect plasma, platelets and red cells from blood donors.
These blood components, including the plasma, are used for transfusion to patients. Our blood center solutions
include information technology platforms and consulting services that support improved operational efficiency
and regulatory compliance. We market our blood center products primarily to not-for-profit blood collectors or
national health agencies.

Blood Center Systems:

We market two MCS brand systems. The first MCS brand system automates the collection of platelets
and other blood components from volunteer donors. The systems enable the donation of a larger number of
the donor’s platelets, which are then generally transfused to cancer patients and others with bleeding disorders.
Before the advent of our automated platelet collection technology, the “pooling” or combination of platelets
from 4 to 7 different donors was the only way to prepare a single therapeutic dose of platelets for transfusion
to a patient. Our MCS line of products allows the collection of a sufficient number of platelets from only one
donor to produce one or two therapeutic doses.

We market another MCS brand system to automate the collection of red cells from volunteer donors.

These systems improve the blood collector’s operational efficiency by increasing the number of blood
components collected per donation event. Automation allows for a significantly higher number of red cells to
be collected than the traditional (non-automated, whole blood) collection method. Automation helps blood
collectors address red cell shortages that commonly plague health care systems. The highest sales volume
product in the MCS red cell product line is our double red cell collection technology which allows for two
units of red cells to be collected from one donor. Specialty protocols enabling the simultaneous collection of a
unit of red cells and a unit of plasma or a unit of red cells and a unit of platelets are also available in various
parts of the world.

Our ACP brand systems automate the process used to freeze, thaw and wash red blood cells which

enables blood collectors and the military to store frozen red cells and ultimately better manage blood
inventories. The ACP systems can also be used to wash liquid stored red blood cells units to significantly
reduce plasma proteins within these units before transfusion to patients with special transfusion requirements.

Blood Center Solutions:

Through internal product development and acquisition, we have significantly bolstered our blood center
information technology offerings over the past three years. Our platforms now span the blood collection supply
chain and include products that manage blood drives, donor recruitment and processing, operations, and

laboratory processing. Our products include: eQue and Donor Doc Automated Interview and Assessment,
Hemasphere, El Dorado Donor, eLynx Workflow Optimization, SafeTrace, Sapanet, Surround, Edgeblood and
EdgeTrack. With our information technology platforms, blood collectors are better able to manage processes
across the blood supply chain and improve safety, regulatory compliance and efficiency. For consulting
services, we offer customers business solutions to support process excellence, quality control, and business
design, including resource allocation and utilization.

Hospital Products and Solutions

Our hospital products include a surgical diagnostic system that measures hemostasis (clotting ability),
giving clinicians valuable information to assess the patient’s hemostasis before, during, and after surgery, and
systems to collect blood during and after surgery, wash and filter unwanted substances from the blood, and
prepare the blood for reinfusion to the surgical patient. Our hospital products also include a system for
tracking and dispensing blood in the hospital. Our hospital solutions include IMPACT Online, an information
technology platform to track blood use and best practices in blood management, as well as consulting services
that assess blood management practices and recommend appropriate changes to ensure quality patient care at
optimal costs. We market these hospital products to hospitals and hospital service providers.

Hospital Systems:

Our TEG Thrombelastograph Hemostasis Analyzer is a blood diagnostic instrument which measures a
patient’s hemostasis or the ability for the specific patient to form a clot and for the clot to break down. By
understanding a patient’s clotting ability, clinicians can better plan for the patient’s care, deciding in advance
whether to start or discontinue use of certain drugs or, if a transfusion is necessary, to provide only the blood
component(s) necessary to stop the patient’s bleeding. Such planning supports the best possible clinical
outcome, which can lead to lower hospital costs through reduced adverse transfusion reactions, use of fewer
blood components, shorter intensive care unit and hospital stays, and fewer needs for exploratory surgery.

Our surgical blood salvage systems allow for the recovery, separation and washing of red cells from blood
lost by a patient during or after surgery, so that red cells can be made available to transfuse back to the patient
if needed. In this way, a surgical patient can receive transfusions of the safest blood possible, his or her own.
Our surgical blood salvage systems include: our Cell Saver brand systems for higher blood loss surgeries and
trauma; our OrthoPAT brand systems for lower, slower blood loss orthopedic procedures; and our cardioPAT
brand system for lower blood loss cardiovascular procedures, like beating heart surgeries, or for use after
higher blood cardiovascular surgeries. We also market the SmartSuction system which is used to clear blood
and debris from the surgical field in conjunction with surgical blood salvage.

Hospital Solutions:

Through internal development and acquisition, we have a portfolio of hospital solutions. SafeTrace TX
and BloodTrack products can manage blood product inventory, perform patient cross-matching, and manage
transfusion. IMPACT Online is a business intelligence web-based portal solution which monitors and measures
improvements in a hospital’s blood management practices. Where before, data was siloed across multiple
information platforms, IMPACT Online compiles data from across the hospital, and provides administrators
with actionable information. With our products, hospitals are better able to manage processes across the blood
supply chain and identify opportunities to reduce costs and enhance processes.

For consulting services, we offer peer to peer clinician consulting services that leverage a proprietary
database of best practices in transfusion medicine to provide hospitals with a baseline view of their blood
management metrics, as well as with recommendations for approaches to transfusion therapy and the
avoidance of unnecessary transfusions. Our services then measure key improvements associated with
recommended best practices to allow hospital customers to track progress.

Software Solutions

Our software solutions offerings include information technology platforms and consulting services which

promote efficiency in blood management. Our software solutions address a universal customer goal — to
provide the best patient care at optimal cost. We market our software solutions to plasma and blood collectors
as well as to hospitals. While we employ a software solutions sales force, we also leverage our plasma, blood
center, and hospital sales force to cross-sell devices with software solutions.

Our BloodTrack systems manage control of blood products from the hospital blood center through to the
transfusion to the patient. “Smart” refrigerators located in operating suites, emergency rooms, and other parts
of the hospital dispense blood units with just-in-time control and automated tracking for efficient
documentation.

Financial Summary

Net revenues . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . .
% of net revenues . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . .
% of net revenues . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . .
Other expense, net . . . . . . . . . . . . . . . . . . . . .
Income before taxes. . . . . . . . . . . . . . . . . . . .
Provision for income tax . . . . . . . . . . . . . . . .
% of pre-tax income. . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . .
% of net revenues . . . . . . . . . . . . . . . . . . .
Earnings per share-diluted . . . . . . . . . . . . . . .

April 2,
2011

March 28,
2009

April 3,
2010
(In thousands, except per share data)
$645,430
$337,481

$676,694
$355,209

$597,879
$308,170

52.5%

52.3%

51.5%

$244,661
$110,548

$254,200
$ 83,281

$222,603
$ 85,567

16.3%
(6)
$
384
$
$
(845)
$110,081
$ 30,101

12.9%
(742)
$
$
399
$ (1,667)
$ 81,271
$ 22,901

14.3%
(64)
$
$
1,968
$ (2,469)
$ 85,002
$ 25,698

27.3%

28.2%

30.2%

% Increase/
(Decrease)
11 vs. 10

% Increase/
(Decrease)
10 vs. 09

4.8%
5.3%

(3.8)%
32.7%

(99.2)%
(3.8)%
(49.3)%
35.4%
31.4%

8.0%
9.5%

14.2%
(2.7)%

1059.4%
(79.7)%
(32.5)%
(4.4)%
(10.9)%

$ 79,980

$ 58,370

$ 59,304

37.0%

(1.6)%

11.8%
3.12

9.0%
2.24

9.9%
2.27

39.3%

(1.3)%

Our fiscal year ends on the Saturday closest to the last day of March. Fiscal years 2011 and 2009 each

includes 52 weeks with all four quarters each having 13 weeks. Fiscal year 2010 includes 53 weeks with each
of the first three quarters having 13 weeks and the fourth quarter having 14 weeks. For fiscal year 2011, net
revenues increased 4.8%. Excluding the effect of the extra week in fiscal year 2010, net revenues for fiscal
year 2011 increased 6.7%.

Net revenues for fiscal year 2011 increased 4.8% over fiscal year 2010. The effects of foreign exchange

accounted for an increase of 0.2% over fiscal year 2010. The increase noted reflects the positive impact of
recent acquisitions, which contributed 5.3% to revenue growth for fiscal year 2011, as well as strong revenue
growth from emerging markets, notably Russia and Asia.

Net revenues for fiscal year 2010 increased 8.0% over fiscal year 2009. The effects of foreign exchange

accounted for an increase of 1.9% over fiscal year 2009. The remaining increase of 6.1% is mainly due to
increases in our disposables revenue and increased revenues as a result of three acquisitions completed during

fiscal year 2010. The increase in disposables revenue resulted primarily from disposable unit increases in the
plasma, platelet and diagnostic product lines.

Gross profit increased 5.3% during fiscal year 2011. The effects of foreign exchange decreased gross
profit by 0.1% over fiscal year 2010. Absent foreign exchange, gross profit increased 5.4%, which was largely
driven by higher software sales as a result of the Global Med acquisition and cost improvements in our
manufacturing operations. Our gross profit margin percentage improved 20 basis points for fiscal year 2011 as
compared to fiscal year 2010. Increased software sales positively impacted gross margin percentage. These
increases were partly offset by increased inventory reserves during fiscal year 2011.

During fiscal year 2010, gross profit increased 9.5%. Foreign exchange resulted in a 4.5% increase in
gross profit from fiscal year 2009. The remaining increase of 5.0% was due primarily to the net increase in
sales and the positive impact of cost reductions including the automation process in our Pittsburgh facility.
This increase was partly offset by increased spending on quality initiatives. Our gross profit margin percent
improved 80 basis points for fiscal year 2010 as compared to fiscal year 2009. Major factors impacting the
gross margin percent improvement of 80 basis points included foreign exchange, manufacturing efficiencies,
and fixed cost leverage. These improvements were partly offset by changes in product mix driven by higher
sales of lower gross margin plasma products and aforementioned increase in spending on quality initiatives.

Operating expenses decreased 3.8% during fiscal year 2011 over fiscal year 2010. Foreign exchange

accounted for a decrease in operating expenses of 0.1% for fiscal year 2011. Without the effects of foreign
exchange, operating expenses decreased 3.7% during fiscal year 2011. Fiscal year 2010 included asset write
downs totaling $15.7 million related to the abandonment of our next generation platelet apheresis platform and
a blood center donation management software product. No similar write downs were experienced in fiscal
2011. The decreases for fiscal year 2011 also included a reduction in the expense associated with cash bonus
incentive compensation for this fiscal year cost. The decreases were offset by higher operating expenses
associated with the Global Med acquisition.

Operating expenses increased 14.2% in fiscal year 2010 from fiscal year 2009. Foreign exchange
accounted for an increase of 0.1% for fiscal year 2010. Without the effects of foreign exchange, operating
expenses increased 14.1% during fiscal year 2010. The higher operating expenses in the fiscal year 2010
included the asset write downs noted above as well as costs related to the separation of employees in
connection with our transformation plan.

During fiscal year 2011, operating income increased 32.7% compared to fiscal year 2010. Foreign

exchange resulted in a 0.1% increase in operating income during the fiscal year. Without the effects of foreign
currency, operating income increased 32.6% over fiscal year 2010. The growth in revenues from our emerging
markets, the acquisition of Global Med and lower cash bonus incentive compensation were significant
contributors to the improvement in operating income. Additionally, we incurred significant costs in fiscal year
2010 related to asset write downs, positively impacting operating income growth as no similar costs were
incurred in fiscal year 2011.

Operating income decreased 2.7% during fiscal year 2010. The effects of foreign exchange accounted for

an increase in operating income of 14.8%. Without the effects of foreign exchange, operating income
decreased 17.5% during fiscal year 2010. Several items contributed to the reduction in operating income,
including the asset write downs noted above, restructuring costs, costs to consummate the acquisition of
Global Med, and increased operating expenses related to new business acquisitions, blood management
solutions, research and development, and our enterprise resource planning system. These decreases were
partially offset by income resulting from the re-measurement of the fair value of contingent consideration from
our Neoteric acquisition, the decrease in employee bonus expense, and the increases in gross profit described
above.

Net income increased 37.0% during fiscal year 2011. Without the effects of foreign exchange, which

accounted for an increase of 0.7%, net income increased 36.3% for fiscal year 2011. The increases in
operating income and lower foreign exchange losses were the principal reasons for the improvement in net
income.

Net income decreased 1.6% during fiscal year 2010. The main factors that affected net income were the
decrease in operating income described above and an increase in other expense that resulted due to increased
interest expense associated with our contingent purchase price liability and reduced interest income due to a
significant reduction in the interest rate yields on cash and cash equivalents.

Market Trends

Plasma Market

Changes in demand for plasma-derived pharmaceuticals, particularly immunoglobulin (“IG”), is the key

driver of plasma collection volumes in the commercial plasma collection market. Various factors related to the
supply of plasma and the production of plasma-derived pharmaceuticals also affect demand, including the
following:

(cid:129) There has been significant industry consolidation among plasma collectors and fractionators. Industry
consolidation impacts us when a collector changes the total number of its collection centers, the total
number of collections performed per center or changes the plasma collection system (either
Haemonetics or a competitive technology) used to perform some or all of those collections.

(cid:129) The supply of source plasma also affects demand for additional collections of source plasma.

(cid:129) The newer plasma fractionation facilities are more efficient in their production processes, utilizing less

plasma to make similar quantities of pharmaceuticals and vaccines.

(cid:129) Reimbursement guidelines affect the demand for end product pharmaceuticals.

(cid:129) Newly approved indications and diagnosis of new patients requiring plasma derived therapies increase

the demand for plasma.

During fiscal year 2011, the supply and demand balance for plasma in the U.S. and Europe experienced a

correction after five consecutive years of double digit growth. The relatively flat growth in collections this
fiscal year resulted from plasma supply exceeding the demand for fractionation. While global markets for
plasmapheresis have been growing, the market in Japan has declined. The Japan Red Cross has shifted some
of its plasma for fractionation from plasmapheresis to recovered plasma from whole blood collections. This
change has reduced demand for automated plasma collections. Currently, demand for plasma-derived therapies
is driving plasma collection growth of approximately 5-7% per year.

Blood Center Market

In the blood center market, we sell products used in the collection of platelets and red cells.

Despite modest increases in the demand for platelets in the United States, Europe, and Japan, improved

collection efficiencies that increase the yield of platelets per collection and more efficient use of collected
platelets have resulted in a flat market for automated collections and related disposables in these countries.
With changes in healthcare and social security systems in emerging markets, a larger number of people get
access to state of the art medical treatments, which drives the demand for platelet transfusions and represent a
faster growing market.

After several years of modest increases in demand for red cell transfusions and a general shortage of
volunteer donors, the market in recent years has experienced lower demand for red cells due to fewer elective
surgeries and an increase in the number of available donors due to both changes in regulation in our major
markets. The reduced demand for red cells adversely impacted our red cell business. We believe that blood
collectors’ imperative to improve operating efficiency and regulatory compliance, coupled with increased
demand for red cells, will provide growth opportunities for our red cell technology in the future.

