Haemonetics
Annual Report 2015

Plain-text annual report

UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549Form 10-KANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended March 28, 2015Commission file number 001-14041HAEMONETICS CORPORATION(Exact name of registrant as specified in its charter)Massachusetts 04-2882273(State or other jurisdiction ofincorporation or organization) (I.R.S. EmployerIdentification No.) 400 Wood Road,Braintree, Massachusetts 02184-9114 (Address of principal executive offices) (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 ExchangeSecurities registered pursuant to Section 12(g) of the Act:NoneIndicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No oIndicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes o No þIndicate 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 1934during 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 requirementsfor at least the past 90 days. Yes þ No oIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data Filerequired 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 shorterperiod that the registrant was required to submit and post such files). Yes þ No oIndicate 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 thebest 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 thisform 10-K. þIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Seethe definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):Large accelerated filer þ Accelerated filer o Non-accelerated filer o Smaller reporting company o (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 o No þThe aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant (assuming for these purposes that allexecutive officers and directors are “affiliates” of the registrant) as of September 27, 2014, the last business day of the registrant’s most recently completedsecond fiscal quarter was $1,777,275,792 (based on the closing sale price of the registrant’s common stock on that date as reported on the New York StockExchange).The number of shares of $0.01 par value common stock outstanding as of April 25, 2015 was 51,682,698.Documents Incorporated By ReferencePortions of the definitive proxy statement for our Annual Meeting of Shareholders to be held on July 21, 2015 are incorporated by reference in Part III ofthis report.TABLE OF CONTENTS PageNumberItem 1.Business1Item 1A.Risk Factors11Item 1B.Unresolved Staff Comments17Item 2.Properties17Item 3.Legal Proceedings17Item 4.Mine Safety Disclosures18Item 4A.Executive Officers18Item 5.Market for the Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities20Item 6.Selected Consolidated Financial Data23Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations24Item 7A.Quantitative and Qualitative Disclosures about Market Risk43Item 8.Financial Statements and Supplementary Data46Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure85Item 9A.Control and Procedures86Item 9B.Other Information88Item 10.Directors and Executive Officers of the Registrant and Corporate Governance88Item 11.Executive Compensation88Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters88Item 13.Certain Relationships and Related Transactions and Director Independence88Item 14.Principal Accounting Fees and Services88Item 15.Exhibits, Financial Statement Schedules89Table of ContentsITEM 1. BUSINESSCompany OverviewHaemonetics is a global healthcare company dedicated to providing innovative blood management solutions to our customers. Our comprehensive portfolioof integrated devices, information management, and consulting services offers blood management solutions for each facet of the blood supply chain, helpingimprove clinical outcomes and reduce costs for blood and plasma collectors, hospitals, and patients around the world. Our products and services help preventa transfusion to a patient who does not need one and provide the right blood product, at the right time, in the right dose to the patient who does. When usedin this report, the terms “we,” “us,” “our” and “the Company” mean Haemonetics.Blood and its components (plasma, platelets, and red cells) have many vital - and frequently life-saving - clinical applications. Plasma is used for patientswith major blood loss and is manufactured into pharmaceuticals to treat a variety of illnesses and hereditary disorders such as hemophilia. Red cells treattrauma patients or patients undergoing surgery with high blood loss, such as open heart surgery or organ transplant. Platelets treat cancer patients undergoingchemotherapy. Blood is essential to a modern healthcare system.Haemonetics is committed to helping our customers create and maintain a safe and efficient blood supply chain. Specifically, we develop and market a widerange of blood collection and processing systems used with plasma and blood donors that collect and process blood into its components using both manualand automated methods. We also develop and market a variety of systems to hospitals that automate the cleaning and reinfusion of a surgical patient's ownblood, automate the tracking and distribution of blood in the hospital, and enhance blood diagnostics. We also sell information technology platforms topromote efficient and compliant operations for all of our customer groups. Finally, we provide consulting services to reduce costs and improve operatingefficiencies in blood management. By better understanding our customers' needs, we are creating comprehensive blood management solutions for bloodcollectors and healthcare systems in approximately 100 countries around the world.Haemonetics was founded in 1971 as a medical device company — a pioneer and market leader in developing and manufacturing automated bloodcomponent collection devices and surgical blood salvage devices. In May 1991, we completed an initial public offering and to this day remain anindependent company.In 2012, we entered the market for manual whole blood collections with the acquisition of Pall Corporation’s blood collection, filtration and processingproduct lines. This acquisition provides access to whole blood markets, manual collection and control over filter manufacturing.Market and ProductsProduct LinesWe serve three customer segments: manufacturers of plasma derived pharmaceuticals, blood collectors, and hospitals. We report revenues for multipleproduct lines under four global product categories: Plasma, Blood Center, Hospital, and Software Solutions. “Plasma” includes plasma collection devicesand disposables. “Blood Center” includes blood collection and processing devices and disposables. “Hospital” includes surgical blood salvage and blooddemand diagnostic devices and disposables. “Software Solutions” includes information technology platforms and consulting services provided to all threemarkets. Although we address our customers' needs through multiple product lines, we manage our business as five operating segments based primarily ongeography; North America Plasma, North America Blood Center and Hospital, Europe, Asia Pacific and Japan. However, for financial reporting purposes weaggregate our five operating segments into one reportable segment as they are economically similar.The financial information required for segments is included herein in Note 15 of the financial statements, entitled Segment Information.1Table of Contents•PlasmaThe Plasma Collection Market for Fractionation — Human plasma is collected and processed by bio-pharmaceutical companies into therapeuticand diagnostic products that aid in the treatment of immune diseases and coagulation disorders. While plasma is also used to aid patients withextreme blood loss, such as trauma victims, bio-pharmaceutical companies solely focus on plasma's pharmaceutical uses. Automated plasmacollection technology allows for the safe and efficient collection of plasma. We manufacture and market automated plasma collection devices andrespective disposables, 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 theplasma required to manufacture their pharmaceuticals. This vertical integration paved the way for highly efficient plasma supply chain managementand the plasma industry leverages information technology to manage operations from the point of plasma donation to fractionation to theproduction of the final product.Haemonetics' Plasma Products — Our portfolio of products and services is designed to support multiple facets of plasma collector operations. Wehave a long-standing commitment to understanding our customers' collection and fractionation processes. As a result, we deliver product quality andreliability; design equipment that is durable, dependable, and easy to use; comprehensive training and support, and strong business continuitypractices.Historically, plasma for fractionation was collected manually, which was time-consuming, labor-intensive, produced relatively poor yields, andposed risk to donors. Today, the vast majority of plasma collections worldwide are performed using automated collection technology because it issafer and more cost-effective. With our PCS® brand automated plasma collection technology, more plasma can be collected during any one donationevent because the other blood components are returned to the donor through the sterile disposable sets used for the plasma donation procedure.We offer “one stop shopping” to our plasma collection customers, enabling them to source from us the full range of products necessary for plasmacollection and storage, including PCS® brand plasma collection equipment and disposables, plasma collection containers, and intravenoussolutions. We also offer a robust portfolio of integrated information technology platforms for plasma customers to manage their donors, operations,and supply chain. Our products automate the donor interview and qualification process; streamline the workflow process in the plasma center;provide the controls necessary to evaluate donor suitability; determine the ability to release units collected; and manage unit distribution. With oursoftware solutions, plasma collectors can manage processes across the plasma supply chain, react quickly to business changes, and identifyopportunities to reduce costs.Our plasma disposables product line represented 35.1%, 31.1%, and 30.1% of our total revenue in fiscal 2015, 2014 and 2013, respectively.•Blood CenterThe Blood Collection Market for Transfusion — There are millions of blood donations throughout the world every year that produce bloodproducts for transfusion to surgical, trauma, or chronically ill patients. Patients typically receive only the blood components necessary to treat aparticular 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 chemotherapy and help patients with bleeding disorders. Red cells are often transfusedto patients to replace blood lost during surgery. Red cells are also transfused to patients with blood disorders, such as sickle cell anemia or aplasticanemia. Plasma, in addition to its role in creating life-saving pharmaceuticals, is frequently transfused to trauma victims and to replace bloodvolume lost during surgery.The demand for blood varies across the world. While overall we expect total demand to remain stable, demand in individual markets can varygreatly. Highly populated emerging market countries are seeing demand growth as they expand healthcare coverage. As greater numbers of peoplegain access to more advanced medical treatment, demand for blood components, plasma-derived drugs, and surgical procedures increases. In moremature markets, the development of less invasive, lower blood loss procedures and better blood management has offset the demand increases fromaging populations. This is particularly true in the United States, where we saw collections decline by approximately 10% in fiscal 2015 and weexpect this trend to moderate in fiscal 2016.Most donations worldwide are manual whole blood donations. In this process, whole blood is collected from the donor and then transported to alaboratory where it is separated into its components: red cells, platelets and/or plasma.2Table of ContentsIn addition to manual collections, there is a significant market for automated component blood collections. In this procedure, the blood separationprocess is automated and occurs in “real-time” while a person is donating blood. In this separation method, only the specific blood componenttargeted is collected, and the remaining components are returned to the blood donor. Automated blood component collection allows significantlymore of the targeted blood component to be collected during a donation event, especially red cells where our automated system supports collectionof two units from eligible donors.Haemonetics’ Blood Center Products — Today, Haemonetics offers automated blood component and manual whole blood collection systems toblood collection centers to collect blood products efficiently and cost effectively.We market the MCS® (Multicomponent Collection System) brand apheresis equipment which is designed to collect specific blood componentsintegrated from the donor. Utilizing the MCS® automated platelet collection protocols, blood centers collect one or more therapeutic “doses” ofplatelets during a single donation. The MCS® two-unit protocol or double red cell collection device helps blood collectors optimize the collectionof red cells by automating the blood separation function, eliminating the need for laboratory processing, and enabling the collection of two units ofred cells from a single donor thus maximizing the amount of red cells collected per eligible donor and helping to mitigate red cell shortages incountries where this problem exists. Blood collectors can also use the MCS® system to collect one unit of red cells and a "jumbo" (double) unit ofplasma, or one unit of red cells and one unit of platelets from a single donor. The MCS® plasma protocol, which provides the possibility ofcollecting 600-800ml of plasma for either transfusion to patients or for use by the pharmaceutical industry, completes the comprehensive portfolioof different blood component collection options on this device.With the whole blood acquisition, Haemonetics now also offers a portfolio of products for manual whole blood collection and processing. The assetsacquired provide us with filter technology and manufacturing capability as well as a broad portfolio of manual collection, filtration and processingproducts. Haemonetics' portfolio of disposable whole blood collection and component storage sets offer flexibility in collecting a unit of wholeblood and the subsequent production and storage of the red blood cell, platelet, and/or plasma products, including options for in-line or dockablefilters for leukoreduction of any blood component. In addition, our innovative AcrodoseSM product line provides a closed system for the pooling,storage, and bacteria testing of leukoreduced whole blood derived platelet concentrates, an AcrodoseSM Platelet, that is “transfusion ready” for thehospital. Use of Acrodose platelets lowers hospital handling costs by eliminating the need for pooling and bacteria testing at the hospital.With the ACP® (Automated Cell Processor) brand, Haemonetics offers a small bench-top solution to automate the washing and freezing of red cellcomponents in the lab. The automated red cell washing procedure removes plasma proteins within the red cell units to provide a safer product fortransfusion to frequently transfused patients, neonates, or patients with a history of transfusion reactions. The automated glycerolization anddeglycerolization steps are required to prepare red cells for frozen storage. Freezing the red cell units can expand the shelf life of these products up to10 years. Customers utilize this technology to implement strategic red cell inventories for catastrophe cases, storage of rare blood types, or enhancedinventory management.Our blood center disposables product line represented 37.3%, 41.5%, and 40.1% of our total revenue in fiscal 2015, 2014 and 2013, respectively.•HospitalThe Transfusion Market for Hospitals — Loss of blood is common in many surgical procedures, including 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. Patients commonlyreceive donor blood, referred to as “allogeneic blood,” which carries various risks including risk of transfusion with the wrong blood type; risk oftransfusion reactions including death, but more commonly chills, fevers or other side effects that can prolong a patient’s recovery; and risk oftransfusion of blood with a blood-borne disease or infectious agent.An alternative to allogeneic blood is surgical cell salvage, also known as autotransfusion, which reduces or eliminates a patient’s need for blooddonated from others and ensures that the patient receives the freshest and safest blood possible — his or her own. Surgical cell salvage involves thecollection of a patient’s own blood during and after surgery, for reinfusion of red cells to that patient. Blood is suctioned from the surgical site orcollected from a wound or chest drain, processed and washed through a centrifuge-based system that yields concentrated red cells available fortransfusion back to the patient. This process occurs in a sterile, closed-circuit, single-use consumable set that is fitted into an electromechanicaldevice. We market our surgical blood salvage products to surgical specialists, primarily cardiovascular, orthopedic, and trauma surgeons, and tosurgical suite service providers.3Table of ContentsWith the whole blood acquisition, Haemonetics now offers filtration products for the hospital. These filters are used during the blood transfusionprocess for reduction of particulate debris, fat globules and leukocytes in the blood components.Haemonetics’ Hospital Products — Haemonetics offers a range of blood management solutions that significantly improve a hospital's systems foracquiring blood, storing it in the hospital, and dispensing it efficiently and correctly. Over the last few years, hospitals have become increasinglyaware of their need to control costs and improve patient safety by managing blood more effectively. Our products and integrated solution platformshelp hospitals optimize performance of blood acquisition, storage, and distribution.Our TEG® Thrombelastograph Hemostasis Analyzer system is a blood diagnostic instrument that measures a patient's hemostasis or the ability toform and maintain blood clots. By understanding a patient’s clotting ability, clinicians can better plan for the patient’s care, deciding in advancewhether to start or discontinue use of certain drugs or, determine the likelihood of the patient's need for a transfusion and which blood componentswill be most effective in stopping bleeding. Such planning supports better care, which can lead to lower hospital costs through a reduction inunnecessary donor blood transfusions, reduced adverse transfusion reactions, and shorter intensive care unit and hospital stays. We have launchedour next generation device, the TEG 6s, in certain markets in Europe and Asia. In North America, our largest market for TEG, we will launch the TEG6s upon receipt of the final 510(k) clearance by the FDA.The Cell Saver® system is a surgical blood salvage system targeted to procedures that involve rapid, high-volume blood loss, such as cardiovascularsurgeries. It has become the standard of care for high blood-loss surgeries. In fiscal 2012, we launched the Cell Saver® Elite® system, which is ourmost advanced autotransfusion option to minimize allogeneic blood use for surgeries with medium to high blood loss.The OrthoPAT® surgical blood salvage system is targeted to orthopedic procedures, such as hip and knee replacements, which involve slower, lowervolume blood loss that often occurs well after surgery. The system is designed to remain with the patient following surgery, to recover blood andproduce a washed red cell product for autotransfusion. Its Quick-Connect feature permits customers to utilize the blood processing set selectively,depending on the patient's need.Our hospital disposables product line represented 13.7%, 13.3%, and 14.7% of our total revenue in fiscal 2015, 2014 and 2013, respectively.•Software SolutionsHaemonetics' Software Products and Services — We have a suite of integrated software solutions for improving efficiencies and helping ensuredonor and patient safety. This includes solutions for blood drive planning, donor recruitment and retention, blood collection, componentmanufacturing and distribution, transfusion management, and remote blood allocation. For our plasma customers, we also provide informationtechnology platforms for managing donors and information associated with the collection of plasma products and their processing withinfractionation facilities. While each Haemonetics information technology platform can be used independently, our mission to provide "Arm toArm®" blood management solutions means they can also work together through integration to further improve process workflows. Also, the abilityto evaluate information based on the integration of these systems allows customers to continually improve their business processes. Leveraginginformation to make more informed decisions is a significant component of Haemonetics' overall commitment to improving blood managementsystems globally.Blood Management Solutions — Combining software solutions with devices, we meet our goal of offering customers powerful tools for improvingblood management while driving growth of our disposables. For example, a hospital may use our consulting services to analyze its transfusionpractices and recommend improvements that result in improved blood management and reduced cost. Then, the hospital can leverage our systemsand services to analyze blood utilization, manage blood inventory, and potentially reduce demand for donated blood. Finally, hospitals can use ourIMPACT® Online blood management business intelligence portal to monitor the results of its new blood management practices. The positive patientimpact and reduced costs from this integrated blood management approach can be significant. Likewise, by understanding best practices, blooddemand, and discrete patient needs, hospitals can more frequently deploy our devices for hemostasis diagnosis and cell salvage to ensure bestpatient care.While each of our products, platforms, and services can be marketed individually, our blood management solutions vision is to offer integratedclosed-loop solutions for blood supply chain management. Our software solutions — information technology platforms and consulting services —can be combined with our devices and sold through our plasma, blood center, and hospital sales forces.4Table of ContentsOur software products help hospitals track and safely deliver stored blood products. SafeTrace Tx® is our software solution that helps manage bloodproduct inventory, perform patient cross-matching, and manage transfusions. In addition, our BloodTrack® suite of solutions manages tracking andcontrol of blood products from the hospital blood center through to transfusion to the patient. “Smart” refrigerators located in or near operatingsuites, emergency rooms, and other parts of the hospital dispense blood units with secure control and automated traceability for efficientdocumentation. With our more comprehensive offerings, hospitals are better able to manage processes across the blood supply chain and identifyincreased opportunities to reduce costs and enhance processes. We released our new BloodTrack HaemoBank, which received 510(k), CE and multi-regional clearances, in fiscal 2015 and expect that this will further expand this solution's growth in fiscal 2016.We believe a key example of our blood management solutions is the potential to balance blood demand with supply and mitigate shortages of bloodcomponents and reduce collection costs. Our software solutions, such as our SafeTrace® and El Dorado Donor® donation and blood unitmanagement systems, span blood center operations and automate and track operations from the recruitment of the blood donor to the disposition ofthe blood product. Our Hemasphere® software solution provides support for more efficient blood drive planning, and Donor Doc® and e-Donor®software help to improve recruitment and retention. Combined, our solutions help blood collectors improve the safety, regulatory compliance, andefficiency of blood collection and supply.Our software solutions product line represented 7.9%, 7.5%, and 7.8% of our total revenue in fiscal 2015, 2014 and 2013, respectively.Marketing/Sales/DistributionWe market and sell our products to bio-pharmaceutical companies, blood collection groups and independent blood centers, hospitals and hospital serviceproviders, group purchasing organizations and national health organizations through our own direct sales force (including full-time sales representatives andclinical specialists) as well as independent distributors. Sales representatives target the primary decision-makers within each of those organizations.United StatesIn fiscal 2015, 2014 and 2013 approximately 54.4%, 53.4%, and 51.0%, respectively, of consolidated net revenues were generated in the U.S., where weprimarily use a direct sales force to sell our products. See Note 15, Segment Information, to our consolidated financial statements contained in Item 8 foradditional information.Outside the United StatesIn fiscal 2015, 2014 and 2013 approximately 45.6%, 46.6%, and 49.0%, respectively, of consolidated net revenues were generated through sales to non-U.S. customers. Outside the United States, we use a combination of direct sales force and distributors. See Note 15, Segment Information, to our consolidatedfinancial statement contained in Item 8 for additional information.Research and DevelopmentOur research and development centers in the United States and Switzerland ensure that protocol variations are incorporated to closely match local customerrequirements. In addition, our Haemonetics Software Solutions also maintains development operations in Canada and France.Customer collaborations are also an important part of our technical strength and competitive advantage. These collaborations with customers and transfusionexperts provide us with ideas for new products and applications, enhanced protocols, and potential test sites as well as objective evaluations and expertopinions regarding technical and performance issues.The development of blood component separation products and extracorporeal blood typing and screening systems has required us to maintain technicalexpertise in various engineering disciplines, including mechanical, electrical, software, and biomedical engineering and material science. Innovationsresulting from these various engineering efforts enable us to develop systems that are faster, smaller, and more user-friendly, or that incorporate additionalfeatures important to our customer base.Research and development expense was $54.2 million in fiscal 2015, $54.2 million in fiscal 2014 and $44.4 million in fiscal 2013, representingapproximately 5.0% - 6.0% of our net sales each year.In fiscal 2015, research and development resources were allocated to supporting next generation plasma collection and software systems, a new TEG®Thrombelastograph Hemostasis Analyzer, and several other enhancements to our legacy product portfolios.5Table of ContentsManufacturingOur principal manufacturing operations are located in the United States, Mexico, Scotland and Switzerland.These include facilities in Mexico and Puerto Rico purchased in 2012 as part of our acquisition of the whole blood business from Pall Corporation.On May 1, 2013, we announced a plan to pursue identified Value Creation and Capture (“VCC”) opportunities. Theseinclude: (i) investment in product line extensions, next generation products and growth platforms; (ii) enhancement of commercial execution capabilities byimplementing go-to-market and other strategies to enable global profitable revenue growth; and (iii) transformation of the manufacturing network to bestsupport these commercial strategies while optimizing expense levels. Collectively, these are opportunities to position us for increased competitiveness andgrowth.Our manufacturing network transformation plan, part of our larger VCC activities previously discussed, includes (i) discontinuing manufacturing activities atour Braintree, Massachusetts, Ascoli-Piceno, Italy and Bothwell, Scotland facilities, (ii) creating a technology center of excellence for product developmentin Braintree, Massachusetts, (iii) expanding of our current facility in Tijuana, Mexico, (iv) engaging Sanmina Corporation as a contract manufacturer toproduce certain medical equipment, and (v) building a new manufacturing facility in Penang, Malaysia closer to our customers in Asia.Our VCC initiatives are moving forward according to plan, we have engaged Sanmina Corporation to be the sole manufacturer of certain equipment, and wehave commenced production in our new manufacturing facility in Penang, Malaysia and in our expanded facility in Tijuana, Mexico allowing us toconsolidate the manufacturing of product formerly produced in the U.S., Italy and Scotland.In general, our production activities occur in controlled settings or “clean room” environments. Each step of the manufacturing and assembly process isquality checked, qualified, and validated. Critical process steps and materials are documented to ensure that every unit is produced consistently and meetsperformance requirements. Our equipment and disposable manufacturing sites are certified to the ISO 13485 standard and to the Medical Device Directiveallowing placement of the CE mark of conformity.Plastics are the principal component of our disposable products. Contracts with our suppliers help mitigate some of the short-term effects of price volatility inthis market. However, increases in the price of petroleum derivatives could result in corresponding increases in our costs to procure plastic raw materials.Contractors manufacture some component-sets and equipment according to our specifications. We maintain important relationships with two Japanesemanufacturers that produce finished disposables in Singapore, Japan, and Thailand. We have also engaged Sanmina Corporation to be the sole manufacturerof certain equipment. Certain parts and components are purchased from sole source vendors. We believe that if necessary, alternative sources of supply areavailable in most cases, and could be secured within a relatively short period of time. Nevertheless, an interruption in supply could temporarily interfere withproduction schedules and affect our operations.Our equipment is designed in-house and assembled by us or our contracted manufacturer from components that are manufactured to our specifications. Thecompleted instruments are programmed, calibrated, and tested to ensure compliance with our engineering and quality assurance specifications. Inspectionchecks are conducted throughout the manufacturing process to verify proper assembly and functionality. When mechanical and electronic components aresourced from outside vendors, those vendors must meet detailed qualification and process control requirements.Intellectual PropertyWe consider our intellectual property rights to be important to our business. We rely on patent, trademark, copyright, and trade secret laws, as well asprovisions in our agreements with third parties, to protect our intellectual property rights. We hold patents in the United States and many internationaljurisdictions on some of our machines, processes, disposables and related technologies. These patents cover certain elements of our systems, includingprotocols employed in our equipment and certain aspects of our processing chambers and disposables. Our patents may cover current products, products inmarkets 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 currentlyembodied in our current products. We may also license patent rights from third parties that cover technologies that we plan to use in our business. Tomaintain our competitive position, we rely on the technical expertise and know-how of our personnel and on our patent rights. We pursue an active andformal program of invention disclosure and patent application in both the United States and foreign jurisdictions. We own various trademarks that have beenregistered in the United States and certain other countries.6Table of ContentsOur 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 commerciallyadvantageous to do so. However, the standards for international protection of intellectual property vary widely. We cannot assure that pending patent andtrademark applications will result in issued patents and registered trademarks, that patents issued to or licensed by us will not be challenged or circumventedby competitors, or that our patents will not be determined invalid.CompetitionWe have established a record of innovation and leadership in each of the areas in which we compete. To remain competitive, we must continue to developand acquire new cost-effective products, information technology platforms, and business services. We believe that our ability to maintain a competitiveadvantage will continue to depend on a combination of factors. Some factors are largely within our control such as: (i) maintenance of a positive reputationamong our customers, (ii) development of new products which meet our customer's needs, (iii) obtaining regulatory approvals for our products in key markets,(iv) obtaining patents which protect our innovations, (v) development and protection of proprietary know-how in important technological areas, (vi) productquality, safety and cost effectiveness and (vii) continual and rigorous documentation of clinical performance. Other factors are outside of our control. Wecould see changes in regulatory standards or clinical practice which favor a competitor's technology or reduce revenues in key areas of our business.In addition, we face competition from several large, global companies with product offerings similar to ours, such as Terumo BCT, Sorin Biomedica andFresenius SE & Co. KGaA. Terumo and Fresenius, in particular, have significantly greater financial and other resources than we do and are strong competitorsin a number of our businesses. The following provides an overview of the key competitors in each of our four global product categories.•PlasmaIn the automated plasma collection market, we principally compete with Fresenius, which acquired Fenwal, Inc. in November 2012, on the basis ofquality, reliability, ease of use, services and technical features of the collection systems, and on the long-term cost-effectiveness of equipment anddisposables. In China, the market is populated by local producers of a product that is intended to be similar to ours. Recently, those competitorshave expanded to markets beyond China, into European and South American countries.•Blood CenterWe have several competitors in the Blood Center product lines, some of which compete across all blood components and others that are morespecialized.Terumo BCT, and Fresenius are our major competitors in platelet collection. In platelet collections, there are two areas of competition - automatedcollection and pooled random donor. In the automated collection area, competition is based on continual performance improvement, as measured bythe time and efficiency of platelet collection and the quality of the platelets collected. Each of these companies has taken a different technologicalapproach in designing their systems for automated platelet collection. In addition to automated platelet collection offerings, we now also compete inthe pooled random donor platelet segment from whole blood collections from which pooled platelets are derived with the Acrodose product or buffycoat pooling sets.Terumo BCT and Fresenius (following its acquisition of Fenwal in 2012) are also competitors in the automated red cell collection market. However,it is important to note that most double red cell collection is done in the U.S. and less than 10% of the red cells collected in the U.S. annually arecollected via automation. Therefore, we also compete with the traditional method of collecting red cells from the manual collection of whole blood.As discussed in our Company Overview, we entered the whole blood collections market during fiscal 2013 through the acquisition of the wholeblood business from Pall Corporation. We compete on the basis of total cost, type-specific collection, process control, product quality, andinventory management.Our whole blood business faces competition on the basis of quality and price. In North America, Europe and Asia-Pacific our main competitors areFresenius, MacoPharma and Terumo BCT. We do not have significant whole blood revenues in Japan today. We have a competitive cost advantagein the supply of filtration needed for leukoreduced whole blood collection because we are vertically integrated in the production of our own filters.In the cell processing market, competition is based on the level of automation, labor-intensiveness, and system type (open versus closed). Opensystems may be weaker in good manufacturing process compliance. Moreover, blood processed through open systems has a 24-hour shelf life. Withthe ACP® (automated cell processor) brand,7Table of ContentsHaemonetics offers a closed system cell processor which gives blood processed through it, a 14-day shelf life. We compete with Terumo BCT's opensystems in this market.•HospitalWithin our hospital business, in the diagnostics market, the TEG Thrombelastograph Hemostasis Analyzer is used primarily in surgical applications.One direct competitor, ROTEM, is a competitor in Europe and in the United States. Other competitive technologies include standard coagulationtests and platelet function testing. The TEG analyzer competes with other laboratory tests based on its ability to provide a complete picture of apatient's hemostasis at a single point in time, and the ability to measure the clinically relevant platelet function for an individual patient.In the intraoperative surgical blood salvage market, competition is based on reliability, ease of use, service, support, and price. For high-volumeplatforms, each manufacturer's technology is similar, and our Cell Saver technology competes principally with Sorin Biomedica, Medtronic, andFresenius.In the perioperative surgical blood salvage market, our OrthoPAT system competes primarily against (i) non-automated processing systems whoseend product is an unwashed red blood cell unit for transfusion to the patient, (ii) transfusions of donated blood and (iii) coagulation therapies suchas tranexamic acid.•Software SolutionIn the software market, we compete with MAK Systems, Mediware, Sunquest Information Systems and applications developed internally by ourcustomers. These companies provide software to blood and plasma collectors and to hospitals for managing donors, collections, and blood units.None of these companies competes with Haemonetics' non-software products.Our technical staff is highly skilled, but certain competitors have substantially greater financial resources and larger technical staffing at their disposal. Therecan be no assurance that competitors will not direct substantial efforts and resources toward the development and marketing of products competitive withthose of Haemonetics.Significant CustomersThere were no customers that accounted for greater than 10% of our net revenues in fiscal 2015 and fiscal 2014.Government RegulationMedical Device RegulationThe products we manufacture and market are subject to regulation by the Center of Biologics Evaluation and Research (“CBER”) and the Center of Devicesand 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 premarket approval application (“PMA”). In the United States, software used to automate blood centeroperations and blood collections and to track those components through the system are considered by the 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 manualcollection and automated systems requires us to obtain an approved New Drug Application (“NDA”) or Abbreviated New Drug Application (“ANDA”) fromthe CBER. A 510(k) pre-market clearance indicates the FDA’s agreement with an applicant’s determination that the product for which clearance is sought issubstantially equivalent to another legally marketed medical device. The process of obtaining a 510(k) clearance may involve the submission of clinical dataand supporting information. The process of obtaining NDA approval for solutions is likely to take much longer than 510(k) clearances because the FDAreview 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 andprovide for inspections of our facilities. There are also certain requirements of state, local and foreign governments that must be complied with in themanufacturing and marketing of our products. We maintain customer complaint files, record all lot numbers of disposable products, and conduct periodicaudits to assure compliance with FDA regulations. We place special emphasis on customer training and advise all customers that device operation should beundertaken only by qualified personnel.8Table of ContentsThe 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 publichealth. The FDA may also enjoin and restrain certain violations of the Food, Drug and Cosmetic Act and the Safe Medical Devices Act pertaining to medicaldevices, 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. Theseregulations 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 securityorganizations 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 where we market our products. Federal, state and foreign regulations regardingthe 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.Conflict MineralsThe Dodd-Frank Wall Street Reform and Consumer Protection Act imposes disclosure requirements regarding the use of "Conflict Minerals" mined from theDemocratic Republic of Congo and adjoining countries in products, whether or not these products are manufactured by third parties. The conflict mineralsinclude tin, tantalum, tungsten and gold, and their derivatives. These requirements could affect the pricing, sourcing and availability of minerals used in themanufacture of our products. There will be additional costs associated with complying with the disclosure requirements, such as costs related to determiningthe source of any conflict minerals used in our products. Our supply chain is complex and we may be unable to verify the origins for all metals used in ourproducts.Other RegulationWe are also subject to various environmental, health and general safety laws, directives and regulations both in the U.S. and abroad. Our operations, likethose of other medical device companies, involve the use of substances regulated under environmental laws, primarily in manufacturing and sterilizationprocesses. We believe that sound environmental, health and safety performance contributes to our competitive strength while benefiting our customers,shareholders and employees.Environmental MattersFailure to comply with international, federal and local environmental protection laws or regulations could have an adverse impact on our business or couldrequire material capital expenditures. We continue to monitor changes in U.S. and international environmental regulations that may present a significant riskto the business, including laws or regulations relating to the manufacture or sale of products using plastics.EmployeesAs of March 28, 2015, we employed the full-time equivalent of 3,383 persons assigned to the following functional areas: manufacturing, 1,913; sales andmarketing, 722; general and administrative, 278; research and development, 209; and quality control and field service, 261.Availability of Reports and Other InformationAll 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://phx.corporate-ir.net/phoenix.zhtml?c=72118&p=irol-IRHome. On this web site the public can also access, free of charge, our annual, quarterly and current reports and otherdocuments filed or furnished to the Securities and Exchange Commission, or SEC, as soon as reasonably practicable after we electronically file such materialwith, or furnish it to, the SEC.Cautionary Statement Regarding Forward-Looking InformationStatements 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, andfinancial trends that may affect our future plans of operations, business strategy, results of operations, and financial position. These statements are based onour current expectations and estimates as to prospective events and circumstances about which we can give no firm assurance. Further, any forward-looking9Table of Contentsstatement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflectevents 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-lookingstatements 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, including: theeffects of disruption from the manufacturing transformation making it more difficult to maintain relationships with employees and timely deliver high qualityproducts, unexpected expenses incurred during our VCC initiatives, technological advances in the medical field and standards for transfusion medicine, ourability to successfully implement products that incorporate such advances and standards, demand for whole blood and blood components, product quality,market acceptance, regulatory uncertainties, the ability of our contract manufacturing vendors to timely supply high quality goods, the effect of economicand political conditions, the impact of competitive products and pricing, blood product reimbursement policies and practices, foreign currency exchangerates, changes in customers’ ordering patterns including single-source tenders, the effect of industry consolidation as seen in the plasma and blood centermarkets, the effect of communicable diseases and the effect of uncertainties in markets outside the U.S. (including Europe and Asia) in which we operate andsuch other risks described under Item 1A. Risk Factors included in this report. The foregoing list should not be construed as exhaustive.10Table of ContentsITEM 1A. RISK FACTORSIn addition to the other information contained in this Annual Report and the exhibits hereto, the following risk factors should be considered carefully inevaluating our business. Our business, financial condition, cash flows or results of operations could be materially adversely affected by any of these risks.This section contains forward-looking statements. You should refer to the explanation of the qualifications and limitations on forward-looking statements atthe end of Item 1 and Item 7 of this Annual Report.If we are unable to successfully expand our product lines through internal research & development and acquisitions, our business may be materially andadversely 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 oracquisition of new products. The creation and adoption of technological advances is only one step. We must also efficiently develop the technology into aproduct which confers a competitive advantage, represents a cost effective solution or provides improved patient care. Finally, as a part of the regulatoryprocess of obtaining marketing clearance for new products, we conduct and participate in numerous clinical trials, the results of which may be unfavorable, orperceived as unfavorable by the market, and could have a material adverse effect on our business, financial condition or results of operations.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 business relationships 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 reachsatisfactory terms, or the need for regulatory approvals. Any acquisition that we complete may be dilutive to earnings and require the investment ofsignificant resources. The economic environment may constrain our ability to access the capital needed for acquisitions and other capital investments.A significant portion of our revenue derives from the sale of blood collection supplies. Future declines in the number of blood collection procedures mayhave an adverse effect on our business, financial condition and results of operations.Sales to blood collectors represented 43.3% of our consolidated disposables revenues in fiscal 2015. In certain markets, changes in medical protocols and thedevelopment of less invasive, lower blood loss procedures has reduced the number of transfusions of red blood cells, which has in turn led to a decline in thenumber of blood collection procedures. This is particularly true in the United States where we saw collections decline by approximately 10% in fiscal 2014and 2015, however we expect this trend to moderate in fiscal 2016. If we are unable to gain and maintain higher market share, lower procedure levels couldresult in lower net revenues and higher product costs.Consolidation of the healthcare providers and blood collectors has increased demand for price concessions and caused the exclusion of suppliers fromsignificant market segments, which could have an adverse effect on our business, financial condition and results of operations.The costs of healthcare in the United States have risen significantly over the past decade. Numerous initiatives and reform by legislators, regulators and third-party payers to curb these costs has reduced reimbursement rates which is causing hospitals to consolidate into larger integrated delivery networks and grouppurchasing organizations in an effort to reduce administrative costs and increase purchasing power. This consolidation has resulted in greater pricing pressureon suppliers, decreased average selling prices and a greater number of sole source relationships. This pressure impacts our Hospital and Blood Centerbusinesses.The expansion among hospitals in the United States of group purchasing organizations, integrated delivery networks and large single accounts directly putsprice pressure on our Hospital business. It also puts price pressure on our United States Blood Center customers who are also facing reduced demand for redcells. Our Blood Center customers have responded to this pressure by creating their own group purchasing organizations and resorting to single sourcetenders to create incentives for suppliers, including us, to significantly reduce prices.We expect that market demand, government regulation, third-party reimbursement policies, government contracting requirements and societal pressures willcontinue to change the worldwide healthcare industry, resulting in further business consolidations and alliances among our customers and competitors. Thismay exert further downward pressure on the prices of our products and adversely impact our business, financial condition or results of operations.11Table of ContentsQuality problems with our processes, goods, and services could harm our reputation for producing high-quality products and erode our competitiveadvantage, sales, and market share.Quality is extremely important to us and our customers due to the serious and costly consequences of product failure. Our quality certifications are critical tothe marketing success of our products and services. If we fail to meet these standards or fail to adapt to evolving standards, our reputation could be damaged,we could lose customers, and our revenue and results of operations could decline.As approximately half of our revenue comes from outside the United States, we are subject to currency fluctuation, geopolitical risk, economic volatility,anti-corruption laws, export and import restrictions, local regulatory authorities and the laws and medical practices in foreign jurisdictions. We do business in over 100 countries and have distributors in approximately 90 countries. This exposes us to currency fluctuation, geopolitical risk,economic volatility, anti-corruption laws, export and import restrictions, local regulatory authorities and the laws and medical practices in foreignjurisdictions.If there are sanctions or restrictions on the flow of capital which prevent product importation or receipt of payments in Russia or China, our business could beadversely affected.Our international operations are governed by the U.S. Foreign Corrupt Practices Act (FCPA) and other similar anti-corruption laws in other countries.Generally, these laws prohibit companies and their business partners or other intermediaries from making improper payments to foreign governments andgovernment officials in order to obtain or retain business. Global enforcement of such anti-corruption laws has increased in recent years, including aggressiveinvestigations and enforcement proceedings. While we have an active compliance program and various other safeguards to discourage impermissiblepractices, we have distributors in 90 countries, several of which are considered high risk for corruption. As a result, our global operations carry some risk ofunauthorized impermissible activity on the part of one of our distributors, employees, agents or consultants. Any alleged or actual violation could subject usto government scrutiny, severe criminal or civil fines, or sanctions on our ability to export product outside the U.S., which could adversely affect ourreputation and financial condition.Export of U.S. technology or goods manufactured in the United States to some jurisdictions requires special U.S. export authorization or local market controlsthat may be influenced by factors, including political dynamics, outside our control.Finally, any other significant changes in the competitive, legal, regulatory, reimbursement or economic environments of the jurisdictions in which weconduct our international business could have a material impact on our business.An interruption in our ability to manufacture our products or an inability to obtain key components or raw materials may adversely affect our business.Certain key products are manufactured at single locations, with limited alternate facilities. If an event occurs that results in damage to one or more of ourfacilities, we may be unable to manufacture the relevant products at previous levels or at all. In addition, for reasons of quality assurance or cost effectiveness,we purchase certain finished goods, components and raw materials from sole suppliers, notably JMS Co. Ltd., Kawasumi Laboratories and SanminaCorporation. Due to the stringent regulations and requirements of the FDA and other similar non-U.S. regulatory agencies regarding the manufacture of ourproducts, we may not be able to quickly establish additional or replacement sources for certain components or materials. A reduction or interruption inmanufacturing, or an inability to secure alternative sources of raw materials or components, could have a material adverse effect on our business, results ofoperations, financial condition and cash flows.If we are unable to meet our debt obligations or experience a disruption in our cash flows, it could have an adverse effect on our financial condition,results of operations, ability to complete our share repurchase program or cost of borrowing.We have $429.4 million in debt outstanding at March 28, 2015 which was incurred to acquire the whole blood business. The obligations to pay interest andrepay the borrowed amounts may restrict our ability to adjust to adverse economic conditions, our ability to fund working capital, capital expenditures,acquisition or other general corporate requirements. The interest rate on the loan is variable and subject to change based on market forces. Fluctuations ininterest rates could adversely affect our profitability and cash flows.In addition, as a global corporation we have significant cash reserves held in foreign countries. These balances may not be immediately available to repay ourdebt.Our credit facilities contain financial covenants that require us to maintain specified financial ratios and make interest and principal payments. If we areunable to satisfy these covenants, we may be required to obtain waivers from our lenders and no assurance can be made that our lenders would grant suchwaivers on favorable terms, or at all, and we could be required to repay any borrowed amounts on short notice.12Table of ContentsAs a medical device manufacturer we are subject to a number of laws and regulations. Non-compliance with those laws or regulations could adverselyaffect 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 mustobtain specific regulatory clearance prior to selling any new product or service, a process which is costly and time consuming. If we are unable to obtain thenecessary regulatory clearance we will be unable to introduce new enhanced product. Our operations are also subject to continuous review and monitoring bythe FDA and other regulatory authorities. Failure to substantially comply with applicable regulations could subject our products to recall or seizure bygovernment authorities, or an order to suspend manufacturing activities. If our products were determined to have design or manufacturing flaws, this couldresult in their recall or seizure. Either of these situations could also result in the imposition of fines.Many of our competitors have significantly greater financial means and resources, which may allow them to more rapidly develop new technologies andmore quickly address changes in customer requirements. 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 ofclinical performance. Other factors are outside of our control such as regulatory standards, medical standards, reimbursement policies and practices, and thepractice of medicine.Loss of a significant customer could adversely affect our business.In fiscal 2015, although no one customer represented more than 10% of our revenues, our ten largest customers accounted for approximately 48.1% of ourrevenue. If any of our largest customers materially reduce their purchases from us or terminate their relationship with us for any reason, we could experiencean adverse effect on our results of operations or financial condition.We may not realize the expected benefits from our Value Creation and Capture initiatives; our plans will result in higher short-term expenses and requiremore cash expenditures.In May 2013, we announced a multi-year Value Creation and Capture initiatives which is intended to reduce our manufacturing costs by changing ourcurrent manufacturing footprint and supply chain strategy. This program has reduced manufacturing costs and improved supply chain efficiency and weexpect further benefits upon completion. However, there are no assurances these further cost savings or supply chain efficiencies will be achieved, andcompletion of the program could introduce risks such as management distraction, business disruption, and attrition beyond our planned reduction inworkforce and reduced employee productivity which may reduce our revenue or increase our costs. In addition, the activities involve the relocation of severalproduct lines to new manufacturing facilities. During these transitions, we may experience challenges in transferring production to the new locations,additional costs, or unacceptable quality. These may lead to additional working capital, warranty or inventory costs. Finally, implementing the program willresult in charges and expenses that impact our operating results and increase our level of capital expenditures. We expect the investment in this program to becompleted in fiscal 2016.Current or worsening economic conditions may adversely affect our business and financial condition.A portion of our trade accounts receivable outside the United States include sales to government-owned or supported healthcare systems in several countries,which are subject to payment delays. Payment is dependent upon the financial stability and creditworthiness of those countries’ national economies.Worsening economic conditions may lead to the rationing of care or reduced order patterns. Although, we have not incurred significant losses on governmentreceivables to date, we continually evaluate all government receivables for potential collection risks associated with the availability of government fundingand reimbursement practices. If the financial condition of customers or the countries’ healthcare systems deteriorate such that their ability to make paymentsis uncertain, allowances may be required in future periods.As a global corporation, we are exposed to fluctuations in currency exchange rates, which could adversely affect our cash flows and results of operations. International revenues and expenses account for a substantial portion of our operations and we intend to continue expanding our presence in internationalmarkets. In fiscal 2015, our international revenues accounted for 45.6% of our total revenues. The exposure to fluctuations in currency exchange rates takesdifferent forms. Reported revenues, as well as manufacturing and operational costs denominated in foreign currencies by our international businesses,fluctuate due to exchange rate movement when translated into U.S. dollars for financial reporting purposes. Fluctuations in exchange rates could adverselyaffect our profitability in U.S. dollars of products and services sold by us into international markets, where payment for our products and services and relatedmanufacturing and operational costs is made in local currencies.13Table of ContentsWe may record future goodwill impairment charges or other asset impairment charges, which could materially adversely impact our results of operations.Goodwill is reviewed for impairment at least annually in accordance with ASC Topic 350, Intangibles - Goodwill and Other, or on an interim basis betweenannual tests when events or circumstances indicate that it is more likely than not that the fair value is less than its carrying value. We perform our annualimpairment test on the first day of the fiscal fourth quarter. We first perform a qualitative test and if necessary, perform a quantitative test. The quantitativetest is based on a discounted cash flow analysis or other valuation techniques, such as the market approach. We review intangible assets subject toamortization at least annually or more frequently if certain conditions arise to determine if any adverse conditions exist that would indicate that the carryingvalue of an asset or asset group may not be recoverable, or that a change in the remaining useful life is required. If an impairment indicator exists, we test theintangible asset for recoverability.Goodwill impairment charges or other asset impairment charges could materially adversely impact our results of operations in the period in which they arerecorded. Refer to Critical Accounting Policies within our Management's Discussion and Analysis of Financial Condition and Results of Operationscontained in Item 7 of this Annual Report on Form 10-K for a discussion of key assumptions used in our testing.We are subject to the risks associated with communicable diseases. A significant outbreak of a disease could reduce the demand for our products andaffect 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 aspandemic flu, SARS, or HIV) could reduce the number of donors, and accordingly reduce the demand for our products for a period of time. A significantoutbreak 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 isavailable 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 sinceexpired. 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 thatsuch products may be exported from China to other countries.In order to aggressively protect our IP throughout the world, we have a program of patent disclosures and filings in markets where we conduct significantbusiness. While we believe this program is reasonable and adequate, the risk of loss is inherent in litigation as different legal systems offer different levels ofprotection to IP, and it is still possible that even patented technologies may not be protected absolutely from infringement.Pending and future intellectual property litigation could be costly and disruptive to us.We operate in an industry that is susceptible to significant intellectual property litigation. This type of litigation is expensive, complex and lengthy and itsoutcome is difficult to predict. Patent litigation may result in adverse outcomes and could significantly divert the attention of our technical and managementpersonnel.The technologies that support 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 aninjunction or to payment of royalties, or both, which may adversely affect our ability to market the affected product(s). In addition, competitors may patenttechnological advances which may give them a competitive advantage or create barriers to entry.We sell our products in certain emerging economies. There are risks with doing business in emerging economies, such as Brazil, Russia, India and China. These economies tend to have less mature productregulatory systems, and more volatile financial markets. In addition, the government controlled health care system's ability to invest in our products andsystems may abruptly shift due to changing government priorities or funding capacity. Our ability to sell products in these economies is dependent upon ourability to hire qualified employees or agents to represent our products locally, and our ability to obtain and maintain the necessary regulatory approvals in aless mature regulatory environment. If we are unable to retain qualified representatives or maintain the necessary regulatory approvals, we will not be able tocontinue 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.14Table of ContentsIn many of the international markets in which we do business, including certain parts of Europe, South America, the Middle East, Russia and Asia, ouremployees, 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 provideappropriate 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 orboth.We have a complex global supply chain which includes key sole source suppliers. We have a complex global supply chain which involves integrating key suppliers and our manufacturing capacity into a global movement of componentsand finished goods.We have certain key suppliers, including JMS Co. Ltd. ("JMS"), Kawasumi Laboratories ("Kawasumi") and Sanmina Corporation, who have their owncomplex supply chains. JMS and Kawasumi make certain finished goods and important sub components in locations throughout Asia. We have engagedSanmina Corporation to be the sole manufacturer of certain equipment as part of our manufacturing network optimization activities.Any disruption to one or more of our suppliers’ production or delivery of sufficient volumes of subcomponents conforming to our specifications coulddisrupt or delay our ability to deliver finished products to our customers. For example, we purchase components in Asia for use in manufacturing in theUnited States, Puerto Rico, Mexico and Scotland. We also regularly ship finished goods from the United States, Puerto Rico, Mexico and Scotland to Europeand Asia.Plastics are the principal component of our disposables, which are the main source of our revenues. Any change in the price, composition or availability ofthe plastics we purchase could adversely affect our business.We have three risks with this key raw material: price, composition and availability.Increases in the price of petroleum derivatives could result in corresponding increases in our costs to procure plastic raw materials. Increases in the costs ofother commodities may affect our procurement costs to a lesser degree.The composition of the plastic we purchase is also important. Today, we purchase plastics which contain phthalates, which are used to make plasticmalleable. Should plastics with phthalates become unavailable due to regulatory changes, we may be required to obtain new FDA or foreign approvals for anumber of products.While we have not experienced shortages in the past, any interruption in the supply for certain plastics could have a material impact on our business bylimiting our ability to manufacture and sell the products which represent a significant portion of our revenues.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 in regulated markets. If we are unable to substitutesuitable materials into our processes, our manufacturing operations may be disrupted. In addition, we may be obligated to disclose the origin of certainmaterials 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 operatingour 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,we inform affected individuals. If our systems are 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 rely on the proper function, availability and security of information technology systems to operate our business and to serve our customers and a cyber-attack or other breach of these systems could have a material adverse effect on our business, financial condition or results of operations.We rely on information technology systems to process, transmit, and store electronic information in our day-to-day operations. Similar to other large multi-national companies, the size and complexity of our information technology systems makes them vulnerable to a cyber-attack, malicious intrusion,breakdown, destruction, loss of data privacy, or other significant disruption. Our information systems require an ongoing commitment of significant resourcesto maintain, protect, and enhance existing systems and develop new systems to keep pace with continuing changes in information processing technology,evolving systems and regulatory standards, the increasing need to protect patient and customer information, and changing customer patterns. In addition,third parties may attempt to hack into our products to obtain data relating to patients with our products or15Table of Contentsour proprietary information. Any failure by us to maintain or protect our information technology systems and data integrity, including from cyber-attacks,intrusions or other breaches, could result in the unauthorized access to patient data and personally identifiable information, theft of intellectual property orother misappropriation of assets, or otherwise compromise our confidential or proprietary information and disrupt our operations. Any of these events, in turn,may cause us to lose existing customers, have difficulty preventing, detecting, and controlling fraud, have disputes with customers, physicians, and otherhealth care professionals, be subject to legal claims and liability, have regulatory sanctions or penalties imposed, have increases in operating expenses, incurexpenses or lose revenues as a result of a data privacy breach or theft of intellectual property, or suffer other adverse consequences, any of which could have amaterial adverse effect on our business, financial condition or results of operations.We operate in an industry susceptible to significant product liability claims. 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 thatpatients 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 areultimately determined to be liable, we may incur significant legal expenses. These claims may be brought by individuals seeking relief on their own behalf orpurporting 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 presenttime.In addition, such litigation could damage our reputation and, therefore, impair our ability to market our products, obtain professional or product liabilityinsurance, or increase the cost of such insurance. While we believe that our current product liability insurance coverage is sufficient, there is no assurance thatsuch coverage will be adequate to cover incurred liabilities or that we will be able to obtain acceptable product and professional liability coverage in thefuture.16Table of ContentsITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESOur headquarters facility, which the Company owns, is located on 14 acres in Braintree, Massachusetts. This facility is located in a light industrial park andwas constructed in the 1970s. The building is approximately 180,000 square feet, of which 70,000 square feet are devoted to manufacturing and qualitycontrol operations, 35,000 square feet to warehousing, 72,000 square feet for administrative and research, development and engineering activities.The Company leases approximately 82,000 square foot facility in Leetsdale, Pennsylvania. This facility is used for warehousing, distribution andmanufacturing operations supporting our plasma business. Annual lease expense is approximately $0.4 million for this facility.The Company owns approximately 100,000 square feet in Draper, Utah. This facility is used for distribution and manufacturing operations supporting ourplasma business. During fiscal 2015, the Company purchased this facility for $6.6 million.The Company owns a facility in Union, South Carolina. This facility is used to manufacture sterile solutions that support our blood center and plasmabusinesses. The facility is approximately 69,000 square feet.The Company leases a facility in Niles, Illinois, which performs research and manufacturing for the Company. This facility is approximately 16,000 squarefeet of office and manufacturing space. Annual lease expense is approximately $0.2 million.The Company leases a facility in Fajardo, Puerto Rico that is approximately 115,000 square feet under an agreement with Pall Corporation executed inconnection with the Company's acquisition of Pall's transfusion medicine business on August 1, 2012. This facility is used for production of blood filters.The Company owns two facilities in Covina, California that occupy approximately 71,000 square feet, dedicated to manufacturing and engineeringfunctions. The facilities also include general administration space. The Company also leases approximately 40,000 square feet of space for warehousing andlogistic operations. Annual lease expense is approximately $0.3 million. These facilities are used for the production of whole blood collection kits.The Company leases approximately 166,000 square feet in Nashville, TN. This facility is used for warehousing and distribution. Annual lease expense isapproximately $0.4 million for this facility.The Company owns a facility in Bothwell, Scotland used to manufacture disposable products for our European and Asian customers. This facility isapproximately 40,000 square feet. During fiscal 2015, the Company announced it will discontinue manufacturing activities at this location as part of its VCCinitiatives.The Company owns a facility in Ascoli, Italy, used for the production of whole blood collection kits. This facility is approximately 87,000 square feet.During fiscal 2014, the Company discontinued manufacturing activities at this location as part of its VCC initiatives.The Company leases 127,000 square feet of space in Tijuana, Mexico with an Annual lease expense of approximately $0.7 million. The Company also ownsa facility in Tijuana, Mexico that is approximately 182,000 square feet. These facilities are used for the production of whole blood collection kits, bloodcenter and hospital disposables, and intra-plant components.The Company owns approximately 240,000 square feet of space in Penang, Malaysia used to manufacture disposable products for our European and Asiancustomers. The facility was completed in February, 2015. The Company leases the land on which the facility was built and the lease payments have beenprepaid. The lease term of 30 years expires in 2043 with an option to renew for a period of no less than 10 years.The Company leases approximately 26,000 square feet of office space in Signy, Switzerland. This facility is used for sales, marketing, finance and otheradministrative services, as well as supply chain and procurement management activities related to our manufacturing operations. Annual lease expense forthis space is approximately $0.9 million.The Company also leases administration, sales, marketing, service, and distribution facilities in locations around the world.ITEM 3. LEGAL PROCEEDINGSWe are presently engaged in various legal actions, and although our ultimate liability cannot be determined at the present time, we believe, based onconsultation with counsel, that any such liability will not materially affect our consolidated financial position or our results of operations.17Table of ContentsItalian Employment LitigationOur Italian manufacturing subsidiary is party to several actions initiated by employees of the facility in Ascoli-Piceno, Italy where we have ceasedmanufacturing operations. These include actions claiming (i) working conditions and minimum salaries should have been established by either a differentclassification under their national collective bargaining agreement or a different agreement altogether, (ii) certain solidarity agreements, which arearrangements between the Company, employees and the government to continue full pay and benefits for employees who would otherwise be terminated intimes of low demand, are void, and (iii) payment of the extra time used for changing into and out of the working clothes at the beginning and end of eachshift.In addition, a union represented in the Ascoli plant has filed an action claiming that the Company discriminated against it in favor of three other representedunions by (i) interfering with an employee referendum, (ii) interfering with an employee petition to recall union representatives from office, and (iii)excluding the union from certain meetings.Finally, we have been added as defendants on claims filed against Pall Corporation prior to our acquisition of the plant in August 2012. These claims relateto agreements to "freeze" benefit allowances for a certain period in exchange for Pall's commitments on hiring and plant investment.As of March 28, 2015, the total amount of damages claimed by the plaintiffs in these matters is approximately $3.7 million; however, it is not possible at thispoint in the proceedings to accurately evaluate the likelihood or amount of any potential losses. We may receive other similar claims in the future.ITEM 4. MINE SAFETY DISCLOSURESNone.ITEM 4A. EXECUTIVE OFFICERSExecutive Officers of the RegistrantThe information concerning our Executive Officers is as follows. Executive officers are elected by and serve at the discretion of our Board of Directors. Thereare no family relationships between any director or executive officer and any other director or executive officer of Haemonetics Corporation.PETER ALLEN (age 56), President, Global Plasma joined Haemonetics in 2003 as President of the Donor Division. In March 2008, Mr. Allen was appointedChief Marketing Officer. In October 2011, he was promoted to President of Global Plasma. Prior to joining Haemonetics, Mr. Allen was Vice President of TheAethena Group, a private equity firm providing services to the global healthcare industry. From 1998 to 2001, he held various positions including VicePresident of Sales and the Oncology Business at Syncor International, a provider of radiopharmaceutical and comprehensive medical imagingservices. Previously, Mr. Allen held executive level positions in sales, marketing, and operations in DataMedic, Inc., Enterprise Systems, Inc./HBOC, andRobertson Lowstuter, Inc. Mr. Allen has also worked in sales and marketing at American Hospital Supply Corporation and Baxter International, Inc.BRIAN BURNS (age 51) Executive Vice President, Global Quality and Regulatory Affairs joined Haemonetics in January 2014. Mr. Burns most recently heldthe position of Senior Vice President, North America QA, RA for Fresenius Medical Corporation, Dialysis Division, where he was also the CorporateManagement Representative. Brian was previously with Boston Scientific as Executive Vice President, Global QA, RA and Safety. During his tenure, he heldleadership positions at the Senior Vice President and Vice President levels with accountability and expertise in global quality, CAPA, Complaints, Clinical,and Regulatory functions.BRIAN CONCANNON (age 57) , President and Chief Executive Officer joined Haemonetics in 2003 as the President, Patient Division and was promoted toPresident, Global Markets in 2006. In 2007, Mr. Concannon was promoted to Chief Operating Officer and in April 2009, Mr. Concannon was promoted toPresident and Chief Executive Officer, and elected to the Haemonetics Board of Directors. Immediately prior to joining the Company, Mr. Concannon wasthe President, Northeast Region, for Cardinal Health Medical Products and Services where he was employed since 1998. From 1985 to 1998, he wasemployed by American Hospital Supply Corporation, Baxter Healthcare Corp and Allegiance Healthcare in a series of sales and operations managementpositions of increasing responsibility. He has served in leadership roles within the healthcare industry for more than 30 years. Mr. Concannon is also amember of the board of directors of CONMED Corporation since July 2013, a member of the board of directors of South Shore Health & EducationalCorporation since January 2014, and is the Chairman of the Board of My Brother’s Keeper. Mr. Concannon is a 1979 graduate of West Point.18Table of ContentsKENT DAVIES (age 52), Chief Operating Officer joined Haemonetics as President, Global Markets in April 2014. In April 2015, he was promoted to ChiefOperating Officer. In this role, he is responsible for worldwide oversight of all of Haemonetics’ commercial operations, including product development andproduct management. Previously, Mr. Davies was the Chief Executive Officer of RoundTable Healthcare Partners' RoundTable III Platform DevelopmentCorporation ("RPDC") where he focused on the identification and development of new investment opportunities in the medical device market. Prior toRPDC, he held executive roles of increasing responsibility, including Chief Executive Officer of Gaymar Industries, a privately held medical device andequipment company that was acquired by Stryker Corp., Division President and corporate officer of publicly-traded Solutia, Inc., in addition to a variety ofglobal general management, commercial, and product leadership roles with Kimberly-Clark Healthcare and 3M Healthcare, amongst a number of othersuccessful business growth and leadership roles throughout his career. Mr. Davies holds a Bachelor of Arts degree from the University of California, Berkeley,an MBA from the University of Minnesota, and has completed advanced course work in Finance at The Wharton School at the University of Pennsylvania.SUSAN HANLON (age 47), Vice President Finance and Chief Accounting Officer joined our Company in 2002 as Vice President and Corporate Controller. In2004, she was promoted to Vice President Planning and Control, and in 2008, Ms. Hanlon was promoted to Vice President Finance. She presently hasresponsibility for Controllership, Financial Planning, Tax, and Treasury. Prior to joining Haemonetics, Ms. Hanlon was a partner with Arthur Andersen LLP inBoston.DAVID HELSEL (age 51) Executive Vice President, Global Manufacturing joined Haemonetics as Vice President of Global Manufacturing in March 2012,and is responsible for worldwide oversight of the Company’s manufacturing and supply chain organizations. Mr. Helsel was previously with Covidien, Ltd.for 16 years, where he most recently was Vice President of Operations for the Surgical Solutions global business unit. During his tenure with Covidien, hisprevious roles included Vice President of Operations for the Medical Supplies segment and Global Director of Operational Excellence – Manufacturing. Mr.Helsel holds a Bachelor of Science degree in Mechanical Engineering from LeTourneau University.SANDRA JESSE (age 62) Chief Legal Officer joined Haemonetics as Vice President, Chief Legal Officer in September 2011, and is responsible for thecompany’s world-wide Legal, Compliance and Corporate Audit and Controls groups. Ms. Jesse was previously the Executive Vice President and Chief LegalOfficer of Blue Cross Blue Shield of Massachusetts, a Partner in the Boston law firm of Choate, Hall and Stewart, and Press Secretary for United StatesCongressman, Lee Hamilton. She has served on a number of Boards of Directors, including the New England Legal Foundation, Longy School of Music,Boston Harbor Island Alliance and the Landmark School. Ms. Jesse is a former President of the Boston Bar Foundation.CHRISTOPHER LINDOP (age 57) Executive Vice President, Business Development and Chief Financial Officer joined Haemonetics in January of 2007 asChief Financial Officer. In 2007, Mr. Lindop assumed responsibility for business development. Prior to joining Haemonetics, he was Chief Financial Officerat Inverness Medical Innovations, a rapidly growing global developer of advanced consumer and professional diagnostic products from 2003 to 2006. Priorto this, Mr. Lindop was a Partner in the Boston offices of Ernst & Young LLP and Arthur Andersen LLP.DR. JONATHAN WHITE (age 55) Chief Science and Technology Officer joined Haemonetics in 2008 as Vice President of Research and Development. Dr.White joined Haemonetics from Pfizer where he held a number of roles including Chief Information Officer. He previously worked at McKinsey andCompany in New York. Dr. White is a Fellow of the Royal College of Surgery in England.19Table of ContentsPART IIITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OFEQUITY SECURITIESMarket InformationOur 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 andlow sales prices of such common stock, which represent actual transactions as reported by the New York Stock Exchange.FirstQuarter SecondQuarter ThirdQuarter FourthQuarterFiscal year ended March 28, 2015: Market price of Common Stock: High$35.73 $37.13 $39.07 $45.43Low$29.86 $33.92 $33.75 $36.48Fiscal year ended March 29, 2014: Market price of Common Stock: High$42.87 $45.90 $44.20 $43.60Low$37.71 $39.32 $38.26 $31.80HoldersThere were approximately 246 holders of record of the Company’s common stock as of March 28, 2015.DividendsThe Company has never paid cash dividends on shares of its common stock and does not expect to pay cash dividends in the foreseeable future.20Table of ContentsStock PerformanceThe following graph compares the cumulative 5-year total return provided to shareholders on Haemonetics Corporation’s common stock relative to thecumulative 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) isassumed to have been made in our common stock and in each of the indexes on 4/3/2010 and its relative performance is tracked through 3/28/2015.