Hospital Market

In the hospital market, we sell cardiovascular surgical blood salvage systems, orthopedic surgical blood

salvage systems, and a blood diagnostics instrument.

Our Cell Saver brand surgical blood salvage system was designed as a solution for rapid, high volume

blood loss procedures, such as cardiovascular surgeries. This part of the surgical blood salvage market is
declining and will likely continue to decline due to improved surgical techniques which minimize blood loss
and a decrease in the number of surgeries performed because patients are undergoing less invasive procedures
before moving to surgeries. The cardioPAT system, a surgical blood salvage system targeted at cardiovascular
procedures when there is less blood loss, is designed to meet the market needs created by these improved
surgical techniques. The cardioPAT can be used intra-operatively as well as post-operatively when blood loss
continues while the patient is in recovery.

Our OrthoPAT technology is used to salvage red cells in lower blood loss orthopedic procedures,
including hip and knee replacement surgeries. The OrthoPAT is the only system on the market designed to
collect, separate and wash a patient’s blood lost during and after surgery. While cell salvage is not yet a
standard of care for U.S. orthopedic procedures, we position this device as an effective alternative to patient
pre-donation or non-washed autotransfusion systems. Particularly in the United States, hip and knee
replacement surgeries are frequently elective surgeries and as a result are subject to economic conditions.

Our TEG system is a diagnostic tool which allows an assessment of a patient’s hemostasis so the surgeon

can then decide the best blood-related clinical treatment for the individual patient. TEG product line sales
further strengthened in fiscal year 2011. This product’s growth is dependent on hospitals adopting this
technology as a standard practice in their blood management programs.

RESULTS OF OPERATIONS

Net Revenues by Geography

April 2,
2011

United States . . . . . . . . . . . . . . . . . .
International . . . . . . . . . . . . . . . . . . .

$317,355
359,339

April 3,
2010
(In thousands)
$303,965
341,465

Net revenues . . . . . . . . . . . . . . . . . .

$676,694

$645,430

$597,879

March 28,
2009

% Increase
11 vs. 10

% Increase
10 vs. 09

$279,029
318,850

4.4%
5.2%

4.8%

8.9%
7.1%

8.0%

International Operations and the Impact of Foreign Exchange

Our principal operations are in the U.S., Europe, Japan and other parts of Asia. Our products are
marketed in more than 80 countries around the world through a combination of our direct sales force and
independent distributors and agents.

Our revenues generated outside the U.S. approximated 53.1%, 52.9%, and 53.3% of net revenues during

fiscal year 2011, 2010, and 2009, respectively. During fiscal year 2011, 2010, and 2009, revenues in Japan
accounted for approximately 16.3%, 17.0%, and 16.3%, respectively, of our total revenues. The natural
disasters that occurred in Japan in late-March 2011 did not materially affect our operations for fiscal year
2011 and are not expected to have a material impact to our operations in future periods. Revenues from
Europe accounted for approximately 27.6%, 28.0%, and 29.5% of our total revenues for fiscal year 2011,
2010, and 2009, respectively. International sales are generally conducted in local currencies, primarily the
Japanese Yen and the Euro. As discussed above, our results of operations are impacted by changes in the value
of the Yen and the Euro relative to the U.S. Dollar.

For fiscal year 2011 as compared to fiscal year 2010, the effects of foreign exchange resulted in a 0.2%

increase in sales. For fiscal year 2010 as compared to fiscal year 2009, the effects of foreign exchange
accounted for a 1.9% increase in sales

Please see 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 Product Type

April 2,
2011

Disposables. . . . . . . . . . . . . . . . . . $551,836
66,876
Software solutions . . . . . . . . . . . . .
57,982
Equipment & other . . . . . . . . . . . .

April 3,
2010
(In thousands)
$555,226
35,919
54,285

March 28,
2009

$512,230
31,605
54,044

Net revenues . . . . . . . . . . . . . . . . $676,694

$645,430

$597,879

% (Decrease)
/ Increase
11 vs. 10

% Increase/
(Decrease)
10 vs. 09

(0.6)%
86.2%
6.8%

4.8%

8.4%
13.6%
0.4%

8.0%

Disposables Revenues by Product Type

April 2,
2011

Plasma disposables . . . . . . . . . . . . $227,209
Blood center disposables
Platelet . . . . . . . . . . . . . . . . . . . . .
Red cell . . . . . . . . . . . . . . . . . . . .

156,251
46,828

April 3,
2010
(In thousands)
$232,378

March 28,
2009

% (Decrease)
/ Increase
11 vs. 10

% Increase/
(Decrease)
10 vs. 09

$202,165

(2.2)%

14.9%

151,026
48,031

143,423
49,508

Hospital disposables
Surgical . . . . . . . . . . . . . . . . . . . .
OrthoPAT . . . . . . . . . . . . . . . . . . .
Diagnostics . . . . . . . . . . . . . . . . . .

203,079

199,057

192,931

66,503
35,631
19,414

69,942
37,079
16,770

67,697
35,420
14,017

121,548

123,791

117,134

Total disposables revenue . . . . . . $551,836

$555,226

$512,230

3.5%
(2.5)%

2.0%

(4.9)%
(3.9)%
15.8%

(1.8)%

(0.6)%

5.3%
(3.0)%

3.2%

3.3%
4.7%
19.6%

5.7%

8.4%

Disposables Revenue

Disposables include the Plasma, Blood center, and Hospital product lines. Disposables revenue decreased
0.6% during fiscal year 2011 and increased 8.4% during fiscal year 2010. Foreign exchange resulted in a 0.1%
increase and 0.2% decrease for fiscal years 2011 and 2010, respectively. Without the effect of foreign
exchange, disposables revenue decreased 0.7% and increased 8.6% for fiscal year 2011 and 2010, respectively.

Plasma

Plasma disposables revenue decreased 2.2% during fiscal year 2011. Foreign exchange accounted for a
decrease of 0.9% over fiscal year 2010. Without the effects of foreign exchange, plasma disposables revenue
decreased 1.3% during fiscal year 2011. This decrease was driven by lower apheresis plasma collection volume
in Japan as more plasma was sourced by the Japan Red Cross as a byproduct from its whole blood collections,
a trend that we expect to continue into the next year. Additionally, one of our significant customers has
removed one of its products from the market, which negatively affected our sales in the U.S. and Europe.
Finally, our commercial plasma customers have slowed their growth and in some cases reduced collections
from last year’s levels in the first half of fiscal year 2011 following several years of significant growth.

During fiscal year 2010, plasma disposable revenue increased 14.9%. Foreign exchange resulted in a

2.1% increase over fiscal year 2009. The remaining 12.8% increase was principally due to unit volume
increases resulting from both market and share increases as well as price increases. The market increase is due
to the demand for plasma derived pharmaceuticals. Demand for source plasma to make collecting pharmaceu-
ticals grew strongly earlier in the year and moderated at the end of fiscal year 2010, a trend which continued
in fiscal year 2011.

Blood Center

Blood center consists of disposables used to collect platelets, red cells, and plasma for transfusion.

Platelet

Platelet disposables revenue increased 3.5% during fiscal year 2011. Foreign exchange accounted for
2.0% of this increase. Without the effect of foreign exchange, platelet disposable revenue increased 1.5%
during fiscal year 2011. Sales increased across emerging markets throughout the fiscal year, which is the
primary driver of the increase in revenue. Sales declines in our European direct market were attributable to
competition and the switch from apheresis platelets to platelets derived from whole blood collections, which is
the primary driver for the decline in net revenue in Europe.

During fiscal year 2010, platelet disposable revenue increased 5.3%. Foreign exchange resulted in a 4.0%
increase in platelet disposable revenue over fiscal year 2009. The remaining 1.3% increase was due to growth
in emerging markets. These increases were partially offset by decreases due to loss of market share in Europe.

Red Cell

Red cell disposables revenue decreased 2.5% during fiscal year 2011. Foreign exchange accounted for a

revenue decrease of 0.5% from fiscal year 2010. The remaining decrease of 2.0% was driven by lower demand
for red cells as a result of fewer surgeries, resulting in a reduced demand for automated red cell collection. We
believe that blood collectors’ efforts to improve operating efficiency and regulatory compliance, coupled with
an expected return of donor shortages, will provide important growth opportunities for our red cell products in
the future.

During fiscal year 2010, red cell disposable revenue decreased 3.0% compared to fiscal year 2009.
Foreign exchange accounted for a decrease of 0.3%. Without this effect, disposables revenue decreased 2.7%.
Our red cell products are sold primarily to blood collectors, such as blood centers and government agencies.
Sales are driven by the total level of red cell collections, the percentage of those collections done with
apheresis devices and our market share of those automated collections. During fiscal year 2010, the reduced
demand for red cells adversely impacted our red cell business.

Hospital

Hospital consists of Surgical, OrthoPAT, and Diagnostics products. The hospital product line includes the

following brand platforms: the Cell Saver brand, the TEG brand, the OrthoPAT brand, the cardioPAT brand,
and the SmartSuction Harmony products.

Surgical

Surgical disposables revenue consists principally of the Cell Saver and cardioPAT products. Revenues
from our surgical disposables decreased 4.9% during fiscal year 2011. Foreign exchange resulted in a decrease
of 0.1% in surgical disposables revenue for the fiscal year. Without the effects of foreign currency, the
decrease in surgical disposables revenue of 4.8% for the fiscal year was the result of a decrease in demand
across our European and North American markets, driven by both competitive pressures and market conditions
resulting in fewer surgeries. This decrease was partly offset by strong sales in our emerging markets.

During fiscal year 2010, revenues from our surgical disposables increased 3.3%. Surgical disposables

revenue consists principally of the Cell Saver, cardioPAT, and Smart Suction Harmony products. Foreign
exchange resulted in a 2.3% increase in surgical disposables revenue. Without the effect of currency, surgical
disposables revenue increased 1.0%. This growth resulted from continued market share gains in Japan.

OrthoPAT

Revenues from our OrthoPAT disposables decreased 3.9% during fiscal year 2011. Foreign exchange

resulted in a decrease in OrthoPAT disposables revenue of 0.2% over fiscal year 2010. Without the effect of

foreign currency, OrthoPAT disposables revenue decreased by 3.7%. The decline in fiscal year 2011 revenue
was driven by a decrease in the frequency of use of the OrthoPAT.

In April 2011, we announced a voluntary recall of our OrthoPAT devices manufactured prior to 2002. We

anticipate spending approximately $10 million of incremental capital equipment expenditures during fiscal
2012 to upgrade our OrthoPAT device in response to the recall, as discussed below within the liquidity and
capital resources narrative. We do not currently believe reductions in equipment or disposable sales due to this
recall will be material to our fiscal 2012 financial performance. In connection with our voluntary recall of our
OrthoPAT devices manufactured prior to 2002, we incurred $0.8 million of expense for repair or replacement
of customer-owned OrthoPAT devices during fiscal year 2011.

During fiscal year 2010, OrthoPAT disposables revenue increased 4.7% over fiscal year 2009. Foreign

exchange resulted in a 0.7% increase in OrthoPAT revenue. Without the effect of currency, OrthoPAT
disposables revenue increased 4.0%. Revenue growth accelerated throughout fiscal year 2010, as we worked
with more customers using our IMPACT approach, which establishes the value of using the product in a
standard of care setting.

Diagnostics

Diagnostics product revenue consists principally of the TEG products. Revenues from our diagnostics
products increased 15.8% during fiscal year 2011. Foreign exchange accounted for an increase of 0.1% during
fiscal year 2011. Without the effect of foreign currency, diagnostic product revenues increased by 15.7%. The
revenue increase is due to new adoption of this product, particularly in the United States.

During fiscal year 2010, diagnostics revenue increased 19.6% over fiscal year 2009. Foreign exchange

resulted in a 4.7% increase in diagnostics revenue. Without the effect of currency, diagnostics revenue
increased 14.9%. Similar to our OrthoPAT product line, diagnostics revenue growth accelerated throughout
fiscal year 2010 as we worked with customers using our IMPACT program to adopt this technology as a key
component of their blood management program.

Other Revenues

April 2,
2011

Software solutions . . . . . . . . . . . . . . . .
Equipment and other . . . . . . . . . . . . . .

$ 66,876
57,982

April 3,
2010
(In thousands)
$35,919
54,285

Net other revenues . . . . . . . . . . . . . .

$124,858

$90,204

$85,649

March 28,
2009

% Increase
11 vs. 10

% Increase
10 vs. 09

$31,605
54,044

86.2%
6.8%

38.4%

13.6%
0.4%

5.3%

Software Solutions

Our software solutions revenues include revenue from software sales which includes per collection or
monthly subscription fees for the license and support of the software, as well as hosting services. With the
acquisition of Global Med on March 31, 2010, a significant portion of our software sales are perpetual licenses
typically accompanied with significant implementation service fees related to software customization, as well
as other professional and technical service fees.

Software solutions revenues increased 86.2% during fiscal year 2011. Foreign exchange resulted in 2.9%

of this increase. The remaining increase of 83.3% during fiscal year 2011 was driven primarily by software
revenues associated with the acquisition of Global Med on March 31, 2010 and increased sales of our
BloodTrack products.

During fiscal year 2010, software solutions revenues increased 13.6% over fiscal year 2009. Foreign

exchange had only a minor impact on the results as sales were primarily in U.S. dollars. The acquisition of
Altivation and L’Attitude Medical Systems (Neoteric) contributed significantly to the software solutions growth
in fiscal year 2010.

Equipment & Other

Our equipment & other revenues include revenue from equipment sales, repairs performed under

preventive maintenance contracts or emergency service visits, spare part sales, and various service and training
programs.

Equipment & other revenues increased 6.8% during fiscal year 2011. Foreign exchange resulted in a 0.8%
decrease during fiscal year 2011. Without the effect of currency exchange, the increase of 7.6% was driven by
acquisition related growth from the SEBRA products, which we acquired in September 2009, and growth in
our emerging markets. Irrespective of the increases noted, equipment sales continue to be adversely impacted
by restricted hospital capital spending and macro economic trends impacting health care funding across most
of our markets.

During fiscal year 2010, revenue from equipment and other sales increased 0.4% over fiscal year 2009.

Foreign exchange resulted in a 2.6% decrease in equipment revenue. Absent the decrease attributable to
foreign exchange, revenues increased 3.0% due to the acquisition of the SEBRA product lines and revenues
from a license of the Arryx technology.

Gross Profit

April 2,
2011

Gross profit. . . . . . . . . . . . . . . . . . . . . . . . . . . $355,209

April 3,
2010
(In thousands)
$337,481

March 28,
2009

% Increase
11 vs. 10

% Increase
10 vs. 09

$308,170

5.3%

9.5%

% of net revenues . . . . . . . . . . . . . . . . . . . .