___________________________________* $100 invested on 4/3/2010 in stock or index, including reinvestment of dividends.Fiscal year ended March 28, 2015. 4/10 4/11 3/12 3/13 3/14 3/15Haemonetics Corporation 100.00 117.89 123.41 147.57 113.74 156.61S&P 500 100.00 112.21 118.61 132.15 156.44 173.57S&P Health Care Equipment 100.00 101.23 106.91 118.36 147.44 179.78Note: The stock price performance included in this graph is not necessarily indicative of future stock price performance. This graph shall not be deemed"filed" for purposes of Section18 of the Exchange Act or otherwise subject to the liabilities of that section nor shall it be deemed incorporated by referencein any filing under the Securities Act or the Exchange Act, regardless of any general incorporation language in such filing.Unregistered Sales of Equity Securities and Use of ProceedsNone.21Table of ContentsIssuer Purchases of Equity SecuritiesIn the April 28, 2014 press release, the Company announced that its Board of Directors approved the repurchase of up to $100.0 million worth of Companyshares, subject to compliance with its loan covenants. Through March 28, 2015, the Company repurchased 1,174,111 shares of its common stock for anaggregate purchase price of $39.0 million. We reflect stock repurchases in our financial statements on a “trade date” basis and as Authorized Unissued(Haemonetics is a Massachusetts company and under Massachusetts law repurchased shares are treated as authorized but unissued).All of the purchases during the year were made under the publicly announced program and were made in the open market.Period Total Numberof SharesRepurchased Average PricePaid per ShareincludingCommissions Total Dollar Valueof Shares Purchasedas Part of PubliclyAnnounced Plansor Programs Maximum DollarValue of Shares thatMay Yet bePurchased Under thePlans or ProgramsMarch 30, 2014 - April 26, 2014 — $— $— $100,000,000April 27, 2014 - May 24, 2014 694,162 $31.81 $22,079,008 $77,920,992May 25, 2014 - June 28, 2014 139,595 $34.23 $4,778,988 $73,142,004June 29, 2014 - July 26, 2014 75,185 $35.49 $2,668,606 $70,473,398July 27, 2014 - August 23, 2014 63,730 $36.12 $2,302,197 $68,171,201August 24, 2014 - September 27, 2014 62,144 $35.55 $2,209,060 $65,962,141September 28, 2014 - October 25, 2014 66,089 $35.04 $2,316,065 $63,646,076October 26, 2014 - November 22, 2014 45,129 $36.48 $1,646,262 $61,999,814November 23, 2014 - December 27, 2014 19,055 $36.76 $700,422 $61,299,392December 28, 2014 - January 24, 2015 6,877 $36.93 $253,942 $61,045,450January 25, 2015 - February 21, 2015 2,145 $36.92 $79,194 $60,966,256February 22, 2015 - March 28, 2015 — $— $— $60,966,256Total 1,174,111 $33.25 $39,033,744 We expect to complete the remaining $61.0 million of purchases in fiscal 2016 and remain in compliance with all loan covenants.22Table of ContentsITEM 6. SELECTED FINANCIAL DATAHaemonetics Corporation Five-Year Review(In thousands, except per share and employee data)2015 2014 2013 2012 2011Summary of Operations Net revenues$910,373 $938,509 $891,990 $727,844 $676,694Cost of goods sold475,955 470,144 463,859 358,604 321,485Gross profit434,418 468,365 428,131 369,240 355,209Operating expenses: Research and development54,187 54,200 44,394 36,801 32,656Selling, general and administrative334,250 366,022 323,053 243,681 212,005Asset write-down5,441 1,711 4,247 — —Total operating expenses393,878 421,933 371,694 280,482 244,661Operating income40,540 46,432 56,437 88,758 110,548Other (expense) income, net(9,375) (10,031) (6,540) 740 (467)Income before provision for income taxes31,165 36,401 49,897 89,498 110,081Provision for income taxes14,268 1,253 11,097 22,612 30,101Net income$16,897 $35,148 $38,800 $66,886 $79,980Income per share: Basic$0.33 $0.68 $0.76 $1.32 $1.59Diluted$0.32 $0.67 $0.74 $1.30 $1.56Weighted average number of shares51,533 51,611 51,349 50,727 50,154Common stock equivalents556 766 910 863 1,038Weighted average number of common and commonequivalent shares52,089 52,377 52,259 51,590 51,1922015 2014 2013 2012 2011Financial and Statistical Data: Working capital$381,185 $406,048 $416,866 $396,385 $340,160Current ratio3.0 2.9 3.3 4.0 4.1Property, plant and equipment, net$321,948 $271,437 $256,953 $161,657 $155,528Capital expenditures$122,220 $73,648 $62,188 $53,198 $46,669Depreciation and amortization$86,053 $81,740 $65,481 $49,966 $48,145Total assets$1,485,417 $1,514,178 $1,461,917 $911,135 $833,264Total debt$427,891 $437,687 $480,094 $3,771 $4,879Stockholders’ equity$826,122 $837,888 $769,182 $732,631 $686,136Debt as a % of stockholders’ equity51.8% 52.2% 62.4% 0.5% 0.7%Employees3,383 3,782 3,563 2,337 2,20123Table of ContentsITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSOur BusinessHaemonetics is a global healthcare company dedicated to providing innovative blood management solutions to our customers. Our comprehensive portfolioof integrated devices, information management, and consulting services offers blood management solutions for each facet of the blood supply chain, helpingimprove patient care and reduce costs for blood and plasma collectors, hospitals, and patients around the world. Our products and services help prevent atransfusion to a patient who does not need one and provide the right blood product, at the right time, in the right dose to the patient who does.Blood and its components (plasma, platelets, and red cells) have many vital and frequently life-saving clinical applications. Plasma is used for patients withmajor blood loss and is manufactured into pharmaceuticals to treat a variety of illnesses and hereditary disorders such as hemophilia. Red cells treat traumapatients or patients undergoing surgery with high blood loss, such as open heart surgery or organ transplant. Platelets treat cancer patients undergoingchemotherapy. Blood is essential to a modern healthcare system.Recent developmentsRussian Economic ConditionsEconomic weakness in Russia has impacted our financial results for fiscal 2015 and we expect that our Russian business performance in fiscal 2016 will besimilar to fiscal 2015. While the needs for our products in the Russian marketplace continue, the challenging macro-economic conditions in Russia haveresulted in reduced government healthcare spending and, as a result, our distributors are placing fewer orders. Russia currently represents approximately 3%of our revenue and we continue to work closely with our Russian distributors to monitor market conditions and credit risk.Declines in U.S. Blood Center CollectionsSales to U.S. blood centers of our whole blood disposables represent approximately 7% of our total revenue. The demand for these disposable products in theU.S. declined in fiscal 2014 and 2015 due to a rapid decline in demand for blood products associated with actions taken by hospitals to improve bloodmanagement techniques and protocols. We believe the decline in U.S. blood center collections of approximately 10% in fiscal 2015 will moderate in fiscal2016. While it will continue to negatively impact red cell and whole blood revenue, the magnitude of the negative impact will be reduced.In response to this trend, certain large U.S. blood center collection groups pursued single source vendors for whole blood collection products which requiredsignificant reductions in average selling prices in order to retain or increase our share of their business. During fiscal 2014 we entered into a multi-yearagreement to supply the HemeXcel Purchasing Alliance, LLC with certain whole blood collection components during the calendar years 2014-2016. Theagreement included a reduction in average selling prices which negatively impacted our financial results in fiscal 2015. In March 2014, the American RedCross selected another exclusive supplier to provide certain whole blood products. This reduced annualized revenues by approximately $25.0 millionbeginning in the second quarter of fiscal 2015.Additionally, U.S. blood collection groups are pursuing arrangements for our red cell business similar to the single source agreements pursued in wholeblood. This may affect our red cell revenues in the future.24Table of ContentsValue Creation and Capture InitiativesOn May 1, 2013, we committed to a plan to pursue identified Value Creation and Capture initiatives ("VCC"). These opportunities include investment inproduct line extensions and next generation products, enhancement of commercial capabilities and a transformation of our manufacturing network. Thetransformation of our manufacturing network will take place over three years and includes changes to the current manufacturing footprint and supply chainstructure (the "Network Plan"). To implement the Network Plan, we are (i) discontinuing manufacturing activities at our Braintree, Massachusetts, Ascoli-Piceno, Italy and Bothwell, Scotland facilities, (ii) creating a technology center of excellence for product development in Braintree, Massachusetts, (iii)expanding our current facility in Tijuana, Mexico, (iv) engaging Sanmina Corporation as a contract manufacturer to produce certain medical equipment, and(v) building a new manufacturing facility in Penang, Malaysia closer to our customers in Asia. See the Liquidity and Capital Resources discussion of thisMD&A for further discussion of the costs of these activities.Our VCC initiatives are moving forward according to plan. We have engaged Sanmina Corporation to be the sole manufacturer of certain equipment, and wehave commenced production in our new manufacturing facility in Penang, Malaysia and in our expanded facility in Tijuana, Mexico allowing us toconsolidate the manufacturing of product formerly produced in the U.S., Italy and Scotland.Market TrendsPlasma MarketChanges in demand for plasma-derived pharmaceuticals, particularly immunoglobulin (“IG”), are the key driver of plasma collection volumes in the bio-pharmaceutical market. Various factors related to the supply of plasma and the production of plasma-derived pharmaceuticals also affect collection volume,including the following:•Several blood collectors supply additional plasma to fractionators, and thus plasma supply can rise overall but not directly impact our plasmabusiness.•Bio-pharmaceutical companies are seeking more efficient production processes, to meet growing demand for pharmaceuticals without requiring anequivalent increase in plasma supply.•Reimbursement guidelines affect the demand for end product pharmaceuticals, although off-label use of pharmaceuticals is growing, in particular forAlzheimer's treatment.•Newly approved indications for, and the growing understanding and thus diagnosis of auto-immune diseases treated with plasma derived therapiesincrease the demand for plasma, as do longer lifespans and a growing aging patient population.•Geographical expansion of biopharmaceuticals also increases demand for plasma.Demand for our plasma products in fiscal 2015 was particularly strong in North America as collection volumes benefited from a robust end user market forplasma-derived biopharmaceuticals with U.S. produced plasma meeting an increasing percentage of plasma volume demand worldwide.Blood Center MarketIn the blood center market, we sell products used in the collection of platelets, red cells and whole blood. Whole blood is collected from the donor and thentransported to a laboratory where it is separated into its components: red cells, platelets or plasma. Despite modest increases in the demand for platelets in Europe and Japan, improved collection efficiencies that increase the yield of platelets per collectionand more efficient use of collected platelets have resulted in a flat market for automated collections and related disposables in these countries. With changesin healthcare and social security systems in emerging markets, a larger number of people are gaining access to state of the art medical treatments, which drivesthe demand for platelet transfusions and represent a faster growing market.Blood management is an approach to optimizing the care of patients that may need a transfusion that includes a wide range of practices and protocols whichinfluence the need for, and use of, blood products in hospitals. Adoption of blood management practices by hospitals, particularly in the United States,continues to gain momentum. Blood management efforts reduce the demand for red cells, which in turn can reduce the demand for our red cell and wholeblood collection products.25Table of ContentsAs discussed in Recent Developments above, we believe the decline in U.S. blood center collections of approximately 10% in fiscal 2015 will moderate infiscal 2016. Demand for red cells has declined in mature markets due to better blood management and the development of less invasive, lower blood lossmedical procedures. However, highly populated emerging market countries are increasing their demand for blood components as they are advancing theirhealth care coverage, and as greater numbers of people gain access to more advanced medical treatment, demand for blood components, including red cellsincreases directly.Hospital MarketIn the hospital market, we sell cardiovascular surgical blood salvage systems, orthopedic surgical blood salvage systems, and a blood diagnostic instrument.Our Cell Saver surgical blood salvage system was designed as a solution for rapid, high volume blood loss procedures, such as cardiovascular surgeries. Inrecent years, more efficient blood use and less invasive cardiovascular surgeries have reduced demand for this device and contributed to intense competitionin mature markets, while increased access to healthcare in emerging economies has provided new markets and sources of growth.Our OrthoPAT technology is used to salvage red cells in high blood loss orthopedic procedures, including hip and knee replacement surgeries. TheOrthoPAT is designed to collect, separate and wash a patient’s shed blood both during and after orthopedic surgery, such as hip and knee replacement.Recently, improved blood management practices, including the use of tranexamic acid to treat and prevent post-operative bleeding, have reduced the use ofOrthoPAT.Our TEG Thrombelastograph Hemostasis Analyzer is a diagnostic tool which provides a comprehensive assessment of a patient’s overall hemostasis. Thisinformation enables caregivers to decide the best blood-related clinical treatment for the individual patient in order to minimize blood loss. The test isexpanding beyond cardiac surgery into trauma, as well as helping manage surgical timing of patients on anti-platelet medications. TEG product line salesfurther strengthened in fiscal 2015, with strong performance in North America and China. This product’s growth is dependent on hospitals adopting thistechnology in their blood management programs. We have launched our next generation device, the TEG 6s, in certain markets in Europe and Asia. In NorthAmerica, our largest market for TEG, we will launch the TEG 6s upon receipt of the final 510(k) clearance.Software MarketOur software solutions portfolio addresses many of the critical data collection and data management needs within the plasma, blood center, and hospitalmarkets and is also a key component of our blood management solutions. In fiscal 2015, the pressures to improve efficiencies, reduce cost, and improvepatient outcomes continued to be key drivers in all three markets.In fiscal 2015, we released our Next Generation Donor Management Software, which has been favorably received by the market and purchased by twosignificant plasma collectors, one of which is planning global adoption.In the blood center market for software, we currently participate most actively in the United States, where expansion to new or emerging technology platformssuch as our El Dorado Software Solution Suite has been slow due to industry consolidation and the relatively high cost of migrating to new informationtechnology platforms. This trend has limited revenue growth, but the high switching costs and recurring maintenance revenue streams from existingcustomers has provided relative revenue stability in this segment.We currently participate in the hospital software market primarily in the United States and Europe. In the United States, we have experienced growth in ourinstalled base for our hospital transfusion solution, SafeTraceTX, due to demand for reliable, proven safety systems within transfusion services. However,growth in the United States continues to be constrained due to hospital IT organization focus on the electronic medical records mandates. Revenues fromBloodTrack, a blood inventory and transfusion management system, have increased in the United States and Europe recently as hospitals seek means toimprove efficiencies and meet compliance guidelines for tracking and dispositioning blood components to patients. We released our new BloodTrackHaemoBank, which received 510(k), CE and multi-regional clearances, in fiscal 2015 and expect that this will further expand this solution's growth in fiscal2016.26Table of ContentsFinancial Summary(In thousands, except per share data)March 28, 2015 March 29, 2014 March 30, 2013 % Increase/(Decrease) 15 vs. 14 % Increase/(Decrease) 14 vs. 13Net revenues$910,373 $938,509 $891,990 (3.0)% 5.2 %Gross profit$434,418 $468,365 $428,131 (7.2)% 9.4 %% of net revenues47.7% 49.9% 48.0% Operating expenses$393,878 $421,933 $371,694 (6.6)% 13.5 %Operating income$40,540 $46,432 $56,437 (12.7)% (17.7)%% of net revenues4.5% 4.9% 6.3% Other (expense) income, net$(9,375) $(10,031) $(6,540) (6.5)% 53.4 %Income before taxes$31,165 $36,401 $49,897 (14.4)% (27.0)%Provision for income tax$14,268 $1,253 $11,097 — % (88.7)%% of pre-tax income45.8% 3.4% 22.2% Net income$16,897 $35,148 $38,800 (51.9)% (9.4)%% of net revenues1.9% 3.7% 4.3% Earnings per share-diluted$0.32 $0.67 $0.74 (52.2)% (9.5)%Our fiscal year ends on the Saturday closest to the last day of March. Fiscal 2015, 2014 and 2013 each included 52 weeks with each quarter having 13 weeks.Fiscal 2016 will have 53 weeks.Net revenue for fiscal 2015 decreased 3.0% compared to fiscal 2014. Without the effects of foreign exchange, net revenue decreased 1.3% compared to fiscal2014. Revenue increases in plasma and diagnostic disposables were more than offset by declines in the whole blood disposables for the fiscal year endedMarch 28, 2015.Net revenue for fiscal 2014 increased 5.2% compared to fiscal 2013. Without the effects of foreign exchange, net revenue increased 6.9% over fiscal 2013.Revenue increased due to a full year of sales from the whole blood business acquired August 1, 2012 as compared to eight months of sales in the prior year, aswell as growth in our plasma and diagnostics disposable products. These increases were partially offset by declines across other product lines for the fiscalyear ended March 29, 2014.During fiscal 2015, operating income decreased 12.7% compared to fiscal 2014. Without the effects of foreign currency, operating income decreased 0.9%compared to fiscal 2014. Operating income decreased primarily due to lower whole blood disposables volume and pricing and the associated reducedmanufacturing efficiency. These decreases were partially offset by reduced restructuring and transformation costs, and organizational cost savings initiatives.Restructuring and transformation costs were $66.8 million for fiscal 2015, as compared to $84.8 million for the comparative prior year period.During fiscal 2014, operating income decreased 17.7% compared to fiscal 2013. Without the effects of foreign currency, operating income decreased 4.1%compared to fiscal 2013. Operating income decreased as gross profit growth was more than offset by higher restructuring and transformation costs and otheroperating expense growth associated with the whole blood acquisition. Restructuring and transformation costs were $84.8 million for the fiscal year endedMarch 29, 2014, as compared to $72.5 million for the comparative prior year period. Restructuring and transformation costs in fiscal 2014 are primarilyassociated with VCC initiatives, and in fiscal 2013 were primarily associated with the acquisition and integration of the whole blood business.Net income decreased 51.9% during fiscal 2015. Without the effects of foreign exchange, net income decreased 20.8% for fiscal 2015. The decrease in netincome was primarily attributable to an increase in tax expense and the decrease in operating income described above. The increase in tax expense isattributable to the establishment of a valuation allowance for our U.S. net deferred tax assets following three years of cumulative losses directly related to oursubstantial restructuring and transformation spending.Net income decreased 9.4% during fiscal 2014. Without the effects of foreign exchange, net income decreased 3.4% for fiscal 2014. The decrease in netincome was attributable to the decrease in operating income described above and additional interest expense associated with a full year of term loanborrowing following the whole blood acquisition. These were partially offset by a reduction in tax expense due to lower income before taxes and a lowerincome tax rate.27Table of ContentsRESULTS OF OPERATIONSNet Revenues by Geography(In thousands)March 28, 2015 March 29, 2014 March 30, 2013 % Increase/(Decrease) 15 vs. 14 % Increase/(Decrease) 14 vs. 13United States$494,788 $500,719 $454,874 (1.2)% 10.1%International415,585 437,790 437,116 (5.1)% 0.2%Net revenues$910,373 $938,509 $891,990 (3.0)% 5.2%International Operations and the Impact of Foreign ExchangeOur principal operations are in the U.S., Europe, Japan and other parts of Asia. Our products are marketed in approximately 100 countries around the worldthrough a combination of our direct sales force and independent distributors and agents.The percentage of revenue generated in our principle operating regions is summarized below:March 28, 2015 March 29, 2014 March 30, 2013United States54.4% 53.4% 51.0%Japan9.7% 11.6% 13.5%Europe23.7% 24.0% 25.2%Other12.2% 11.0% 10.3%Total100.0% 100.0% 100.0%International sales are generally conducted in local currencies, primarily the Japanese Yen, the Euro, the Chinese Yuan and the Australian Dollar. Our resultsof operations are impacted by changes in foreign exchange rates, particularly in the value of the Yen, the Euro and Australian Dollar relative to theU.S. Dollar.We have placed foreign currency hedges to minimize the risk of currency fluctuations. For fiscal 2015 as compared to fiscal 2014, the effects of foreignexchange resulted in a 1.7% decrease in sales. The primary reason is the relative strength of the U.S. Dollar to the Japanese Yen, Euro and Australian Dollar.We expect this relative strength of the U.S. Dollar to continue to negatively impact operating income in fiscal 2016 and fiscal 2017. For fiscal 2014 ascompared to fiscal 2013, the effects of foreign exchange also accounted for a 1.7% decrease in sales.Please see section entitled “Foreign Exchange” in this discussion for a more complete explanation of how foreign currency affects our business and ourstrategy for managing this exposure.Net Revenues by Product Type(In thousands)March 28, 2015 March 29, 2014 March 30, 2013 % Increase/(Decrease) 15 vs. 14 % Increase/(Decrease) 14 vs. 13Disposables$783,426 $806,834 $757,765 (2.9)% 6.5 %Software solutions72,185 70,441 69,952 2.5 % 0.7 %Equipment & other54,762 61,234 64,273 (10.6)% (4.7)%Net revenues$910,373 $938,509 $891,990 (3.0)% 5.2 %28Table of ContentsDisposables Revenues by Product Type(In thousands)March 28, 2015 March 29, 2014 March 30, 2013 % Increase/(Decrease) 15 vs. 14 % Increase/(Decrease) 14 vs. 13Plasma disposables$319,190 $291,895 $268,900 9.4 % 8.6 %Blood center disposables Platelet152,588 156,643 169,602 (2.6)% (7.6)%Red cell42,700 42,378 49,733 0.8 % (14.8)%Whole blood143,905 190,698 138,436 (24.5)% 37.8 % 339,193 389,719 357,771 (13.0)% 8.9 %Hospital disposables Surgical62,540 66,876 73,508 (6.5)% (9.0)%OrthoPAT20,316 25,042 30,230 (18.9)% (17.2)%Diagnostics42,187 33,302 27,356 26.7 % 21.7 % 125,043 125,220 131,094 (0.1)% (4.5)%Total disposables revenue$783,426 $806,834 $757,765 (2.9)% 6.5 %Disposables RevenueDisposables include the Plasma, Blood Center, and Hospital product lines. Disposables revenue decreased 2.9% during fiscal 2015 and increased 6.5%during fiscal 2014. Without the effects of foreign exchange, disposables revenue decreased 1.1% and increased 8.3% for fiscal 2015 and 2014, respectively.In fiscal 2015, the decrease was primarily driven by significantly reduced whole blood disposables revenue and was partially offset by growth in plasma anddiagnostic disposables revenue. In fiscal 2014, the increase was primarily due to a full year of sales from the whole blood business as compared to eightmonths of sales in the prior year, as well as growth in our plasma and diagnostics disposable products.PlasmaPlasma disposables revenue increased 9.4% during fiscal 2015. Without the effects of foreign exchange, plasma disposables revenue increased 10.4% duringfiscal 2015 compared to fiscal 2014. Plasma revenue increased due to higher volumes in the United States associated with end market growth for plasma-derived biopharmaceuticals and benefits from the transition to a direct sales model in Australia and New Zealand which occurred in the second quarter offiscal 2014. We expect the demand for plasma-derived biopharmaceuticals to continue to grow in fiscal 2016 and incremental growth associated with ourexpanded saline solutions offering.Plasma disposables revenue increased 8.6% during fiscal 2014. Without the effects of foreign exchange, plasma disposables revenue increased 10.3% duringfiscal 2014. Plasma revenue increased due to higher volumes in the United States and the transition to a direct sales model in Australia and New Zealand.Blood CenterBlood Center consists of disposables used to collect platelets, red cells and whole blood.PlateletWe continue to see significant differences in demand for our platelet products in various markets depending on access to health care and adoption of certainefficient collection techniques. In emerging markets, increased access to health care continues to increase the demand for platelet transfusions, whileincreases in the demand for platelet transfusions in developed markets is modest. Collection efficiencies which increase the yield of platelets per collectionand more efficient use of collected platelets reduce the number of collections required to meet market demand. Where we see adoption of these techniques weexperience reduced demand for our products; however, not all markets have adopted these collection efficiencies at the same level.These significant differences in platelet use and collection impact the performance of our platelet business across our different geographies. Japan recentlybegan adoption of more efficient collection techniques which has negatively impacted revenue from platelet collection disposables, while emerging marketsrevenues continue to grow due to increasing use of platelets in patient care.Platelet disposables revenue decreased 2.6% during fiscal 2015. Without the effects of foreign exchange, platelet disposable revenue increased 3.0% duringfiscal 2015. Without the effect of foreign exchange, the increase was due to growth in emerging markets and the benefit of order timing in North Americaoffset by the impact of the collection trends in Japan noted above.29Table of ContentsPlatelet disposables revenue decreased 7.6% during fiscal 2014. Without the effects of foreign exchange, platelet disposable revenue decreased 3.8% duringfiscal 2014, due primarily to lower revenues in Canada and lower revenues in emerging markets associated with order timing and reductions of distributorinventory levels.Red Cells and Whole BloodSales to U.S. blood centers represent approximately 75% of our total U.S. red cell and whole blood disposable revenue. The demand for these disposableproducts in the U.S. has recently declined due to a rapid reduction in demand for blood products associated with actions taken by hospitals to improve bloodmanagement techniques and protocols.Red cell disposables revenue increased 0.8% during fiscal 2015. Without the effects of foreign exchange, red cell disposables revenue increased 0.8% duringfiscal 2015. The increase was driven by North American sales due to changes in red cell collection practices and was partially offset by declines in Europeand Latin America. We have seen a modest shift in order patterns from whole blood to red cell disposables due to customer efforts to more efficiently collectred cells.Red cell disposables revenue decreased 14.8% during fiscal 2014. Without the effects of foreign exchange, red cell disposables revenue decreased 14.3%during fiscal 2014, due to the market factors discussed above.Whole blood revenue decreased 24.5% during fiscal 2015. Without the effect of foreign exchange, whole blood revenue decreased 24.1% during fiscal 2015,due to the loss of the American Red Cross business, lower pricing to HemeXcel, the loss of a European tender early in fiscal 2014 and macro-economicconditions in Russia. Declines in North American transfusion rates of 10% contributed approximately $8.0 million to the fiscal 2015 decline. As notedabove, we expect that the rate of decline in transfusion rates in the United States will moderate in fiscal 2016.Whole blood revenue increased 37.8% during fiscal 2014. Without the effect of foreign exchange, whole blood revenue increased 37.4% during fiscal 2014,due to a full period of sales from the whole blood business acquired August 1, 2012 as compared to eight months of sales in the prior year period. Theincrease was partially offset by the negative impact of the U.S. collection market, a European tender loss and a decline in contract manufacturing revenue.HospitalHospital disposable revenue includes Surgical, OrthoPAT, and Diagnostics products. The hospital product line includes the following brand platforms: theCell Saver brand, the TEG brand and the OrthoPAT brand.SurgicalSurgical disposables revenue consists principally of the Cell Saver products. Revenue from our surgical disposables decreased 6.5% during fiscal 2015.Without the effect of foreign exchange, surgical disposables revenue decreased 3.3% during fiscal 2015. The decline in surgical revenue in developedmarkets, partially offset by growth in emerging markets.Revenue from our surgical disposables decreased 9.0% during fiscal 2014. Without the effect of foreign exchange, surgical disposables revenue decreased5.4% during fiscal 2014. Surgical revenue decreased due to the return to the market of a competitor with aggressive pricing whose operations were limited bya natural disaster in the prior year, and by a reduction in demand for surgical procedures. This decrease was partially offset by growth in emerging markets,primarily China.OrthoPATRevenue from our OrthoPAT disposables decreased 18.9% during fiscal 2015. Without the effect of foreign exchange, OrthoPAT disposables revenuedecreased 16.5% as better blood management has reduced orthopedic blood loss and demand for OrthoPAT disposables. Recent trends in blood managementparticularly the adoption of tranexamic acid to treat and prevent orthopedic post-operative blood loss have continued to reduce hospital use of OrthoPATdisposables and we expect this trend to continue.Revenue from our OrthoPAT disposables decreased 17.2% during fiscal 2014. Without the effect of foreign exchange, OrthoPAT disposables revenuedecreased 14.7% as better blood management has reduced orthopedic blood loss and demand for OrthoPAT disposables. Recent trends in blood management,particularly the adoption of tranexamic acid to treat and prevent orthopedic post-operative blood loss, have continued to reduce hospital use of OrthoPATdisposables.DiagnosticsDiagnostics product revenue consists of the TEG products. Revenue from diagnostic products increased 26.7% during fiscal 2015. Without the effect offoreign exchange, diagnostic product revenue increased 23.4%. The revenue increase is due to continued adoption of our TEG analyzer, principally in theUnited States and China.30Table of ContentsRevenue from our diagnostic products increased 21.7% during fiscal 2014. Without the effect of foreign exchange, diagnostic product revenue increased20.0%. The revenue increase is due to continued adoption of our TEG analyzer, principally in the United States and China.Other Revenues(In thousands)March 28, 2015 March 29, 2014 March 30, 2013 % Increase/(Decrease) 15 vs. 14 % Increase/(Decrease) 14 vs. 13Software solutions$72,185 $70,441 $69,952 2.5 % 0.7 %Equipment and other54,762 61,234 64,273 (10.6)% (4.7)%Net other revenues$126,947 $131,675 $134,225 (3.6)% (1.9)%Software SolutionsOur software solutions revenue includes sales of our information technology software platforms and consulting services.Software solutions revenue increased 2.5% during fiscal 2015. Without the effects of foreign exchange, software solutions revenue increased 2.9% duringfiscal 2015. During fiscal 2015, software revenue increased due to strong BloodTrack sales in the U.S. and Europe.Software solutions revenue increased 0.7% during fiscal 2014. Without the effects of foreign exchange, software solutions revenue increased 0.1% duringfiscal 2014. During fiscal 2014, growth in hospital software revenue was offset by lower hosting fees associated with a large bio-pharmaceutical customer.Equipment & OtherOur equipment and other revenues include revenue from equipment sales, repairs performed under preventive maintenance contracts or emergency servicevisits, spare part sales, and various service and training programs. These revenues are primarily composed of equipment sales, which tend to vary from periodto period more than our disposable product line due to the timing of order patterns, particularly in our distribution markets.Equipment and other revenue decreased 10.6% during fiscal 2015. Without the effects of currency exchange, equipment and other revenue decreased 8.7%.The decrease in revenue during fiscal 2015 is due primarily to the impact of order timing and macro-economic conditions in Russia.Equipment and other revenue decreased 4.7% during fiscal 2014. Without the effect of currency exchange, equipment and other revenue decreased 2.0%. Thedecrease in revenue during fiscal 2014 is due primarily to benefits in the prior year from a competitor whose operations were limited by a natural disaster andthe successful launch of the Cell Saver Elite, partially offset by higher services revenue associated with a transition to a direct sales model in Australia andNew Zealand.Gross Profit(In thousands)March 28, 2015 March 29, 2014 March 30, 2013 % Increase/(Decrease) 15 vs. 14 % Increase/(Decrease) 14 vs. 13Gross profit$434,418 $468,365 $428,131 (7.2)% 9.4%% of net revenues47.7% 49.9% 48.0% Our gross profit decreased 7.2% during fiscal 2015. Without the effects of foreign exchange, gross profit decreased 5.1% during fiscal 2015. Our gross profitmargin percentage decreased by 220 basis points for fiscal 2015 as compared to fiscal 2014. The decrease in gross profit margin for the fiscal year endedMarch 28, 2015 was primarily due to price reductions in the blood collection markets, reduced manufacturing efficiency related to lower whole bloodvolumes and relatively higher sales from products with lower gross margins. These decreases were partially offset by cost savings from our VCC initiativesimplemented during fiscal 2014 and 2015.Our gross profit amount increased 9.4% during fiscal 2014. Without the effects of foreign exchange, gross profit increased 12.0% during fiscal 2014. Ourgross profit margin percentage decreased by 190 basis points for fiscal 2014 as compared to fiscal 2013. The increase in gross profit margin for the fiscal yearended March 29, 2014 was primarily driven by lower whole blood related inventory charges. During fiscal 2013, we recorded inventory reserves associatedwith the removal of certain whole blood collection sets from inventory based on a quality matter detected during the year. We also recorded significantinventory step-up charges related to acquired whole blood inventory. Improvements to reported gross margin excluding the31Table of Contentsinventory adjustments noted also included improvements in manufacturing efficiencies. These increases were partially offset by the impact of foreigncurrency.Operating Expenses(In thousands)March 28, 2015 March 29, 2014 March 30, 2013 % Increase/(Decrease) 15 vs. 14 % Increase/(Decrease) 14 vs. 13Research and development$54,187 $54,200 $44,394 — % 22.1 %% of net revenues6.0% 5.8% 5.0% Selling, general and administrative$334,250 $366,022 $323,053 (8.7)% 13.3 %% of net revenues36.7% 39.0% 36.2% Asset write-downs$5,441 $1,711 $4,247 218.0 % (59.7)%% of net revenues0.6% 0.2% 0.5% Total operating expenses$393,878 $421,933 $371,694 (6.6)% 13.5 %% of net revenues43.3% 45.0% 41.7% Research and DevelopmentResearch and development remained flat during fiscal 2015. Without the effect of the increased restructuring and transformation costs of $2.8 million infiscal 2015, as compared to the prior year, research and development decreased by approximately 6.0% as a result of reduced program spending related to thewhole blood acquisition.Research and development increased 22.1% during fiscal 2014. This increase includes a $3.6 million in-process research and development charge related tothe acquisition of certain technology and manufacturing rights to be used in a next generation device. Excluding the impact of the in-process research anddevelopment charge, research and development was 5.4% of net revenues. Other increases are primarily due to additional staff and program spending relatedto the whole blood acquisition, new research initiatives and development programs.Selling, General and AdministrativeDuring fiscal 2015, selling, general and administrative expenses decreased 8.7%. Without the effects of foreign exchange, selling, general and administrativeexpenses decreased 6.4% during fiscal 2015. The decrease during fiscal 2015 is primarily related to a $20.1 million decrease in restructuring andtransformation costs related to VCC initiatives. This decrease was partially offset by our increased commercial investment in plasma and emerging marketsand increased variable compensation.During fiscal 2014, selling, general and administrative expenses increased 13.3%. Without the effects of foreign exchange, selling, general andadministrative expenses increased 15.0% during fiscal 2014. The increase during fiscal 2014 is primarily related to a $21.1 million increase in restructuringand transformation costs due to VCC initiatives. We also incurred incremental costs of approximately $21.0 million associated with operating the wholeblood business for the entire year as compared to eight months in the prior year, of which approximately $7.0 million relates to the amortization of acquiredintangible assets.Asset Write-DownWe recorded asset write-downs of $5.4 million in fiscal 2015 associated with exit activities related to our VCC initiatives and certain research anddevelopment programs.We recorded asset write-downs of $1.7 million in the fourth quarter of fiscal 2014 associated with exit activities related to our VCC and integrationinitiatives.We recorded an asset write-down of $4.2 million in the fourth quarter of fiscal 2013 associated with exit activities related to technologies originally acquiredfrom Arryx, Inc.Other (expense) income, netOther expense, net, decreased 6.5% during fiscal 2015 as compared to fiscal 2014. Interest expense from our term loan borrowings constitutes the majority ofexpense reported in both periods. The effective interest rate on total debt outstanding for the fiscal year ended March 28, 2015 was approximately 2.0%.32Table of ContentsTaxes March 28, 2015 March 29, 2014 March 30, 2013 % Increase/(Decrease) 15 vs. 14 % Increase/(Decrease) 14 vs. 13Reported income tax rate45.8% 3.4% 22.2% 42.4% (18.8)%Reported Tax RateWe conduct business globally and as a result report our results of operations in a number of foreign jurisdictions and the United States. Historically, ourreported tax rate was lower than the U.S. statutory tax rate due primarily to our jurisdictional mix of earnings as the income earned in our foreign subsidiariesis generally taxed at a lower tax rate. For the year ended March 28, 2015, the Company established a valuation allowance against a portion of its U.S. deferredtax assets that it concluded are not more-likely-than-not realizable. In fiscal 2015, we entered into a three year cumulative book loss position in the U.S.which primarily relates to ongoing restructuring and transformation spending.The reported tax rate for the year ended March 28, 2015 was 45.8%. Our current tax rate is higher than our tax rates of 3.4% and 22.2% for the years endedMarch 29, 2014 and March 30, 2013, respectively. The increase in the tax rate is primarily due to the establishment of a valuation allowance against aportion of our domestic deferred tax assets that we concluded were not more-likely-than-not realizable.33Table of ContentsLiquidity and Capital ResourcesThe following table contains certain key performance indicators we believe depict our liquidity and cash flow position:(In thousands)March 28, 2015 March 29, 2014Cash & cash equivalents$160,662 $192,469Working capital$381,185 $406,048Current ratio3.0 2.9Net debt position (1)$(267,229) $(245,218)Days sales outstanding (DSO)58 62Disposables finished goods inventory turnover4.3 4.2_______________________________________(1)Net debt position is the sum of cash and cash equivalents less total debt.As previously discussed, during fiscal 2015 and 2014 our business was negatively impacted by reductions in the demand for blood products caused bychanges in blood management practices and actions taken by U.S. blood center customers in response to reductions in demand. This includes the loss of theAmerican Red Cross whole blood contract which impacted our results beginning in the first quarter of fiscal 2015.Our VCC initiatives require cash expenditures for plant closure costs and employee separation benefits, new plant construction and temporary increases ininventory levels as manufacturing is transitioned to new facilities. We paid $114.3 million and $72.9 million in cash related to restructuring costs,transformation costs and capital expenditures associated with the VCC initiatives during fiscal 2015 and 2014, respectively. We estimate we will spend $27.0million to complete these initiatives in fiscal 2016.As of March 28, 2015, we had $160.7 million in cash and cash equivalents. We currently have a credit facility which provides for a $475.0 million term loanand a $100.0 million revolving loan. The credit facility matures on July 1, 2019. At March 28, 2015, $379.4 million was outstanding under the term loan and$50.0 million was outstanding on the revolving loan. We also have $62.1 million of uncommitted operating lines of credit to fund our global operations andthere are no outstanding borrowings as of March 28, 2015.The credit facility contains covenants that limit the use of cash and require us to maintain certain financial ratios. Any failure to comply with the financialand or other operating covenants of the credit facility would prevent us from borrowing under the revolving credit facility and would constitute a default,which could result in, among other things, the amounts outstanding including all accrued interest and unpaid fees, becoming immediately due and payable.As of March 28, 2015, we were in compliance with all covenants.Our primary sources of liquidity are cash and cash equivalents, internally generated cash flow from operations and option exercises. Although cash flow fromoperations will be negatively impacted by the trends noted above, we believe these sources are sufficient to fund our cash requirements over at least the nexttwelve months, which are primarily payments associated with VCC initiatives described above, share repurchases, capital expenditures, cash payments underthe loan agreement, investments and other acquisitions. These are described in more detail in Contractual Obligations below.34Table of ContentsCash Flow Overview:(In thousands)March 28, 2015 March 29, 2014 March 30, 2013 Increase/(Decrease) 15 vs. 14 Increase/(Decrease) 14 vs. 13Net cash provided by (used in): Operating activities$127,178 $139,524 $85,074 $(12,346) $54,450Investing activities(121,768) (105,830) (596,395) 15,938 (490,565)Financing activities(33,160) (20,700) 461,853 12,460 (482,553)Effect of exchange rate changes on cash and cashequivalents (1)(4,057) 355 (273) (4,412) 628Net increase/(decrease) in cash and cash equivalents$(31,807) $13,349 $(49,741) _______________________________________(1)The balance sheet is affected by spot exchange rates used to translate local currency amounts into U.S. dollars. In accordance with GAAP, we haveeliminated the effect of foreign currency throughout our cash flow statement, except for its effect on our cash and cash equivalents.In fiscal 2015, the Company repurchased approximately 1.2 million shares of its common stock for an aggregate purchase price of $39.0 million. This waspart of a $100.0 million share repurchase program that was announced in April 2014.In fiscal 2014, the Company did not repurchase shares of its common stock.In fiscal 2013, the Company repurchased approximately 1.2 million shares of its common stock for an aggregate purchase price of $50.0 million. Thiscompleted a $50.0 million share repurchase program that was announced in April 2012.Operating Activities:Net cash provided by operating activities was $127.2 million during fiscal 2015, a decrease of $12.3 million as compared to fiscal 2014 primarily due tolower earnings.Net cash provided by operating activities was $139.5 million during fiscal 2014, an increase of $54.5 million as compared to fiscal 2013 primarily due tohigher cash receipts associated with strong collections which more than offset increased expenditures for inventory. Additionally, initial investments inaccounts receivable were required in fiscal 2013 as existing accounts receivable were not acquired in the whole blood acquisition, negatively impacting netcash provided by operating activities in the prior year.Investing Activities:Net cash used in investing activities was $121.8 million during fiscal 2015, an increase of $15.9 million as compared to fiscal 2014 primarily due to $122.2million of capital expenditures including $44.9 million related to our manufacturing network transformation activities. The increase was partially offset by areduction in acquisition related investments of $32.7 million in fiscal 2014.Net cash used in investing activities was $105.8 million during fiscal 2014, a decrease of $490.6 million as compared to fiscal 2013 primarily due to the$535.2 million paid for the whole blood acquisition, of which $475.0 million was funded by term loan borrowings discussed above. Investing activities alsoincluded $23.1 million paid for the acquisition of Hemerus Medical, LLC, and $73.6 million of capital expenditures including $18.0 million related to ourmanufacturing network transformation activities.Financing Activities:Net cash used in financing activities was $33.2 million during fiscal 2015, an increase of $12.5 million as compared to fiscal 2014 primarily due to $39.0million used to repurchase approximately 1.2 million shares of common stock. The increase was partially offset by reduced payments towards the term loan infiscal 2015.Net cash used in financing activities was $20.7 million during fiscal 2014, a decrease of $482.6 million as compared to fiscal 2013 primarily due to the$475.0 million term loan borrowed in fiscal 2013 to finance the whole blood acquisition. Financing activities included $22.8 million of proceeds from theexercise of share-based compensation, offset by $37.1 million of debt35Table of Contentsrepayments related to term loan repayments and an additional $5.5 million of short term debt repayments in foreign jurisdictions.Contractual ObligationsA summary of our contractual and commercial commitments as of March 28, 2015, is as follows: Payments Due by Period(In thousands)Total Less than 1 year 1-3 years 4-5 years More than 5 yearsDebt$427,891 $21,522 $237,805 $168,564 $—Operating leases29,347 6,797 8,538 4,247 9,765Purchase commitments*114,598 99,598 15,000 — —Expected retirement plan benefit payments15,725 1,735 3,155 3,342 7,493Employee related commitments14,350 12,701 1,649 — —Total contractual obligations$601,911 $142,353 $266,147 $176,153 $17,258_______________________________________* Includes amounts we are committed to spend on purchase orders entered in the normal course of business for capital equipment and for the purpose ofmanufacturing our products including contract manufacturers, specifically JMS Co. Ltd., Kawasumi Laboratories and Sanmina Corporation for themanufacture of certain disposable products and equipment. The majority of our operating expense spending does not require any advancecommitment.The above table does not reflect our long-term liabilities associated with unrecognized tax benefits of $4.0 million recorded in accordance with ASC Topic740, Income Taxes. We cannot reasonably make a reliable estimate of the period in which we expect to settle these long-term liabilities due to factors outsideof our control, such as tax examinations.At the closing of the whole blood acquisition, we anticipate paying an additional $15.0 million upon replication and delivery of certain manufacturing assetsof Pall's filter media business to Haemonetics by 2018.Concentration of Credit RiskConcentrations of credit risk with respect to trade accounts receivable are generally limited due to our large number of customers and their diversity acrossmany geographic areas. A portion of our trade accounts receivable outside the United States, however, include sales to government-owned or supportedhealthcare systems in several countries, which are subject to payment delays. Payment is dependent upon the financial stability and creditworthiness of thosecountries' national economies.Although we have not incurred significant losses on government receivables to date, we continually evaluate all government receivables for potentialcollection risks associated with the availability of government funding and reimbursement practices. If the financial condition of customers or the countries'healthcare systems deteriorate such that their ability to make payments is uncertain, allowances may be required in future periods.Contingent CommitmentsIn fiscal 2014, we acquired the business assets of Hemerus Medical, LLC, a company that develops innovative technologies for the collection of whole bloodand processing and storage of blood components, including SOLX storage solutions. We paid $24.1 million and will pay an additional $3.0 million upon afurther FDA approval of the SOLX solution for 24 hour storage of whole blood prior to processing. We will also pay up to $14.0 million based on future salesof SOLX-based products through fiscal 2025.Legal ProceedingsWe are presently engaged in various legal actions, and although our ultimate liability cannot be determined at the present time, we believe, based onconsultation with counsel, that any such liability will not materially affect our consolidated financial position or our results of operations.36Table of ContentsItalian Employment LitigationOur Italian manufacturing subsidiary is party to several actions initiated by employees of the facility in Ascoli-Piceno, Italy where we have ceasedmanufacturing operations. These include actions claiming (i) working conditions and minimum salaries should have been established by either a differentclassification under their national collective bargaining agreement or a different agreement altogether, (ii) certain solidarity agreements, which arearrangements between the Company, employees and the government to continue full pay and benefits for employees who would otherwise be terminated intimes of low demand, are void, and (iii) payment of the extra time used for changing into and out of the working clothes at the beginning and end of eachshift.In addition, a union represented in the Ascoli plant has filed an action claiming that the Company discriminated against it in favor of three other representedunions by (i) interfering with an employee referendum, (ii) interfering with an employee petition to recall union representatives from office, and (iii)excluding the union from certain meetings.Finally, we have been added as defendants on claims filed against Pall Corporation prior to our acquisition of the plant in August 2012. These claims relateto agreements to "freeze" benefit allowances for a certain period in exchange for Pall's commitments on hiring and plant investment.As of March 28, 2015, the total amount of damages claimed by the plaintiffs in these matters is approximately $3.7 million; however, it is not possible at thispoint in the proceedings to accurately evaluate the likelihood or amount of any potential losses. We may receive other similar claims in the future.InflationWe 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 tomitigate the effects of inflation by improving our manufacturing and purchasing efficiencies, by increasing employee productivity, and by adjusting theselling prices of products. We continue to monitor inflation pressures generally and raw materials indices that may affect our procurement and productioncosts. Increases in the price of petroleum derivatives could result in corresponding increases in our costs to procure plastic raw materials.Foreign ExchangeDuring fiscal 2015, approximately 45.6% of our sales were generated outside the U.S., generally in foreign currencies, yet our reporting currency is the U.S.Dollar. We also incur certain manufacturing, marketing and selling costs in international markets in local currency. Our primary foreign currency exposuresrelate to sales denominated in Euro, Japanese Yen, Chinese Yuan and Australian Dollars. We also have foreign currency exposure related to manufacturingand other operational costs denominated in Swiss Francs, British Pounds, Canadian Dollars and Mexican Pesos. The Yen, Euro, Yuan and Australian Dollarsales exposure is partially mitigated by costs and expenses for foreign operations and sourcing products denominated in foreign currencies. Since our foreigncurrency denominated Yen, Euro, Yuan and Australian Dollar sales exceed the foreign currency denominated costs, whenever the U.S. Dollar strengthensrelative to the Yen, Euro, Yuan or Australian Dollar, there is an adverse effect on our results of operations and, conversely, whenever the U.S. Dollar weakensrelative to the Yen, Euro, Yuan or Australian Dollar, there is a positive effect on our results of operations. For Swiss Francs, British Pounds, Canadian Dollarsand Mexican Pesos, our primary cash flows relate to product costs or costs and expenses of local operations. Whenever the U.S. Dollar strengthens relative tothese foreign currencies, there is a positive effect on our results of operations. Conversely, whenever the U.S. Dollar weakens relative to these currencies, thereis 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 ofderivative financial instruments to minimize, for a period of time, the unforeseen impact on our financial results from changes in foreign exchange rates. Weutilize forward foreign currency contracts to hedge the anticipated cash flows from transactions denominated in foreign currencies, primarily Japanese Yenand Euro, and to a lesser extent Swiss Francs, British Pounds, Australian Dollars, Canadian Dollars and Mexican Pesos. This does not eliminate the volatilityof foreign exchange rates, but because we generally enter into forward contracts one year out, rates are fixed for a one-year period, thereby facilitatingfinancial planning and resource allocation.These contracts are designated as cash flow hedges. The final impact of currency fluctuations on the results of operations is dependent on the local currencyamounts hedged and the actual local currency results.37Table of ContentsPresented below are the spot rates for our Euro, Japanese Yen, Australian Dollar, Canadian Dollar, British Pound, Swiss Franc and Mexican Peso cash flowhedges that settled during fiscal years 2013, 2014 and 2015 or are presently outstanding. These hedges cover our long foreign currency positions that resultfrom our sales designated in Euro, Japanese Yen and Australian Dollars. These hedges include our short positions associated with costs incurred in CanadianDollars, British Pounds, Swiss Francs and Mexican Pesos. The table shows how the strengthening or weakening of the spot rates associated with those hedgecontracts versus the spot rates in the contracts that settled in the prior comparable period affects our results favorably or unfavorably. The table assumes aconsistent notional amount for hedge contracts in each period presented. FirstQuarter Favorable /(Unfavorable) SecondQuarter Favorable /(Unfavorable) ThirdQuarter Favorable /(Unfavorable) FourthQuarter Favorable /(Unfavorable)Sales Hedges Euro - Hedge Spot Rate (USD per Euro) FY131.43 15 % 1.42 9 % 1.36 — % 1.32 (4)% FY141.27 (11)% 1.25 (12)% 1.29 (5)% 1.33 1 % FY151.33 5 % 1.35 8 % 1.35 5 % 1.37 3 % FY161.35 2 % 1.29 (4)% 1.25 (8)% 1.13 (18)% Japanese Yen - Hedge Spot Rate (JPY per USD) FY1379.40 11 % 76.65 11 % 77.58 5 % 78.69 5 % FY1479.85 (1)% 79.68 (4)% 84.32 (9)% 93.92 (19)% FY1597.16 (22)% 98.18 (23)% 101.09 (20)% 102.44 (9)% FY16102.05 (5)% 106.84 (9)% 118.46 (17)% 117.25 (14)% Australian Dollar - Hedge Spot Rate (USD per AUD) FY14— — % 0.92 — % 0.91 — % 0.92 — % FY150.90 — % 0.94 3 % 0.94 3 % 0.90 (2)% FY160.94 4 % 0.91 (3)% 0.85 (10)% 0.79 (12)% Operating Hedges Canadian Dollar - Hedge Spot Rate (CAD per USD) FY130.98 (7)% 0.99 (4)% 1.01 1 % 1.00 1 % FY141.01 3 % 1.00 1 % 1.00 (1)% 1.01 1 % FY15— — % — — % 1.08 8 % 1.09 8 % FY161.13 — % 1.14 — % 1.17 9 % 1.24 14 % British Pound - Hedge Spot Rate (USD per GBP) FY131.62 (8)% 1.63 (6)% 1.60 (2)% 1.57 1 % FY141.59 2 % 1.55 5 % 1.52 5 % 1.54 2 % FY151.56 2 % 1.57 (1)% 1.62 (7)% 1.65 (7)% FY161.64 (5)% 1.57 — % 1.57 3 % 1.53 7 % FY171.55 5 % — — % — — % — — % Swiss Franc - Hedge Spot Rate (CHF per USD) FY130.82 (22)% 0.85 (16)% 0.92 (4)% 0.92 — % FY140.96 17 % 0.95 12 % 0.92 — % 0.93 1 % FY150.94 (2)% 0.92 (3)% 0.90 (2)% 0.89 (4)% FY160.90 (5)% 0.95 3 % 0.94 4 % 0.92 3 % Mexican Peso - Hedge Spot Rate (MXN per USD) FY1412.34 — % 12.35 — % 12.22 — % 12.20 — % FY1512.40 1 % 13.06 6 % 13.09 7 % 13.08 7 % FY1613.10 6 % 13.07 — % 13.63 4 % 14.46 11 % FY1714.93 14 % — — % — — % — — %_______________________________________We generally place our cash flow hedge contracts on a rolling twelve month basis.38Table of ContentsRecent Accounting PronouncementsSee Note 2, Summary of Significant Accounting Policies to our consolidated financial statements contained in Item 8 of this Annual Report on Form 10-K foradditional information on Standards Implemented and Standards to be Implemented.Critical Accounting PoliciesOur significant accounting policies are summarized in Note 2 of our consolidated financial statements. While all of these significant accounting policiesimpact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies thathave the most significant impact on our financial statements and require management to use a greater degree of judgment and/or estimates. Actual results maydiffer from those estimates.The accounting policies identified as critical are as follows:Revenue RecognitionWe recognize revenue from product sales, software and services in accordance with ASC Topic 605, Revenue Recognition and ASC Topic 985-605, Software.These standards require that revenue is recognized when persuasive evidence of an arrangement exists, product delivery, including customer acceptance, hasoccurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured. When more than one element such asequipment, disposables and services are contained in a single arrangement, we allocate revenue between the elements based on each element’s relativeselling price, provided that each element meets the criteria for treatment as a separate unit of accounting. An item is considered a separate unit of accountingif it has value to the customer on a stand-alone basis. The selling price of the undelivered elements is determined by the price charged when the element issold 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 third-party evidence of selling price or by management's best estimate of selling price. For our software arrangements accounted for under the provisionsof ASC 985-605, Software, we establish fair value of undelivered elements based upon vendor specific objective evidence.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 asa reduction of revenue and classify the corresponding liability as current. We estimate rebates for products where there is sufficient historical informationavailable to predict the volume of expected future rebates. If we are unable to estimate the expected rebates reasonably, we record a liability for the maximumpotential rebate or discount that could be earned.We generally recognize revenue from the sale of perpetual licenses on a percentage-of-completion basis which requires us to make reasonable estimates of theextent 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 quarterlyfees. We recognize these fees and charges as earned, typically as these services are provided during the contract period.Goodwill and Other Intangible AssetsIntangible assets acquired in a business combination are recorded under the purchase method of accounting at their estimated fair values at the date ofacquisition. Costs associated with the application and award of patents in the U.S. and various other countries are capitalized and amortized on a straight-linebasis over their estimated useful life. Goodwill represents the excess purchase price over the fair value of the net tangible and other identifiable intangibleassets acquired. We amortize our other intangible assets over their estimated useful lives.Goodwill is not amortized. Instead goodwill is reviewed for impairment at least annually in accordance with ASC Topic 350, Intangibles - Goodwill andOther, or on an interim basis between annual tests when events or circumstances indicate that it is more likely than not that the fair value of a reporting unit isless than its carrying value. We perform our annual impairment test on the first day of the fiscal fourth quarter for each of our reporting units. We first performa qualitative test and if necessary, perform a quantitative test.Prior to fiscal 2014, we determined we operated a single operating segment, blood management solutions, based on our chief operating decision maker("CODM") primarily using consolidated results to make operating and strategic decisions. Our reporting units for purposes of assessing goodwill impairmentprior to fiscal 2014 were medical devices and software. During fiscal 2014, our CODM utilized financial results by operating units organized primarily ongeography to make operating and strategic decisions due to changes in the composition in the executive staff reporting to the CODM. Based on thesechanges we determined the five operating units represent operating segments as defined under ASC 280 - Segment Reporting. Following39Table of Contentsthis change, we determined our reporting units for purposes of assessing goodwill impairment by identifying our operating segments and assessing whethersegment management regularly reviews the operating results of any components. Through this process, we concluded that our reporting units were the sameas our operating segments, which are the following operating units organized based primarily on geography: North America Plasma, North America BloodCenter and Hospital, Europe, Asia-Pacific and Japan. During fiscal 2014, goodwill was reallocated from the medical device and software reporting units to thenew reporting units based on a relative fair value basis. For fiscal 2015, there were no changes to operating segments or reporting units for purposes ofassessing goodwill impairment.ASC 350, Intangibles - Goodwill and Other defines the fair value of a reporting unit as the price that would be received to sell the unit as a whole in anorderly transaction between market participants at the measurement date. The quantitative test is based on a discounted cash flow analysis or other valuationtechniques, such as the market approach, for each reporting unit. The fair values of our reporting units in fiscal 2013 were determined using the incomeapproach. Under the income approach, the fair value of a reporting unit is based on the present value of future cash flows using appropriate discount rates,growth rates, operating margins and future market conditions amongst others. We changed our valuation approach to assessing goodwill impairment in fiscal2014 in connection with the change in reporting units. In fiscal 2015 and 2014, we determined the fair value of our reporting units based on the marketapproach. We utilized the market approach as we determined relevant comparable information was available, and accordingly such method was anappropriate alternative to the income method. Under the market approach, we estimate the fair value of our reporting units based on a combination of, a)market multiples of projected earnings before interest, taxes, depreciation and amortization (“EBITDA”) and b) market multiples of projected net revenues foreach individual reporting unit. For the market approach, we use judgment in identifying the relevant comparable-company market multiples, such as recentdivestitures/acquisitions, facts and circumstances surrounding the market and growth rates. Management assesses the relevance and reliability of themultiples by considering factors unique to its reporting units, including recent operating results, business plans, economic projections, anticipated futurecash flows, and other data. EBITDA and revenue multiples can also be significantly impacted by future growth opportunities for the reporting unit as well asfor the company itself, general market and geographic sentiment, and pending or recently completed merger transactions.These tests showed no evidence of impairment to our goodwill for fiscal 2015, 2014 or 2013 and demonstrated that the fair value of each reporting unitexceeded the reporting unit’s carrying value in each period. During March 2014, circumstances arose that indicated a potential impairment. We performed aninterim impairment test and noted that the fair value of our reporting units still exceeded their carrying values.We review intangible assets subject to amortization at least annually or more frequently if certain conditions arise to determine if any adverse conditionsexist that would indicate that the carrying value of an asset or asset group may not be recoverable, or that a change in the remaining useful life is required.Conditions indicating that an impairment exists include but are not limited to a change in the competitive landscape, internal decisions to pursue new ordifferent technology strategies, a loss of a significant customer or a significant change in the marketplace including prices paid for our products or the size ofthe market for our products. During March 2014, circumstances arose that indicated a potential impairment of certain intangible assets subject toamortization. We performed the recoverability test described below for the relevant asset group and determined expected undiscounted cash flows exceededthe carrying value of the asset group.If an impairment indicator exists, we test the intangible asset for recoverability. For purposes of the recoverability test, we group our amortizable intangibleassets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of otherassets and liabilities. If the carrying value of the intangible asset (asset group) exceeds the undiscounted cash flows expected to result from the use andeventual disposition of the intangible asset (asset group), we will write the carrying value down to the fair value in the period identified.We generally calculate fair value of our intangible assets as the present value of estimated future cash flows we expect to generate from the asset using a risk-adjusted discount rate. In determining our estimated future cash flows associated with our intangible assets, we use estimates and assumptions about futurerevenue contributions, cost structures and remaining useful lives of the asset (asset group).If we determine the estimate of an intangible asset's remaining useful life should be reduced based on our expected use of the asset, the remaining carryingamount of the asset is amortized prospectively over the revised estimated useful life.40Table of ContentsInventory ProvisionsWe base our provisions for excess, expired and obsolete inventory primarily on our estimates of forecasted net sales. A significant change in the timing orlevel of demand for our products as compared to forecasted amounts may result in recording additional provisions for excess, expired and obsolete inventoryin the future. Additionally, uncertain timing of next-generation product approvals, variability in product launch strategies, product recalls and variation inproduct utilization all affect our estimates related to excess, expired and obsolete inventory.Income TaxesThe income tax provision is calculated for all jurisdictions in which we operate. The income tax provision process involves calculating current taxes due andassessing temporary differences arising from items which are taxable or deductible in different periods for tax and accounting purposes and are recorded asdeferred tax assets and liabilities. Deferred tax assets are evaluated for realizability and a valuation allowance is maintained for the portion of our deferred taxassets that are not more-likely-than-not realizable.We file income tax returns in all jurisdictions in which we operate. We record a liability for uncertain tax positions taken or expected to be taken in incometax returns. Our financial statements reflect expected future tax consequences of such positions presuming the taxing authorities' full knowledge of theposition and all relevant facts. We record a liability for the portion of unrecognized tax benefits claimed which we have determined are not more-likely-than-not realizable. These tax reserves have been established based on management's assessment as to the potential exposure attributable to our uncertain taxpositions as well as interest and penalties attributable to these uncertain tax positions. All tax reserves are analyzed quarterly and adjustments are made asevents occur that result in changes in judgment.Valuation of AcquisitionsWe 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 ofacquisition, including acquired identifiable intangible assets, and purchased research and development. We base the estimated fair value of identifiableintangible assets on detailed valuations that use historical and forecasted information and market assumptions based upon the assumptions of a marketparticipant. We allocate any excess purchase price over the fair value of the net tangible and intangible assets acquired to goodwill.In certain acquisitions, we have earn-out arrangements or contingent consideration to provide potential future payments to the seller for achieving certainagreed-upon financial targets. We record the contingent consideration at its fair value at the acquisition date. Generally, we have entered into arrangementswith contingent consideration that require payments in cash. As such, we periodically revalue the contingent consideration obligations associated withcertain acquisitions to their current fair value and record the change in the fair value as contingent consideration income or expense within selling, generaland administrative expense. Increases or decreases in the fair value of the contingent consideration obligations can result from changes in assumed discountperiods and rates, changes in the assumed timing and amount of revenue and expense estimates, and changes in assumed probability adjustments with respectto regulatory approval. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for eachsubsequent period. Accordingly, future business and economic conditions, as well as changes in any of the assumptions described above, can materiallyimpact the amount of contingent consideration income or expense we record in any given period.ContingenciesWe may become involved in various legal proceedings that arise in the ordinary course of business, including, without limitation, patent infringement,product liability and environmental matters. Accruals recorded for various contingencies including legal proceedings, self-insurance and other claims arebased on judgment, the probability of losses and, where applicable, the consideration of opinions of internal and/or external legal counsel and actuariallydetermined estimates. When a range is established but a best estimate cannot be made, we record the minimum loss contingency amount. These estimates areoften initially developed substantially earlier than the ultimate loss is known, and the estimates are reevaluated each accounting period, as additionalinformation is available. When we are initially unable to develop a best estimate of loss, we record the minimum amount of loss, which could be zero. Asinformation becomes known, additional loss provision is recorded when either a best estimate can be made or the minimum loss amount is increased. Whenevents result in an expectation of a more favorable outcome than previously expected, our best estimate is changed to a lower amount.41Table of ContentsCautionary Statement Regarding Forward-Looking InformationStatements 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, andfinancial trends that may affect our future plans of operations, business strategy, results of operations, and financial position. These statements are based onour current expectations and estimates as to prospective events and circumstances about which we can give no firm assurance. Further, any forward-lookingstatement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflectevents 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-lookingstatements 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, including: theeffects of disruption from the manufacturing transformation making it more difficult to maintain relationships with employees and timely deliver high qualityproducts, unexpected expenses incurred during our VCC initiatives, technological advances in the medical field and standards for transfusion medicine, ourability to successfully implement products that incorporate such advances and standards, demand for whole blood and blood components, product quality,market acceptance, regulatory uncertainties, the ability of our contract manufacturing vendors to timely supply high quality goods, the effect of economicand political conditions, the impact of competitive products and pricing, blood product reimbursement policies and practices, foreign currency exchangerates, changes in customers’ ordering patterns including single-source tenders, the effect of industry consolidation as seen in the plasma and blood centermarkets, the effect of communicable diseases and the effect of uncertainties in markets outside the U.S. (including Europe and Asia) in which we operate andsuch other risks described under Item 1A. Risk Factors included in this report. The foregoing list should not be construed as exhaustive.42Table of ContentsITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKThe Company’s exposures relative to market risk are due to foreign exchange risk and interest rate risk.Foreign Exchange RiskSee 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 oftime, the unforeseen impact on our financial results of fluctuations in foreign exchange rates by using derivative financial instruments known as forwardcontracts to hedge anticipated cash flows from forecasted foreign currency denominated sales and costs. We do not use the financial instruments forspeculative or trading activities. At March 28, 2015, we had the following significant foreign exchange contracts to hedge the anticipated foreign currencycash flows outstanding.Hedged Currency (BUY)/SELLLocal Currency WeightedSpotContract Rate WeightedForwardContract Rate Fair ValueGain/(Loss) Maturity QuarterExpectedto AffectEarningsEUR 9,499,000 1.354 1.356 $2,523,176 Mar 2015 - May 2015 Q1 FY16EUR 8,700,000 1.293 1.298 $1,768,500 Jun 2015 - Aug 2015 Q2 FY16EUR 11,450,000 1.246 1.250 $1,748,953 Sep 2015 - Nov 2015 Q3 FY16EUR 13,008,000 1.131 1.137 $533,176 Dec 2015 - Feb 2016 Q4 FY16JPY 701,018,000 102.10 per USD 101.83 per USD $986,543 Mar 2015 - May 2015 Q1 FY16JPY 979,914,000 106.84 per USD 106.42 per USD $944,966 Jun 2015 - Aug 2015 Q2 FY16JPY 1,229,976,000 118.46 per USD 117.91 per USD $67,338 Sep 2015 - Nov 2015 Q3 FY16JPY 1,242,192,000 117.25 per USD 116.56 per USD $157,349 Dec 2015 - Feb 2016 Q4 FY16GBP (602,000) 1.579 1.577 $(51,935) Feb 2015 - Apr 2015 Q1 FY16GBP (1,874,000) 1.569 1.567 $(141,298) May 2015 - Jul 2015 Q2 FY16GBP (1,589,000) 1.566 1.563 $(113,125) Aug 2015 - Oct 2015 Q3 FY16GBP (1,264,000) 1.528 1.526 $(43,871) Nov 2015 - Jan 2016 Q4 FY16GBP (340,000) 1.552 1.550 $(19,354) Feb 2015 - Apr 2016 Q1 FY17CHF (5,189,000) 0.90 per USD 0.89 per USD $(392,208) Apr 2015 - Jun 2015 Q1 FY16CHF (5,439,000) 0.95 per USD 0.94 per USD $(82,370) Jul 2015 - Sep 2015 Q2 FY16CHF (5,103,000) 0.94 per USD 0.93 per USD $(113,002) Oct 2015 - Dec 2015 Q3 FY16CHF (4,689,000) 0.92 per USD 0.90 per USD $(252,731) Jan 2016 - Mar 2016 Q4 FY16CAD (1,333,000) 1.13 per USD 1.14 per USD $(105,925) Apr 2015 - Jun 2015 Q1 FY16CAD (1,611,000) 1.14 per USD 1.15 per USD $(117,024) Jul 2015 - Sep 2015 Q2 FY16CAD (1,483,000) 1.18 per USD 1.18 per USD $(68,843) Oct 2015 - Dec 2015 Q3 FY16CAD (1,326,000) 1.25 per USD 1.25 per USD $(4,595) Jan 2016 - Mar 2016 Q4 FY16MXN (12,750,000) 12.99 per USD 13.27 per USD $(118,655) Feb 2015 - Apr 2015 Q1 FY16MXN (40,240,000) 13.07 per USD 13.36 per USD $(360,073) May 2015 - Jul 2015 Q2 FY16MXN (42,679,000) 13.63 per USD 13.90 per USD $(274,061) Aug 2015 - Oct 2015 Q3 FY16MXN (45,630,000) 14.46 per USD 14.76 per USD $(125,057) Nov 2015 - Jan 2016 Q4 FY16MXN (14,299,000) 14.93 per USD 15.29 per USD $(11,117) Feb 2016 - Apr 2016 Q1 FY17AUD 1,835,000 0.938 0.919 $259,896 Jan 2015 - Mar 2015 Q1 FY16AUD 2,634,000 0.911 0.891 $304,346 Apr 2015 - Jun 2015 Q2 FY16AUD 2,700,000 0.849 0.830 $156,488 Jul 2015 - Sep 2015 Q3 FY16AUD 2,559,000 0.792 0.777 $24,312 Oct 2015 - Dec 2015 Q4 FY16 $7,079,799 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 othermajor 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 $7.8 millionincrease in the fair value of the forward contracts; whereas a 10% weakening of the U.S. dollar would result in a $8.1 million decrease in the fair value of theforward contracts.43Table of ContentsInterest Rate RiskOur exposure to changes in interest rates is associated with borrowings on our Credit Agreement, all of which is variable rate debt. All other long-term debt isat fixed rates. Total outstanding debt under our Credit Facilities for the fiscal year ended March 28, 2015 was $429.4 million with an interest rate of 1.563%based on prevailing Adjusted LIBOR rates. An increase of 100 basis points in Adjusted LIBOR rates would result in additional annual interest expense of$4.3 million. On December 21, 2012, we entered into interest rate swap agreements to effectively convert $250.0 million of borrowings from a variable rate toa fixed rate. The interest rate swaps qualify for hedge accounting treatment as cash flow hedges.44Table of ContentsReport of Independent Registered Public Accounting FirmThe Board of Directors and Stockholders of Haemonetics CorporationWe have audited the accompanying consolidated balance sheets of Haemonetics Corporation and subsidiaries as of March 28, 2015 and March 29, 2014, andthe related consolidated statements of income, comprehensive (loss) income, shareholders' equity and cash flows for each of the three years in the periodended March 28, 2015. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and scheduleare the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on ouraudits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our auditsprovide a reasonable basis for our opinion.In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of HaemoneticsCorporation and subsidiaries at March 28, 2015 and March 29, 2014, and the consolidated results of their operations and their cash flows for each of the threeyears in the period ended March 28, 2015, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financialstatement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information setforth therein.