52.5%

52.3%

51.5%

Operating Expenses

April 2,
2011

Research, development and engineering . . . . . . $ 32,656

April 3,
2010
(In thousands)
$ 26,376

March 28,
2009

% Increase
11 vs. 10

% Increase
10 vs. 09

$ 23,859

23.8%

10.5%

% of net revenues . . . . . . . . . . . . . . . . . . . .

4.8%

4.1%

4.0%

Selling, general and administrative. . . . . . . . . . $213,899

$214,483

$198,744

(0.3)%

7.9%

% of net revenues . . . . . . . . . . . . . . . . . . . .

31.6%
Contingent consideration income . . . . . . . . . . . $ (1,894)
(cid:2)0.3%

% of net revenues . . . . . . . . . . . . . . . . . . . .
Asset writedowns . . . . . . . . . . . . . . . . . . . . . . $
% of net revenues . . . . . . . . . . . . . . . . . . . .

33.2%
$ (2,345)
(cid:2)0.4%

— $ 15,686
0.0%

2.4%

33.2%
—
0.0%
—
0.0%

(19.2)%

n.m.

(100.0)%

n.m.

Total operating expenses . . . . . . . . . . . . . . . . . $244,661

$254,200

$222,603

(3.8)%

14.2%

% of net revenues . . . . . . . . . . . . . . . . . . . .

36.2%

39.4%

37.2%

Research, Development and Engineering

Research, development and engineering expenses increased 23.8% during fiscal year 2011. Without the
increase of 2.3% in foreign exchange effect, the 21.5% increase is primarily related to incremental software
development expenditures as a result of our Global Med acquisition on March 31, 2010.

During fiscal year 2010, research, development and engineering expenses increased 10.5%. Foreign
exchange resulted in a 1.4% increase in research, development and engineering during the year. Without
foreign exchange, the increase of 9.1% was attributable to increased new product spending on our automated
whole blood collection device, and a new cell salvage system — the Cell Saver EliteTM.

Selling, General and Administrative

During fiscal year 2011, selling, general and administrative expenses decreased 0.3%. Foreign exchange

resulted in an increase of 3.6% in selling, general and administrative expenses. Excluding the impact of
foreign exchange, selling, general and administrative expense decreased 3.9% during the fiscal year 2011. The
decrease was attributable to a reduction in cash bonus incentive compensation this fiscal year as the
Company’s financial results were lower than the financial targets established at the beginning of the year. This
decrease was largely offset by expenses associated with newly acquired businesses, SEBRA and Global Med.

During fiscal year 2010, selling, general and administrative expenses increased 7.9%. The effect of
foreign exchange accounted for an increase of 0.4%. Excluding the impact of foreign exchange, selling,
general and administrative expense increased 7.5% for fiscal year 2010 as compared to fiscal year 2009. The
increase was due largely to increased costs related to newly acquired businesses, increased marketing spend
behind our blood management solutions initiatives including our IMPACT selling approach and related tools,
an increase in restructuring costs, and costs to consummate the acquisition of Global Med. The increase also
included exit costs related to the separation of employees in connection with our transformation plan. These
increases were offset by reductions in performance based compensation expense as we did not offer a special
bonus and our financial performance was at a lower payout point against pre-established performance targets
than in fiscal year 2009.

Contingent Consideration Income

Under the accounting rules for business combinations, we established a liability for payments that we
might make in the future to former shareholders of Neoteric that are tied to the performance of the Blood
Track business for the first three years post acquisition, beginning with fiscal year 2010. During each of fiscal
year 2011 and 2010, this business did not achieve the necessary revenue growth milestones for the former
shareholders to receive additional performance payments. As such, we reduced the contingent liability by

$1.9 million and $2.3 million during fiscal year 2011 and 2010, respectively, and recorded the adjustments as
contingent consideration income in the consolidated statements of income.

Asset Write Downs

At the end of fiscal year 2010 we recorded intangible asset write downs totaling $15.7 million. The
impairment related to two software assets: the Symphony blood center software system totaling $3.5 million,
which we no longer market in favor of the Global Med El Dorado blood center software system we acquired
in March 2010, and software for our Portico platelet apheresis device totaling $12.2 million, that we
abandoned as we prioritized superior research and development initiatives.

Operating Income

Operating income . . . . . . . . . . . . . . .
% of net revenues . . . . . . . . . . . . . . .

April 2,
2011

$110,548

April 3,
2010
(In thousands)
$83,281

March 28,
2009

% Decrease
11 vs. 10

% Decrease
10 vs. 09

$85,567

32.7%

(2.7)%

16.3%

12.9%

14.3%

During fiscal year 2011, operating income increased 32.7% compared to fiscal year 2010. Foreign

Operating income decreased 2.7% during fiscal year 2010. The effects of foreign exchange accounted for

Other (expense)/income, net

April 2,
2011

April 3,
2010

March 28,
2009

% Decrease
11 vs. 10

% Increase
10 vs. 09

Interest expense . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . .
Other expense, net

(6)
384
(845)

(In thousands)
$ (742)
399
(1,667)

(64)
1,968
(2,469)

Total other expense, net . . . . . . . . . . . .

$(467)

$(2,010)

$ (565)

(76.8)% H100%

The decrease in other expense, net during fiscal year 2011 included a reduction in foreign currency losses
on foreign currency assets and lower hedge points on forward contracts. Hedge points on forward contracts are
amounts, either expensed or earned, based on the interest rate differential between two foreign currencies in a
forward hedge contract. The reversal of interest expense on contingent consideration related to the Neoteric
acquisition also contributed to the decrease noted.

The main reasons for the increase in other expense, net in fiscal year 2010 is the net of (i) the increase in
interest expense due to the accounting relating to the contingent consideration on a recent acquisition, (ii) the

decrease in interest income due to significantly reduced investment yields, and (iii) a decrease in hedge points
expenses.

Taxes

Reported income tax rate . . . . . . . . . . . . .

27.3% 28.2%

30.2%

(0.9)%

(2.0)%

April 2,
2011

April 3,
2010

March 28,
2009

% Decrease
11 vs. 10

% Decrease
10 vs. 09

(In thousands)

Reported Tax Rate

Our reported tax rate includes two principal components: an expected annual tax rate and discrete items

resulting in additional provisions or benefits that are recorded in the quarter that an event arises, events or
items that give rise to discrete recognition include finalizing audit examinations for open tax years, a statute of
limitation’s expiration, or a stock acquisition.

The reported tax rate was 27.3% for the current fiscal year. The reported tax rate includes:

(cid:129) A 27.2% effective annual rate which reflects tax benefits and expenses from foreign taxes, domestic
manufacturing deduction, state provisions, and stock compensation not deductible in all jurisdictions.

(cid:129) A $0.8 million benefit due to our eligibility for a reduced Swiss income tax rate.

(cid:129) A $1.0 million reversal of previously accrued income taxes because of the expiration of foreign and

federal statute of limitations.

(cid:129) A $1.9 million increase in tax expense due to potential foreign and federal tax assessment.

(cid:129) A $0.7 million increase in tax expense due to finalizing our prior year income tax return.

(cid:129) A $0.5 million benefit from the remittance of European dividends.

The reported tax rate was 28.2% for the 2010 fiscal year. The reported tax rate includes:

(cid:129) A 29.6% effective annual rate which reflects tax benefits and expenses from foreign taxes, domestic
manufacturing deduction, state provisions, and stock compensation not deductible in all jurisdictions.

(cid:129) A $1.6 million benefit from the remittance of a Japanese dividend before the restructuring of that

subsidiary.

(cid:129) A $0.5 million increase in tax expense as a determination of our eligibility for a reduced Swiss income

tax rate has not been finalized.

(cid:129) A $0.3 million reversal of previously accrued income taxes because of the finalization of our federal

and state tax returns and the expiration of domestic statutes of limitations.

Critical Accounting Policies

Our significant accounting policies are summarized in Note 2 of our consolidated financial statements.

While all of these significant accounting policies impact our financial condition and results of operations, we
view certain of these policies as critical. Policies determined to be critical are those policies that have the most
significant impact on our financial statements and require management to use a greater degree of judgment
and/or estimates. Actual results may differ from those estimates.

The accounting policies identified as critical are as follows:

Revenue Recognition

We recognize revenues from product sales, software and services in accordance with ASC Topic 605,
Revenue Recognition and ASC Topic 985-605, Software. These standards require that revenues are recognized
when persuasive evidence of an arrangement exists, product delivery, including customer acceptance, has

occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably
assured. When more than one element such as equipment, disposables and services are contained in a single
arrangement, we allocate revenue between the elements based on each element’s relative fair value, provided
that each element meets the criteria for treatment as a separate unit of accounting. An item is considered a
separate unit of accounting if it has value to the customer on a stand alone basis and there is objective and
reliable evidence of the fair value of the undelivered items. The fair value of the undelivered elements is
determined by the price charged when the element is sold separately, which constitutes vendor specific
objective evidence as defined under ASC Topic 985-605, or in cases when the item is not sold separately, by
other objective evidence as defined in ASC Topic 605.

We generally do not allow our customers to return products. We offer sales rebates and discounts to
certain customers. We treat sales rebates and discounts as a reduction of revenue and classify the correspond-
ing liability as current. We estimate rebates for products where there is sufficient historical information
available to predict the volume of expected future rebates. If we are unable to estimate the expected rebates
reasonably, we record a liability for the maximum potential rebate or discount that could be earned.

We recognize revenue from the sale of perpetual licenses on a percentage-of-completion basis which

requires us to make reasonable estimates of the extent of progress toward completion of the contract. These
arrangements most often include providing customized implementation services to our customer. We also
provide other services, including in some instances hosting, technical support, and maintenance, for the
payment of periodic, monthly, or quarterly fees. We recognize these fees and charges as earned, typically as
these services are provided during the contract period.

Inventories

Inventories are stated at the lower of the actual cost to purchase and/or manufacture or the current
estimated market value of the inventory. On a quarterly basis, inventory quantities on hand are reviewed and
an analysis of the provision for excess and obsolete inventory is performed based primarily on our estimates of
product demand and production requirements for the next twenty-four months. A change in the estimated
timing or amount of demand for our products could result in additional provisions for excess inventory
quantities on hand. Any significant unanticipated changes in demand could have a significant impact on the
value of our inventory and reported operating results.

Goodwill and Other Intangible Assets

Intangible assets acquired in a business combination, including licensed technology, are recorded under
the purchase method of accounting at their estimated fair values at the date of acquisition. Goodwill represents
the excess purchase price over the fair value of the net tangible and other identifiable intangible assets
acquired. We amortize our other intangible assets over their useful lives using the estimated economic benefit
method, as applicable.

Goodwill is not amortized. Instead goodwill is reviewed for impairment at least annually in accordance

with ASC Topic 350, Intangibles — Goodwill and Other. We perform our annual impairment test in the fiscal
fourth quarter for each of our reporting units. The test is based on a discounted cash flow analysis for each
reporting unit. The test showed no evidence of impairment to our goodwill and other indefinite lived assets for
either fiscal year 2011 or 2010 and demonstrated that the fair value of each reporting unit significantly
exceeded the reporting unit’s carrying value in each period.

We review our intangible assets, subject to amortization, and their related useful lives periodically to
determine if any adverse conditions exist that would indicate the carrying value of these assets may not be
recoverable. Our review includes examination of whether certain conditions exist, including: a change in the
competitive landscape, any internal decisions to pursue new or different technology strategies, a loss of a
significant customer, or a significant change in the market place including changes in the prices paid for our
products or changes in the size of the market for our products.

An impairment results if the carrying value of the asset exceeds the estimated fair value of the asset. Fair

value is determined using different methodologies depending upon the nature of the underlying asset. If the
estimate of an intangible asset’s remaining useful life is changed, the remaining carrying amount of the
intangible asset is amortized prospectively over the revised remaining useful life.

Property, Plant and Equipment

Property, plant and equipment are depreciated over their useful lives. Useful lives are based on our
estimate of the period that the assets will generate revenue. Any change in conditions that would cause us to
change our estimate as to the useful lives of a group or class of assets may significantly impact our
depreciation expense on a prospective basis. Haemonetics’ equipment includes devices that we have placed at
our customers under contractual arrangements that allow them to use the device in exchange for rental
payments or the purchase of disposables. In addition to periodically reviewing the useful lives of these devices,
we also periodically perform reviews to determine if a group of these devices is impaired. To conduct these
reviews we must estimate the future amount and timing of demand for these devices. Changes in expected
demand can result in additional depreciation expense, which is classified as cost of goods sold. Any significant
unanticipated changes in demand could have a significant impact on the value of equipment and our reported
operating results.

Consistent with the impairment tests noted above for intangible assets subject to amortization, we review
our property, plant, and equipment assets, subject to depreciation, and their related useful lives at least once a
year, or more frequently if certain conditions arise, to determine if any adverse conditions exist that would
indicate the carrying value of these assets may not be recoverable.

Capitalized Software Costs

Software development costs have been capitalized in accordance with ASC Topic 985-20, Software, which

specifies that costs incurred internally in researching and developing a computer software product should be
charged to expense until technological feasibility has been established for the product. Technological feasibility
is established when we have a detailed program design of the software and when research and development
activities on the underlying device, if applicable, are completed. Once technological feasibility is established,
all software costs should be capitalized until the product is available for general release to customers. We
review the net realizable value of capitalized software assets periodically to assess the recoverability of
amounts capitalized.

Income Taxes

The income tax provision is calculated for all jurisdictions in which we operate. This process involves
estimating actual current taxes due plus assessing temporary differences arising from differing treatment for
tax and accounting purposes that are recorded as deferred tax assets and liabilities. Deferred tax assets are
periodically evaluated to determine their recoverability and a valuation allowance is established with a
corresponding additional income tax provision recorded in our consolidated statements of income if their
recovery is not considered likely. The provision for income taxes could also be materially impacted if actual
taxes due differ from our earlier estimates.

We record a liability for uncertain tax positions taken or expected to be taken in income tax returns.
Uncertain tax positions are unrecognized tax benefits for which reserves have been established. Our financial
statements reflect expected future tax consequences of such positions presuming the taxing authorities’ full
knowledge of the position and all relevant facts.

We file income tax returns in all jurisdictions in which we operate. We establish reserves to provide for

additional income taxes that may be due in future years as these previously filed tax returns are audited. These
reserves have been established based on management’s assessment as to the potential exposure attributable to
permanent differences and interest applicable to both permanent and temporary differences. All tax reserves
are analyzed periodically and adjustments are made as events occur that warrant modification.

Stock-Based Compensation

We use the Black-Scholes option-pricing model to calculate the grant-date fair value of our stock options.

The following assumptions, which involve the use of judgment by management, are used in the computation
of the grant-date fair value of our stock options:

Expected Volatility — We have principally used our historical volatility as a basis to estimate

expected volatility in our valuation of stock options.

Expected Term — We estimate the expected term of our options using historical exercise and
forfeiture data. We believe that this historical data is currently the best estimate of the expected term of
our new option grants.