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Haemonetics Corporation andsubsidiaries' internal control over financial reporting as of March 28, 2015, based on criteria established in Internal Control-Integrated Framework issued bythe Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated May 22, 2015 expressed an unqualifiedopinion thereon./s/ Ernst & Young LLPBoston, MassachusettsMay 22, 201545Table of ContentsITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHAEMONETICS CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME(In thousands, except per share data) Year Ended March 28, 2015 March 29, 2014 March 30, 2013 Net revenues$910,373 $938,509 $891,990Cost of goods sold475,955 470,144 463,859Gross profit434,418 468,365 428,131Operating expenses: Research and development54,187 54,200 44,394Selling, general and administrative334,250 366,022 323,053Asset write-down5,441 1,711 4,247Total operating expenses393,878 421,933 371,694Operating income40,540 46,432 56,437Other (expense) income, net(9,375) (10,031) (6,540)Income before provision for income taxes31,165 36,401 49,897Provision for income taxes14,268 1,253 11,097Net income$16,897 $35,148 $38,800 Net income per share - basic$0.33 $0.68 $0.76Net income per share - diluted$0.32 $0.67 $0.74 Weighted average shares outstanding Basic51,533 51,611 51,349Diluted52,089 52,377 52,259The accompanying notes are an integral part of these consolidated financial statements.46Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME(In thousands) Year Ended March 28, 2015 March 29, 2014 March 30, 2013 Net income$16,897 $35,148 $38,800 Other comprehensive loss: Impact of defined benefit plans, net of tax(4,331) 481 (820)Foreign currency translation adjustment(23,710) (935) (4,705)Unrealized gain on cash flow hedges, net of tax11,371 5,001 4,594Reclassifications into earnings of cash flow hedge gains, net of tax(6,464) (8,570) (2,746)Other comprehensive loss(23,134) (4,023) (3,677)Comprehensive (loss) income$(6,237) $31,125 $35,123 The accompanying notes are an integral part of these consolidated financial statements.47Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In thousands, except per share data) March 28, 2015 March 29, 2014 ASSETS Current assets: Cash and cash equivalents$160,662 $192,469Accounts receivable, less allowance of $1,749 at March 28, 2015 and $1,676 at March 29, 2014145,827 164,603Inventories, net211,077 197,661Deferred tax asset, net12,608 14,144Prepaid expenses and other current assets40,103 54,099Total current assets570,277 622,976Property, plant and equipment, net321,948 271,437Intangible assets, net244,588 271,159Goodwill334,310 336,768Deferred tax asset, long term3,023 1,184Other long-term assets11,271 10,654Total assets$1,485,417 $1,514,178 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Notes payable and current maturities of long-term debt$21,522 $45,630Accounts payable48,425 53,562Accrued payroll and related costs51,115 54,913Accrued taxes3,819 3,113Other current liabilities64,211 59,710Total current liabilities189,092 216,928Long-term debt, net of current maturities406,369 392,057Long-term deferred tax liability32,097 29,664Other long-term liabilities31,737 37,641Stockholders’ equity: Common stock, $0.01 par value; Authorized — 150,000,000 shares; Issued and outstanding — 51,670,969 shares at March 28,2015 and 52,041,189 shares at March 29, 2014517 520Additional paid-in capital426,964 402,611Retained earnings420,365 433,347Accumulated other comprehensive (loss) income(21,724) 1,410Total stockholders’ equity826,122 837,888Total liabilities and stockholders’ equity$1,485,417 $1,514,178The accompanying notes are an integral part of these consolidated financial statements.48Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY(In thousands, except per share data) Common Stock AdditionalPaid-in Retained AccumulatedOtherComprehensive TotalStockholders’ Shares Par Value Capital Earnings Income/(Loss) EquityBalance, March 31, 201250,604 $506 $322,232 $400,783 $9,110 $732,631Employee stock purchase plan151 1 4,141 — — 4,142Exercise of stock options and related tax benefit1,398 14 35,801 — — 35,815Stock-based compensation adjustment related to acquisition— — 504 — — 504Shares repurchased(1,236) (12) (8,607) (41,384) — (50,003)Issuance of restricted stock, net of cancellations115 1 — — — 1Stock compensation expense— — 10,969 — — 10,969Net income— — — 38,800 — 38,800Other comprehensive loss— — — — (3,677) (3,677)Balance, March 30, 201351,032 $510 $365,040 $398,199 $5,433 $769,182Employee stock purchase plan161 2 5,227 — — 5,229Exercise of stock options and related tax benefit740 7 19,263 — — 19,270Issuance of restricted stock, net of cancellations108 1 — — — 1Stock compensation expense— — 13,081 — — 13,081Net income— — — 35,148 — 35,148Other comprehensive loss— — — — (4,023) (4,023)Balance, March 29, 201452,041 $520 $402,611 $433,347 $1,410 $837,888Employee stock purchase plan183 2 4,761 — — 4,763Exercise of stock options and related tax benefit500 5 14,640 — — 14,645Shares repurchased(1,174) (11) (9,143) (29,879) — (39,033)Issuance of restricted stock, net of cancellations121 1 — — — 1Stock compensation expense— — 14,095 — — 14,095Net income— — — 16,897 — 16,897Other comprehensive loss— — — — (23,134) (23,134)Balance, March 28, 201551,671 $517 $426,964 $420,365 $(21,724) $826,122The accompanying notes are an integral part of these consolidated financial statements.49Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands) Year Ended March 28, 2015 March 29, 2014 March 30, 2013Cash Flows from Operating Activities: Net income$16,897 $35,148 $38,800Adjustments to reconcile net income to net cash provided by operating activities: Non-cash items: Depreciation and amortization86,053 81,740 65,481Amortization of financing costs1,013 1,505 1,139Stock compensation expense14,095 13,081 10,969Deferred tax expense4,230 (202) 589Purchased in process research and development— 3,569 —Loss on sale of property, plant and equipment42 293 351Unrealized (gain)/loss from hedging activities1,558 (128) 700Changes in fair value of contingent consideration(2,918) 45 —Asset write-down5,877 2,587 4,247Change in operating assets and liabilities: Decrease/(increase) in accounts receivable, net8,835 6,154 (38,080)Increase in inventories(16,932) (12,684) (18,685)(Increase)/decrease in prepaid income taxes10,662 1,175 (4,025)Decrease/(increase) in other assets and other long-term liabilities(8,013) 3,176 (6,187)Tax benefit of exercise of stock options3,786 1,649 4,194Increase in accounts payable and accrued expenses1,993 2,416 25,581Net cash provided by operating activities127,178 139,524 85,074Cash Flows from Investing Activities: Capital expenditures on property, plant and equipment(122,220) (73,648) (62,188)Proceeds from sale of property, plant and equipment452 488 1,968Acquisition of Whole Blood Business— — (535,175)Acquisition of Hemerus— (23,124) (1,000)Other acquisitions— (9,546) —Net cash used in investing activities(121,768) (105,830) (596,395)Cash Flows from Financing Activities: Payments on long-term real estate mortgage(1,048) (964) (886)Net (decrease)/increase in short-term loans843 (5,521) 7,446Term loan borrowings— — 475,000Repayment of term loan borrowings(8,531) (37,063) —Debt issuance costs(1,013) — (5,467)Proceeds from employee stock purchase plan4,763 5,229 4,142Proceeds from exercise of stock options9,290 15,224 27,517Excess tax benefit on exercise of stock options1,569 2,395 4,101Share repurchase(39,033) — (50,000)Net cash (used in)/provided by financing activities(33,160) (20,700) 461,853Effect of exchange rates on cash and cash equivalents(4,057) 355 (273)Net Increase/(Decrease) in Cash and Cash Equivalents(31,807) 13,349 (49,741)Cash and Cash Equivalents at Beginning of Year192,469 179,120 228,861Cash and Cash Equivalents at End of Year$160,662 $192,469 $179,120Non-cash Investing and Financing Activities: Transfers from inventory to fixed assets for placement of Haemonetics equipment$7,458 $10,584 $21,677Supplemental Disclosures of Cash Flow Information: Interest paid$8,497 $8,942 $5,910Income taxes paid$11,211 $7,261 $13,178The accompanying notes are an integral part of these consolidated financial statements50Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATIONHaemonetics is a global healthcare company dedicated to providing innovative blood management solutions for our customers — plasma collectors, bloodcollectors, and hospitals. Anchored by our strong brand name in medical device systems for the transfusion industry, we also provide information technologyplatforms and value added services to provide customers with business solutions which support improved care for patients and efficiency in the blood supplychain.Our systems automate the collection and processing of donated blood; perform blood diagnostics; salvage and process surgical patient blood; and dispenseblood within the hospital. These systems include devices and single-use, proprietary disposable sets that operate only on our specialized equipment. Ourmanual blood collection and filtration systems enable the manual collection of all blood components while detecting bacteria, thus reducing the risks ofinfection through transfusion. 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’sblood loss allowing clinicians to make informed decisions about a patient’s treatment as it relates to blood loss in surgery. Our surgical blood salvagesystems 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 safestblood possible — his or her own. Our blood distribution systems are “smart” refrigerators located throughout hospitals which automate the storage, inventorytracking, 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 byeliminating previously manual functions at not-for-profit blood centers and commercial plasma centers which are operated by our bio-pharmaceuticalcustomers. Our platforms are also used by hospitals to enable hospital administrators to monitor and measure blood management practices and to manageprocesses within transfusion 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.On November 30, 2012 we completed a two-for-one split of our common stock in the form of a stock dividend. Unless otherwise indicated, all common stockshares and per share information referenced within the Consolidated Financial Statements have been retroactively adjusted to reflect the stock split. Theexercise price of each outstanding option has also been proportionately and retroactively adjusted for all periods presented. Par value per share andauthorized shares were however not affected by the stock split.The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).The accompanying consolidated financial statements present separately our financial position, results of operations, cash flows, and changes in shareholders’equity. All amounts presented, except per share amounts, are stated in thousands of U.S. dollars, unless otherwise indicated.We consider events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidencerelative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated, and there were no material itemsthat arose after the balance sheet date but prior to the issuance of the financial statements that would be considered recognized subsequent events.2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESFiscal YearOur fiscal year ends on the Saturday closest to the last day of March. Fiscal years 2015, 2014 and 2013 each includes 52 weeks with each quarter having13 weeks.Principles of ConsolidationThe accompanying consolidated financial statements include all accounts including those of our subsidiaries. All significant intercompany accounts andtransactions have been eliminated in consolidation.51Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Use of EstimatesThe preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses duringthe reporting period. Actual results could vary from the amounts derived from our estimates and assumptions.ReclassificationsCertain reclassifications have been made to prior years' amounts to conform to the current year's presentation.ContingenciesWe may become involved in various legal proceedings that arise in the ordinary course of business, including, without limitation, patent infringement,product liability and environmental matters. Accruals recorded for various contingencies including legal proceedings, self-insurance and other claims arebased on judgment, the probability of losses and, where applicable, the consideration of opinions of internal and/or external legal counsel and actuariallydetermined estimates. When a range is established but a best estimate cannot be made, we record the minimum loss contingency amount. These estimates areoften initially developed substantially earlier than the ultimate loss is known, and the estimates are reevaluated each accounting period, as additionalinformation is available. When we are initially unable to develop a best estimate of loss, we record the minimum amount of loss, which could be zero. Asinformation becomes known, additional loss provision is recorded when either a best estimate can be made or the minimum loss amount is increased. Whenevents result in an expectation of a more favorable outcome than previously expected, our best estimate is changed to a lower amount.Revenue RecognitionOur 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, productdelivery, including customer acceptance, has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonablyassured. We may have multiple contracts with the same customer and each contract is typically treated as a separate arrangement. When more than oneelement such as equipment, disposables, and services are contained in a single arrangement, we allocate revenue between the elements based on eachelement’s relative selling price, provided that each element meets the criteria for treatment as a separate unit of accounting. An item is considered a separateunit of accounting if it has value to the customer on a stand-alone basis. The selling price of the undelivered elements is determined by the price chargedwhen the element is sold separately, or in cases when the item is not sold separately, by third-party evidence of selling price or by management's best estimateof selling price. For our software arrangements accounted for under the provisions of ASC 985-605, Software, we establish fair value of undelivered elementsbased upon vendor specific objective evidence.Product RevenuesProduct sales consist of the sale of our disposable blood component collection and processing sets and the related equipment. On product sales to endcustomers, revenue is recognized when both the title and risk of loss have transferred to the customer as determined by the shipping terms and all obligationshave been completed. For product sales to distributors, we recognize revenue for both equipment and disposables upon shipment of these products to ourdistributors. Our standard contracts with our distributors state that title to the equipment passes to the distributors at point of shipment to a distributor’slocation. The distributors are responsible for shipment to the end customer along with installation, training and acceptance of the equipment by the endcustomer. Payments from distributors are not contingent upon resale of the product.Software RevenuesOur software solutions business provides support to our plasma, blood collection and hospital customers. We provide information technology platforms andtechnical support for donor recruitment, blood and plasma testing laboratories, and for efficient and compliant operations of blood and plasma collectioncenters. For plasma customers, we also provide information technology platforms for managing distribution of plasma from collection centers to plasmafractionation facilities. For hospitals, we provide solutions to help improve patient safety, reduce cost and ensure compliance.Our software solutions revenues also include revenue from software sales which includes per collection or monthly subscription fees for the license andsupport of the software as well as hosting services. A significant portion of our software52Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)sales are perpetual licenses typically accompanied with significant implementation service fees related to software customization as well as other professionaland technical service fees.We generally recognize revenue from the sale of perpetual licenses on a percentage-of-completion basis which requires us to make reasonable estimates of theextent 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 quarterlyfees. We recognize these fees and charges as earned, typically as these services are provided during the contract period.Non-Income TaxesWe 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 theyare promptly remitted to the relevant taxing authority.We are also required to pay a medical device excise tax relating to U.S. sales of Class I, II and III medical devices. This excise tax went into effect January 1,2013, established as part of the March 2010 U.S. healthcare reform legislation, and has been included in selling, general and administrative expenses.Translation of Foreign CurrenciesAll 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 ineffect during the year. The net effect of these translation adjustments is shown in the accompanying financial statements as a component of stockholders'equity. Foreign currency transaction gains and losses, including those resulting from inter-company transactions, are charged directly to earnings andincluded in other (expense) income, net on the consolidated statements of income. The impact of foreign exchange on long-term intercompany loans, forwhich repayment has not been scheduled or planned, are recorded in accumulated other comprehensive income on the consolidated balance sheet.Cash and Cash EquivalentsCash equivalents include various instruments such as money market funds, U.S. government obligations and commercial paper with maturities of threemonths or less at date of acquisition. Cash and cash equivalents are recorded at cost, which approximates fair market value. As of March 28, 2015, our cashand cash equivalents consisted of investments in United States Government Agency and institutional money market funds.Allowance for Doubtful AccountsWe establish a specific allowance for customers when it is probable that they will not be able to meet their financial obligation. Customer accounts arereviewed individually on a regular basis and appropriate reserves are established as deemed appropriate. We also maintain a general reserve using apercentage that is established based upon the age of our receivables and our collection history. We establish allowances for balances not yet due and past dueaccounts based on past experience.Property, Plant and EquipmentProperty, plant and equipment is recorded at historical cost. We provide for depreciation and amortization by charges to operations using the straight-linemethod in amounts estimated to recover the cost of the building and improvements, equipment, and furniture and fixtures over their estimated useful lives asfollows:Asset Classification EstimatedUseful LivesBuilding 30 YearsBuilding improvements 5-20 YearsPlant equipment and machinery 3-15 YearsOffice equipment and information technology 3-10 YearsHaemonetics equipment 3-7 Years53Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)We evaluate the depreciation periods of property, plant and equipment to determine whether events or circumstances warrant revised estimates of useful lives.All property, plant and equipment are also tested for impairment whenever events or changes in circumstances indicate that their carrying amount may not berecoverable.Our installed base of devices includes devices owned by us and devices sold to the customer. The asset on our balance sheet classified as Haemoneticsequipment consists of medical devices installed at customer sites but owned by Haemonetics. Generally the customer has the right to use it for a period oftime as long as they meet the conditions we have established, which among other things, generally include one or more of the following:•Purchase and consumption of a certain level of disposable products•Payment of monthly rental fees•An asset utilization performance metric, such as performing a minimum level of procedures per month per deviceConsistent with the impairment tests noted below for other intangible assets subject to amortization, we review Haemonetics equipment and their relateduseful lives at least once a year, or more frequently if certain conditions arise, to determine if any adverse conditions exist that would indicate the carryingvalue of these assets may not be recoverable. To conduct these reviews we estimate the future amount and timing of demand for disposables used with thesedevices, from which we generate revenues. Changes in expected demand can result in additional depreciation expense, which is classified as cost of goodssold. Any significant unanticipated changes in demand could impact the value of our devices and our reported operating results.Leasehold improvements are depreciated over the lesser of their useful lives or the term of the lease. Maintenance and repairs are generally expensed tooperations as incurred. When the repair or maintenance costs significantly extend the life of the asset, these costs may be capitalized. When equipment andimprovements are sold or otherwise disposed of, the asset cost and accumulated depreciation are removed from the accounts, and the resulting gain or loss, ifany, is included in the statements of income.Goodwill and Intangible AssetsIntangible assets acquired in a business combination are recorded under the purchase method of accounting at their estimated fair values at the date ofacquisition. Costs associated with the application and award of patents in the U.S. and various other countries are capitalized and amortized on a straight-linebasis over their estimated useful life. Goodwill represents the excess purchase price over the fair value of the net tangible and other identifiable intangibleassets acquired. We amortize our other intangible assets over their estimated useful lives.Goodwill is not amortized. Instead goodwill is reviewed for impairment at least annually in accordance with ASC Topic 350, Intangibles - Goodwill andOther, or on an interim basis between annual tests when events or circumstances indicate that it is more likely than not that the fair value of a reporting unit isless than its carrying value. We perform our annual impairment test on the first day of the fiscal fourth quarter for each of our reporting units. We first performa qualitative test and if necessary, perform a quantitative test.Prior to fiscal 2014, we determined we operated a single operating segment, blood management solutions, based on our chief operating decision maker("CODM") primarily using consolidated results to make operating and strategic decisions. Our reporting units for purposes of assessing goodwill impairmentprior to fiscal 2014 were medical devices and software. During fiscal 2014, our CODM utilized financial results by operating units organized primarily ongeography to make operating and strategic decisions due to changes in the composition in the executive staff reporting to the CODM. Based on thesechanges we determined the five operating units represent operating segments as defined under ASC 280 - Segment Reporting. Following this change, wedetermined our reporting units for purposes of assessing goodwill impairment by identifying our operating segments and assessing whether segmentmanagement regularly reviews the operating results of any components. Through this process, we concluded that our reporting units were the same as ouroperating segments, which are the following operating units organized based primarily on geography: North America Plasma, North America Blood Centerand Hospital, Europe, Asia-Pacific and Japan. During fiscal 2014, goodwill was reallocated from the medical device and software reporting units to the newreporting units based on a relative fair value basis. For fiscal 2015, there were no changes to operating segments or reporting units for purposes of assessinggoodwill impairment.ASC 350, Intangibles - Goodwill and Other defines the fair value of a reporting unit as the price that would be received to sell the unit as a whole in anorderly transaction between market participants at the measurement date. The quantitative test is based on a discounted cash flow analysis or other valuationtechniques, such as the market approach, for each reporting unit. The fair values of our reporting units in fiscal 2013 were determined using the incomeapproach. Under the income approach, the fair54Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)value of a reporting unit is based on the present value of future cash flows using appropriate discount rates, growth rates, operating margins and future marketconditions amongst others. We changed our valuation approach to assessing goodwill impairment in fiscal 2014 in connection with the change in reportingunits. In fiscal 2015 and 2014, we determined the fair value of our reporting units based on the market approach. We utilized the market approach as wedetermined relevant comparable information was available, and accordingly such method was an appropriate alternative to the income method. Under themarket approach, we estimate the fair value of our reporting units based on a combination of, a) market multiples of projected earnings before interest, taxes,depreciation and amortization (“EBITDA”) and b) market multiples of projected net revenues for each individual reporting unit. For the market approach, weuse judgment in identifying the relevant comparable-company market multiples, such as recent divestitures/acquisitions, facts and circumstancessurrounding the market and growth rates. Management assesses the relevance and reliability of the multiples by considering factors unique to its reportingunits, including recent operating results, business plans, economic projections, anticipated future cash flows, and other data. EBITDA and revenue multiplescan also be significantly impacted by future growth opportunities for the reporting unit as well as for the company itself, general market and geographicsentiment, and pending or recently completed merger transactions.These tests showed no evidence of impairment to our goodwill for fiscal 2015, 2014 or 2013 and demonstrated that the fair value of each reporting unitexceeded the reporting unit’s carrying value in each period. During March 2014, circumstances arose that indicated a potential impairment. We performed aninterim impairment test and noted that the fair value of our reporting units still exceeded their carrying values.We review intangible assets subject to amortization at least annually or more frequently if certain conditions arise to determine if any adverse conditionsexist that would indicate that the carrying value of an asset or asset group may not be recoverable, or that a change in the remaining useful life is required.Conditions indicating that an impairment exists include but are not limited to a change in the competitive landscape, internal decisions to pursue new ordifferent technology strategies, a loss of a significant customer or a significant change in the marketplace including prices paid for our products or the size ofthe market for our products. During March 2014, circumstances arose that indicated a potential impairment of certain intangible assets subject toamortization. We performed the recoverability test described below for the relevant asset group and determined expected undiscounted cash flows exceededthe carrying value of the asset group.If an impairment indicator exists, we test the intangible asset for recoverability. For purposes of the recoverability test, we group our amortizable intangibleassets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of otherassets and liabilities. If the carrying value of the intangible asset (asset group) exceeds the undiscounted cash flows expected to result from the use andeventual disposition of the intangible asset (asset group), we will write the carrying value down to the fair value in the period identified.We generally calculate fair value of our intangible assets as the present value of estimated future cash flows we expect to generate from the asset using a risk-adjusted discount rate. In determining our estimated future cash flows associated with our intangible assets, we use estimates and assumptions about futurerevenue contributions, cost structures and remaining useful lives of the asset (asset group).If we determine the estimate of an intangible asset's remaining useful life should be reduced based on our expected use of the asset, the remaining carryingamount of the asset is amortized prospectively over the revised estimated useful life.Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise MarketedASC Topic 985-20, Software, specifies that costs incurred internally in researching and developing a computer software product should be charged toexpense until technological feasibility has been established for the product. Once technological feasibility is established, all software costs should becapitalized until the product is available for general release to customers, at which point capitalized costs are amortized over their estimated useful life of fiveto 10 years. Technological feasibility is established when we have a detailed design of the software and when research and development activities on theunderlying device, if applicable, are completed.We review the net realizable value of capitalized assets periodically to assess the recoverability of amounts capitalized. In the future, the net realizable valuemay be adversely affected by the loss of a significant customer or a significant change in the market place, which could result in an impairment beingrecorded.55Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Other LiabilitiesOther liabilities represent items payable or expected to settle within the next twelve months. The items included in the fiscal year end balances were:(In thousands)March 28, 2015 March 29, 2014VAT liabilities$4,205 $7,114Forward contracts2,657 1,255Deferred revenue22,362 24,777All other34,987 26,564Total$64,211 $59,710Research and Development ExpensesAll research and development costs are expensed as incurred.Advertising CostsAll advertising costs are expensed as incurred and are included in selling, general and administrative expenses in the consolidated statements of income.Advertising expenses were $4.5 million, $3.6 million, and $4.6 million for 2015, 2014 and 2013, respectively.Accounting for Shipping and Handling CostsShipping and handling costs are included in selling, general and administrative expenses. Freight is classified in cost of goods sold when the customer ischarged for freight and in selling, general and administration when the customer is not explicitly charged for freight.Income TaxesThe income tax provision is calculated for all jurisdictions in which we operate. The income tax provision process involves calculating current taxes due andassessing temporary differences arising from items which are taxable or deductible in different periods for tax and accounting purposes and are recorded asdeferred tax assets and liabilities. Deferred tax assets are evaluated for realizability and a valuation allowance is maintained for the portion of our deferred taxassets that are not more-likely-than-not realizable.We file income tax returns in all jurisdictions in which we operate. We record a liability for uncertain tax positions taken or expected to be taken in incometax returns. Our financial statements reflect expected future tax consequences of such positions presuming the taxing authorities' full knowledge of theposition and all relevant facts. We record a liability for the portion of unrecognized tax benefits claimed which we have determined are not more-likely-than-not realizable. These tax reserves have been established based on management's assessment as to the potential exposure attributable to our uncertain taxpositions as well as interest and penalties attributable to these uncertain tax positions. All tax reserves are analyzed quarterly and adjustments are made. Taxreserves are reversed when the statute of limitations expires or the matter is considered effectively settled.Derivative InstrumentsWe account for our derivative financial instruments in accordance with ASC Topic 815, Derivatives and Hedging (“ASC 815”) and ASC Topic 820, FairValue Measurements and Disclosures (“ASC 820”). In accordance with ASC 815, we record all derivatives on the balance sheet at fair value. The accountingfor the change in the fair value of derivatives depends on the intended use of the derivative, whether we have elected to designate a derivative as a hedginginstrument for accounting purposes, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. In addition, ASC815 provides that, for derivative instruments that qualify for hedge accounting, changes in the fair value are either (a) offset against the change in fair valueof the hedged assets, liabilities, or firm commitments through earnings or (b) recognized in equity until the hedged item is recognized in earnings, dependingon whether the derivative is being used to hedge changes in fair value or cash flows. The ineffective portion of a derivative’s change in fair value isimmediately recognized in earnings. We do not use derivative financial instruments for trading or speculation purposes.56Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The gains or losses on the forward foreign exchange rate contracts designated as hedges are recorded in net revenues, cost of goods sold, operating expensesand other (expense) income, net in our consolidated statements of income, depending on the nature of the underlying hedged transactions, when theunderlying hedged transaction affects earnings. The cash flows related to the gains and losses are classified in the consolidated statements of cash flows aspart of cash flows from operating activities. For those derivative instruments that are not designated as part of a hedging relationship we record the gains orlosses in earnings currently. These gains and losses are intended to offset the gains and losses recorded on net monetary assets or liabilities that aredenominated in foreign currencies. We recorded foreign currency losses of $1.1 million, $0.5 million, and $0.8 million in fiscal 2015, 2014 and 2013,respectively.On a quarterly basis, we assess whether the cash flow hedges are highly effective in offsetting changes in the cash flow of the hedged item. We manage thecredit risk of the counterparties by dealing only with institutions that we consider financially sound and consider the risk of non-performance to be remote.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 andgains on the item being hedged. We do not enter into derivative transactions for speculative purposes and we do not have any non-derivative instrumentsthat are designated as hedging instruments pursuant to ASC Topic 815.Stock-Based CompensationTo calculate the grant-date fair value of our stock options we use the Black-Scholes option-pricing model and for performance share units and market stockunits we use Monte Carlo Simulation models.Valuation of AcquisitionsWe allocate the amounts we pay for each acquisition to the assets acquired and liabilities assumed based on their estimated fair values at the dates ofacquisition, including acquired identifiable intangible assets. We base the estimated fair value of identifiable intangible assets on detailed valuations thatuse historical information and market assumptions based upon the assumptions of a market participant. We allocate any excess purchase price over the fairvalue of the net tangible and intangible assets acquired to goodwill.In certain acquisitions, we have earn-out arrangements or contingent consideration to provide potential future payments to the seller for achieving certainagreed-upon targets. We record the contingent consideration at its fair value at the acquisition date. Generally, we have entered into arrangements withcontingent consideration that require payments in cash. As such, we periodically revalue the contingent consideration obligations associated with certainacquisitions to their current fair value and record the change in the fair value as contingent consideration income or expense within selling, general andadministrative expense. These changes are recorded in selling, general and administrative expense. Increases or decreases in the fair value of the contingentconsideration obligations can result from changes in assumed discount periods and rates, changes in the assumed timing and amount of revenue and expenseestimates, and changes in assumed probability with respect to regulatory approval. Significant judgment is employed in determining the appropriateness ofthese assumptions as of the acquisition date and for each subsequent period. Accordingly, future business and economic conditions, as well as changes in anyof the assumptions described above, can materially impact the amount of contingent consideration income or expense we record in any given period.Concentration of Credit Risk and Significant CustomersFinancial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash equivalents and accounts receivable. Infiscal 2015 and 2014, no one customer accounted for more than 10% of our revenues. Sales to one unaffiliated Japanese customer, the Japanese Red CrossSociety, amounted to $90.1 million for fiscal 2013.Certain other markets and industries can expose us to concentrations of credit risk. For example, in our plasma business, our sales are concentrated withseveral large customers. As a result, our accounts receivable extended to any one of these bio-pharmaceutical customers can be significant at any point intime. Also, a portion of our trade accounts receivable outside the United States include sales to government-owned or supported healthcare systems in severalcountries, which are subject to payment delays. Payment is dependent upon the financial stability and creditworthiness of those countries’ nationaleconomies. We have not incurred significant losses on government receivables. We continually evaluate all government receivables for potential collectionrisks associated with the availability of government funding and reimbursement practices. If the financial condition of customers or the countries’ healthcaresystems deteriorate such that their ability to make payments is uncertain, allowances may be required in future periods.57Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Recent Accounting PronouncementsStandards to be ImplementedIn April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, Presentation of FinancialStatements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Componentsof an Entity. ASU No. 2014-08 limits the requirement to report discontinued operations to disposals of components of an entity that represent strategic shiftsthat have (or will have) a major effect on an entity’s operations and financial results. The amendments also require expanded disclosures concerningdiscontinued operations and disclosures of certain financial results attributable to a disposal of a significant component of an entity that does not qualify fordiscontinued operations reporting. The amendments in ASU No. 2014-08 are effective prospectively for reporting periods beginning on or after December 15,2014, with early adoption permitted. Management does not believe that the adoption of ASU No. 2014-08 will have a material effect on our FinancialStatements.In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU No. 2014-09 stipulates that an entity shouldrecognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects tobe entitled in exchange for those goods or services. To achieve this core principle, an entity should apply the following steps: (1) identify the contract(s) witha customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performanceobligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. ASU No. 2014-09 will be effective for theCompany retrospectively beginning April 2, 2017, with early adoption not permitted. The impact of adopting ASU No. 2014-09 on our Financial Statementsis being assessed by management.In June 2014, the FASB issued ASU No. 2014-12, Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Termsof an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. ASU No. 2014-12 requires that a performance targetthat affects vesting and could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existingguidance in ASC 718, Compensation—Stock Compensation, as it relates to such awards. ASU No. 2014-12 is effective in our first quarter of fiscal 2017 withearly adoption permitted using either of two methods: (i) prospective to all awards granted or modified after the effective date; or (ii) retrospective to allawards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new ormodified awards thereafter, with the cumulative effect of applying ASU No. 2014-12 as an adjustment to the opening retained earnings balance as of thebeginning of the earliest annual period presented in the financial statements. Management does not believe that the adoption of ASU No. 2014-12 will have amaterial effect on our Financial Statements.In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertaintiesabout an Entity’s Ability to Continue as a Going Concern. ASU No. 2014-15 defines management's responsibility to assess an entity's ability to continue as agoing concern, and to provide related footnote disclosures in certain circumstances. This guidance will be effective for all entities in the first annual periodending after December 15, 2016; however, early adoption is permitted. Management does not believe that the adoption of ASU No. 2014-15 will have amaterial effect on our Financial Statements.In January 2015, the FASB issued ASU No. 2015-01, Income Statement-Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income StatementPresentation by Eliminating the Concept of Extraordinary Items. ASU No. 2015-01 eliminates from GAAP the concept of extraordinary items. An entity willno longer be required to (1) segregate an extraordinary item from the results of ordinary operations; (2) separately present an extraordinary item on its incomestatement, net of tax, after income from continuing operations; and (3) disclose income taxes and earnings-per-share data applicable to an extraordinary item.ASU No. 2015-01 will be effective for fiscal years beginning after December 15, 2015. An entity may apply the amendments prospectively or retrospectivelyto all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscalyear of adoption. Management does not believe that the adoption of ASU No. 2015-01 will have a material effect on our Financial Statements.In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU No. 2015-02 amendedthe process that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. ASU No. 2015-02 is effective forannual periods ending after December 15, 2015, and for annual periods and interim periods thereafter with early adoption permitted. Management does notbelieve that the adoption of ASU No. 2015-02 will have a material effect on our Financial Statements.58Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)In April 2015, the FASB issued ASU No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.ASU No. 