Additionally, after determining the fair value of our stock options, we use judgment in establishing an

estimated forfeiture rate, to determine the amount of stock based compensation to record each period:

Estimated Forfeiture Rate — We have applied, based on an analysis of our historical forfeitures, an

annual forfeiture rate of 8% to all unvested stock options as of April 2, 2011, which represents the
portion that we expect will be forfeited each year over the vesting period. We reevaluate this analysis
periodically and adjust the forfeiture rate as necessary. Ultimately, we will only recognize expense for
those shares that vest.

Valuation of Acquisitions

We allocate the amounts we pay for each acquisition to the assets we acquire and liabilities we assume
based on their estimated fair values at the dates of acquisition, including acquired identifiable intangible assets,
and purchased research and development. We base the estimated fair value of identifiable intangible assets on
detailed valuations that use historical and forecasted information and market assumptions based upon the
assumptions of a market participant. We allocate any excess purchase price over the fair value of the net
tangible and intangible assets acquired to goodwill. The use of alternative valuation assumptions, including
estimated cash flows and discount rates, and alternative estimated useful life assumptions could result in
different purchase price allocations, and intangible asset amortization expense in current and future periods.

In certain acquisitions, we have earn out arrangements or contingent consideration to provide potential

future payments to the seller for achieving certain agreed-upon financial targets. We record the contingent
consideration at its fair value at the acquisition date. Generally, we have entered into arrangements with
contingent consideration that require payments in cash. As such, we periodically revalue the contingent
consideration obligations associated with certain acquisitions to their then fair value and record the change in
the fair value as contingent consideration income or expense. Increases or decreases in the fair value of the
contingent consideration obligations can result from changes in assumed discount periods and rates, changes in
the assumed timing and amount of revenue and expense estimates, and changes in assumed probability
adjustments with respect to regulatory approval. Significant judgment is employed in determining the
appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly,
future business and economic conditions, as well as changes in any of the assumptions described above, can
materially impact the amount of contingent consideration income or expense we record in any given period.

Liquidity and Capital Resources

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

flow position:

April 2,
2011

April 3,
2010

(Dollars in thousands)

Cash & cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash position(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Days sales outstanding (DSO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Disposables finished goods inventory turnover . . . . . . . . . . . . . . . . . . . . . . .

$196,707
$340,160
4.1
$191,828
68
6.1

$141,562
$250,888
2.9
$120,911
59
5.8

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

Our primary sources of liquidity include on-hand cash and cash equivalents, cash flow generated from
operations and proceeds from stock option exercises. We believe these sources will be sufficient to fund our
cash requirements for at least the next 12 months, which are primarily capital expenditures and approximately
$50 million of repurchases of our common stock.

A primary factor contributing to the increase in days sales outstanding (DSO) for fiscal year 2011 was a
result of the additional week of sales in the fourth quarter of fiscal year 2010 which lowered the DSO for the
prior year. Additionally, higher final month sales from our emerging markets in the fourth quarter of fiscal
year 2011 contributed to the increase in DSO for the current year.

In April 2011, we announced a voluntary recall of our OrthoPAT devices manufactured prior to 2002. In

the fourth quarter of fiscal year 2011, we recorded $0.8 million of expense based on our current estimate of
accruable costs related to remediation efforts associated with the recall. In fiscal year 2012, we anticipate
spending approximately $10 million of incremental capital equipment-related expenditures to the upgrade of
our OrthoPAT device placed at customer locations.

Net cash provided by (used in):

Operating activities . . . . . . . . . . . . . . . . . . .
Investing activities . . . . . . . . . . . . . . . . . . . .
Financing activities . . . . . . . . . . . . . . . . . . .
Effect of exchange rate changes on cash and
cash equivalents(1) . . . . . . . . . . . . . . . . . .

Net increase/(decrease) in cash and cash

April 2,
2011

April 3,
2010

March 28,
2009
(In thousands)

(Decrease)/
Increase
11 vs. 10

Increase/
(Decrease)
10 vs. 09

$123,455
(51,558)
(18,084)

$ 130,668
(132,335)
(13,970)

$116,364
(60,000)
(30,737)

$ (7,213)
80,777
(4,114)

$ 14,304
(72,335)
16,767

1,332

478

(2,459)

854

2,937

equivalents. . . . . . . . . . . . . . . . . . . . . . . . . .

$ 55,145

$ (15,159)

$ 23,168

$70,304

$(38,327)

(1) The balance sheet is affected by spot exchange rates used to translate local currency amounts into U.S. dol-

lars. In accordance with GAAP, we have removed the effect of foreign currency throughout our cash flow
statement, except for its effect on our cash and cash equivalents.

Cash Flow Overview:

The balance sheet is affected by spot exchange rates used to translate local currency amounts into
U.S. dollars. In comparing spot exchange rates at April 2, 2011 versus April 3, 2010 and at April 3, 2010
versus March 28, 2009, (i) the European currencies, primarily the Euro, strengthened and weakened,
respectively, against the U.S. dollar and (ii) the Yen strengthened against the U.S. dollar during both
comparison periods.

In fiscal year 2011, the Company repurchased approximately 0.9 million shares of its common stock for
an aggregate purchase price of $50.0 million. This completed a $50.0 million share repurchase program that
was announced in April 2010.

In fiscal year 2010, the Company repurchased approximately 0.7 million shares of its common stock for
an aggregate purchase price of $40.0 million. This completed a $40.0 million share repurchase program that
was announced in May 2009.

In fiscal year 2009, the Company repurchased approximately 1.1 million shares of its common stock for
an aggregate purchase price of $60.0 million. This completed a $60.0 million share repurchase program that
was announced in May 2008.

FISCAL YEAR 2011 AS COMPARED TO FISCAL YEAR 2010

Operating Activities:

Net cash provided by operating activities was $123.5 million during fiscal year 2011, a decrease of
$7.2 million as compared to fiscal year 2010. The decrease noted is driven by an increase in cash payments
related to integration, restructuring and other exit costs primarily related to the Global Med acquisition and a
lower accrual for cash bonus incentive compensation payments for next fiscal year, offset by the positive
impact of net income growth in fiscal 2011.

Investing Activities:

Net cash used in investing activities decreased by $80.8 million during fiscal year 2011 as compared to
fiscal year 2010. The cash paid to acquire businesses in fiscal year 2010 totaled $77.8 million due primarily to
$58.1 million paid for the Global Med acquisition. In fiscal year 2011, we completed one acquisition for
which we paid $6.2 million for ACCS, a distributor of our TEG product. We also reduced capital expenditures
in fiscal 2011 versus the prior year by $9.6 million, consistent with our capital plan.

Financing Activities:

During fiscal year 2011, cash used in financing activities include:

(cid:129) $50.0 million in cash paid out relating to stock repurchases — compared to the $40.0 million paid out

during the prior year,

(cid:129) $47.7 million in proceeds from stock options, related excess tax benefits from stock option exercises,
and the employee stock purchase plan as compared to $20.6 million from the same sources in fiscal
year 2010, and

(cid:129) $7.7 million in repayment of debt assumed from our acquisition of Global Med.

(cid:129) $7.5 million in repayment of outstanding unsecured debt.

FISCAL YEAR 2010 AS COMPARED TO FISCAL YEAR 2009

Operating Activities:

Net cash provided by operating activities increased $14.3 million in 2010 as compared to 2009 due

primarily to:

(cid:129) Increased net income after non-cash expenses,

(cid:129) $4.4 million decrease in accounts receivable due to increased collections and improvements in days

sales outstanding during the fiscal year,

(cid:129) $9.6 million decreased investment in inventory,

partially offset by:

(cid:129) $14.8 million decrease in accounts payable and accrued expenses primarily due to the payment of fiscal

year 2009 employee performance bonuses worldwide and a discretionary bonus for extraordinary
performance to all employees other than the Chief Executive Officer and certain other executives,

(cid:129) $9.5 million increase in other assets and other long-term liabilities, and

(cid:129) $2.1 million increase in tax payments.

Investing Activities:

Net cash used in investing activities increased $72.3 million in 2010 as compared to 2009 due primarily

to the $71.8 million cash used for acquisitions during the fiscal year which was $77.8 million in fiscal year
2010 compared to the $6.0 million in fiscal year 2009.

Financing Activities:

Net cash used by financing activities decreased by $16.8 million due to:

(cid:129) $40.0 million used to repurchase shares of Company common stock during fiscal year 2010 as

compared to the $60.0 million used in fiscal year 2009.

(cid:129) $7.5 million increase in short term notes payable.

partially offset by:

(cid:129) $8.1 million decrease in exercise of stock options.

(cid:129) $7.0 million decrease in tax benefit on exercise of stock options.

Contractual Obligations and Contingencies

A summary of our contractual and commercial commitments as of April 2, 2011, is as follows (for more

information concerning our debt see Note 8 to the consolidated financial statements and for our operating
lease obligations see Note 10):

Payments Due by Period

Total

Less than 1 year

Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating leases . . . . . . . . . . . . . . . . . . . . .
Purchase commitments* . . . . . . . . . . . . . . .
Expected retirement plan benefit payments. . .

$ 4,879
$ 18,139
$133,811
$ 3,116

$
913
$ 6,516
$133,811
152
$

Total contractual obligations . . . . . . . . . . . .

$159,945

$141,392

$9,241

$4,456

4-5 years

1-3 years
(In thousands)
$2,060
$1,906
$2,124
$6,459
$ — $ —
$ 426
$ 722

After 5 years

$ —
$3,040
$ —
$1,816

$4,856

* Includes amounts we are committed to spend on purchase orders entered in the normal course of business
for capital equipment and for the purpose of manufacturing our products including contract manufacturers,
specifically JMS Co. Ltd., and Kawasumi Laboratories, for the manufacture of certain disposable products.
The majority of our operating expense spending does not require any advance commitment.

The above table does not reflect our long-term liabilities associated with unrecognized tax benefits of
$4.9 million recorded in accordance with ASC Topic 740, Income Taxes. Due to the complexity associated
with tax uncertainties related to these unrecognized benefits, we cannot reasonably make a reliable estimate of
the period in which we expect to settle these long-term liabilities. See Note 9 for more information on our
unrecognized tax benefits.

Contingent Commitments

Contingent Consideration

shareholders to receive additional performance payments. As such, we reduced the contingent liability by
$1.9 million and $2.3 million during fiscal year 2011 and 2010, respectively, and recorded the adjustments as
contingent consideration income in the consolidated statements of income.

The ending contingent liability for this consideration was $2.3 million and $4.1 million at April 2, 2011

and April 3, 2010, respectively.

Legal Proceedings

We believe our competitor Fenwal has produced, and continues to produce, a red cell consumable kit

In December 2005 we filed a lawsuit against Baxter Healthcare SA and Fenwal Inc. in Massachusetts
federal district court, seeking an injunction and damages from Baxter’s infringement of a Haemonetics patent,
through the sale of Baxter’s ALYX brand automated red cell collection system, a competitor of our automated
red cell collection systems. In March 2007, Baxter sold the division which marketed the ALYX product to
private investors, TPG, and Maverick Capital, Ltd. The new company which resulted from the sale was
renamed Fenwal.

In January 2009, a jury found that the Fenwal ALYX system infringed Haemonetics’ patent. Ultimately,

In response to Fenwal’s modification of their disposable, we filed a second related patent infringement

action in December 2009 in the same Massachusetts federal trial court as the first case described above.

On May 28, 2010 the Patent and Trademark Office reexamined the patent which is the subject of the two

cases described above, and determined that the patent is valid, contrary to Fenwal’s assertions.

On September 20, 2010, Haemonetics filed a patent infringement action in Germany, against Fenwal and

Company’s business in Italy to date. A third proceeding was referred by the Milan court for hearing in
Bergamo, Italy. There have been evidentiary hearings, but no material developments in that case.

Inflation

We do not believe that inflation had a significant impact on our results of operations for 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. We continue to monitor inflation 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.

Foreign Exchange

During fiscal year 2011, approximately 53.1% of our sales were generated outside the U.S., generally in

foreign currencies, yet our reporting currency is the U.S. Dollar. Our primary foreign currency exposures relate
to sales denominated in the Euro and the Japanese Yen. We also have foreign currency exposure related to
manufacturing and other operational costs denominated in the Swiss Franc, the British Pound, and the
Canadian Dollar. The Yen and Euro 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 and Euro sales exceed the foreign currency denominated costs, whenever the U.S. Dollar strengthens
relative to the Yen or Euro, there is an adverse affect on our results of operations and conversely, whenever
the U.S. dollar weakens relative to the Yen or Euro, there is a positive effect on our results of operations. For
the Swiss Franc, the British Pound, and the Canadian Dollar, our primary cash flows are 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 the Japanese Yen and the Euro, and to a lesser extent the Swiss Franc, British
Pound, and the Canadian Dollar. 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 and are intended to lock in the expected cash flows of

forecasted foreign currency denominated sales and costs at the available spot rate. Actual spot rate gains and
losses on these contracts are recorded in sales and costs, at the same time the underlying transactions being
hedged are recorded. 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.

Presented below are the spot rates for our Euro, Japanese Yen, Canadian Dollar, British Pound, and Swiss

Franc cash flow hedges that settled during fiscal years 2011 and 2010 or are presently outstanding. These
hedges cover our long foreign currency positions that result from our sales designated in The Euro and the
Japanese Yen. These hedges also include our short positions associated with costs incurred in Canadian
Dollars, British Pounds, and Swiss Francs. The table also shows how the strengthening or weakening of the
spot rates associated with those hedge contracts versus the spot rates in the contracts that settled in the prior

comparable period affects our results favorably or unfavorably. The table assumes a consistent notional amount
for hedge contracts in each period presented.

First
Quarter

Favorable/
(Unfavorable)

Second
Quarter

Favorable/
(Unfavorable)

Third
Quarter

Favorable/
(Unfavorable)

Fourth
Quarter

Favorable/
(Unfavorable)

6.8%
9.4%

1.57
1.36
1.24

(13.4)%
(8.5)%

105.11
94.91
85.65

105.28
98.17
88.99

Euro — Hedge Spot Rate (US$ per Euro)
1.49
FY10 . . .
1.41
FY11 . . .
FY12 . . .
1.30
Japanese Yen — Hedge Spot Rate (JPY per US$)
FY10 . . .
FY11 . . .
FY12 . . .
Canadian Dollar — Hedge Spot Rate (CAD per US$)
FY10 . . .
FY11 . . .
FY12 . . .
British Pound — Hedge Spot Rate (US$ per GBP)
FY10 . . .
FY11 . . .
FY12 . . .
Swiss Franc — Hedge Spot Rate (CHF per US$)
FY11 . . .
FY12 . . .

(3.9)%
(4.2)%

(1.6)%
(2.0)%

1.12
1.09
1.03

1.14
1.10
1.05

1.44
1.65
1.54

1.45
1.47
1.50

1.05
1.01

1.05

(5.0)%
(8.0)%

9.7%
9.8%

(3.0)%
(5.0)%

(14.5)%
6.8%

3.6%

1.32
1.43
1.36

96.38
89.13
81.73

1.11
1.07
1.00

1.42
1.63
1.57

1.04
0.96

8.6%
(4.9)%

7.5%
8.3%

(4.2)%
(5.8)%

(14.7)%
3.6%

7.9%

1.28
1.35
1.35

93.50
89.78
82.45

1.09
1.03

1.40
1.59
1.54

1.05
0.95

5.5%
0.1%

4.0%
8.2%

(5.5)%

(12.9)%
3.2%

9.7%

* We generally place our cash flow hedge contracts on a rolling twelve month basis.