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from thecarrying amount of that debt liability, consistent with debt discounts. ASU No. 2015-03 is effective for annual periods beginning after December 15, 2015,and interim periods within those annual periods. Management does not believe that the adoption of ASU No. 2015-03 will have a material effect on ourFinancial Statements.In April 2015, the FASB issued ASU No. 2015-04, Compensation—Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of anEmployer’s Defined Benefit Obligation and Plan Assets. ASU No. 2015-04 provides a practical expedient, for an entity with a fiscal year-end that does notcoincide with a month-end, that permits the entity to measure defined benefit plan assets and obligations using the month-end that is closest to the entity'sfiscal year-end and apply that practical expedient consistently from year to year. ASU No. 2015-04 is effective for fiscal years beginning after December 15,2015, and interim periods within those fiscal years. Early application is permitted. The impact of adopting ASU No. 2015-04 on our Financial Statements isbeing assessed by management.In April 2015, the FASB issued ASU No. 2015-05, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting forFees Paid in a Cloud Computing Arrangement. ASU No. 2015-05 will help entities evaluate the accounting for fees paid by a customer in a cloud computingarrangement. ASU No. 2015-05 is effective for interim and annual periods beginning after December 15, 2015 with early adoption permitted. The impact ofadopting ASU No. 2015-05 on our Financial Statements is being assessed by management.3. ACQUISITIONSAcquisitions were completed in fiscal 2014 and fiscal 2013. We did not complete any acquisitions in fiscal 2015.Fiscal Year 2014 AcquisitionHemerus AcquisitionOn April 30, 2013, we completed the acquisition of certain assets of Hemerus Medical, LLC ("Hemerus"), a Minnesota based company that developsinnovative technologies for the collection of whole blood and processing and storage of blood components. Hemerus has received U.S Food and DrugAdministration (FDA) approval for SOLX® whole blood collection system for eight hour storage of whole blood prior to processing. Hemerus previouslyreceived Conformité Européenne or CE Mark in the European Union to market SOLX as the world's first 56-day red blood cell storage solution. We paid$24.1 million and will pay an additional $3.0 million upon a further FDA approval of the SOLX solution for 24 hour storage of whole blood prior toprocessing. We will also pay up to $14.0 million based on future sales of SOLX-based products through fiscal 2025.We acquired Hemerus to complement the portfolio of whole blood collection, filtration and processing product lines we recently acquired and to bringgreater efficiency and productivity to whole blood collection and processing. Hemerus manufactures and sells manual blood collection systems and filtersand has operations in North America. Revenue from the sale of SOLX will be reported within the blood center disposables product line.The assets acquired from Hemerus were recorded at fair value at the date of acquisition.59Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The final purchase price allocation is as follows:Asset class Amounts recognized asof March 29, 2014Acquired technology $22,800Trade name 1,900Customer relationship 600Goodwill 6,425Total $31,725 The fair value of the acquired assets and liabilities are reflected in the Consolidated Balance Sheets. The acquired assets are amortized over the estimate oftheir useful lives on a straight-line basis. We recorded $2.5 million and $2.3 million in amortization expense relating to the acquired intangible assets for thefiscal years ended March 28, 2015 and March 29, 2014, respectively.Goodwill represents the excess of the purchase price over the fair value of the net assets. Goodwill of $6.4 million primarily represents future economicbenefits expected to arise from the work force and synergies expected to be gained from the integration of SOLX into our whole blood products. Prior to theacquisition, we had not conducted any business with Hemerus.Contingent considerationAs described above, we will pay the sellers of the Hemerus assets up to $14.0 million based on future sales of SOLX. We recognized a liability equal to thefair value of the contingent payments we expect to make as of the acquisition date. We revalue this liability each reporting period and record necessarychanges in the fair value in our consolidated statements of income. As of March 28, 2015, the maximum amount of future contingent consideration(undiscounted) that we could be required to pay related to future SOLX sales is $14.0 million. Additionally, we will pay $3.0 million upon FDA approval ofthe SOLX solution for 24 hour storage of whole blood prior to processing. The carrying value of this liability is $4.7 million as of March 28, 2015.Contingent consideration liabilities are measured at fair value using projected revenues, discount rates, probabilities of payment and projected paymentdates. This Level 3 fair value measurement was performed using a probability-weighted discounted cash flow analysis over a ten year period.Increases or decreases in the fair value of our contingent consideration liability can result from changes in discount periods and rates, as well as changes inthe timing and amount of revenue estimates or likelihood of earning revenue. Projected revenues are based on our most recent internal forecast and analysis.Fiscal Year 2013 AcquisitionWhole Blood AcquisitionOn August 1, 2012, we completed the acquisition from Pall Corporation (“Pall”) of substantially all of the assets relating to its blood collection, filtration,processing, storage, and re-infusion product lines, and all of the outstanding equity interest in Pall Mexico Manufacturing, S. de R.L. de C.V., a subsidiary ofPall based in Mexico pursuant to an Asset Purchase Agreement (the “Purchase Agreement”) with Pall. We refer to the acquired business as the “whole bloodbusiness.”At the closing of the transaction, we paid a total consideration of $535.2 million in cash and $0.5 million in shares following resolution of post-closingadjustments for working capital and historical earnings levels. We anticipate paying an additional $15.0 million upon replication and delivery of certainmanufacturing assets of Pall's filter media business to Haemonetics by 2018. Until that time, Pall will manufacture and sell filter media to Haemonetics undera supply agreement.60Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)We entered into a credit agreement on August 1, 2012 in connection with the transaction which includes a $475.0 million term loan to fund the majority ofthe cash paid to Pall. See Note 8 for a detailed description of the key terms and provisions of the credit agreement.We acquired the whole blood business to provide access to the manual collection and whole blood markets and provide scope for introduction of automatedsolutions in those markets. The whole blood business manufactures and sells manual blood collection systems and filters and has operations in NorthAmerica, Europe and Asia Pacific countries. Revenue from the sale of whole blood disposables has been reported within the blood center disposables productline since the date of acquisition.The assets and liabilities acquired from Pall were recorded at fair value at the date of acquisition. We completed the allocation of the purchase price to theestimated fair value of the acquired assets and liabilities in June 2013 and is summarized below:Asset class Amounts Recognized asof March 30, 2013(In thousands) Inventories $49,917Property, plant and equipment 85,984Intangible assets 188,500Other assets/liabilities, net (6,166)Goodwill 216,940Fair value of net assets acquired $535,175The fair value of the acquired assets and liabilities are reflected in the Consolidated Balance Sheets. The $188.5 million of acquired intangible assets wasallocated to acquired technology and customer relationships at fair values of $61.0 million and $127.5 million, respectively. The acquired intangible assetswere initially amortized over their estimated useful lives of 12 years on a straight-line basis. We adopted the straight-line amortization of 12 years as it bestreflected the pattern of benefits. As of March 29, 2014, the remaining estimated useful life of the customer relationship assets was adjusted to 8 years to betterreflect its current pattern of benefits. We recorded $18.8 million, $15.7 million and $10.5 million in amortization expense relating to the acquired intangibleassets for the fiscal years ended March 28, 2015, March 29, 2014 and March 30, 2013, respectively.Goodwill represents the excess of the purchase price over the fair value of the net assets. Goodwill of $216.9 million represents future economic benefitsexpected to arise from work force at the various plants and locations and significant technological know-how in filter manufacturing. All of the goodwill isdeductible for tax purposes.Revenue for the acquired whole blood business included in our operating results was $143.9 million in fiscal 2015, $190.7 million in fiscal 2014 and $138.4million in fiscal 2013.The following represents the pro forma consolidated statements of income for the fiscal year ended March 30, 2013, as if the acquisition had been included inour consolidated results as beginning April 1, 2012:(In thousands, except per share amounts) March 30, 2013Net Sales $963,923Net Income $56,540Basic EPS $1.10Diluted EPS $1.0861Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)4. PRODUCT WARRANTIESWe generally provide a warranty on parts and labor for one year after the sale and installation of each device. We also warrant our disposables productsthrough their use or expiration. We estimate our potential warranty expense based on our historical warranty experience, and we periodically assess theadequacy of our warranty accrual and make adjustments as necessary.(In thousands)March 28, 2015 March 29, 2014Warranty accrual as of the beginning of the year$590 $673Warranty provision1,199 1,340Warranty spending(1,258) (1,423)Warranty accrual as of the end of the year$531 $5905. INVENTORIESInventories are stated at the lower of cost or market and include the cost of material, labor and manufacturing overhead. Cost is determined with the first-in,first-out method.(In thousands)March 28, 2015 March 29, 2014Raw materials$71,794 $72,508Work-in-process12,462 7,383Finished goods126,821 117,770Total Inventory$211,077 $197,6616. GOODWILL AND INTANGIBLE ASSETSGoodwillThe changes in the carrying amount of goodwill for fiscal 2015 and 2014 are as follows:(In thousands) Carrying amount as of March 30, 2013$330,474Hemerus acquisition6,425Effects of change in foreign currency exchange rates(131)Carrying amount as of March 29, 2014$336,768Effects of change in foreign currency exchange rates(2,458)Carrying amount as of March 28, 2015$334,31062Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Intangible AssetsIntangible assets include the value assigned to license rights and other developed technology, patents, customer contracts and relationships and trade names.The estimated useful lives for all of these intangible assets are 2 to 19 years. The gross carrying amount of intangible assets and the related accumulatedamortization as of March 28, 2015 and March 29, 2014 is as follows:(In thousands)Gross CarryingAmount AccumulatedAmortization Net Weighted AverageUseful Life (In years)As of March 28, 2015 Patents$10,473 $7,373 $3,100 9Capitalized software39,690 5,654 34,036 7Other developed technology124,573 46,474 78,099 12Customer contracts and related relationships195,985 70,440 125,545 10Trade names7,042 3,234 3,808 11Total intangibles$377,763 $133,175 $244,588 10(In thousands)Gross CarryingAmount AccumulatedAmortization Net Weighted AverageUseful Life (In years)As of March 29, 2014 Patents$9,543 $7,039 $2,504 9Capitalized software31,750 2,414 29,336 4Other developed technology123,525 36,632 86,893 12Customer contracts and related relationships200,694 52,741 147,953 12Trade names7,341 2,868 4,473 11Total intangibles$372,853 $101,694 $271,159 11The changes to the net carrying value of our intangible assets from March 29, 2014 to March 28, 2015 reflect investment in capitalized software and otherless significant intangible assets, amortization expense and the effect of exchange rate changes in the translation of our intangible assets held by ourinternational subsidiaries.Aggregate amortization expense for amortized intangible assets for fiscal year 2015, 2014, and 2013 was $33.5 million, $29.2 million, and $22.1 million,respectively. Future annual amortization expense on intangible assets is estimated to be as follows:Fiscal Year Amount (inthousands)2016 $33,7522017 $32,9982018 $32,1652019 $30,4702020 and thereafter $104,5447. DERIVATIVES AND FAIR VALUE MEASUREMENTSWe manufacture, market and sell our products globally. For the fiscal year ended March 28, 2015, approximately 45.6% of our sales were generated outsidethe 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 reportingcurrency. We have a program in place that is designed to mitigate our exposure to changes in foreign currency exchange rates. That program includes the useof derivative financial instruments to minimize for a period of time, the unforeseen impact on our financial results from changes in foreign exchange rates. Weutilize foreign currency63Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)forward contracts to hedge the anticipated cash flows from transactions denominated in foreign currencies, primarily the Japanese Yen and the Euro, and to alesser extent the Swiss Franc, Australian Dollar, British Pound Sterling, Canadian Dollar and the Mexican Peso. This does not eliminate the volatility offoreign exchange rates, but because we generally enter into forward contracts one year out, rates are fixed for a one-year period, thereby facilitating financialplanning and resource allocation.Designated Foreign Currency Hedge ContractsAll of our designated foreign currency hedge contracts as of March 28, 2015 and March 29, 2014 were cash flow hedges under ASC Topic 815, Derivativesand Hedging. We record the effective portion of any change in the fair value of designated foreign currency hedge contracts in Other Comprehensive Incomein the Statement of Stockholders’ Equity until the related third-party transaction occurs. Once the related third-party transaction occurs, we reclassify theeffective portion of any related gain or loss on the designated foreign currency hedge contracts to earnings. In the event the hedged forecasted transactiondoes 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 atthat time. We had designated foreign currency hedge contracts outstanding in the contract amount of $145.8 million as of March 28, 2015 and $157.9million as of March 29, 2014.During fiscal 2015, we recognized net gains of $6.5 million in earnings on our cash flow hedges, compared to recognized net gains of $8.6 million and $2.7million during fiscal 2014 and 2013, respectively. For the fiscal year ended March 28, 2015, $12.2 million of gains, net of tax, were recorded in AccumulatedOther Comprehensive Income to recognize the effective portion of the fair value of any designated foreign currency hedge contracts that are, or previouslywere, designated as foreign currency cash flow hedges, as compared to net gains of $3.7 million, net of tax, for the fiscal year ended March 29, 2014 and netgains of $5.1 million, net of tax, for the fiscal year ended March 30, 2013. At March 28, 2015, gains of $12.2 million, net of tax, will be reclassified toearnings within the next twelve months. All currency cash flow hedges outstanding as of March 28, 2015 mature within twelve months.Non-designated Foreign Currency ContractsWe manage our exposure to changes in foreign currency on a consolidated basis to take advantage of offsetting transactions and balances. We use foreigncurrency forward contracts as a part of our strategy to manage exposure related to foreign currency denominated monetary assets and liabilities. These foreigncurrency forward contracts are entered into for periods consistent with currency transaction exposures, generally one month. They are not designated as cashflow or fair value hedges under ASC Topic 815. These forward contracts are marked-to-market with changes in fair value recorded to earnings. We had non-designated foreign currency hedge contracts under ASC Topic 815 outstanding in the contract amount of $45.8 million as of March 28, 2015 and $72.9million as of March 29, 2014.Interest Rate SwapsOn August 1, 2012, we entered into a Credit Agreement which provided for a $475.0 million term loan (“Term Loan”). Under the terms of this CreditAgreement, the Company may borrow at a spread to an index, including the LIBOR index of 1-month, 3-months, 6-months, etc. From the date of the CreditAgreement, the Company has chosen to borrow against the 1-month USD-LIBOR-BBA rounded up, if necessary, to the nearest 1/16th of 1% (“AdjustedLIBOR”). The terms of the Credit Agreement also allow us to borrow in multiple tranches. As of March 28, 2015, we have four tranches outstanding.Accordingly, our earnings and cash flows are exposed to interest rate risk from changes in Adjusted LIBOR. Part of our interest rate risk management strategyincludes the use of interest rate swaps to mitigate our exposure to changes in variable interest rates. Our objective in using interest rate swaps is to addstability to interest expense and to manage and reduce the risk inherent in interest rate fluctuations.On December 21, 2012, we entered into two interest rate swap agreements ("the swaps"), whereby we receive Adjusted LIBOR and pay an average fixed rate of0.68% on a total notional value of $250.0 million of debt. The interest rate swaps mature on August 1, 2017. The Company designated the interest rate swapsas a cash flow hedge of variable interest rate risk associated with $250.0 million of indebtedness. For the fiscal years ended March 28, 2015, March 29, 2014and March 30, 2013, $0.9 million of losses, $1.3 million of gains and $0.8 million of losses, net of tax, were recorded in Accumulated Other ComprehensiveIncome to recognize the effective portion of the fair value of interest rate swaps that qualify as cash flow hedges, respectively.64Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Fair Value of Derivative InstrumentsThe following table presents the effect of our derivative instruments designated as cash flow hedges and those not designated as hedging instruments underASC Topic 815 in our consolidated statements of income for the fiscal year ended March 28, 2015.Derivative Instruments Amount ofGain/(Loss)Recognizedin OCI(Effective Portion) Amount ofGain/(Loss)Reclassifiedfrom OCI intoEarnings(Effective Portion) Location inStatement of Operations Amount ofGain/(Loss)Excluded fromEffectivenessTesting (*) Location inStatement ofOperations(In thousands) Designated foreign currency hedge contracts,net of tax $12,249 $6,464 Net revenues, COGS,and SG&A $(170) Other income(expense), netNon-designated foreign currency hedgecontracts — — $7,510 Other income(expense)Designated interest rate swaps, net of tax $(878) $— Interest income(expense), net $— (*) 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 March 28, 2015 or March 29, 2014. As of March 28, 2015, the amountrecognized as a deferred tax liability for designated foreign currency hedges was $0.8 million and the amount recognized as a deferred tax asset for interestrate swap hedges was $0.1 million.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 fairvalue of our derivative instruments using the framework prescribed by ASC Topic 820, Fair Value Measurements and Disclosures, by considering theestimated amount we would receive or pay to sell or transfer these instruments at the reporting date and by taking into account current interest rates, currencyexchange rates, current interest rate curves, interest rate volatilities, 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 liabilitiesin 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; andinputs derived principally from, or corroborated by, observable market data by correlation or other means. As of March 28, 2015, we have classified ourderivative assets and liabilities within Level 2 of the fair value hierarchy prescribed by ASC Topic 815, as discussed below, because these observable inputsare 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 March 28, 2015 andMarch 29, 2014 by type of contract and whether it is a qualifying hedge under ASC Topic 815.(In thousands)Location inBalance Sheet Balance as of March28, 2015 Balance as of March29, 2014Derivative Assets: Designated foreign currency hedge contractsOther current assets $9,740 $2,574Designated interest rate swapsOther current assets — 1,250 $9,740 $3,824Derivative Liabilities: Designated foreign currency hedge contractsOther current liabilities $2,499 $1,255Designated interest rate swapsOther current liabilities 159 — $2,658 $1,25565Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Other Fair Value MeasurementsASC Topic 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value in accordance withU.S. GAAP, and expands disclosures about fair value measurements. ASC Topic 820 does not require any new fair value measurements; rather, it applies toother accounting pronouncements that require or permit fair value measurements. In accordance with ASC Topic 820, for the fiscal years ended March 28,2015 and March 29, 2014, we applied the requirements under ASC Topic 820 to our non-financial assets and non-financial liabilities. As we did not have animpairment of any non-financial assets or non-financial liabilities, there was no disclosure required relating to our non-financial assets or non-financialliabilities.On a recurring basis, we measure certain financial assets and financial liabilities at fair value, including our money market funds, foreign currency hedgecontracts, 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 inan orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determinedbased 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 thevaluation 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 asfollows:•Level 1 — Inputs to the valuation methodology are quoted market prices for identical assets or liabilities.•Level 2 — Inputs to the valuation methodology are other observable inputs, including quoted market prices for similar assets or liabilities andmarket-corroborated inputs.•Level 3 — Inputs to the valuation methodology are unobservable inputs based on management’s best estimate of inputs market participants woulduse 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.Fair Value Measured on a Recurring BasisFinancial assets and financial liabilities measured at fair value on a recurring basis consist of the following as of March 28, 2015 and March 29, 2014:As of March 28, 2015Quoted MarketPrices for IdenticalAssets(Level 1) Significant OtherObservable Inputs(Level 2) SignificantUnobservable Inputs(Level 3) Total (In thousands) (In thousands) (In thousands) (In thousands)Assets Money market funds$119,946 $— $— $119,946Foreign currency hedge contracts— 9,740 — 9,740 $119,946 $9,740 $— $129,686Liabilities Foreign currency hedge contracts$— $2,499 $— $2,499Interest rate swap— 159 — 159Contingent consideration— — 4,727 4,727 $— $2,658 $4,727 $7,38566Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)As of March 29, 2014Quoted MarketPrices for IdenticalAssets(Level 1) Significant OtherObservable Inputs(Level 2) SignificantUnobservable Inputs(Level 3) Total (In thousands) (In thousands) (In thousands) (In thousands)Assets Money market funds$135,378 $— $— $135,378Forward currency hedge contracts— 2,574 — 2,574Interest rate swap— 1,250 — 1,250 $135,378 $3,824 $— $139,202Liabilities Forward currency hedge contracts$— $1,255 $— $1,255Contingent consideration— — 7,645 7,645 $— $1,255 $7,645 $8,900For the fiscal years ended March 28, 2015 and March 29, 2014, non-designated foreign currency hedge contracts were not significant and are not disclosedseparately in the above tables.Contingent considerationHemerusA description of the methods used to determine the fair value of the Level 3 liabilities is included within Note 3, Acquisitions. The table below provides areconciliation of the beginning and ending Level 3 liabilities for the year ended March 28, 2015.(In thousands) Fair value measurements usingsignificant unobservable inputs(Level 3)Contingent consideration as of March 29, 2014 $7,645Fair value adjustment (2,918)Ending balance $4,727The fair value adjustment to contingent consideration was a result of updated assumptions pertaining to timing and unit volumes.Other Fair Value DisclosuresThe Term Loan is carried at amortized cost and accounts receivable and accounts payable are also reported at their cost which approximates fair value.8. NOTES PAYABLE AND LONG-TERM DEBTNotes payable and long-term debt consisted of the following:(In thousands)March 28, 2015 March 29, 2014Term loan, net of financing fees$426,814 $435,338Real estate mortgage851 1,906Bank loans and other borrowings226 443Less current portion(21,522) (45,630)Long-term debt$406,369 $392,057On August 1, 2012 in connection with the acquisition of the whole blood business, we entered into a credit agreement ("Credit Agreement") with certainlenders (together, “Lenders”) which provided for a $475.0 million term loan and a $50.0 million67Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)revolving loan (the “Revolving Credit Facility”), and together with the Term Loan, (the “Credit Facilities”). The Credit Facilities had a term of five years andmatured on August 1, 2017.Under the terms of this Credit Agreement, the Company may borrow at a spread to an index, including the LIBOR index of 1-month, 3-months, 6-months, etc.From the date of the Credit Agreement, the Company has chosen to borrow against the 1-month USD-LIBOR-BBA rounded up, if necessary, to the nearest1/16th of 1%. The terms of the Credit Agreement also allow the Company to borrow in multiple tranches. The Company currently borrows in four tranches.At closing, we borrowed the Term Loan and used the proceeds to pay Pall for the acquisition of the assets described in Note 3. Interest for the Credit Facilitieswas based on Adjusted LIBOR plus a range of 1.125% to 1.500% depending on the achievement of leverage ratios and customary credit terms whichincluded financial and negative covenants. Revolving loans may be borrowed, repaid and re-borrowed to fund our working capital needs and for othergeneral corporate purposes. The current margin of the Term Loan is 1.375% over Adjusted LIBOR and our effective interest rate inclusive of prepaidfinancing costs and other fees was approximately 2.0% as of March 28, 2015. The Term Loan or portions thereof may be prepaid at any time, or from time totime without penalty. Once repaid, such amount may not be re-borrowed.On June 30, 2014, we modified our existing Credit Facilities by extending the maturity date to July 1, 2019, extending the principal repayments of the TermLoan, and modifying certain restrictive covenants to allow greater operational flexibility and enhanced near term liquidity. In addition, the amended CreditAgreement provides for a $100.0 million Revolving Credit Facility and establishes interest rates in the range of LIBOR plus 1.125% to 1.500% depending oncertain conditions. At March 28, 2015, $379.4 million was outstanding under the Term Loan and $50.0 million was outstanding on the Revolving CreditFacility, both with an interest rate of 1.5625%. No additional amounts were borrowed as a result of this modification. The fair value of debt approximates itscurrent value of approximately $429.4 million as of March 28, 2015.Under the Credit Facilities, we are required to maintain a Consolidated Total Leverage Ratio not to exceed 3.0:1.0 and a Consolidated Interest CoverageRatio not to be less than 4.0:1.0 during periods when the Credit Facilities are outstanding. In addition, we are required to satisfy these covenants, on a proforma basis, in connection with any new borrowings (including any letter of credit issuances) on the Revolving Credit Facility as of the time of suchborrowings. The Consolidated Interest Coverage Ratio is calculated as the Consolidated EBITDA divided by Consolidated Interest Expense while theConsolidated Total Leverage Ratio is calculated as Consolidated Total Debt divided by Consolidated EBITDA. Consolidated EBITDA includes EBITDAadjusted by non-recurring and unusual transactions specifically as defined in the Credit Facilities.The Credit Facilities also contain usual and customary non-financial affirmative and negative covenants which include certain restrictions with respect tosubsequent indebtedness, liens, loans and investments (including acquisitions), financial reporting obligations, mergers, consolidations, dissolutions orliquidation, asset sales, affiliate transactions, change of our business, capital expenditures, share repurchase and other restricted payments. These covenantsare subject to important exceptions and qualifications set forth in the Credit Agreement.Any failure to comply with the financial and operating covenants of the Credit Facilities would prevent us from being able to borrow additional funds andwould constitute a default, which could result in, among other things, the amounts outstanding including all accrued interest and unpaid fees, becomingimmediately due and payable. In addition, the Credit Facilities include customary events of default, in certain cases subject to customary cure periods. As ofMarch 28, 2015, we were in compliance with the covenants.Commitment feePursuant to the Credit Agreement we are required to pay the Lenders, on the last day of each calendar quarter, a commitment fee on the unused portion of theRevolving Credit Facility. The commitment fee is subject to a pricing grid based on our Consolidated Total Leverage Ratio. The commitment fee ranges from0.175% to 0.300%. The current commitment fee on the undrawn portion of the Revolving Credit Facility is 0.250%.68Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Debt issuance costs and interestExpenses associated with the issuance of the Term Loan were capitalized and are amortized as additional interest expense over the five years using theeffective interest method. In connection with the Term Loan, we initially recorded deferred financing costs of $5.5 million and we recorded additionaldeferred financing costs of $1.0 million in connection with the June 30, 2014 modification, of which $2.6 million remains as a debt discount. The debtdiscount is netted against the $429.4 million balance, resulting in a net note payable of $426.8 million. The debt discount will also be amortized asadditional interest expense over the life of the term loan.Interest expense was $8.5 million and $8.9 million for the fiscal years ended March 28, 2015 and March 29, 2014, respectively. Accrued interest associatedwith our outstanding debt is included as a component of accrued expenses and other current liabilities in the accompanying consolidated balance sheets. Asof March 28, 2015, accrued interest totaled $0.6 million.Other Credit FacilitiesThe other debt as of March 28, 2015 includes the real estate mortgage loan of $0.9 million and short term bank borrowings of $0.2 million under operatinglines of credit.In December 2000, we entered into a $10.0 million real estate mortgage agreement (the “Mortgage Agreement”) with an investment firm. The MortgageAgreement requires principal and interest payments of $0.1 million per month for a period of 180 months, commencing February 1, 2001. The MortgageAgreement provides for interest to accrue on the unpaid principal balance at a rate of 8.41% per annum. Borrowings under the Mortgage Agreement, with acarrying value of approximately $0.9 million and $1.9 million as of March 28, 2015 and March 29, 2014, respectively, are secured by the land, building andbuilding improvements at our headquarters and manufacturing facility in the U.S. There are no financial covenants in the terms and conditions of thisagreement.Maturity ProfileThe maturity profile of all gross long-term debt, exclusive of debt discounts, as of March 28, 2015 is presented below:Fiscal year (in thousands) MortgageObligation Credit Facilities Bank loans andother borrowings Total2016 $851 $21,342 $144 $22,3372017 — 42,683 65 42,7482018 — 45,054 17 45,0712019 — 151,763 — 151,7632020 — 168,564 — 168,564 $851 $429,406 $226 $430,48369Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)9. INCOME TAXESDomestic and foreign income before provision for income tax is as follows:(In thousands)March 28, 2015 March 29, 2014 March 30, 2013Domestic$(17,265) $(6,859) $17,360Foreign48,430 43,260 32,537Total$31,165 $36,401 $49,897The income tax provision contains the following components:(In thousands)March 28, 2015 March 29, 2014 March 30, 2013Current Federal$3,526 $(4,896) $3,795State898 873 1,324Foreign5,614 5,478 5,389Total current$10,038 $1,455 $10,508Deferred Federal1,227 (1,785) 1,644State3,215 207 (229)Foreign(212) 1,376 (826)Total deferred$4,230 $(202) $589Total$14,268 $1,253 $11,097Our subsidiary in Puerto Rico has been granted a fifteen year tax grant which expires in 2027. Our qualification for the tax grant is dependent on thecontinuation of our manufacturing activities in Puerto Rico. We benefit from a reduced tax rate on our earnings in Puerto Rico under the tax grant.Our subsidiary in Switzerland operates as a principle company for direct federal tax purposes. Operating under this structure affords our Swiss subsidiary areduced tax rate in Switzerland. Our Swiss subsidiary also operates under a 10 year tax holiday set to expire in 2018.Tax affected, significant temporary differences comprising the net deferred tax liability are as follows:(In thousands)March 28, 2015 March 29, 2014Depreciation$(23,733) $(23,658)Amortization(24,038) (18,618)Inventory6,189 7,371Hedging84 321Accruals, reserves and other15,927 10,368Net operating loss carry-forward5,392 1,507Stock based compensation10,652 8,757Tax credit carry-forward, net8,678 2,660Gross deferred taxes$(849) $(11,292)Less valuation allowance(16,027) (3,083)Net deferred tax liability$(16,876) $(14,375)The valuation allowance increased by $12.9 million during 2015, primarily due to recording a valuation allowance against domestic deferred tax assets thatwe have determined are not more-likely-than-not realizable. In determining the need for a valuation allowance, we have assessed the available means ofrecovering deferred tax assets, including the ability to carryback net operating losses, the existence of reversing temporary differences, the availability of taxplanning strategies and available70Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)sources of future taxable income. We have also considered the ability to implement certain strategies that would, if necessary, be implemented to acceleratetaxable income and use expiring deferred tax assets. We believe we are able to support the deferred tax assets recognized as of the end of the year based on allof the available evidence. The worldwide net deferred tax liability as of March 28, 2015 includes deferred tax liabilities related to amortizable goodwill,which are indefinite lived and are not considered to be a source of taxable income. As of March 28, 2015, we maintain a valuation allowance against theportion of our U.S. net deferred tax assets that are not more-likely-than-not realizable and a full valuation allowance against the net deferred tax assets ofcertain foreign subsidiaries.At March 28, 2015, we have U.S. federal net operating loss carry-forwards of approximately $11.7 million, U.S. state net operating loss carry-forwards of$23.6 million, federal tax credit carry-forwards of $6.4 million and state tax credit carry-forwards of $4.0 million that are available to reduce future taxableincome. A portion of the federal net operating losses are subject to an annual limitation due to the ownership change limitations set forth under InternalRevenue Code Sections 382. Certain of the aforementioned amounts have not been recognized because they relate to excess stock based compensation. AtMarch 28, 2015, $1.5 million of the federal net operating loss carry-forwards, $4.0 million of the state net operating loss carry-forwards, none of the federaltax credit carry-forwards and none of the state tax credit carry-forwards relate to excess stock based compensation tax deductions for which the benefit will berecorded to additional paid-in capital when recognized. The federal and state net operating losses begin to expire in 2022 and 2019, respectively. The federaland state tax credits begin to expire in 2023 and 2025, respectively.As of March 28, 2015, we have foreign net operating losses of approximately $6.6 million that are available to reduce future income. Substantially all of ourforeign net operating loss carry-forwards have unlimited carryover periods.Income taxes have not been provided on the undistributed earnings of foreign subsidiaries of approximately $300.2 million, because such earnings areconsidered to be indefinitely reinvested in the business. The accumulated earnings in the foreign subsidiaries are primarily utilized to fund working capitalrequirements as our subsidiaries continue to expand their operations, to service existing debt obligations and to fund future foreign acquisitions. We do notbelieve it is practicable to estimate the amount of income taxes payable on the earnings that are indefinitely reinvested in foreign operations.The income tax provision from operations differs from tax provision computed at the 35.0% U.S. federal statutory income tax rate due to the following:(In thousands)March 28, 2015 March 29, 2014 March 30, 2013Tax at federal statutory rate$10,907 35.0 % $12,739 35.0 % $17,464 35.0 %Domestic manufacturing deduction— — % — — % (504) (1.0)%Difference between U.S. and foreign tax(6,929) (22.2)% (10,846) (29.8)% (5,584) (11.2)%State income taxes net of federal benefit(818) (2.6)% (252) (0.7)% 718 1.4 %Change in uncertain tax positions(1,762) (5.7)% (1,678) (4.6)% (580) (1.2)%Intercompany loan deduction— — % (2,185) (6.0)% — — %Non-deductible expenses1,237 4.0 % 1,035 2.8 % 1,178 2.4 %Research credits(1,000) (3.2)% (688) (1.9)% (799) (1.6)%Naked Credit3,826 12.3 % — — % — — %Valuation allowance8,524 27.4 % 2,400 6.6 % — — %Other, net283 0.8 % 728 2.0 % (796) (1.6)%Income tax provision$14,268 45.8 % $1,253 3.4 % $11,097 22.2 %Unrecognized Tax BenefitsUnrecognized tax benefits represent uncertain tax positions for which reserves have been established. As of March 28, 2015, we had $7.1 million ofunrecognized tax benefits, of which $2.0 million would impact the effective tax rate, if recognized. As of March 29, 2014, we had $5.6 million ofunrecognized tax benefits, all of which would impact the effective tax rate, if recognized. At March 30, 2013, we had $6.9 million of unrecognized taxbenefits, of which $6.7 million would impact the effective tax rate, if recognized.71Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)During the fiscal year ended March 28, 2015 our unrecognized tax benefits were increased by $1.5 million due primarily to tax reserve increases for prior yearadditions, partially offset by the release of certain previously established reserves in connection with the closure of tax statutes of limitations.The following table summarizes the activity related to our gross unrecognized tax benefits for the fiscal years ended March 28, 2015, March 29, 2014 andMarch 30, 2013:(In thousands)March 28, 2015 March 29, 2014 March 30, 2013Beginning Balance$5,604 $6,930 $6,885Additions based upon positions related to the current year— — 1,192Additions for tax positions of prior years3,234 990 18Settlements with taxing authorities(338) — (80)Closure of statute of limitations(1,430) (2,316) (1,085)Ending Balance$7,070 $5,604 $6,930As of March 28, 2015 we anticipate that the liability for unrecognized tax benefits for uncertain tax positions could change by up to $0.9 million in the nexttwelve months, as a result of closure of various 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 taxexpense. Approximately $0.7 million and $0.8 million of gross interest and penalties were accrued at March 28, 2015 and March 29, 2014, respectively andis not included in the amounts above. There was a benefit included in tax expense of $0.3 million, zero and $0.1 million for the periods ended March 28,2015, March 29, 2014 and March 30, 2013, respectively.We conduct business globally and, as a result, file consolidated and separate Federal, state and foreign income tax returns in multiple jurisdictions. In thenormal course of business, we are subject to examination by taxing authorities throughout the world. With a few exceptions overseas, we are no longersubject to U.S. federal, state and local, or foreign income tax examinations for years before 2012.10. COMMITMENTS AND