Recent Accounting Pronouncements

In October 2009, the FASB issued Accounting Standards Update No. 2009-13, Multiple-Deliverable

Revenue Arrangements, an amendment to FASB ASC topic 605, Revenue Recognition, and Update
No. 2009-14, Certain Revenue Arrangements That Include Software Elements, an amendment to FASB ASC
subtopic 985-605, Software — Revenue Recognition (the “Updates”). The Updates provide guidance on
arrangements that include software elements, including tangible products that have software components that
are essential to the functionality of the tangible product and will no longer be within the scope of the software
revenue recognition guidance, and software-enabled products that will now be subject to other relevant revenue
recognition guidance. The Updates provide authoritative guidance on revenue arrangements with multiple
deliverables that are outside the scope of the software revenue recognition guidance. Under the new guidance,
when vendor specific objective evidence or third party evidence of fair value for deliverables in an
arrangement cannot be determined, a best estimate of the selling price is required to separate deliverables and
allocate arrangement consideration using the relative selling price method. The Updates also include new
disclosure requirements on how the application of the relative selling price method affects the timing and
amount of revenue recognition. The Updates must be adopted in the same period using the same transition
method and are effective prospectively, with retrospective adoption permitted, for revenue arrangements
entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is also
permitted; however, early adoption during an interim period requires retrospective application from the
beginning of the fiscal year. The Company will adopt the guidance on April 3, 2011, the first day of fiscal
year 2012, and does not expect that the impact of this guidance on its financial position and results of
operations will be material.

Cautionary Statement Regarding Forward-Looking Information

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

The Company’s exposures relative to market risk are 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. At April 2, 2011, we had the following significant
foreign exchange contracts to hedge the anticipated foreign currency cash flows outstanding. The contracts
have been organized into maturity groups and the related quarter that we expect the hedge contract to affect
our earnings.

Hedged Currency

Euro . . . . . . . . .
Euro . . . . . . . . .
Euro . . . . . . . . .
Euro . . . . . . . . .
Japanese Yen . . .
Japanese Yen . . .
Japanese Yen . . .
Japanese Yen . . .
GBP . . . . . . . . .
GBP . . . . . . . . .
GBP . . . . . . . . .
GBP . . . . . . . . .
GBP . . . . . . . . .
CAD. . . . . . . . .
CAD. . . . . . . . .
CAD. . . . . . . . .
CHF . . . . . . . . .
CHF . . . . . . . . .
CHF . . . . . . . . .
CHF . . . . . . . . .

(BUY)/SELL
Local Currency

Weighted
Spot
Contract Rate

Weighted
Forward
Contract Rate

Fair Value
Gain/(Loss)

Maturity

7,496,474
11,612,400
10,267,000
10,732,156
960,110,424
1,531,130,000
1,490,748,302
1,238,150,398
(824,502)
(2,679,632)
(2,679,632)
(2,679,632)
(631,860)
(4,039,754)
(4,148,622)
(2,680,000)
(4,023,000)
(3,924,000)
(3,893,500)
(2,396,000)

1.248
1.301
1.362
1.370
88.38per US$
85.65per US$
81.73per US$
82.45per US$
1.446
1.540
1.574
1.581
1.603
1.050per US$
1.032per US$
1.003per US$
1.054per US$
1.011per US$
0.957per US$
0.946per US$

1.250
1.300
1.356
1.361
87.84per US$
85.21per US$
81.30per US$
82.05per US$
1.448
1.538
1.569
1.574
1.593
1.054per US$
1.040per US$
1.012per US$
1.050per US$
1.007per US$
0.953per US$
0.943per US$

$(1,152,825) Apr 2011 - May 2011
Jun 2011 - Aug 2011
$(1,164,269)
Sep 2011 - Nov 2011
$ (417,033)
$ (332,659)
Dec 2011 - Feb 2012
$ (630,376) Apr 2011 - May 2011
Jun 2011 - Aug 2011
$ (476,826)
Sep 2011 - Nov 2011
334,704
$
Dec 2011 - Feb 2012
117,940
$
128,243
$
Apr 2011
170,421 May 2011 - July 2011
$
Aug 2011 - Oct 2011
81,208
$
Nov 2011 - Jan 2012
59,836
$
Feb 2012
716
$
Apr 2011 - Jun 2011
315,231
$
Jul 2011 - Sep 2011
256,689
$
Oct 2011 - Dec 2011
89,331
$
Apr 2011 - Jun 2011
506,358
$
Jul 2011 - Sep 2011
334,066
$
Oct 2011 - Dec 2011
120,238
$
Jan 2012 - Feb 2012
47,967
$

$(1,611,040)

Quarter
Expected
to Affect
Earnings

Q1 FY12
Q2 FY12
Q3 FY12
Q4 FY12
Q1 FY12
Q2 FY12
Q3 FY12
Q4 FY12
Q1 FY12
Q2 FY12
Q3 FY12
Q4 FY12
Q1 FY13
Q1 FY12
Q2 FY12
Q3 FY12
Q1 FY12
Q2 FY12
Q3 FY12
Q4 FY12

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. 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 $10.6 million increase in the fair
value of the forward contracts; whereas a 10% weakening of the US dollar would result in a $12.3 million
decrease in the fair value of the forward contracts.

Interest Rate Risk

All of our long-term debt is at fixed rates. Accordingly, a change in interest rates has an insignificant
effect on our interest expense amounts. The fair value of our long-term debt, however, does change in response
to interest rate movements due to its fixed rate nature. These changes reflect the premium (when market
interest rates decline below the contract fixed interest rates) or discount (when market interest rates rise above
the fixed interest rate) that an investor in these long-term obligations would pay in the market interest rate
environment.

At April 2, 2011, the fair value of our long-term debt was approximately $0.4 million higher than the

value of the debt reflected on our financial statements. This higher fair value is entirely related to the
$3.8 million remaining principal balance of the original $10.0 million, 8.41% real estate mortgage due January,
2016.

Using scenario analysis, if the interest rate on all long-term maturities changed by 10% from the rate

levels that existed at April 2, 2011, the fair value of our long-term debt would change by less than
$0.1 million.

Item 8. Financial Statements and Supplementary Data

HAEMONETICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $676,694
321,485
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

April 2,
2011

Year Ended
April 3,
2010
(In thousands, except per share data)
$645,430
307,949

$597,879
289,709

March 28,
2009

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

355,209

337,481

308,170

Operating expenses:
Research, development and engineering . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contingent consideration income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asset impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

32,656
213,899
(1,894)
—

26,376
214,483
(2,345)
15,686

23,859
198,744
—
—

Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

244,661

254,200

222,603

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income before provision for income taxes. . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

110,548
(6)
384
(845)

110,081
30,101

83,281
(742)
399
(1,667)

81,271
22,901

85,567
(64)
1,968
(2,469)

85,002
25,698

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 79,980

$ 58,370

$ 59,304

Basic income per common share

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

3.19

Income per common share assuming dilution

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

3.12

2.29

2.24

2.34

2.27

Weighted average shares outstanding

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25,077
25,596

25,451
26,063

25,389
26,173

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

HAEMONETICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)

April 2,
2011

April 3,
2010(1)
(In thousands, except share
data)

$ 196,707

$ 141,562

ASSETS

Current assets:

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable, less allowance of $1,799 at April 2, 2011 and $2,554 at

April 3, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax asset, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Property, plant and equipment:

Land, building and building improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plant equipment and machinery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Office equipment and information technology . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Haemonetics equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other assets:

127,166
84,387
9,674
30,897
448,831

52,359
128,612
83,258
211,455
475,684
(320,156)
155,528

Intangible assets, less amortization of $43,827 at April 2, 2011 and $32,693 at

April 3, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax asset, long term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

101,789
115,367
1,291
10,458
228,905
$ 833,264

Current liabilities:

LIABILITIES AND STOCKHOLDERS’ EQUITY

Notes payable and current maturities of long-term debt . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued payroll and related costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt, net of current maturities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments and contingencies (Note 12)

913
28,323
27,039
6,033
107
46,256
108,671
3,966
18,669
15,822

Stockholders’ equity:

Common stock, $0.01 par value; Authorized — 150,000,000 shares; Issued and
outstanding — 25,660,393 shares at April 2, 2011 and 25,440,856 shares at
April 3, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

256
302,709
373,630
9,541
686,136
$ 833,264

118,580
79,953
10,985
34,862
385,942

49,292
113,534
75,023
206,267
444,116
(289,803)
154,313

100,060
109,988
910
9,715
220,673
$ 760,928

$ 16,062
25,786
39,046
5,092
68
49,000
135,054
4,458
15,377
12,915

255
252,323
334,641
5,905
593,124
$ 760,928

(1) Certain balances were revised to reflect updates to our purchase price allocation of our Global Med acquisi-

tion — See Note 3, Acquisitions.

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

HAEMONETICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY AND OTHER COMPREHENSIVE
INCOME

Common
Stock

$’s

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income/(Loss)

Total
Stockholders’
Equity

Comprehensive
Income

Balance, March 29, 2008 . . . . . . . . . . . . . . .

25,695 $256

$186,933

$302,196

$ 4,803

$494,188

Employee stock purchase plan . . . . . . . . . .
Exercise of stock options and related tax

benefit . . . . . . . . . . . . . . . . . . . . . . . .
Shares repurchased . . . . . . . . . . . . . . . . . .
Issuance of restricted stock, net of

cancellations . . . . . . . . . . . . . . . . . . . .
Stock compensation expense . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . .
Impact of defined benefit plans, net of tax . .
Foreign currency translation adjustment . . . .
Unrealized gain on hedges, net of tax. . . . . .
Reclassification of hedge loss to earnings, net
of tax . . . . . . . . . . . . . . . . . . . . . . . . .

Comprehensive income . . . . . . . . . . . . . . .

2,658

—

950
(1,100)

10
(11)

35,060
(8,003)

—
(51,984)

18
—
—
—
—
—

—

—
—
—
—
—
—

—

—
10,181
—
—
—
—

—

—
—
59,304
—
—
—

—

—
—

—
—
—
(697)
(10,045)
4,858

4,364

—

2,659

35,070
(59,998)

—
10,181
59,304
(697)
(10,045)
4,858

4,364

—

Balance, March 28, 2009 . . . . . . . . . . . . . . .

25,622 $256

$226,829

$309,516

$ 3,283

$539,884

Employee stock purchase plan . . . . . . . . . .
Exercise of stock options and related tax

benefit . . . . . . . . . . . . . . . . . . . . . . . .
Shares repurchased . . . . . . . . . . . . . . . . . .
Stock compensation expense . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . .
Impact of defined benefit plans, net of tax . .
Foreign currency translation adjustment . . . .
Unrealized loss on hedges, net of tax . . . . . .
Reclassification of hedge loss to earnings, net
of tax . . . . . . . . . . . . . . . . . . . . . . . . .

Comprehensive income . . . . . . . . . . . . . . .

2,908

—

2,909

488
(735)
—
—
—
—
—

—

5
(7)
—
—
—
—
—

—

19,067
(6,748)
10,267
—
—
—
—

—

—
(33,245)
—
58,370
—
—
—

—

—
—
—
—
(309)
2,599
(477)

809

—

19,072
(40,000)
10,267
58,370
(309)
2,599
(477)

809

—

Balance, April 3, 2010 . . . . . . . . . . . . . . . . .

25,441 $255

$252,323

$334,641

$ 5,905

$593,124

Employee stock purchase plan . . . . . . . . . .
Exercise of stock options and related tax

benefit . . . . . . . . . . . . . . . . . . . . . . . .
Shares repurchased . . . . . . . . . . . . . . . . . .
Issuance of restricted stock, net of

cancellations . . . . . . . . . . . . . . . . . . . .
Stock compensation expense . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . .
Impact of defined benefit plans, net of tax . .
Foreign currency translation adjustment . . . .
Unrealized loss on hedges, net of tax . . . . . .
Reclassification of hedge loss to earnings, net
of tax . . . . . . . . . . . . . . . . . . . . . . . . .

Comprehensive income . . . . . . . . . . . . . . .

1,012
(907)

36
—
—
—
—
—

—

9
(9)

—
—
—
—
—
—

—

3,680

—

44,896
(9,000)

—
(40,991)

—
10,810
—
—
—
—

—

—
—
79,980
—
—
—

—

—
—

—
—
—
555
6,380
(4,068)

769

—

3,681

44,905
(50,000)

—
10,810
79,980
555
6,380
(4,068)

769

—

Balance, April 2, 2011 . . . . . . . . . . . . . . . . .

25,660 $256

$302,709

$373,630

$ 9,541

$686,136

$ 59,304
(697)
(10,045)
4,858

4,364

$ 57,784

$ 58,370
(309)
2,599
(477)

809

$ 60,992

$ 79,980
555
6,380
(4,068)

769

$ 83,616

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

HAEMONETICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

April 2,
2011

Year Ended
April 3,
2010
(In thousands)

March 28,
2009

Cash Flows from Operating Activities:

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 79,980

$ 58,370

$ 59,304

Adjustments to reconcile net income to net cash provided by operating

activities:
Non cash items:

Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss/(gain) on sales of property, plant and equipment . . . . . . . . . . . . . . . . . . . . .
Unrealized gain from hedging activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contingent consideration income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Reversal)/accretion of interest expense on contingent consideration . . . . . . . . . . .
Asset impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Change in operating assets and liabilities:

(Increase)/decrease in accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . .
(Increase)/decrease in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease in prepaid income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease in other assets and other long-term liabilities . . . . . . . . . . . . . . . . . . . .
Tax benefit of exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Decrease)/increase in accounts payable and accrued expenses . . . . . . . . . . . . . .
Net cash provided by operating activities. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash Flows from Investing Activities:

Capital expenditures on property, plant and equipment . . . . . . . . . . . . . . . . . . . .
Proceeds from sale of property, plant and equipment . . . . . . . . . . . . . . . . . . . . .
Acquisition of ACCS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of Global Med Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of SEBRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of Neoteric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of Altivation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of Medicell
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash Flows from Financing Activities:

48,145
10,810
5,782
674
(614)
(1,894)
(416)

(3,920)
(2,560)
1,680
(470)
4,941
(18,683)
123,455

(46,669)
1,468
(6,229)
(128)
—
—
—
—
(51,558)

43,236
10,267
2,592
(435)
(1,368)
(2,345)
588
15,686

4,364
(1,665)
7,254
(13,809)
2,670
5,263
130,668

(56,304)
1,785
—
(58,052)
(12,845)
(6,613)
—
(306)
(132,335)

36,462
10,181
1,645
(124)
3,812
—
—

2
(11,236)
(2,913)
(4,241)
3,368
20,104
116,364

(56,379)
2,383
—
—
—
—
(3,545)
(2,459)
(60,000)

(632)
Payments on long-term real estate mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . .
(15,153)
Net (decrease)/increase in short-term loans . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,681
Employee stock purchase plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40,896
Exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,124
Excess tax benefit on exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . .
(50,000)
Share repurchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(18,084)
Net cash used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,332
Effect of exchange rates on cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . .
Net Increase in Cash and Cash Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . .
55,145
Cash and Cash Equivalents at Beginning of Year . . . . . . . . . . . . . . . . . . . . . . .
141,562
Cash and Cash Equivalents at End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . $196,707

(754)
6,184
2,909
17,270
421
(40,000)
(13,970)
478
(15,159)
156,721
$ 141,562

(694)
(5,580)
2,659
25,406
7,470
(59,998)
(30,737)
(2,459)
23,168
133,553
$156,721

Non-cash Investing and Financing Activities:
Transfers from inventory to fixed assets for placements of

Haemonetics equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

5,069

7,833

$ 6,818

Debt assumed from acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

— $

5,132

Supplemental Disclosures of Cash Flow Information:

Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

487

563

—

545

Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 16,669

$ 21,519

$ 19,391

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

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF THE BUSINESS

Haemonetics is a global healthcare company dedicated to providing innovative blood management

solutions for our customers — plasma collectors, blood collectors, and hospitals. Anchored by our strong brand
name in medical device systems for the transfusion industry, we also provide information technology platforms
and valued added services to provide customers with business solutions which support improved clinical
outcomes for patients and efficiency in the blood supply chain.

Our systems automate the collection and processing of donated blood; perform blood diagnostics; salvage
and process surgical patient blood; and dispense blood within the hospital. These systems include devices and
single-use, proprietary disposable sets that operate only on our specialized equipment. Our blood processing
systems allow users to collect and process only the blood component(s) they target — plasma, platelets, or red
blood cells — increasing donor and patient safety as well as collection efficiencies. Our blood diagnostics
system assesses the likelihood of a patient’s blood loss allowing clinicians to make informed decisions about a
patient’s treatment as it relates to blood loss in surgery. Our surgical blood salvage systems collect blood lost
by a patient in surgery, clean the blood, and make it available for reinfusion to the patient, in this way giving
the patient the safest blood possible — his or her own. Our blood distribution systems are “smart” refrigerators
located throughout hospitals which automate the storage, inventory tracking, and dispositioning of blood in
key blood use areas.

Our information technology platforms are used by blood and plasma collectors to improve the safety and

efficiency of blood collection logistics by eliminating previously manual functions at not-for-profit blood
centers and commercial plasma centers. Our platforms are also used by hospitals to enable hospital
administrators to monitor and measure blood management practices and to manage processes within transfu-
sion services. Our information technology platforms allow all customers to better manage processes across the
blood supply chain, comply with regulatory requirements, and identify increased opportunities to reduce costs.

Our business services include consulting, Six Sigma, and LEAN manufacturing offerings that support our

customers’ needs for regulatory compliance and operational efficiency in the blood supply chain and best
practice in blood management.

2. SUMMARY OF SIGNIFICANT ACCOUNTING PRONOUNCEMENTS

Fiscal Year

Our fiscal year ends on the Saturday closest to the last day of March. Fiscal years 2011 and 2009 each

includes 52 weeks with all four quarters each having 13 weeks. Fiscal year 2010 includes 53 weeks with each
of the first three quarters having 13 weeks and the fourth quarter having 14 weeks.

Principles of Consolidation

The accompanying consolidated financial statements include all accounts including those of our subsidiar-

ies. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could vary from the amounts derived from our estimates and assumptions.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Reclassifications

Certain reclassifications have been made to prior years’ amounts to conform to the current year’s
presentation. During fiscal year 2011, we received new information related to our Global Med acquisition
which we have considered and estimated the effect on the final purchase price allocation of the assets and
liabilities acquired. These adjustments have been reflected in our consolidated balance sheet as of April 3,
2010 and are discussed further in Note 3.

Revenue Recognition

Our revenue recognition policy is to recognize revenues from product sales, software and services in

accordance with ASC Topic 605, Revenue Recognition, and ASC Topic 985-605, Software. These standards
require that revenues are recognized when persuasive evidence of an arrangement exists, product delivery,
including customer acceptance, has occurred or services have been rendered, the price is fixed or determinable
and collectability is reasonably assured. When more than one element such as equipment, disposables, and
services are contained in a single arrangement, we allocate revenue between the elements based on each
element’s relative fair value, provided that each element meets the criteria for treatment as a separate unit of
accounting. An item is considered a separate unit of accounting if it has value to the customer on a stand
alone basis and there is objective and reliable evidence of the fair value of the undelivered items. The fair
value of the undelivered elements is determined by the price charged when the element is sold separately, or
in cases when the item is not sold separately, by using vendor specific objective evidenced under ASC Topic
985-605 or other objective evidence as defined in ASC Topic 605.

Product Revenues

Product sales consist of the sale of our equipment devices and the related disposables used with these
devices. On product sales to end customers, revenue is recognized when both the title and risk of loss have
transferred to the customer as determined by the shipping terms and all obligations have been completed. For
product sales to distributors, we recognize revenue for both equipment and disposables upon shipment of these
products to our distributors. Our standard contracts with our distributors state that title to the equipment passes
to the distributors at point of shipment to a distributor’s location. The distributors are responsible for shipment
to the end customer along with installation, training and acceptance of the equipment by the end customer. All
shipments to distributors are at contract prices and payment is not contingent upon resale of the product.

Collection of Taxes from Customers

We are required to collect sales or valued added taxes in connection with the sale of certain of our
products. We report revenues net of these amounts as they are promptly remitted to the relevant taxing
authority.

Software Solutions and Services Revenues

Our software solutions business provides support to our plasma and blood collection customers and
hospitals. Through our Haemonetics Software Solutions unit, we provide information technology platforms and
technical support for donor recruitment, blood and plasma testing laboratories, and for efficient and compliant
operations of blood and plasma collection centers. For plasma customers, we also provide information
technology platforms for managing distribution of plasma from collection centers to plasma fractionation
facilities.

Our software solutions revenues also include revenue from software sales which includes per collection or

monthly subscription fees for the license and support of the software as well as hosting services. With the

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

acquisition of Global Med, a significant portion of our software sales are perpetual licenses typically
accompanied with significant implementation service fees related to software customization as well as other
professional and technical service fees.

We recognize revenue from the sale of perpetual licenses on a percentage-of-completion basis which

Translation of Foreign Currencies

All assets and liabilities of foreign subsidiaries are translated at the rate of exchange at year-end while
sales and expenses are translated at an average rate in effect during the year. The net effect of these translation
adjustments is shown in the accompanying financial statements as a component of stockholders’ equity.

Cash and Cash Equivalents

Cash and cash equivalents are recorded at cost, which approximates fair market value. As of April 2,

2011, Haemonetics’ cash and cash equivalents consisted primarily of cash and investments in money market
funds invested in United States Government Agency securities. Throughout the year, cash equivalents may
include various instruments such as money market funds, U.S. government obligations, and commercial paper
with maturities of three months or less at date of acquisition.

Allowance for Doubtful Accounts

We establish a specific allowance for customers when it is probable that they will not be able to meet

their financial obligation. Customer accounts are reviewed individually on a regular basis and appropriate
reserves are established as deemed appropriate. We also maintain a general reserve using a percentage that is
established based upon the age of our receivables. We establish percentages for balances not yet due and past
due accounts based on past experience.

Concentration of Credit Risk and Significant Customers

Financial instruments that potentially subject the Company to concentrations of credit risk consist
primarily of cash equivalents and accounts receivable. Sales to one unaffiliated Japanese customer, the
Japanese Red Cross Society, amounted to $95.9 million, $92.6 million, and $87.6 million for 2011, 2010, and
2009, respectively. Accounts receivable balances attributable to this customer accounted for 13.7%, 12.6%, and
17.5% of our consolidated accounts receivable at fiscal year ended 2011, 2010, and 2009. While the accounts
receivable related to the Japanese Red Cross Society may be significant, we do not believe the credit loss risk
to be significant given the consistent payment history by this customer.

Certain other markets and industries can expose us to concentrations of credit risk. For example, in our
commercial plasma business, we tend to have only a few customers in total but they are large in size. As a
result, our accounts receivable extended to any one of these commercial plasma customers can be somewhat
significant at any point in time.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Property, Plant and Equipment

Property, plant and equipment is recorded at historical cost. We provide for depreciation and amortization

by charges to operations using the straight-line method in amounts estimated to recover the cost of the
building and improvements, equipment, and furniture and fixtures over their estimated useful lives as follows:

Asset Classification

Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Building improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plant equipment and machinery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Office equipment and information technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Haemonetics equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Estimated
Useful Lives

30 Years
5-20 Years
5 Years
3-10 Years
3-9 Years
2-6 Years

Depreciation expense was $37.0 million, $35.5 million, and $30.5 million for fiscal year 2011, 2010, and

2009, respectively.

Leasehold improvements are amortized over the lesser of their useful lives or the term of the lease.
Maintenance and repairs are expensed to operations as incurred. When equipment and improvements are sold
or otherwise disposed of, the asset cost and accumulated depreciation are removed from the accounts, and the
resulting gain or loss, if any, is included in the statements of income. Fully depreciated assets are removed
from the accounts when they are no longer in use.

Our installed base of devices includes devices owned by us and devices sold to the customer. The asset
on our balance sheet entitled Haemonetics equipment consists of medical devices installed at customer sites
but owned by Haemonetics. Generally the customer has the right to use it for a period of time as long as they
meet the conditions we have established, which among other things, generally include one or more of the
following:

(cid:129) Purchase and consumption of a certain level of disposable products

(cid:129) Payment of monthly rental fees

(cid:129) An asset utilization performance metric, such as performing a minimum level of procedures per month

per device

Consistent with the impairment tests noted for other intangible assets subject to amortization, we review
our property, plant, and equipment assets, subject to depreciation, and their related useful lives at least once a
year, or more frequently if certain conditions arise, to determine if any adverse conditions exist that would
indicate the carrying value of these assets may not be recoverable. To conduct these reviews we estimate the
future amount and timing of demand for these devices. Changes in expected demand can result in additional
depreciation expense, which is classified as cost of goods sold. Any significant unanticipated changes in
demand could impact the value of our devices and our reported operating results. There were no indicators of
impairment in either fiscal year 2011 or 2010. Expenditures for normal maintenance and repairs are charged to
expense as incurred.

Goodwill and Other Intangible Assets

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Goodwill is not amortized. Instead goodwill is reviewed for impairment at least annually in accordance

An impairment results if the carrying value of the asset exceeds the estimated fair value of the asset. Fair

Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed

ASC Topic 985-20, Software, specifies that costs incurred internally in researching and developing a
computer software product should be charged to expense until technological feasibility has been established
for the product. Once technological feasibility is established, all software costs should be capitalized until the
product is available for general release to customers. Technological feasibility is established when we have a
detailed design of the software and when research and development activities on the underlying device, if
applicable, are completed.

The Company has capitalized $6.9 million and $4.7 million in other software development costs during

fiscal year 2011 and 2010 for ongoing initiatives. At April 2, 2011 and April 3, 2010, we had a total of
$13.4 million and $6.5 million, respectively, of costs capitalized related to other in process software
development initiatives. The costs capitalized for each project are included in intangible assets in the
consolidated financial statements. We review the net realizable value of capitalized assets periodically to assess
the recoverability of amounts capitalized.

At the end of fiscal year 2010, based on a review of ongoing development plans for our next generation

platelet apheresis products (Portico), we abandoned and wrote off $12.2 million associated with previously
capitalized software development costs. Additionally, in connection with the acquisition of Global Med we
elected to no longer market the Symphony blood center donation management system in favor of Global
Med’s El Dorado application. As a result, we wrote off the carrying value of the Symphony intangible asset
totaling approximately $3.5 million.

Other Accrued Liabilities

Other accrued liabilities represent items payable within the next twelve months. Other accrued liabilities

were $46.3 million and $49.0 million as of April 2, 2011 and April 3, 2010, respectively.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The significant items included in the fiscal year end balances were:

VAT Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11,867
4,174
Forward Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21,740
Deferred Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,475
All Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 9,802
1,747
19,548
17,903

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $46,256

$49,000

April 2,
2011

April 3,
2010

(In thousands)

Research, Development and Engineering Expenses

All research, development and engineering costs are expensed as incurred with the exception of the

capitalized software development costs (see Note 17).

Advertising Costs

All advertising costs are expensed as incurred and are included in selling, general and administrative
expenses in the consolidated statement of income. Advertising expenses were $2.8 million, $1.6 million, and
$2.1 million for 2011, 2010, and 2009, respectively.

Accounting for Shipping and Handling Costs

Shipping and handling costs are included in costs of goods sold with the exception of $9.7 million for
fiscal year 2011, $11.2 million for fiscal year 2010, and $11.9 million for fiscal year 2009 that are included in
selling, general and administrative expenses. Freight is classified in cost of goods sold when the customer is
charged for freight and in selling, general and administration when the customer is not explicitly charged for
freight.

Income Taxes

We file income tax returns in all jurisdictions in which we operate. We establish reserves to provide for

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Foreign Currency

We recognize all derivative financial instruments in our consolidated financial statements at fair value in

accordance with ASC Topic 815, Derivatives and Hedging. In accordance with ASC Topic 815, for those
derivative instruments that are designated and qualify as hedging instruments, the hedging instrument must be
designated, based upon the exposure being hedged, as a fair value hedge, cash flow hedge, or a hedge of a net
investment in a foreign operation.

The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on

whether it has been designated and qualifies as part of a hedging relationship. The gains or losses on the
forward exchange contracts designated as hedges are recorded in net revenues, cost of goods sold, and
operating expenses in our consolidated statements of income when the underlying hedged transaction affects
earnings. The cash flows related to the gains and losses are classified in the consolidated statements of cash
flows as part of cash flows from operating activities. For those derivative instruments that are not designated
as part of a hedging relationship we record the gains or losses in earnings currently. These gains and losses are
intended to offset the gains and losses recorded on net monetary assets or liabilities that are denominated in
foreign currencies. The Company recorded foreign currency losses of $1.4 million, $2.2 million, and
$2.3 million in fiscal year 2011, 2010 and 2009, respectively.

Our derivative instruments do not subject our earnings or cash flows to material risk, as gains and losses

on these derivatives are intended to offset losses and gains on the item being hedged. We do not enter into
derivative transactions for speculative purposes and we do not have any non-derivative instruments that are
designated as hedging instruments pursuant to ASC Topic 815.

Stock-Based Compensation

We use the Black-Scholes option-pricing model to calculate the grant-date fair value of our stock options.