CONTINGENCIESWe lease facilities and certain equipment under operating leases expiring at various dates through fiscal 2028. Facility leases require us to pay certaininsurance expenses, maintenance costs and real estate taxes.Approximate future basic rental commitments under operating leases as of March 28, 2015 are as follows (in thousands):Fiscal Year Ending (In thousands) 2016$6,79720174,78020183,75820192,4272020 and thereafter11,585 $29,347Rent expense in fiscal 2015, 2014, and 2013 was $6.3 million, $7.7 million and $7.0 million, respectively. Some of the Company's operating leases includerenewal provisions, escalation clauses and options to purchase the facilities that we lease.We are presently engaged in various legal actions, and although our ultimate liability cannot be determined at the present time, we believe, based onconsultation with counsel, that any such liability will not materially affect our consolidated financial position or our results of operations.72Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Italian Employment LitigationOur Italian manufacturing subsidiary is party to several actions initiated by employees of the facility in Ascoli-Piceno, Italy where we have ceasedmanufacturing operations. These include actions claiming (i) working conditions and minimum salaries should have been established by either a differentclassification under their national collective bargaining agreement or a different agreement altogether, (ii) certain solidarity agreements, which arearrangements between the Company, employees and the government to continue full pay and benefits for employees who would otherwise be terminated intimes of low demand, are void, and (iii) payment of the extra time used for changing into and out of the working clothes at the beginning and end of eachshift.In addition, a union represented in the Ascoli plant has filed an action claiming that the Company discriminated against it in favor of three other representedunions by (i) interfering with an employee referendum, (ii) interfering with an employee petition to recall union representatives from office, and (iii)excluding the union from certain meetings.Finally, we have been added as defendants on claims filed against Pall Corporation prior to our acquisition of the plant in August 2012. These claims relateto agreements to "freeze" benefit allowances for a certain period in exchange for Pall's commitments on hiring and plant investment.As of March 28, 2015, the total amount of damages claimed by the plaintiffs in these matters is approximately $3.7 million; however, it is not possible at thispoint in the proceedings to accurately evaluate the likelihood or amount of any potential losses. We may receive other similar claims in the future.11. CAPITAL STOCKStock PlansThe 2005 Long-Term Incentive Compensation Plan (the “2005 Incentive Compensation Plan”) permits the award of non-qualified stock options, incentivestock options, stock appreciation rights, restricted stock, deferred stock/restricted stock units, other stock units and performance shares to the Company’s keyemployees, officers and directors. The 2005 Incentive Compensation Plan is administered by the Compensation Committee of the Board of Directors (the“Committee”) consisting of three independent members of our Board of Directors.The maximum number of shares available for award under the 2005 Incentive Compensation Plan is 15,024,920. The maximum number of shares that may beissued pursuant to incentive stock options may not exceed 500,000. Any shares that are subject to the award of stock options shall be counted against thislimit as one (1) share for every one (1) share issued. Any shares that are subject to awards other than stock options shall be counted against this limit as3.26 shares for every one (1) share granted.Each award has different terms under the 2005 Incentive Compensation Plan. Options, Restricted Stock Awards and Restricted Stock Units becomeexercisable, or in the case of restricted stock, the resale restrictions are released in a manner determined by the Committee, generally over a four year periodfor employees and one year from grant for non-employee directors, and all options expire not more than 7 years from the date of the grant. The exercise pricefor options granted under the 2005 Incentive Compensation Plan is determined by the Committee, but in no event shall such exercise price be less than thefair market value of the common stock at the time of the grant. Holders of market stock units are eligible to receive a share of Haemonetics’ stock for eachmarket stock unit based on the performance of the stock through March 31, 2017. If our stock is below a minimum threshold price of $50 per share during therelevant measurement period, the holders receive no market share units. If the stock achieves certain price levels, the holders are eligible to receive upto three times the “target” amount of market share units. As a result, we may issue up to 863,046 shares at a stock price of $85 per share or higher inconnection with these grants.At March 28, 2015, there were outstanding options to purchase 3,761,666 shares, 357,547 shares of restricted stock outstanding and 287,682 market stockunits outstanding under this plan and 999,243 shares available for future grant.The Company had a long-term incentive stock option plan and a non-qualified stock option plan, (the “2000 Long-term Incentive Plan”) which permitted theissuance of a maximum of 7,000,000 shares of our common stock pursuant to incentive and non-qualified stock options granted to key employees, officersand directors. The plan was terminated in connection with the adoption of the 2005 Incentive Compensation Plan. The remaining 55,750 optionsoutstanding under this plan were exercised in fiscal 2015 and no further options will be granted under this plan.73Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The Company has an Employee Stock Purchase Plan (the “Purchase Plan”) under which a maximum of 1,400,000 shares (subject to adjustment for stocksplits and similar changes) of common stock may be purchased by eligible employees. Substantially all of our full-time employees are eligible to participatein the Purchase Plan.The Purchase Plan provides for two “purchase periods” within each of our fiscal years, the first commencing on November 1 of each year and continuingthrough April 30 of the next calendar year, and the second commencing on May 1 of each year and continuing through October 31 of such year. Shares arepurchased through an accumulation of payroll deductions (of not less than 2% or more than 15% of compensation, as defined) for the number of whole sharesdetermined by dividing the balance in the employee’s account on the last day of the purchase period by the purchase price per share for the stock determinedunder the Purchase Plan. The purchase price for shares is the lower of 85% of the fair market value of the common stock at the beginning of the purchaseperiod, or 85% of such value at the end of the purchase period.Stock-based compensation expense of $14.1 million, $13.1 million, and $11.0 million was recognized under ASC Topic 718, Compensation — StockCompensation, for the fiscal year ended March 28, 2015, March 29, 2014, and March 30, 2013, respectively. The related income tax benefit recognized was$4.5 million, $4.3 million, and $3.5 million for the fiscal year ended March 28, 2015, March 29, 2014, and March 30, 2013, respectively. We recognizestock-based compensation on a straight line basis.ASC Topic 718 requires that cash flows relating to the benefits of tax deductions in excess of stock compensation cost recognized be reported as a financingcash flow, rather than as an operating cash flow. This excess tax benefit was $1.6 million, $2.4 million, and $4.1 million for the fiscal year ended March 28,2015, March 29, 2014, and March 30, 2013, respectively.Stock OptionsA summary of stock option activity for the fiscal year ended March 28, 2015 is as follows: OptionsOutstanding(shares) WeightedAverageExercise Priceper Share WeightedAverageRemainingLife (years) AggregateIntrinsicValue($000’s)Outstanding at March 29, 20143,834,372 $32.93 4.19 $9,436Granted592,024 34.87 Exercised(500,103) 26.14 Forfeited(164,627) 38.13 Outstanding at March 28, 20153,761,666 $33.90 4.02 $37,067 Exercisable at March 28, 20152,281,022 $31.57 2.92 $27,826 Vested or expected to vest at March 28, 20153,596,493 $33.73 3.93 $36,066The total intrinsic value of options exercised was $5.6 million, $11.7 million, and $20.9 million during fiscal 2015, 2014, and 2013, respectively.As of March 28, 2015, there was $9.2 million of total unrecognized compensation cost related to non-vested stock options. This cost is expected to berecognized over a weighted average period of 2.37 years.The fair value was estimated using the Black-Scholes option-pricing model based on the weighted average of the high and low stock prices at the grant dateand the weighted average assumptions specific to the underlying options. Expected volatility assumptions are based on the historical volatility of ourcommon stock. The risk-free interest rate was selected based upon yields of U.S. Treasury issues with a term equal to the expected life of the option beingvalued. The expected life of the option was estimated with reference to historical exercise patterns, the contractual term of the option and the vesting period.74Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The assumptions utilized for option grants during the periods presented are as follows: March 28, 2015 March 29, 2014 March 30, 2013Volatility22.5% 24.8% 26.4%Expected life (years)4.9 4.9 4.9Risk-free interest rate1.5% 1.3% 0.8%Dividend yield0.0% 0.0% 0.0%The weighted average grant date fair value of options to purchase one share granted during 2015, 2014, and 2013 was approximately $7.91, $10.15, and$9.76, respectively.We have applied, based on an analysis of our historical forfeitures, an annual forfeiture rate of 8% to all unvested stock options as of March 28, 2015 andMarch 29, 2014, which represents the portion that we expect will be forfeited each year over the vesting period.Employee Stock Purchase PlanThe fair values of shares purchased under the Employee Stock Purchase Plan are estimated using the Black-Scholes single option-pricing model with thefollowing weighted average assumptions: March 28, 2015 March 29, 2014 March 30, 2013Volatility23.7% 22.9% 24.9%Expected life (months)6 6 6Risk-free interest rate0.1% 0.1% 0.2%Dividend Yield0.0% 0.0% 0.0%The weighted average grant date fair value of the six-month option inherent in the Purchase Plan was approximately $7.09, $8.25, and $8.50 during fiscal2015, 2014, and 2013, respectively.Performance Stock Units, Restricted Stock Units and Market Stock UnitsOn October 22, 2014, the Company issued a new type of equity award under its 2005 Incentive Compensation Plan, Performance Share Units, with a targetaward level of 129,130 shares for 14 senior executives.The value of these Performance Share Units is based upon the Company’s total shareholder return for the period from October 1, 2014 to their vesting date ofSeptember 30, 2017 relative to the total shareholder return of the companies comprising the Standard & Poor's Health Care Equipment Index (the "Index").These awards are conditioned upon the employees’ continued employment with the Company through the vesting date. If an employee is no longeremployed by the Company at the vesting date as a result of a Qualifying Retirement, then the continued employment requirement shall cease to apply andprorated shares awarded will be determined as of the vesting date.Total shareholder return is equal to the appreciation of the share price during a performance period, plus any dividends paid on the applicable company’scommon stock. Relative total shareholder return compares the company's total shareholder return to the Index.The actual number of shares awarded under a Performance Share Unit may range from 0% to a maximum of 200% of the target award depending upon theCompany’s relative total shareholder return. If the Company’s total shareholder return for the performance period is negative, then any share payout will becapped at 100% of the target award, regardless of the Company's performance relative to the Index.Grant date fair values for the Performance Share Units were estimated using a Monte Carlo Simulation of the Company's and the Index's stock pricecorrelation over three-year time horizons matching the Performance Share Units performance period with a risk free rate of 0.78%, volatility of 20% and 12months of dividend history.75Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The estimated fair value, potential shares to be awarded, recognized compensation expense and future compensation expense to be recognized, includingestimated forfeitures, for Performance Share Unit awards are as follows: For Year Ended March 28, 2015 Performance PeriodAward Fair Valueas of October 22,2014RecognizedCompensationExpenseUnrecognizedCompensationExpenseMinimum SharesTarget SharesMaximum Shares(Per share)(In thousands)(In thousands)Oct 1, 2014 - Sept 30, 2017$35.09$662$3,869—129,130258,260As of March 28, 2015, there were 287,682 market stock units outstanding. We determined the fair value of each market stock unit to be $37.42, utilizing aMonte Carlo simulation model based on an expected term of 3.7 years, a risk free rate of 0.9%, volatility of 20% and no dividends. The grant date fair valueof these awards totaled $11.2 million and will be expensed evenly over the 3.7 year period through the cliff-vesting date of March 31, 2017.As of March 28, 2015, there was $13.2 million of total unrecognized compensation cost related to non-vested restricted stock units and market stock units.This cost is expected to be recognized over a weighted average period of 2.37 years.A summary of performance stock units, restricted stock units and market stock units activity for the fiscal year ended March 28, 2015 is as follows: Shares WeightedAverageMarket Valueat Grant DateUnvested at March 29, 2014599,673 $37.70Awarded351,666 $35.18Released(110,048) $36.65Forfeited(66,932) $37.83Unvested at March 28, 2015774,359 $36.7012. EARNINGS PER SHARE (“EPS”)The following table provides a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations. Basic EPS iscomputed by dividing net income by weighted average shares outstanding. Diluted EPS includes the effect of potentially dilutive common shares. Thecommon stock weighted average number of shares has been retroactively adjusted for the stock split.(In thousands, except per share amounts)March 28, 2015 March 29, 2014 March 30, 2013Basic EPS Net income$16,897 $35,148 $38,800Weighted average shares51,533 51,611 51,349Basic income per share$0.33 $0.68 $0.76Diluted EPS Net income$16,897 $35,148 $38,800Basic weighted average shares51,533 51,611 51,349Net effect of common stock equivalents556 766 910Diluted weighted average shares52,089 52,377 52,259Diluted income per share$0.32 $0.67 $0.74Weighted average shares outstanding, assuming dilution, excludes the impact of 1.6 million, 1.1 million and 0.5 million stock options for fiscal years 2015,2014 and 2013, respectively, because these securities were anti-dilutive during the noted periods.76Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)13. PROPERTY, PLANT AND EQUIPMENTProperty and equipment consisted of the following:(In thousands) March 28, 2015 March 29, 2014Land $9,468 $7,168Building and building improvements 118,384 83,439Plant equipment and machinery 220,793 236,539Office equipment and information technology 118,810 111,925Haemonetics equipment 264,307 262,784 Total 731,762 701,855Less: accumulated depreciation and amortization (409,814) (430,418)Property, plant and equipment, net $321,948 $271,437Depreciation expense was $52.6 million, $52.6 million, and $43.4 million for fiscal 2015, 2014, and 2013, respectively.14. RETIREMENT PLANSDefined Contribution PlansWe have a Savings Plus Plan that is a 401(k) plan that allows our U.S. employees to accumulate savings on a pre-tax basis. In addition, matchingcontributions are made to the Plan based upon pre-established rates. Our matching contributions amounted to approximately $5.8 million in 2015, $6.2million in 2014, and $4.9 million in 2013. Upon Board approval, additional discretionary contributions can also be made. No discretionary contributionswere made for the Savings Plan in fiscal 2015, 2014, or 2013.Some of our subsidiaries also have defined contribution plans, to which both the employee and the employer make contributions. The employercontributions to these plans totaled $1.0 million, $0.8 million, and $2.4 million in fiscal 2015, 2014, and 2013, respectively.Defined Benefit PlansASC Topic 715, Compensation — Retirement Benefits, requires an employer to: (a) recognize in its statement of financial position an asset for a plan’s over-funded status or a liability for a plan’s under-funded status; (b) measure a plan’s assets and its obligations that determine its funded status as of the end of theemployer’s fiscal year (with limited exceptions); and (c) recognize changes in the funded status of a defined benefit post retirement plan in the year in whichthe changes occur. Accordingly, the Company is required to report changes in its funded status in comprehensive income on its Statement of Stockholders’Equity and Comprehensive Income.Benefits under these plans are generally based on either career average or final average salaries and creditable years of service as defined in the plans. Theannual cost for these plans is determined using the projected unit credit actuarial cost method that includes actuarial assumptions and estimates which aresubject to change.77Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Some of the our foreign subsidiaries have defined benefit pension plans covering substantially all full time employees at those subsidiaries. Net periodicbenefit costs for the plans in the aggregate include the following components:(In thousands)March 28, 2015 March 29, 2014 March 30, 2013Service cost$2,979 $3,351 $2,759Interest cost on benefit obligation686 623 639Expected (return)/loss on plan assets(449) (435) (413)Actuarial loss/(gain)107 88 196Amortization of unrecognized prior service cost(29) 182 (14)Amortization of unrecognized transition obligation45 47 48Totals$3,339 $3,856 $3,215The activity under those defined benefit plans are as follows:(In thousands)March 28, 2015 March 29, 2014Change in Benefit Obligation: Benefit Obligation, beginning of year$(32,621) $(30,126)Service cost(2,979) (3,351)Interest cost(686) (623)Benefits paid4,902 4,474Actuarial (loss)/gain(6,883) 55Employee and plan participants contribution(2,978) (2,963)Plan Amendments114 419Foreign currency changes564 (506)Benefit obligation, end of year$(40,567) $(32,621)Change in Plan Assets: Fair value of plan assets, beginning of year$19,981 $19,577Company contributions2,112 2,241Benefits paid(4,621) (4,641)Gain/(Loss) on plan assets506 100Employee and plan participants contributions2,851 3,087Foreign currency changes2,336 (383)Fair value of Plan Assets, end of year$23,165 $19,981Funded Status$(17,402) $(12,640)Unrecognized net actuarial loss/(gain)11,096 5,899Unrecognized initial obligation64 94Unrecognized prior service cost(459) (422)Net amount recognized$(6,701) $(7,069)One of the benefit plans is funded by benefit payments made by the Company. Accordingly that plan has no assets included in the information presentedabove. The total liability for this plan was $9.2 million and $7.4 million as of March 28, 2015 and March 29, 2014, respectively.The accumulated benefit obligation for all plans was $34.9 million and $30.9 million for the fiscal year ended March 28, 2015 and March 29, 2014,respectively.The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the pension plans with an accumulated benefit obligationin excess of plan assets were $40.6 million, $34.9 million and $23.2 million, respectively, as of78Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)March 28, 2015 and $32.6 million, $30.9 million and $20.0 million, respectively, as of March 29, 2014. There were no plans where the plan assets weregreater than the accumulated benefit obligation as of March 28, 2015 and March 29, 2014.The components of the change recorded in our accumulated other comprehensive income related to our defined benefit plans, net of tax, are as follows (inthousands):Balance, March 31, 2012$(4,253)Obligation at transition556Actuarial loss(1,237)Prior service cost(139)Balance as of March 30, 2013$(5,073)Obligation at transition172Actuarial loss(129)Prior service cost438Balance as of March 29, 2014$(4,592)Obligation at transition(19)Actuarial loss(6,198)Prior service cost1,886Balance as of March 28, 2015$(8,923)We expect to amortize $0.6 million from accumulated other comprehensive loss during 2016.The weighted average rates used to determine the net periodic benefit costs and projected benefit obligations were as follows: March 28, 2015 March 29, 2014 March 30, 2013Discount rate0.93% 2.02% 1.97%Rate of increased salary levels1.65% 1.57% 1.42%Expected long-term rate of return on assets1.68% 1.94% 1.92%Assumptions for expected long-term rate of return on plan assets are based upon actual historical returns, future expectations of returns for each asset classand the effect of periodic target asset allocation rebalancing. The results are adjusted for the payment of reasonable expenses of the plan from plan assets.We have no other material obligation for post-retirement or post-employment benefits.Our investment policy for pension plans is to balance risk and return through a diversified portfolio to reduce interest rate and market risk. Maturities aremanaged so that sufficient liquidity exists to meet immediate and future benefit payment requirements.ASC Topic 820, Fair Value Measurements and Disclosures, provides guidance for reporting and measuring the plan assets of our defined benefit pensionplan at fair value as of March 28, 2015. Using the same three-level valuation hierarchy for disclosure of fair value measurements as described in Note 7, all ofthe assets of the Company’s plan are classified within Level 2 of the fair value hierarchy because the plan assets are primarily insurance contracts.Expected benefit payments for both plans are estimated using the same assumptions used in determining the company’s benefit obligation at March 28,2015. Benefit payments will depend on future employment and compensation levels, average years employed and average life spans, among other factors,and changes in any of these factors could significantly affect these estimated future benefit payments.79Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Estimated future benefit payments during the next five years and in the aggregate for the five fiscal years thereafter, are as follows (in thousands):Expected Benefit Payments Fiscal Year 2016$1,735Fiscal Year 2017$1,654Fiscal Year 2018$1,502Fiscal Year 2019$1,610Fiscal Year 2020$1,732Fiscal Year 2021-2024$7,493The Company's contributions for fiscal 2016 are expected to be consistent with the current year.15. SEGMENT INFORMATIONSegment Definition CriteriaWe manage a global business which designs, manufactures and markets blood management solutions. Our solutions are marketed through operatingsegments organized primarily on geography: North America Plasma, North America Blood Center and Hospital, Europe, Asia Pacific and Japan.ASC 280, Segment Reporting, permits the aggregation of segments which are economically similar as well as similar in all of the following areas: (i) thenature of the products and services, (ii) the nature of the production processes, (iii) the type or class of customer for their products and services, (iv) themethods used to distribute their products or provide their services, and (v) the nature of the regulatory environment.The Company believes aggregating the operating segments noted above is consistent with the key principles of ASC 280, based on the determination thatthey are economically similar. The Company believes a single reportable segment is consistent with its basic organizational structure and believesaggregation is consistent with its primary basis for decision making and accordingly does not conflict with the basic principles of ASC 280.Enterprise Wide Disclosures About Product and ServicesWe have four global product families: plasma, blood center, hospital, and software solutions.Our products include whole blood disposables, equipment devices and the related disposables used with these devices. Disposables include part of plasma,blood center, and hospital product families. Plasma consists of the disposables used to perform apheresis for the separation of whole blood components andsubsequent collection of plasma to be used as a raw material for biologically derived pharmaceuticals. Blood center consists of disposables which separatewhole blood for the subsequent collection of platelets, plasma, red cells, or a combination of these components for transfusion to patients as well asdisposables for manual whole blood collection. Hospital consists of surgical disposables (principally the Cell Saver® autologous blood recovery systemtargeted to procedures that involve rapid, high volume blood loss such as cardiovascular surgeries), the OrthoPAT® orthopedic perioperative autotransfusionsystem designed to operate both during and after surgery to recover and wash the patient’s red cells to prepare them for reinfusion, and diagnostics products(principally the TEG® Thrombelastograph® hemostasis analyzer used to help assess a surgical patient’s hemostasis during and after surgery).Software solutions include information technology platforms that assist blood centers, plasma centers, and hospitals to more effectively manage regulatorycompliance and operational efficiency.80Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Revenues from External Customers:(In thousands)March 28, 2015 March 29, 2014 March 30, 2013Disposable revenues Plasma disposables$319,190 $291,895 $268,900Blood center disposables Platelet152,588 156,643 169,602Red cell42,700 42,378 49,733Whole blood143,905 190,698 138,436 339,193 389,719 357,771Hospital disposables Surgical62,540 66,876 73,508OrthoPAT20,316 25,042 30,230Diagnostics42,187 33,302 27,356 125,043 125,220 131,094Disposables revenue783,426 806,834 757,765Software solutions72,185 70,441 69,952Equipment & other54,762 61,234 64,273Total revenues$910,373 $938,509 $891,990Enterprise Wide Disclosures About Product and ServicesYear Ended (in thousands)March 28, 2015UnitedStates OtherNorthAmerica TotalNorthAmerica Japan OtherAsia TotalEurope TotalConsolidatedNet revenues$494,788 $9,617 $504,405 $88,298 $102,095 $215,575 $910,373Total Assets$810,159 $240,610 $1,050,769 $41,621 $79,084 $313,943 $1,485,417Long-Lived Assets$532,187 $212,548 $744,735 $9,230 $46,857 $114,318 $915,140March 29, 2014UnitedStates OtherNorthAmerica TotalNorthAmerica Japan OtherAsia TotalEurope TotalConsolidatedNet revenues$500,719 $9,557 $510,276 $108,679 $94,762 $224,792 $938,509Total Assets$810,409 $225,998 $1,036,407 $53,207 $53,055 $371,509 $1,514,178Long-Lived Assets$519,396 $211,624 $731,020 $11,522 $17,269 $131,391 $891,202March 30, 2013UnitedStates OtherNorthAmerica TotalNorthAmerica Japan OtherAsia TotalEurope TotalConsolidatedNet revenues$454,874 $6,851 $461,725 $120,726 $84,860 $224,679 $891,990Total Assets$830,754 $225,849 $1,056,603 $44,189 $41,037 $320,088 $1,461,917Long-Lived Assets$503,606 $209,439 $713,045 $12,977 $8,076 $117,717 $851,815The Long-Lived Assets reported above include Goodwill, Intangibles and Net Property, Plant and Equipment.81Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)16. RESTRUCTURINGOn an ongoing basis, we review the global economy, the healthcare industry, and the markets in which we compete. From these reviews we identifyopportunities to improve efficiencies, enhance commercial capabilities, better align our resources and offer customers better comprehensive solutions. Inorder to realize these opportunities, from time to time, we undertake restructuring and other initiatives to transform our business.On May 1, 2013, we committed to a plan to pursue identified Value Creation and Capture initiatives ("VCC"). These opportunities include investment inproduct line extensions and next generation products, enhancement of commercial capabilities and a transformation of our manufacturing network. Thetransformation of our manufacturing network will take place over three years and includes changes to the current manufacturing footprint and supply chainstructure (the "Network Plan"). To implement the Network Plan, we are (i) discontinuing manufacturing activities at our Braintree, Massachusetts, Ascoli-Piceno, Italy and Bothwell, Scotland facilities, (ii) creating a technology center of excellence for product development in Braintree, Massachusetts, (iii)expanding our current facility in Tijuana, Mexico, (iv) engaging Sanmina Corporation as a contract manufacturer to produce certain medical equipment, and(v) building a new manufacturing facility in Penang, Malaysia closer to our customers in Asia. See liquidity and capital resources discussion of this MD&Afor further discussion of the costs of these activities.We estimate we will incur approximately $45.0 million of restructuring and restructuring related expense and spend approximately $27.0 million to completethese initiatives in fiscal 2016.For the year ended March 28, 2015, we incurred $36.9 million of restructuring and restructuring related charges and paid approximately $42.3 million withapproximately $13.3 million payable within the next twelve months. The substantial majority of restructuring expenses have been included as a componentof selling, general and administrative expense in the accompanying consolidated statements of income and comprehensive income.The following summarizes the restructuring activity for the fiscal year ended March 28, 2015, March 29, 2014, and March 30, 2013, respectively:(In thousands)Balance at March 29,2014 CostIncurred Payments Less Non-CashAdjustments Restructuring AccrualBalance at March 28,2015Severance and other employee costs$22,908 $19,879 $(26,394) $— $16,393Other costs728 15,362 (15,871) — 219Accelerated depreciation— 1,326 — (1,326) —Asset write-down— 296 — (296) — $23,636 $36,863 $(42,265) $(1,622) $16,612(In thousands)Balance at March 30,2013 CostIncurred Payments Less Non-CashAdjustments Restructuring AccrualBalance at March 29,2014Severance and other employee costs$3,089 $31,492 $(11,673) $— $22,908Other costs173 14,254 (13,699) — 728Accelerated depreciation— 2,390 — (2,390) —Asset write down— 915 — (915) — $3,262 $49,051 $(25,372) $(3,305) $23,63682Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(In thousands)Balance at March 31,2012 CostIncurred Payments Less Non-CashAdjustments Restructuring AccrualBalance at March 30,2013Severance and other employee costs$1,461 $6,214 $(4,586) $— $3,089Facility related costs533 431 (791) — 173Asset write down— 4,247 — (4,247) — $1,994 $10,892 $(5,377) $(4,247) $3,262We deployed significant financial resources for these activities. Many of the activities necessary to complete the VCC initiatives include severance andother costs which qualify as restructuring expenses under ASC 420, Exit or Disposal Cost Obligations. We incurred $36.9 million in severance, asset write-offs and other restructuring charges in fiscal 2015. In addition, we also incurred $29.9 million of costs that do not constitute restructuring under ASC 420,which we refer to as "Transformation Costs". These costs consist primarily of expenditures directly related to our transformation activities including programmanagement, integration and product line transfer teams, infrastructure related costs, accelerated depreciation and asset disposals. The table below presents restructuring and transformation costs recorded in cost of goods sold, research and development, selling, general and administrativeexpenses and other (expense) income, net in our statements of income and comprehensive income for the periods presented. In fiscal 2015 and 2014,Transformation Costs were primarily related to our VCC initiatives. In fiscal 2013, the majority of our Transformation Costs were related to the integration ofthe whole blood acquisition.Transformation costs (in thousands)March 28, 2015 March 29, 2014 March 30, 2013Integration and other costs$24,061 $30,701 $60,878Accelerated depreciation930 4,203 687Asset disposal4,925 796 —Total$29,916 $35,700 $61,565 Restructuring costs (in thousands)March 28, 2015 March 29, 2014 March 30, 2013Severance and other employee costs$19,879 $31,492 $6,214Other costs15,362 14,254 431Accelerated depreciation1,326 2,390 —Asset disposal296 915 4,247Total$36,863 $49,051 $10,892 Total restructuring and transformation$66,779 $84,751 $72,457 83Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)17. CAPITALIZATION OF SOFTWARE DEVELOPMENT COSTSThe cost of software that is developed or obtained for internal use is accounted for pursuant to ASC Topic 350, Intangibles — Goodwill and Other. Pursuantto ASC Topic 350, the Company capitalizes costs incurred during the application development stage of software developed for internal use, and expensescosts incurred during the preliminary project and the post-implementation operation stages of development. The costs capitalized for each project areincluded in intangible assets in the consolidated financial statements.For costs incurred related to the development of software to be sold, leased, or otherwise marketed, the Company applies the provisions of ASC Topic 985-20,Software - Costs of Software to be Sold, Leased or Marketed, which specifies that costs incurred internally in researching and developing a computersoftware product should be charged to expense until technological feasibility has been established for the product. Once technological feasibility isestablished, all software costs should be capitalized until the product is available for general release to customers.We capitalized $9.5 million and $6.0 million in software development costs for ongoing initiatives during the fiscal years ended March 28, 2015 andMarch 29, 2014, respectively. At March 28, 2015 and March 29, 2014, we have a total of $39.7 million and $31.7 million of software costs capitalized, ofwhich $7.9 million and $15.6 million are related to in process software development initiatives, respectively. In connection with these developmentactivities, we capitalized interest of $0.2 million and $0.4 million in fiscal 2015 and 2014, respectively. We amortize capitalized costs when the products arereleased for sale. During fiscal 2015, $15.7 million of capitalized costs were placed into service, compared to $10.4 million of capitalized costs placed intoservice during fiscal 2014. Amortization of capitalized software development cost expense was $3.2 million, $1.1 million and $0.9 million for fiscal 2015,2014 and 2013 respectively.18. SUMMARY OF QUARTERLY DATA (UNAUDITED)(In thousands) Three months endedFiscal 2015 June 28, 2014 September 27, 2014 December 27, 2014 March 28, 2015Net revenues $224,488 $227,580 $231,827 $226,478Gross profit $106,278 $108,114 $111,661 $108,365Operating (loss) income $(1,666) $12,407 $18,260 $11,539Net (loss) income $(3,649) $7,487 $15,988 $(2,929)Per share data: Net (loss) Income: Basic $(0.07) $0.15 $0.31 $(0.06)Diluted $(0.07) $0.14 $0.31 $(0.06) Three months endedFiscal 2014 June 29, 2013 September 28, 2013 December 28, 2013 March 29, 2014Net revenues $219,543 $235,755 $242,120 $241,091Gross profit $111,412 $119,884 $121,629 $115,440Operating (loss) income $(6,608) $23,120 $17,554 $12,366Net (loss) income $(7,874) $16,548 $16,290 $10,184Per share data: Net (loss) Income: Basic $(0.15) $0.32 $0.31 $0.20Diluted $(0.15) $0.32 $0.31 $0.1984Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)19. ACCUMULATED OTHER COMPREHENSIVE INCOMEThe following is a roll-forward of the components of Accumulated Other Comprehensive Income, net of tax, for the years ended March 28, 2015 andMarch 29, 2014:(In thousands) Foreign currency Defined benefitplans Net UnrealizedGain/loss onDerivatives TotalBalance as of March 30, 2013 $4,133 $(5,073) $6,373 $5,433Other comprehensive (loss)/income before reclassifications (935) 223 5,001 4,289Amounts reclassified from Accumulated Other Comprehensive Income — 258 (8,570) (8,312)Net current period other comprehensive (loss)/income (935) 481 (3,569) (4,023)Balance as of March 29, 2014 $3,198 $(4,592) $2,804 $1,410Other comprehensive (loss)/income before reclassifications (23,710) (4,410) 11,371 (16,749)Amounts reclassified from Accumulated Other Comprehensive Income — 79 (6,464) (6,385)Net current period other comprehensive (loss)/income (23,710) (4,331) 4,907 (23,134)Balance as of March 28, 2015 $(20,512) $(8,923) $7,711 $(21,724)The details about the amount reclassified from Accumulated Other Comprehensive Income for the years ended March 28, 2015 and March 29, 2014 are asfollows:(In thousands) Amounts Reclassified from OtherComprehensive Income Affected Line in theStatement of IncomeDerivative instruments reclassified to income statement Year ended March28, 2015 Year ended March29, 2014 Realized net gain on derivatives $6,736 $8,960 Revenue, cost of goods sold, otherincomeIncome tax effect (272) (390) Provision for income taxesNet of taxes $6,464 $8,570 Pension items reclassified to income statement Realized net loss on pension assets $123 $317 Other incomeIncome tax effect (44) (59) Provision for income taxesNet of taxes $79 $258 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURENone.85Table of ContentsITEM 9A. CONTROLS AND PROCEDURESEvaluation of Disclosure Controls and ProceduresAs of the end of the period covered by this report, we conducted an evaluation under the supervision and with the participation of our management,including our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively) regarding theeffectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15 of the Securities Exchange Act of 1934 (the“Exchange Act”). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered bythis report, our disclosure controls and procedures are effective. There has been no change in our internal control over financial reporting during the fiscalyear ended March 28, 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.Reports on Internal ControlManagement’s Annual Report on Internal Control over Financial ReportingThe management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is definedin Exchange Act Rules 13a-15(f) and 15d-a5(f). The Company’s internal control system was designed to provide reasonable assurance to the Company’smanagement and Board of Directors regarding the preparation and fair presentation of published financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.The Company’s management assessed the effectiveness of its internal control over financial reporting as of March 28, 2015. In making this assessment, themanagement used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-IntegratedFramework (2013 framework). Based on our assessment we believe that, as of March 28, 2015, the Company’s internal control over financial reporting iseffective based on those criteria.Ernst & Young, LLP, an independent registered public accounting firm, has issued an attestation report on the effectiveness of our internal control overfinancial reporting. This report, in which they expressed an unqualified opinion, is included below.Changes in Internal ControlsThere were no changes in the Company’s internal control over financial reporting that occurred during the fourth quarter of the Company’s most recentlycompleted fiscal year that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.86Table of ContentsReport of Independent Registered Public Accounting FirmThe Board of Directors and Shareholders of Haemonetics CorporationWe have audited Haemonetics Corporation and subsidiaries’ internal control over financial reporting as of March 28, 2015, based on criteria established inInternal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSOcriteria). Haemonetics Corporation and subsidiaries’ management is responsible for maintaining effective internal control over financial reporting, and for itsassessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Controlover Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all materialrespects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testingand evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considerednecessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal controlover financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate.In our opinion, Haemonetics Corporation and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of March28, 2015, based on the COSO criteria.