The following assumptions, which involve the use of judgment by management, are used in the computation
of the grant-date fair value of our stock options:

Expected Volatility — We have principally used our historical volatility as a basis to estimate

expected volatility in our valuation of stock options.

Additionally, after determining the fair value of our stock options, we use judgment in establishing an

estimated forfeiture rate, to determine the amount of stock based compensation to record each period:

Estimated Forfeiture Rate — We have applied, based on an analysis of our historical forfeitures, an

Valuation of Acquisitions

We allocate the amounts we pay for each acquisition to the assets we acquire and liabilities we assume
based on their estimated fair values at the dates of acquisition, including acquired identifiable intangible assets,
and purchased research and development. We base the estimated fair value of identifiable intangible assets on
detailed valuations that use historical information and market assumptions based upon the assumptions of a
market participant. We allocate any excess purchase price over the fair value of the net tangible and intangible
assets acquired to goodwill. The use of alternative valuation assumptions, including estimated cash flows and

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

discount rates, and alternative estimated useful life assumptions could result in different purchase price
allocations, and intangible asset amortization expense in current and future periods.

In certain acquisitions, we have earn-out arrangements or contingent consideration to provide potential

future payments to the seller for achieving certain agreed-upon financial targets. We record the contingent
consideration at its fair value at the acquisition date. Generally, we have entered into arrangements with
contingent consideration that require payments in cash. As such, each quarter, we revalue the contingent
consideration obligations associated with certain acquisitions to their then fair value and record the change in
the fair value as contingent consideration income or expense. Increases or decreases in the fair value of the
contingent consideration obligations can result from changes in assumed discount periods and rates, changes in
the assumed timing and amount of revenue and expense estimates, and changes in assumed probability
adjustments with respect to regulatory approval. Significant judgment is employed in determining the
appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly,
future business and economic conditions, as well as changes in any of the assumptions described above, can
materially impact the amount of contingent consideration income or expense we record in any given period.

Recent Accounting Pronouncements

In October 2009, the FASB issued Accounting Standards Update No. 2009-13, Multiple-Deliverable

Revenue Arrangements, an amendment to FASB ASC topic 605, Revenue Recognition, and Update No. 2009-14,
Certain Revenue Arrangements That Include Software Elements, an amendment to FASB ASC subtopic 985-605,
Software — Revenue Recognition (the “Updates”). The Updates provide guidance on arrangements that include
software elements, including tangible products that have software components that are essential to the
functionality of the tangible product and will no longer be within the scope of the software revenue recognition
guidance, and software-enabled products that will now be subject to other relevant revenue recognition guidance.
The Updates provide authoritative guidance on revenue arrangements with multiple deliverables that are outside
the scope of the software revenue recognition guidance. Under the new guidance, when vendor specific objective
evidence or third party evidence of fair value for deliverables in an arrangement cannot be determined, a best
estimate of the selling price is required to separate deliverables and allocate arrangement consideration using the
relative selling price method. The Updates also include new disclosure requirements on how the application of
the relative selling price method affects the timing and amount of revenue recognition. The Updates must be
adopted in the same period using the same transition method and are effective prospectively, with retrospective
adoption permitted, for revenue arrangements entered into or materially modified in fiscal years beginning on or
after June 15, 2010. Early adoption is also permitted; however, early adoption during an interim period requires
retrospective application from the beginning of the fiscal year. The Company will adopt the guidance on April 3,
2011, the first day of fiscal year 2012, and does not expect that the impact of this guidance on its financial
position and results of operations will be material.

3. ACQUISITIONS

ACCS Acquisition

On December 28, 2010, Haemonetics acquired certain assets of Applied Critical Care Services, Inc. (ACCS)
for $6.4 million. ACCS was a manufacturer’s representative for Haemonetics engaged in the selling and servicing
of the TEG analyzer product line. The purchase price was initially allocated to customer relationships of
$4.3 million, other liabilities of $0.6 million, and goodwill of $2.7 million. The Company is still in the process
of obtaining and evaluating the information necessary to determine the allocation of fair value of the assets and
liabilities acquired. The preliminary purchase price allocation will be finalized once the Company has received
and completed this evaluation, which will occur not later than one year from the acquisition date. When
finalized, the purchase price will be more specifically allocated to identifiable intangible assets acquired.
Additionally, estimated intangible asset amortization expense recorded to date may also be adjusted. The impact
of these adjustments may result in a change in the preliminary value attributed to goodwill.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Global Med Acquisition

On March 31, 2010 the Company completed its cash tender offer for the shares of Global Med
Technologies, Inc. (“Global Med”). The total acquisition cost for the shares and outstanding warrants of
Global Med was approximately $60.4 million.

Goodwill was determined by comparing the purchase price with the fair value of the assets and liabilities

acquired. The carrying value of the related goodwill has been adjusted to reflect the final purchase price
allocation. At April 2, 2011, goodwill recorded after our final purchase price allocation was $39.6 million and
is not tax deductible. Global Med has an in-place workforce with extensive knowledge and experience in the
development and support of blood management software. The acquisition was a unique strategic fit for the
Company given our global presence and customer relationships in blood management.

Purchase Price Allocation

The following chart summarizes the final purchase price allocation:

Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets subject to amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(In thousands)
$ 39,554
39,920
6,848
7,639
(10,928)
(7,701)
(7,180)
(7,725)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 60,427

After the April 3, 2010 financial statements were issued, we received new information related to the fair
value of the assets and liabilities acquired. After considering this new information, we estimated the carrying
amount of certain assets and liabilities acquired to finalize our purchase price allocation. The impact of these
adjustments resulted in a change in the value attributed to goodwill as follows:

(cid:129) Increase of $14.0 million in intangible assets which resulted in a decrease in goodwill

(cid:129) Increase of $5.9 million in net deferred tax liabilities resulting in an increase to goodwill

(cid:129) $0.1 million decrease in trade accounts receivable resulting in an increase in goodwill

(cid:129) $1.1 million increase in other assets resulting in a decrease in goodwill

(cid:129) $0.9 million decrease in deferred revenue which resulted in a decrease to goodwill

(cid:129) $0.6 million decrease in accounts payable and other liabilities resulting in an decrease to goodwill

The net effect of these estimated changes resulted in a corresponding net decrease to goodwill of

$10.6 million. These estimated changes are reflected accordingly in the purchase price allocation table above.

Accordingly, amortization expense recorded reflects these revised fair value estimates and the final

purchase price allocation.

SEBRA Acquisition

On September 4, 2009, Haemonetics acquired the assets of the blood collection and processing business

unit (“SEBRA”) of Engineering and Research Associates, Inc., a leading provider of blood and medical

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

manufacturing technologies. SEBRA products, which include tubing sealers, blood shakers, sterile connection
systems, mobile lounges and ancillary products used in blood collection and processing, complement
Haemonetics’ portfolio and add depth to Haemonetics’ blood center and plasma product lines. The purchase
price of $12.8 million was allocated to core technology of $2.0 million, customer relationships of $4.6 million,
trade name intangible of $0.4 million, trade accounts receivables of $1.0 million, inventory of $1.1 million,
and goodwill of $3.7 million.

Neoteric Acquisition

On April 16, 2009, Haemonetics acquired the outstanding shares of Neoteric. Neoteric is a medical
information management company that markets a full end-to-end suite of products to track, allocate, release,
and dispense hospital blood units while controlling inventory and recording the disposition of blood. The
acquisition strategically broadened Haemonetics’ blood management solutions. The purchase price was
$6.6 million plus contingent consideration of $5.0 million was allocated to other intangible assets of
$5.0 million, deferred tax liabilities of $1.6 million, and goodwill of $8.2 million.

The contingent consideration is based upon estimated annual revenue growth for the three years following

the acquisition, at established profitability thresholds, and is not limited. Using projected revenues for fiscal
years 2010, 2011, and 2012, an analysis was performed that probability weighted three performance outcomes
for the noted years. The performance outcomes are then discounted using a discount rate commensurate with
the risks associated with Neoteric to arrive at the fair value of the contingent consideration. The Company is
required to reassess the fair value of contingent consideration on a periodic basis. During fiscal year 2011 and
2010, the Company reassessed the fair value of the contingent consideration as performance outcomes for
these years were not met, which resulted in a reduction in the estimated liability. The ending liability balance
was $2.3 million and $4.1 million at April 2, 2011 and April 3, 2010, respectively.

Altivation Software Acquisition

On March 27, 2009, the Company acquired Altivation Software (“Altivation”) for approximately
$3.5 million in cash plus contingent consideration based upon future operating performance. Altivation is a
provider of blood drive and resource management software for blood collectors. The purchase price was
principally allocated to intangible assets including goodwill. The results of the Altivation operations are
included in our consolidated results for periods after the acquisition date.

Medicell Limited Acquisition

On April 4, 2008, the Company acquired Medicell Limited (“Medicell”) for approximately $2.5 million

in cash plus contingent consideration based upon future operating performance. Medicell was the exclusive
distributor in the United Kingdom for the Haemoscope product line since 1998. The purchase price was
principally allocated to intangible assets including goodwill. The results of the Medicell operations are
included in our consolidated results for periods after the acquisition date.

4. PRODUCT WARRANTIES

We generally provide a 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

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

warranty expense based on our historical warranty experience, and we periodically assess the adequacy of our
warranty accrual and make adjustments as necessary.

April 2,
2011

April 3,
2010

Warranty accrual as of the beginning of the period . . . . . . . . . . . . . . . . . . . . . .
Warranty provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Warranty spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(In thousands)
903
1,823
(1,453)

$ 1,835
1,313
(2,245)

Warranty accrual as of the end of the period . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 1,273

903

INVENTORIES

Inventories are stated at the lower of cost or market and include the cost of material, labor and

manufacturing overhead. Cost is determined on the first-in, first-out method.

April 2,
2011

April 3,
2010

(In thousands)

Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $26,404
4,352
Work-in-process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
53,631
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$25,850
3,825
50,278

$84,387

$79,953

6. GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for fiscal year 2011, 2010, and 2009 are as follows:

Carrying amount as of March 28, 2009. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Global Med(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SEBRA(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
L’Attitude Medical Systems Inc. (Neoteric)(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Altivation Software Inc.(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Medicell Ltd.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of change in foreign currency exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . .

(In thousands)
$ 56,426
39,554
3,521
8,186
2,110
583
(392)

Carrying amount as of April 3, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SEBRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Altivation Software Inc.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ACCS(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of change in foreign currency exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . .

$109,988
163
228
2,662
2,326

Carrying amount as of April 2, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$115,367

(a) See Note 3, Acquisitions, for a full description of the acquisition of Medicell Limited (“Medicell”), which

occurred on April 4, 2008.

(b) See Note 3, Acquisitions, for a full description of the acquisition of Altivation Software (“Altivation”),

which occurred on March 27, 2009.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

bal Med”), which occurred on March 31, 2010.

(d) See Note 3, Acquisitions, for a full description of the acquisition of the SEBRA» assets, which occurred

on September 4, 2009.

(e) See Note 3, Acquisitions, for a full description of the acquisition of L’Attitude Medical Systems, Inc.

(“Neoteric”), which occurred on April 16, 2009.

(f) See Note 3, Acquisitions, for a full description of the acquisition of Applied Critical Care Services, Inc.

(“ACCS”), which occurred on December 28, 2010.

Other Intangible Assets

Other intangible assets include the value assigned to license rights and other technology, patents, customer

contracts and relationships, software technology, and a trade name. The estimated useful lives for all of these
intangible assets are 5 to 20 years.

Aggregate amortization expense for amortized other intangible assets for fiscal year 2011, 2010, and 2009

was $11.1 million, $7.7 million, and $6.0 million, respectively. Future annual amortization expense on other
intangible assets is expected to approximate $11.9 million for fiscal year 2012, $12.8 million for fiscal year
2013, $12.6 million for fiscal year 2014, $11.1 million for fiscal year 2015 and $10.7 million for fiscal year
2016.

Amortized Intangibles

Gross Carrying
Amount
(In thousands)

Accumulated
Amortization
(In thousands)

Weighted Average
Useful Life
(In years)

As of April 2, 2011
Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized software . . . . . . . . . . . . . . . . . . . . . . .
Other technology . . . . . . . . . . . . . . . . . . . . . . . . .
Customer contracts and related relationships . . . . .
Trade names. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 12,704
14,506
43,244
69,908
5,254

Total intangibles . . . . . . . . . . . . . . . . . . . . . . . . . .

$145,616

$ 6,827
656
17,391
17,740
1,213

$43,827

11
6
11
12
10

Gross Carrying
Amount
(In thousands)

Accumulated
Amortization
(In thousands)

Weighted Average
Useful Life
(In years)

As of April 3, 2010
Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized software . . . . . . . . . . . . . . . . . . . . . . .
Other technology . . . . . . . . . . . . . . . . . . . . . . . . .
Customer contracts and related relationships . . . . .
Trade names. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 11,928
7,642
43,240
65,011
4,932

Total intangibles . . . . . . . . . . . . . . . . . . . . . . . . . .

$132,753

$ 5,801
498
14,187
11,549
658

$32,693

11
6
10
11
7

In addition to the acquisitions of SEBRA, Neoteric, Global Med, and ACCS discussed in Note 3, changes
to the net carrying value of our intangible assets from April 3, 2010 to April 2, 2011 reflect the capitalization
of software costs associated with our devices and software products (see Note 17), amortization expense and

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

the effect of exchange rate changes in the translation of our intangible assets held by our international
subsidiaries.

7. DERIVATIVES AND FAIR VALUE MEASUREMENTS

We manufacture, market and sell our products globally. For the year ended April 2, 2011, approximately
53.1% of our sales were generated outside the U.S. in local currencies. We also incur 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 reporting currency.

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 the Japanese Yen and the Euro, and to a lesser extent the Swiss Franc, British
Pound Sterling and the Canadian Dollar. 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.

Designated Foreign Currency Hedge Contracts

All of our designated foreign currency hedge contracts as of April 2, 2011 and April 3, 2010 were cash

flow hedges under ASC Topic 815, Derivatives and Hedging. We record the effective portion of any change in
the fair value of designated foreign currency hedge contracts in Other Comprehensive Income in the Statement
of Stockholders’ Equity until the related third-party transaction occurs. Once the related third-party transaction
occurs, we reclassify 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, we would reclassify the amount of any gain or loss on the related cash flow hedge to
earnings at that time. We had designated foreign currency hedge contracts outstanding in the contract amount
of $154.8 million as of April 2, 2011 and $135.4 million as of April 3, 2010.

During fiscal year 2011 and 2010, we recognized net gains of $0.6 million and $1.4 million, respectively,

in earnings on our cash flow hedges. All currency cash flow hedges outstanding as of April 2, 2011 mature
within twelve months. For the year ended April 2, 2011, $4.1 million of losses, net of tax, were recorded in
Other Comprehensive Income to recognize the effective portion of the fair value of any designated foreign
currency hedge contracts that are, or previously were, designated as foreign currency cash flow hedges, as
compared to net losses of $0.5 million as of April 3, 2010. At April 2, 2011, losses of $0.8 million, net of tax,
may be reclassified to earnings within the next twelve months.

Non-designated Foreign Currency Contracts

We manage our exposure to changes in foreign currency on a consolidated basis to take advantage of
offsetting transactions and balances. We use currency forward contracts as a part of our strategy to manage
exposure related to foreign currency denominated monetary assets and liabilities. These currency forward
contracts are not designated as cash flow or fair value hedges under ASC Topic 815. These forward contracts
are marked-to-market with changes in fair value recorded to earnings; and are entered into for periods
consistent with currency transaction exposures, generally one month. We had non-designated foreign currency
hedge contracts under ASC Topic 815 outstanding in the contract amount of $45.9 million as of April 2, 2011
and $29.6 million as of April 3, 2010.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Fair Value of Derivative Instruments

The following table presents the effect of our derivative instruments designated as cash flow hedges under

ASC Topic 815 in our consolidated statement of income for the year ended April 2, 2011.

Derivative Instruments

Amount of
Loss
Recognized in
OCI (Effective
Portion)

Amount of Loss
Reclassified
from OCI into
Earnings
(Effective
Portion)

Designated foreign currency

hedge contracts . . . . . . . . . .

$(4,068)

$(769)

Amount
Excluded from
Effectiveness
Testing (*)

Location in
Statement of
Operations

$ (513)

Other income

Location in
Statement of
Operations
(In thousands)

Net revenues,
COGS, and
SG&A

Non-designated foreign
currency contracts

$(4,068)

$(769)

$2,338

$1,825

Other expense

(*) We exclude the difference between the spot rate and hedge forward rate from our effectiveness testing.

We did not have fair value hedges or net investment hedges outstanding as of April 2, 2011 or April 3, 2010.

ASC Topic 815 requires all derivative instruments to be recognized at their fair values as either assets or
liabilities on the balance sheet. We determine the fair value of our derivative instruments using the framework
prescribed by ASC Topic 820, Fair Value Measurements and Disclosures, by considering the estimated amount
we 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, the creditworthiness of the counterparty for assets, and our
creditworthiness for liabilities. In certain instances, we may utilize financial models to measure fair value.
Generally, we use 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 April 2, 2011, we have classified our derivative assets and liabilities within Level 2 of
the fair value hierarchy prescribed by ASC Topic 815, as discussed below, because these observable inputs are
available for substantially the full term of our derivative instruments.

The following tables present the fair value of our derivative instruments as they appear in our
consolidated balance sheets as of April 2, 2011 and April 3, 2010 by type of contract and whether it is a
qualifying hedge under ASC Topic 815.

Location in
Balance Sheet

Balance as of
April 2, 2011

Balance as of
April 3, 2010

(In thousands)

Derivative Assets:
Designated foreign currency hedge

contracts . . . . . . . . . . . . . . . . . . . . . . . . . Other current assets

Derivative Liabilities:
Designated foreign currency hedge

contracts . . . . . . . . . . . . . . . . . . . . . . . . . Other accrued liabilities

$2,563

$4,407

$4,174

$1,747

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Other Fair Value Measurements

ASC Topic 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework
for measuring fair value in accordance with U.S. GAAP, and expands disclosures about fair value measure-
ments. ASC Topic 820 does not require any new fair value measurements; rather, it applies to other accounting
pronouncements that require or permit fair value measurements. In accordance with ASC Topic 820, for the
year ended April 2, 2011 and April 3, 2010, we applied the requirements under ASC Topic 820 to our non-
financial assets and non-financial liabilities. As we did not have an impairment of any non-financial assets or
non-financial liabilities, there was no disclosure required relating to our non-financial assets or non-financial
liabilities.

On a recurring basis, we measure certain financial assets and financial liabilities at fair value, including
our money market funds, foreign currency derivative contracts, and contingent consideration. ASC Topic 820
defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. As such, fair value is a market-based
measurement that should be determined based on assumptions that market participants would use in pricing an
asset or liability. We base fair value upon quoted market prices, where available. Where quoted market prices
or other observable inputs are not available, we apply valuation techniques to estimate fair value.

ASC Topic 820 establishes a three-level valuation hierarchy for disclosure of fair value measurements.
The categorization of assets and liabilities within the valuation hierarchy is based upon the lowest level of
input that is significant to the measurement of fair value. The three levels of the hierarchy are defined as
follows:

(cid:129) Level 1 — Inputs to the valuation methodology are quoted market prices for identical assets or

liabilities.

(cid:129) Level 2 — Inputs to the valuation methodology are other observable inputs, including quoted market

prices for similar assets or liabilities and market-corroborated inputs.

(cid:129) 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 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.

We recognize all derivative financial instruments in our consolidated financial statements at fair value in
accordance with ASC Topic 815, Derivatives and Hedging. We determine the fair value of these instruments
using the framework prescribed by ASC Topic 820 by considering the estimated amount we would receive or
pay to terminate these agreements at the reporting date and by taking into account current spot rates, the
creditworthiness of the counterparty for assets, and our creditworthiness for liabilities. We have classified our
foreign currency hedge contracts within Level 2 of the fair value hierarchy because these observable inputs are
available for substantially the full term of our derivative instruments. For the year ended April 2, 2011 and
April 3, 2010, we have classified our other liabilities — contingent consideration relating to our acquisition of
Neoteric within Level 3 of the fair value hierarchy because the value is determined using significant
unobservable inputs.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Fair Value Measured on a Recurring Basis

Financial assets and financial liabilities measured at fair value on a recurring basis consist of the

following as of April 2, 2011 :

Assets
Money market funds . . . . . . . . . . . . . . . . . . .
Forward currency exchange contracts . . . . . .

Liabilities
Forward currency exchange contracts . . . . . .
Other liabilities — contingent consideration . .

Quoted
Market Prices
for
Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

(In thousands)

$148,369
—

$148,369

—
—

—

$ —
2,563

$2,563

$4,174
—

$4,174

$ —
—

$ —

$ —
2,284

$2,284

Total

$148,369
2,563

$150,932

$ 4,174
2,284

$ 6,458

A description of the methods used to determine the fair value of the Level 3 liabilities (other liabilities —
contingent consideration) is included within Note 3, Acquisitions. The table below provides a reconciliation of
the beginning and ending Level 3 liabilities for the year ended April 2, 2011.

Beginning balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reversal of interest expense on contingent consideration, net . . . . . . . . . . . . . . . . . .
Contingent consideration income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency translation adjustment

Fair Value
Measurements
Using Significant
Unobservable
Inputs
(Level 3)
(In thousands)
$ 4,101
(416)
(1,894)
493

Ending balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 2,284

Other Fair Value Disclosures

The fair value of our real estate mortgage obligation was $4.1 million and $5.1 million at April 2, 2011

and April 3, 2010, respectively.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

8. NOTES PAYABLE AND LONG-TERM DEBT

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

April 2,
2011

April 3,
2010

(In thousands)

Real estate mortgage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,590
289
Short-term notes payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
Notes payable assumed in acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$4,879
Less-Current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 913

$ 5,344
7,475
7,701

$20,520
$16,062

$3,966

$ 4,458

Real Estate Mortgage Agreement

In December 2000, we entered into a $10.0 million real estate mortgage agreement (the “Mortgage
Agreement”) with an investment firm. The Mortgage Agreement requires principal and interest payments of
$0.1 million per month for a period of 180 months, commencing February 1, 2001. The entire balance of the
loan may be repaid at any time after February 1, 2006, subject to a prepayment premium, which is calculated
based upon the change in the current weekly average yield of Ten (10)-year U.S. Treasury Constant Maturities,
the principal balance due and the remaining loan term. The Mortgage Agreement provides for interest to
accrue on the unpaid principal balance at a rate of 8.41% per annum. Borrowings under the Mortgage
Agreement are secured by the land, building and building improvements at our headquarters and manufactur-
ing facility in the U.S. with a carrying value of approximately $4.6 million and $5.3 million as of April 2,
2011 and April 3, 2010, respectively. There are no financial covenants in the terms and conditions of this
agreement.

Short-Term Notes Payable.

Our subsidiary, Haemonetics Japan Co. Ltd., had no outstanding unsecured debt as of April 2, 2011 and

$7.5 million outstanding as of April 3, 2010.

Notes Payable Assumed in Acquisition

As of April 3, 2010, Global Med had $7.8 million outstanding in loan and security agreements. These
agreements provided for a revolving line of credit and term loans. Subsequent to April 3, 2010, as part of our
integration of Global Med, we paid the outstanding balances under this obligation.

The weighted average short-term rates for U.S. and non-U.S. borrowings were 0.51%, 0.54%, and 1.03%

as of April 2, 2011, April 3, 2010, and March 28, 2009, respectively.

As of April 2, 2011, notes payable and long-term debt matures as follows (in thousands):

Fiscal Year Ending
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 913
1,090
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
970
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,055
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
851
2016 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$4,879

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

INCOME TAXES

Domestic and foreign income before provision for income tax is as follows:

April 2,
2011

Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 58,040
$ 52,041

April 3,
2010
(In thousands)
$42,259
$39,011

March 28,
2009

$55,240
$29,762

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$110,081

$81,270

$85,002

The income tax provision contains the following components:

April 2,
2011

April 3,
2010
(In thousands)

March 28,
2009

Current
Federal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$14,982
2,111
7,226

$10,088
887
9,333

$16,809
1,768
5,476

Total current. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$24,319

$20,308

$24,053

Deferred
Federal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,931
438
413

4,103
259
(1,770)

1,779
(1)
(133)

Total deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 5,782

$ 2,592

$ 1,645

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$30,101

$22,900

$25,698

Included in the federal income tax provisions for fiscal years 2011, 2010 and 2009 are approximately
$10.8 million, $8.1 million and $6.8 million, respectively, provided on foreign source income of approximately
$31.0 million, $23.2 million and $19.6 million for fiscal year 2011, 2010 and 2009, respectively, for taxes
which are payable in the United States.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Tax affected, significant temporary differences comprising the net deferred tax asset are as follows:

April 2,
2011

April 3,
2010

(In thousands)

Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (9,447)
(20,597)
Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,244
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,120
Hedging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,950
Accruals and reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,241
Net operating loss carryforward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,725
Stock Based Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,583
Tax credit carryforward, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4,181)
Gross Deferred Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (3,630)

$ (8,317)
(14,995)
1,169
(1,329)
9,419
6,904
8,226
1,594

2,671
(378)

Net deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (7,811)

$ 2,293

As of April 2, 2011, the Company has approximately $9.5 million in U.S. acquisition and approximately

$1.2 million in Canada acquisition related net operating loss carry forwards that it believes are more likely
than not that they will be realized. The Company has established valuation allowances to reduce the value of
tax assets to amounts that it deems to be realizable. The valuation allowance is made up of $0.4 million
acquisition-related R&D credits and $3.2 million acquisition-related net operating losses. The net operating
loss carry forwards are subject to separate limitations and will expire beginning in 2020. The Company also
has $1.5 million in gross federal and state tax credits available to offset future tax.

Approximately $143 million of our foreign subsidiary undistributed earnings are deemed to be perma-

nently reinvested outside the US. Accordingly we have not provided US income taxes on these earnings. The
income tax provision from operations differs from tax provision computed at the 35% U.S. federal statutory
income tax rate due to the following:

April 2,
2011

April 3,
2010
(In thousands)

March 28,
2009

Tax at federal statutory rate. . . . . . . . . . . . . . . . . . . . $38,528
Domestic Manufacturing Deduction and

35.0% $28,444

35.0% $29,751

35.0%

Extraterritorial Income Exclusion. . . . . . . . . . . . . .
Difference between U.S. and foreign tax . . . . . . . . . .
State income taxes net of federal benefit . . . . . . . . . .
In Process Research and Dividend repatriation . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,120)
(8,610)
1,741
(506)
68

(1.0)%
(883)
(7.9)% (4,392)
1.6%
764
(0.5)% (1,574)
541
0.1%

(1.1)% (1,396)
(5.4)% (4,267)
1,461
0.9%
(795)
(1.9)%
944
0.7%

(1.6)%
(5.0)%
1.7%
(1.0)%
1.1%

Income tax provision . . . . . . . . . . . . . . . . . . . . . . . . $30,101

27.3% $22,900

28.2% $25,698

30.2%

Unrecognized Tax Benefits

Unrecognized tax benefits represent uncertain tax positions for which reserves have been established. As

of April 2, 2011, we had $4.7 million of unrecognized tax benefits, of which $4.3 million will impact the
effective tax rate, if recognized. As of April 3, 2010, we had $4.6 million of unrecognized tax benefits, of
which $4.2 million will impact the effective tax rate, if recognized.

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Each year the statute of limitations for income tax returns filed in various jurisdictions closes, sometimes

without adjustments. During the year ended April 2, 2011 our unrecognized tax benefits were reduced by
$1.6 million as a result of the expiration of the statute of limitations in several jurisdictions and settlements
with taxing authorities. This was offset in part by the establishment of reserves of $1.7 million for various
matters. Total unrecognized tax benefits on April 2, 2011 were $4.7 million.

The following table summarizes the activity related to our gross unrecognized tax benefits for the years

ending April 3, 2010 and April 2, 2011:

April 2,
2011

April 3,
2010

(In thousands)

Beginning Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions based upon positions related to the current year . . . . . . . . . . . . . . . . .
Additions for tax positions of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reductions of tax positions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Settlements with taxing authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Closure of statute of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 4,620
20
1,641
(1,042)
—
(570)

$ 3,890
1,722
1,335
—
(924)
(1,403)

Ending Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 4,669

$ 4,620

As of April 2, 2011 we anticipate that the liability for unrecognized tax benefits for uncertain tax

positions could change by up to $0.3 million in the next twelve months, as a result of closure of various
foreign statutes of limitations.

Our historic practice has been and continues to be to recognize interest and penalties related to Federal,

state and foreign income tax matters in income tax expense. Approximately $0.7 million and $0.6 million was
accrued for interest and penalties at April 2, 2011 and April 3, 2010, respectively and is not included in the
amounts above.

We conduct business globally and, as a result, file consolidated federal and consolidated and separate
state and foreign income tax returns in multiple jurisdictions. In the normal course of business, we are subject
to examination by taxing authorities throughout the world in jurisdictions including the U.S., Japan, Germany,
France, the United Kingdom, and Switzerland. With few exceptions, we are no longer subject to U.S. federal,
state and local, or foreign income tax examinations for years before 2007.

10. COMMITMENTS AND CONTINGENCIES

We lease facilities and certain equipment under operating leases expiring at various dates through fiscal
year 2016. Facility leases require us to pay certain insurance expenses, maintenance costs and real estate taxes.

Approximate future basic rental commitments under operating leases as of April 2, 2011 are as follows

(in thousands):

Fiscal Year Ending
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 6,516
4,313
2,146
1,096
1,028
3,040

$18,139

HAEMONETICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Rent expense in fiscal year 2011, 2010, and 2009 was $6.6 million, $5.9 million, and $5.2 million,

respectively.