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheetsof Haemonetics Corporation and subsidiaries as of March 28, 2015 and March 29, 2014, and the related consolidated statements of income, comprehensive(loss) income, shareholders’ equity and cash flows for each of the three years in the period ended March 28, 2015 of Haemonetics Corporation andsubsidiaries and our report dated May 22, 2015 expressed an unqualified opinion thereon. /s/ Ernst & Young LLPBoston, MassachusettsMay 22, 201587Table of ContentsITEM 9B. OTHER INFORMATIONNonePART IIIITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT AND CORPORATE GOVERNANCE1. The information called for by Item 401 of Regulations S-K concerning our directors and the information called for by Item 405 of Regulation S-Kconcerning compliance with Section 16(a) of the Securities Exchange Act of 1934 required by this Item is incorporated by reference from our ProxyStatement for the Annual Meeting to be held July 21, 2015.2. The information concerning our Executive Officers is set forth at the end of Part I hereof.3. The balance of the information required by this item, including information concerning our Audit Committee and the Audit Committee FinancialExpert and compliance with Item 407(c)(3) of S-K, is incorporated by reference from the Company’s Proxy Statement for the Annual Meeting to be held July21, 2015. We have adopted a Code of Ethics that applies to our chief executive officer, chief financial officer and senior financial officers. The Code of Ethicsis incorporated into the Company’s Code of Business Conduct located on the Company’s internet web site at http://phx.corporate-ir.net/phoenix.zhtml?c=72118&p=irol-IRHome and it is available in print to any shareholder who requests it. Such requests should be directed to our Company’s Secretary.We intend to disclose any amendment to, or waiver from, a provision of the Code of Ethics that applies to our chief executive officer, chief financialofficer or senior financial officers and that relates to any element of the Code of Ethics definition enumerated in Item 406 of Regulation S-K by posting suchinformation on our website. Pursuant to NYSE Rule 303A.10, as amended, any waiver of the code of ethics for any executive officer or director must bedisclosed within four business days by a press release, SEC Form 8-K, or internet posting.ITEM 11. EXECUTIVE COMPENSATIONThe information required by this Item is incorporated by reference from our Proxy Statement for the Annual Meeting to be held July 21, 2015.Notwithstanding the foregoing, the Compensation Committee Report included within the Proxy Statement is only being “furnished” hereunder and shall notbe deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSThe information required by this Item is incorporated by reference from the Company’s Proxy Statement for the Annual Meeting to be held July 21, 2015.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPEDENCEThe information required by this Item is incorporated by reference from our Proxy Statement for the Annual Meeting to be held July 21, 2015.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESThe information required by this Item is incorporated by reference from our Proxy Statement for the Annual Meeting to be held July 21, 2015.88Table of ContentsPART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULESThe following documents are filed as a part of this report:A)Financial Statements are included in Part II of this reportFinancial Statements required by Item 8 of this Form Report of Independent Registered Public Accounting Firm45Consolidated Statements of Income46Consolidated Statements of Comprehensive Income47Consolidated Balance Sheets48Consolidated Statements of Stockholders’ Equity49Consolidated Statements of Cash Flows50Notes to Consolidated Financial Statements51Schedules required by Article 12 of Regulation S-X II Valuation and Qualifying Accounts95All other schedules have been omitted because they are not applicable or not required.B)Exhibits required by Item 601 of Regulation S-K are listed in the Exhibit Index beginning at page 91, which is incorporated herein byreference.89Table of ContentsSIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized. HAEMONETICS CORPORATION By: /s/ Brian Concannon Brian Concannon, President and Chief Executive OfficerDate : May 22, 2015Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrantand in the capacities and on the dates indicated.Signature Title Date /s/ Brian Concannon President, Chief Executive Officer and Director May 22, 2015Brian Concannon (Principal Executive Officer) /s/ Christopher Lindop Chief Financial Officer and Executive Vice President BusinessDevelopment May 22, 2015Christopher Lindop (Principal Financial Officer) /s/ Susan Hanlon Vice President Finance May 22, 2015Susan Hanlon (Principal Accounting Officer) /s/ Charles Dockendorff Director May 22, 2015Charles Dockendorff /s/ Susan Bartlett Foote Director May 22, 2015Susan Bartlett Foote /s/ Ronald Gelbman Director May 22, 2015Ronald Gelbman /s/ Pedro Granadillo Director May 22, 2015Pedro Granadillo /s/ Mark Kroll Director May 22, 2015Mark Kroll /s/ Richard Meelia Director May 22, 2015Richard Meelia /s/ Ronald Merriman Director May 22, 2015Ronald Merriman /s/ Ellen Zane Director May 22, 2015Ellen Zane 90Table of ContentsEXHIBITS FILED WITH SECURITIES AND EXCHANGE COMMISSIONNumber and Description of Exhibit1. Articles of Organization3A* Pro forma Amended and Restated Articles of Organization of the Company reflecting Articles of Amendment dated August 23, 1993 andAugust 21, 2006 (filed as Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the Quarter ended December 29, 2012 andincorporated herein by reference).3B* By-Laws of the Company, as amended through January 21, 2015 (filed as Exhibit 99.1 to the Company's Form 8-K dated January 27, 2015). 2. Instruments Defining the Rights of Security Holders4A* Specimen certificate for shares of common stock (filed as Exhibit 4B to the Company's Amendment No. 1 to Form S-1 No. 33-39490 andincorporated herein by reference). 3. Material Contracts10A* Lease dated July 17, 1990 between the Buncher Company and the Company of property in Pittsburgh, Pennsylvania (filed as Exhibit 10Kto the Company's Form S-1 No. 33-39490 and incorporated herein by reference).10B* First Amendment to lease dated July 17, 1990, made as of July 17, 1996 between Buncher Company and the Company of property inPittsburgh, Pennsylvania (filed as Exhibit 10AI to the Company's Form 10-Q for the quarter ended December 28, 1996 and incorporatedherein by reference).10C* Second Amendment to lease dated July 17, 1990, made as of October 18, 2000 between Buncher Company and the Company for theproperty in Pittsburgh, Pennsylvania (filed as Exhibit 10AG to the Company's Form 10-K for the year ended March 29, 2003 andincorporated herein by reference).10D* Third Amendment to lease dated July 17, 1990, made as of March 23, 2004 between Buncher Company and the Company for the propertyin Pittsburgh, Pennsylvania (filed as Exhibit 10D to the Company's Form 10-K for the year ended March 30, 2013 and incorporated hereinby reference).10E* Fourth Amendment to lease dated July 17, 1990, made as of March 12, 2008 between Buncher Company and the Company for the propertyin Pittsburgh, Pennsylvania (filed as Exhibit 10E to the Company's Form 10-K for the year ended March 30, 2013 and incorporated hereinby reference).10F* Fifth Amendment to lease dated July 17, 1990, made as of October 1, 2008 between Buncher Company and the Company for the property inPittsburgh, Pennsylvania (filed as Exhibit 10F to the Company's Form 10-K for the year ended March 30, 2013 and incorporated herein byreference).10G* Sixth Amendment to lease dated July 17, 1990 made as of January 8, 2010 between Buncher Company and the Company for the property inPittsburgh, Pennsylvania (filed as Exhibit 10G to the Company's Form 10-K for the year ended March 30, 2013 and incorporated herein byreference).10H* Seventh Amendment to lease dated July 17, 1990, made as of March 31, 2011 between Buncher Company and the Company for theproperty in Pittsburgh, Pennsylvania (filed as Exhibit 10H to the Company's Form 10-K for the year ended March 30, 2013 and incorporatedherein by reference).10I* Eighth Amendment to lease dated July 17, 1990, made as of February 26, 2013 between Buncher Company and the Company for theproperty in Pittsburgh, Pennsylvania (filed as Exhibit 10I to the Company's Form 10-K for the year ended March 30, 2013 and incorporatedherein by reference).10J* Lease dated February 21, 2000 between BBVA Bancomer Servicios, S.A., as Trustee of the “Submetropoli de Tijuana” Trust andHaemonetics Mexico Manufacturing, S. de R.L. de C.V., as successor in interest to Ensatec, S.A. de C.V. with authorization of El FloridoCalifornia, S.A. de C.V., for property located in Tijuana, Mexico (filed as Exhibit 10J to the Company's Form 10-K for the year ended March30, 2013 and incorporated herein by reference).10K* Amendment to Lease dated February 21, 2000 made as of July 25, 2008 between BBVA Bancomer Servicios, S.A., as Trustee of the“Submetropoli de Tijuana” Trust Haemonetics Mexico Manufacturing, S. de R.L. de C.V., as successor in interest to Ensatec, S.A. de C.V.,for property located in Tijuana, Mexico (filed as Exhibit 10K to the Company's Form 10-K for the year ended March 30, 2013 andincorporated herein by reference).10L* Extension to Lease dated February 21, 2000, made as of August 14, 2011 between PROCADEF 1, S.A.P.I. de C.V. and Haemonetics MexicoManufacturing, S. de R.L. de C.V., as successor in interest to Ensatec, S.A. de C.V., for property located in Tijuana, Mexico (Spanish toEnglish translation filed as Exhibit 10L to the Company's Form 10-K for the year ended March 30, 2013 and incorporated herein byreference).91Table of Contents10M* Amendment Letter to Lease dated February 21, 2000, made as of August 14, 2011 between BBVA Bancomer Servicios, S.A., as Trustee ofthe “Submetropoli de Tijuana” Trust and Haemonetics Mexico Manufacturing, S. de R.L. de C.V., as successor in interest to Ensatec, S.A. deC.V., for property located in Tijuana, Mexico (filed as Exhibit 10M to the Company's Form 10-K for the year ended March 30, 2013 andincorporated herein by reference).10N* Notice of Assignment to Lease dated February 21, 2000, made as of February 23, 2012 between BBVA Bancomer Servicios, S.A., as Trusteeof the “Submetropoli de Tijuana” Trust and Haemonetics Mexico Manufacturing, S. de R.L. de C.V., as successor in interest to Ensatec, S.A.de C.V. for property located in Tijuana, Mexico (Spanish to English translation filed as Exhibit 10N to the Company's Form 10-K for theyear ended March 30, 2013 and incorporated herein by reference).10O* Note and Mortgage dated December 12, 2000 between the Company and General Electric Capital Business Asset Funding Corporationrelating to the Braintree facility (filed as Exhibit 10B to the Company's Form 10-Q for the quarter ended December 30, 2000 andincorporated herein by reference).10P* Real Estate Lease Agreement dated November 2, 2002 between Haemonetics Produzione Italia S.r.l. as successor in interest to Pall Italia S.r.land Tempera Infissi S.r.l for premises located in Ascoli, Italy (Italian to English translation filed as Exhibit 10P to the Company's Form 10-K for the year ended March 30, 2013 and incorporated herein by reference).10Q* Lease dated March 23, 2004 effective July 15, 2004 between Howard Commons Associates, LLC and Haemoscope Corporation for theproperty located in Niles, Illinois (filed as Exhibit 10Q to the Company's Form 10-K for the year ended March 30, 2013 and incorporatedherein by reference).10R* First Amendment to Lease dated March 23, 2004 effective July 15, 2004, made as of June 10, 2004 between Howard Commons Associates,LLC and Haemoscope Corporation for the property located in Niles, Illinois (filed as Exhibit 10R to the Company's Form10-K for the yearended March 30, 2013 and incorporated herein by reference).10S* Second Amendment to Lease dated March 23, 2004 effective July 15, 2004, made as of June 5, 2007 between Cabot II - ILI W02-W03, LLC,predecessor-in interest to Howard Commons Associates, LLC and Haemoscope Corporation for the property located in Niles, Illinois (filedas Exhibit 10S to the Company's Form 10-K for the year ended March 30, 2013 and incorporated herein by reference).10T* Third Amendment to Lease dated March 23, 2004 effective July 15, 2004, made as of November 19, 2007 between Cabot II - ILI W02-W03,LLC, Haemoscope Corporation and Huron Acquisition Corporation, a wholly-owned subsidiary of the Company, as successor in interest toHaemoscope Corporation for the property located in Niles, Illinois (filed as Exhibit 10T to the Company's Form 10-K for the year endedMarch 30, 2013 and incorporated herein by reference).10U* Fourth Amendment to Lease dated March 23, 2004 effective July 15, 2004, made as of December 22, 2010 between Cabot II - ILI W02-W03,LLC, Haemoscope Corporation and the Company as assignee and New Tenant of the property located in Niles, Illinois (filed as Exhibit 10Uto the Company's Form 10-K for the year ended March 30, 2013 and incorporated herein by reference).10V* Fifth Amendment to Lease dated March 23, 2004 effective July 15, 2004, made as of July 24, 2012 between Cabot II - ILI W02-W03, LLCand the Company of the property located in Niles, Illinois (filed as Exhibit 10V to the Company's10-K for the year ended March 30, 2013and incorporated herein by reference).10W* Sixth Amendment to Lease dated March 23, 2004, effective July 15, 2004 made as of May 28, 2013 between Cabot II - ILI W02-W03, LLCand the Company of the property located in Niles, Illinois (filed as Exhibit 10A to the Company's Form 10-Q for the quarter ended June 28,2014 and incorporated herein by reference).10X* Seventh Amendment to Lease dated March 23, 2004, effective July 15, 2004 made as of May 1, 2014 between Cabot II - ILI W02-W03, LLCand the Company of the property located in Niles, Illinois (filed as Exhibit 10B to the Company's Form 10-Q for the quarter ended June 28,2014 and incorporated herein by reference).10Y* Lease Agreement effective December 3, 2007 between Mrs. Blanca Estela Colunga Santelices, by her own right, and Pall Life SciencesMexico, S.de R.L. de C.V., for the property located in Tijuana, Mexico (Spanish to English translation filed as Exhibit 10W to theCompany's Form 10-K for the year ended March 30, 2013 and incorporated herein by reference).10Z* Assignment to Lease Agreement effective December 3, 2007, made as of December 2, 2011 between Mrs. Blanca Estela Colunga Santelices,by her own right, Pall Life Sciences Mexico, S.de R.L. de C.V., (“Assignor”) and Haemonetics Mexico Manufacturing, S. de R.L. de C.V.assuccessor in interest to Pall Mexico Manufacturing S. de R.L. de C.V., (“Assignee”) assigned in favor of the property located in Tijuana,Mexico (filed as Exhibit 10X to the Company's Form 10-K for the year ended March 30, 2013 and incorporated herein by reference).10AA* Sublease Contract to Lease Agreement effective December 3, 2007, made as of December 3, 2011 between Haemonetics MexicoManufacturing, S. de R.L. de C.V. as successor in interest to Pall Mexico Manufacturing, S.de R.L. de C.V., and Pall Life Sciences Mexico,S. de R.L. de C.V., for the property located in Tijuana, Mexico (filed as Exhibit 10Y to the Company's Form 10-K for the year endedMarch 30, 2013 and incorporated herein by reference).92Table of Contents10AB* Sublease Contract to Lease Agreement effective December 3, 2007, made as of February 23, 2012 between Haemonetics MexicoManufacturing, S. de R.L. de C.V. as successor in interest to Pall Mexico Manufacturing S. de R.L. de C.V. and Ensatec, S.A. de C.V., for theproperty located in Tijuana, Mexico (filed as Exhibit 10Z to the Company's Form 10-K for the year ended March 30, 2013 and incorporatedherein by reference).10AC* Lease dated August 20, 2009 between Price Logistics Center Draper One, LLC and the Company for property located in Draper, Utah. (filedas Exhibit 10AA to the Company's Form 10-K for the year ended March 30, 2013 and incorporated herein by reference).10AD* Lease dated February 25, 2014 between and among 840 Business Center #2, LLC and Haemonetics Corporation for the property located inMount Juliet, Tennessee (filed as Exhibit 10C to the Company's Form 10-Q for the quarter ended June 28, 2014 and incorporated herein byreference).10AE* Lease dated September 19, 2013 between the Penang Development Corporation ("Lessor") and Haemonetics Malaysia Sdn Bhd ("Lessee") ofthe property located in Penang, Malaysia (filed as Exhibit 10D to the Company's 10-Q for the quarter ended June 28, 2014 and incorporatedherein by reference).10AF*† Pro Forma Haemonetics Corporation 2005 Long-Term Incentive Compensation Plan, reflecting amendments dated July 31, 2008, July 29,2009, July 21, 20011, November 30, 2012, July 24, 2013 and January 21, 2014 (filed as Exhibit 10AE to the Company's Form 10-K for theyear ended March 29, 2014 and incorporated herein by reference).10AG*† Form of Option Agreement for Non-Qualified stock options for the 2005 Long Term-Incentive Compensation Plan for Non-employeeDirectors (filed as Exhibit 10.1 to the Company's Form 10-Q for the quarter ended October 1, 2005 and incorporated herein by reference).10AH*† Form of Option Agreement for Non-Qualified stock options for the 2005 Long-Term Incentive Compensation Plan for Employees. (filed asExhibit 10S to the Company's Form 10-K for the year ended March 30, 2010 and incorporated herein by reference).10AI*† Form of Option Agreement for Non-Qualified stock options for the 2005 Long-Term Incentive Compensation Plan for the Chief ExecutiveOfficer (filed as Exhibit 10.3 to the Company's Form 10-Q for the quarter ended October 1, 2005 and incorporated herein by reference).10AJ*† Form of Restricted Stock Agreement with Employees under 2005 Long-Term Incentive Compensation Plan. (filed as Exhibit 10U to theCompany's Form 10-K for the year ended April 3, 20`0 and incorporated herein by reference).10AK*† Form of Amended and Restated Change in Control Agreement made effective on April 2, 2009 between the Company and Brian Concannon(filed as Exhibit 10Y to the Company's Form 10-Q for the quarter ended June 27, 2009 and incorporated herein by reference).10AL*† Form of Market Stock Unit Agreement for the 2005 Long-Term Incentive Compensation Plan (filed as Exhibit 10.3 to the Company's 8-K,dated July 26, 2013 and incorporated herein by reference).10AM*† Form of Amended and Restated Change in Control Agreement (filed as exhibit 10AK to the Company's Form 10-K, for the year-endedMarch 31, 2013 and incorporated herein by reference).10AN*† 2007 Employee Stock Purchase Plan (filed as Exhibit 10AS to the Company's Form 10-K for the year ended March 29, 2008 andincorporated herein by reference).10AO*† Pro Forma Amended and Restated Non-Qualified Deferred Compensation Plan as amended and restated on July 24, 2013 (filed as Exhibit10B to the Company's Form 10-Q for the quarter ended September 27, 2014 and incorporated herein by reference).10AP† Form of Performance Share Unit Agreement for the 2005 Long-Term Incentive Compensation Plan (filed herewith).10AQ* Asset Purchase Agreement, dated as of April 28, 2012, by and between Haemonetics Corporation and Pall Corporation (filed as Exhibit 10Zto the Company's Form 10-K for the fiscal year ended March 31, 2012 and incorporated herein by reference).10AR* Credit Agreement dated as of June 30, 2014 among Haemonetics Corporation and the Lenders listed therein and JPMorgan Chase Bank,N.A. as Administrative Agent (filed as Exhibit 10.1 to the Company's Form 8-K dated July 7, 2014 and incorporated herein by reference). 93Table of Contents 4. Subsidiary Certifications and Consents21.1 Subsidiaries of the Company.23.1 Consent of the Independent Registered Public Accounting Firm.31.1 Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002, of Brian Concannon, President and Chief Executive Officer of theCompany.31.2 Certification pursuant to Section 302 of Sarbanes-Oxley of 2002, of Christopher Lindop, Executive Vice President and Chief FinancialOfficer of the Company.32.1 Certification Pursuant to 18 United States Code Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, ofBrian Concannon, President and Chief Executive Officer of the Company32.2 Certification Pursuant to 18 United States Code Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, ofChristopher Lindop, Chief Financial Officer and Executive Vice President Business Development of the Company101ˆ The following materials from Haemonetics Corporation on Form 10-K for the year ended March 30, 2013, formatted in Extensive BusinessReporting Language (XBRL): (i) Consolidated Statements of Income, (ii) Consolidated Statements of Comprehensive Income (iii)Consolidated Balance Sheets, (iv) Consolidated Statement of Stockholders' Equity and Other Comprehensive Income, (v) ConsolidatedStatements of Cash Flows, and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text.*Incorporated by reference†Agreement, plan, or arrangement related to the compensation of officers or directorsˆIn accordance with Rule 406T of Regulation S-T, the XBRL-related information in Exhibit 101 to this Form 10-K is deemed not filed or part of aregistration statement or prospectus for purposes of sections 11 or 12 of the Securities Act, is deemed not filed for purposes of section 18 of the ExchangeAct, and otherwise is not subject to liability under these sections.94Table of ContentsSCHEDULE IIHAEMONETICS CORPORATIONVALUATION AND QUALIFYING ACCOUNTS(In thousands)Balance atBeginning ofFiscal Year Charged toCosts andExpenses Write-Offs(Net of Recoveries) Balance at Endof Fiscal YearFor Year Ended March 28, 2015 Allowance for Doubtful Accounts$1,676 $399 $(326) $1,749For Year Ended March 29, 2014 Allowance for Doubtful Accounts$1,727 $186 $(237) $1,676For Year Ended March 30, 2013 Allowance for Doubtful Accounts$1,480 $446 $(199) $1,72795EXHIBIT 10APHAEMONETICS CORPORATION2005 LONG-TERM INCENTIVE COMPENSATION PLANPERFORMANCE SHARE UNIT AGREEMENTWITH«Name»HAEMONETICS CORPORATIONPERFORMANCE SHARE UNIT AGREEMENTUNDER 2005 LONG-TERM INCENTIVE COMPENSATION PLANTHIS PERFORMANCE SHARE UNIT AGREEMENT (“Agreement”), dated as of «PSU Grant_Date» (“Grant Date”) byand between Haemonetics Corporation, a Massachusetts Corporation (“Company”), and «Name» (“Employee”), is entered into asfollows:WHEREAS, the Company has established the Haemonetics Corporation 2005 Incentive Compensation Plan, as amended,(“Plan”), a copy of which has been provided to Employee, and which Plan is made a part hereof; andWHEREAS, the Compensation Committee of the Board of Directors of the Company (“Committee”) has determined that theEmployee shall be granted a Performance Share Unit award pursuant to Article 10 (Other Stock Unit Awards) of the Plan with respectto the Company’s $0.01 par value Common Stock (“Stock”), subject to the restrictions as hereinafter set forth;NOW, THEREFORE, the parties hereby agree as follows:1. Grant of Performance Share Units.Subject to the terms and conditions of this Agreement and of the Plan, the Company hereby grants to the Employee a targetaward (“Target Award”) of «X_Total_PSUs» Performance Share Units (“PSUs”). Each unit represents the right to receive one shareof Stock. Subject to satisfaction of the terms and conditions of this Agreement and the Plan, the PSUs shall be settled in Stock. Nodividend equivalent rights are payable with respect to the PSUs.2. Vesting Schedule.(a) Vesting Dates. The interest of the Employee in the PSUs shall vest, if at all, on September 30, 2017, (the “Maturity Date”)according to the following vesting schedule (“Vesting Schedule”), and also conditioned upon the Employee’s continued employmentwith the Company through the Maturity Date: Company Relative TSR PercentileRankat Maturity DateShare Payoutas a Percentage ofTarget Award40th or lower0%41st to 60th 50% to 99%61st to 80th 100% to 200%81st or higher200%Company Relative TSR Percentile Rank performance that is in between any two Company Relative TSR Percentile Ranks adjacent toeach other in the above Vesting Schedule will be interpolated linearly and rounded down to the nearest whole percentage (i.e., below0.5 round down, at or above 0.5 round up). Notwithstanding the Vesting Schedule above, if the Company’s Total Shareholder Returnfor the Performance Period is negative, then any Share Payout shall be capped at 100% of the Target Award.“Company Relative TSR Percentile Rank” shall mean the Company’s Total Shareholder Return for the Performance Period ascompared to the Total Shareholder Return of the companies comprising the Standard & Poors Health Care Equipment Index (the“Index”).“Total Shareholder Return” shall mean the appreciation of the Per Share Price during the Performance Period, plus any dividends paidon the applicable company’s common stock during the Performance Period. All determinations regarding the companies comprisingthe membership of the Index, the methodology of calculating Total Shareholder Return and similar matters shall be determined by theCommittee in its sole discretion pursuant to the procedures and methodology used by Standard & Poors.“Per Share Price” shall mean the average of the closing prices of common shares for the applicable company during the thirty (30)consecutive trading days ending on the day prior to the applicable measuring date.“Performance Period” shall mean the three (3) year period beginning on October 1, 2014 and ending on September 30, 2017.Subject to any deferral election made by the Employee pursuant to Section 4(b) below and any earlier payment made under Section2(f) below, any Share Payout shall be made by the Company in a single payment of shares of Stock (subject to applicable taxwithholding) no earlier than the Maturity Date and later than December 31, 2017 following certification by the Committee of theCompany’s Relative TSR Percentile Rank.In situations where there is not continued employment through the Maturity Date, notwithstanding the foregoing, the interest of theEmployee in the Stock shall be determined as specified below.(b) Employment Required. Except as otherwise provided in this Section 2, if the Employee ceases to be an employee of theCompany prior to the Maturity Date, the PSUs granted to the Employee hereunder shall not vest and instead shall be forfeited. In suchevent, vesting shall not be pro-rated between the Grant Date and the Maturity Date.(c) Disability. If such termination of employment is because of the Employee’s Disability while in the employ of theCompany, then the continued employment requirement for the Employee shall cease to apply and the Share Payout as a Percentage ofTarget Award for the PSUs shall be determined as of the Maturity Date and paid in accordance with Section 2(a) above; provided,however, that number of shares of Stock paid to the Employee shall be multiplied by a fraction, the numerator of which is the numberof days elapsed from the Grant Date to the date of the Employee’s Disability, and denominator of which is 1075.(d) Death. If the termination of employment is because of the death of the Employee while in the employ of the Company, thenthe continued employment requirement for the Employee shall cease to apply and the Share Payout as a Percentage of Target Awardfor the PSUs shall be determined as of the Maturity Date and paid in accordance with Section 2(a) above; provided, however, that thenumber of shares of Stock to be paid to the Employee’s estate shall be multiplied by a fraction, the numerator of which is the numberof days elapsed from the Grant Date to the date of the Employee’s death, and the denominator of which is 1075.(e) Qualifying Retirement. If such termination of employment is because of the Employee’s Qualifying Retirement while in theemploy of the Company, then the continued employment requirementfor the Employee shall cease to apply and the Share Payout as a Percentage of Target Award for the PSUs shall be determined as ofthe Maturity Date and paid in accordance with Section 2(a) above; provided, however, that the number of shares of Stock to be paid tothe Employee shall be multiplied by a fraction, the numerator of which is the number of days elapsed from the Grant Date to the dateof the Employee’s Qualifying Retirement, and the denominator of which is 1075.(f) Change in Control. Notwithstanding anything to the contrary contained in any employment agreement, severance agreementor Change in Control agreement between the Company and the Employee, if a Change in Control of the Company occurs prior to theMaturity Date and while the Employee is in the employ of the Company, then the continued employment requirement for theEmployee shall cease to apply and the Share Payout as a Percentage of Target Award for the PSUs shall be determined in accordancewith Schedule 2(a) above; provided, however, that the Company Relative TSR Percentile Rank shall be determined by reference to theCompany’s average Relative TSR Rank on the thirty (30) consecutive trading days preceding the Change in Control and any SharePayout shall be made in a single payment of shares of Stock (subject to applicable tax withholding) no earlier than the date of theChange in Control and no later than ten (10) calendar days after the date of the Change in Control.(g) Special Definitions. For purposes of this Agreement, the following terms have the meanings set forth below:(1) “Change in Control” means the earliest to occur of the following events.(A) a person, or any two or more persons acting as a group, and all affiliates of such person or persons, who prior tosuch time owned less than thirty-five percent (35%) of the then outstanding shares of the Common Stock, shallacquire such additional shares of the Common Stock in one or more transactions, or series of transactions, such thatfollowing such transaction or transactions such person or group and affiliates beneficially own thirty-five percent(35%) or more of the Common Stock outstanding,(B) closing of the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelatedperson or entity, and(C) the consummation of any merger, reorganization, consolidation or share exchange unless the persons who werethe beneficial owners of the outstanding shares of the common stock of Company immediately before theconsummation of such transaction beneficially own more than 50% of the outstanding shares of the common stockof the successor or survivor entity in such transaction immediately following the consummation of such transaction.For purposes of this definition, the percentage of the beneficially owned shares of the successor or survivor entitydescribed above shall be determined exclusively by reference to the shares of the successor or survivor entity whichresult from the beneficial ownership of shares of Common Stock by the persons described above immediatelybefore the consummation of such transaction.Notwithstanding the foregoing, none of the above events or conditions shall constitute a Change in Control forpurposes of this Agreement unless the event or condition also constitutes a “Change in Control Event” for purposesof Treas. Reg. §1. 409A-3(i)(5).(2) “Disability” has the meaning given it in Article 2 of the Plan; provided, however, that the Employee must also beconsidered to be “disabled” for purposes of Treas. Reg. §1.409A-3(i)(4).(3) “Qualifying Retirement” shall mean that the Employee voluntarily retires from the employ of the Company at orafter both attaining age fifty-five (55), completing five (5) consecutive years of service. For purposes of this Agreement,a “year of service” shall mean a twelve (12) month period of continuous full-time employment with the Company(determined without regard to any breaks in service due to any paid leave of absence or any unpaid leave of absenceauthorized in writing by the Company).3. Restrictions.(a) No Transfer. The PSUs granted hereunder may not be sold, transferred, pledged, assigned, encumbered, or otherwisealienated or hypothecated.(b) Forfeiture. Except as provided for in Section 2, if the Employee’s employment with the Company terminates for any reason,the balance of the PSUs subject to the provisions of this Agreement which have not vested at the time of the Employee’s termination ofemployment shall be forfeited by the Employee, and the Employee shall have no future rights with respect to any such unvested PSUs.(c) Clawback. This award and any resulting payment or Shares is subject to set-off, recoupment, or other recovery or“clawback” as required by applicable law or by any Company policy on the clawback of compensation, as amended from time to time.4. Delivery of Shares.(a) Method of Settlement. The means of settlement of vested PSUs is that the Company shall deliver to the Employee acertificate or certificates, or at the election of the Company make an appropriate book entry, for the number of shares of Stock equal tothe number of the Employee’s PSUs that vest and are payable as specified in Section 2. An Employee shall have no further rights withregard to PSUs once the underlying Stock has been so delivered.(b) Deferred Delivery. Shares otherwise deliverable under this Agreement may be deferred by the Employee to a date after theMaturity Date to the extent that this PSU award constitutes “performance-based compensation” under Section 409A of the Code andthe Employee makes a timely and otherwise valid election to defer receipt of payment. Any payment deferred under the terms of thisAgreement and the Plan shall also be subject to the provisions of the Haemonetics Corporation Non-Qualified Deferred CompensationPlan, including the deemed investment funds available under such plan. Any deferral election of the Employee shall be deemed voidand payment shall be made as otherwise provided by this Agreement in the event of the Employee’s Disability, the Employee’s death,or a Change in Control prior to the deferred payment date.5. Employee Shareholder Rights.Neither the Employee nor any person claiming through the Employee, will have any of the rights or privileges of a stockholder ofHaemonetics with respect to the PSUs unless and until Stock has been issued, recorded on the records of the Company or its transferagent, and delivered to the Employee. No dividend equivalents shall be paid on PSUs with respect to any cash dividends declaredduring any periods of time prior delivery of the shares of Stock6. Adjustments or Changes in Capitalization.Adjustments as a result of changes in corporate capitalization and the like or as a result of a corporate transaction shall be made inaccordance with Article 4 of the Plan.7. Disability or Death of Employee.Any Stock delivered pursuant to Section 4 shall be delivered to the Employee if legally competent or to a legally designated guardianor representative if the Employee is legally incompetent. If the Employee is not then living, the Stock shall be delivered to therepresentative of the Employee’s estate.8. Taxes.The Employee acknowledges and agrees that any income or other taxes due from the Employee with respect to the PSUs issuedpursuant to this Agreement, including Social Security and Medicare taxes that may be owed on account of the vesting of the PSUs(unless the Company elects to withhold such payroll taxes at a later time in accordance with applicable law), and federal, state andlocal income taxes that may be owed on account of payment of the PSUs, shall be the Employee’s responsibility. By accepting thisGrant, the Employee agrees and acknowledges that the Company promptly may withhold from the Employee’s compensation,including but not limited to Stock delivered pursuant to Section 4, the amount of taxes the Company is required to withhold pursuant tothis Agreement, unless the Employee shall satisfy such withholding obligation to the Company as provided in Article 17 of the Plan.9. Data Privacy Consent.As a condition of the Grant, the Employee consents to the collection, use and transfer of the Employee’s personal data as described inthis Section 9. The Employee understands that the Company and its subsidiaries hold certain personal information about the Employee,including the Employee’s name, home address and telephone number, date of birth, social insurance (or security) number oridentification number, salary, nationality, job title, any shares of Stock or directorships held in the Company (or any of its subsidiaries),details of all options or any other entitlement to shares of Stock awarded, canceled, exercised, vested, unvested or outstanding in theEmployee’s favor, for the purpose of implementing, managing and administering the Plan (“Data”). The Employee further understandsthat the Company and/or a subsidiary may transfer Data amongst themselves as necessary for the purpose of implementation,administration and management of the Employee’s participation in the Plan, and that the Company and/or a subsidiary may eachfurther transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. TheEmployee understands that these recipients may be located in the European Economic Area, or elsewhere, such as the United States orCanada, and that the recipient’s country may have different data privacy laws and protections than the Employee’s country. TheEmployee authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes ofimplementing, administering and managing the Employee’s participation in the Plan, including any requisite transfer of such Data to abroker or other third party with whom the Employee may elect to deposit any shares of Common Stock acquired pursuant to the Planas may be required for the administration of the Plan and/or the subsequent holding of shares of Common Stock on the Employee’sbehalf. The Employee understands that Data will be held only as long as is necessary to implement, administer and manage theEmployee’s participation in the Plan. The Employee understands that the Employee may, at any time, view Data, request additionalinformation about the storage and processing of Data, require any necessary amendments to it or refuse or withdraw the consentsherein, in any case without cost, by contacting in writing the Employee’s local Human Resources representative. Refusal orwithdrawal of consent may, however, affect the Employee’s ability to exercise or realize benefits from the Grant or the Plan. For moreinformation on the consequences ofthe Employee’s refusal to consent or withdrawal of consent, the Employee understands that the Employee may contact the Employee’slocal Human Resources representative.10. Miscellaneous.(a) Enforcement. The Company shall not be required (i) to transfer on its books any shares of Stock of the Company whichshall have been sold or transferred in violation of any of the provisions set forth in this Agreement, or (ii) to treat as owner of suchshares or to accord the right to vote as such owner or to pay dividends to any transferee to whom such shares shall have been sotransferred.(b) Further Acts. The parties agree to execute such further instruments and to take such action as may reasonably be necessaryto carry out the intent of this Agreement.(c) Notice. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upondelivery to the Employee at her/his address then on file with the Company.(d) No Guarantee of Employment. Nothing contained in the Plan or this Agreement shall be construed or deemed by anyperson under any circumstances to bind the Company to grant the Employee any right to remain an Employee of the Company duringthe vesting period or otherwise.(e) Entire Agreement. This Agreement and the Plan constitute the entire agreement of the parties with respect to the subjectmatter hereof. The Agreement is subject to and shall be construed in accordance with the terms of the Plan, and words or phrasesdefined in the Plan shall have the same meaning for purposes of this Agreement unless the context clearly requires otherwise.(f) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth ofMassachusetts and applicable federal law, without regard to applicable conflicts of laws.[Remainder of this page intentionally left blank]IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized representative,and the Employee has accepted this agreement, all as of the Grant Date first above written.HAEMONETICS CORPORATION_________________________Brian Concannon, President and CEO_________________________Signature of Employee__________________________Date: RETAIN A COPY OF THIS AGREEMENT FOR YOUR RECORDSExhibit 21.1Exhibit 21.1 - Subsidiaries of the CompanyEntity NameJurisdiction of Incorporation5D Information Management, Inc.DelawareArryx, Inc.NevadaGlobal Med Technologies, Inc.ColoradoHaemonetics (Hong Kong) LimitedHong KongHaemonetics (Hong Kong) Limited - Liaison OfficeHaryana - IndiaHaemonetics (UK) LimitedUnited KingdomHaemonetics Asia IncorporatedDelawareHaemonetics Asia Incorporated - Taiwan BranchDelawareHaemonetics Asia UK Ltd.England/WalesHaemonetics Asia, Inc.Taipei - TaiwanHaemonetics Australia PTY Ltd.VictoriaHaemonetics Belgium NVBrussels - BelgiumHaemonetics BVBreda - NetherlandsHaemonetics Canada Ltd.British ColumbiaHaemonetics CZ, spol. s.r.o.Brno - Czech RepublicHaemonetics France S.a.r.lPlaisir - FranceHaemonetics GmbHMunich - GermanyHaemonetics Handelsgesellschaft m.b.H.Vienna - AustriaHaemonetics Healthcare India Private LimitedIndiaHaemonetics Hospitalar Ltda.Sao Paulo - BrazilHaemonetics International Finance S.a.r.l.LuxembourgHaemonetics International Holdings GmbHLuzern, SwitzerlandHaemonetics IP HC SarlSigny - SwitzerlandHaemonetics Italia s.r.l.Milan - ItalyHaemonetics Japan GKToyko - JapanHaemonetics Korea, Inc.Seoul - KoreaHaemonetics LimitedBedfordshire - United KingdomHaemonetics Malaysia Sdn. Bhd.MalaysiaHaemonetics Manufacturing, Inc.DelawareHaemonetics Massachusetts Security CorporationMassachusettsHaemonetics Medical Devices (Shanghai) International Trading Co., Ltd.Shanghai - ChinaHaemonetics Mexico Manufacturing, S.de R.L. de C.V.MexicoHaemonetics New Zealand LimitedNew ZealandHaemonetics Produzione Italia S.r.l.ItalyHaemonetics Puerto Rico LLCPuerto RicoHaemonetics S.A.Signy - SwitzerlandHaemonetics Scandinavia ABLund - SwedenHaemonetics Singapore Pte. Ltd.SingaporeHaemoscope CorporationMassachusettsInlog SASFranceInlog Deutschland GmbHGermanyInlog Holdings France SASFranceTransfusion Technologies CorporationDelawareConsent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in the Registration Statements (Form S-8 Nos. 333-200226, 333-181847, 333-136839, 333-149205, and 333-159434) of our reports dated May 22, 2015, with respect to the consolidated financial statements and schedule of Haemonetics Corporation and theeffectiveness of internal control over financial reporting of Haemonetics Corporation, included in this Annual Report (Form 10-K) of HaemoneticsCorporation for the fiscal year ended March 28, 2015./s/ Ernst & Young LLPBoston, MassachusettsMay 22, 2015EXHIBIT 31.1CERTIFICATIONI, Brian Concannon, certify that:1.I have reviewed this Annual Report on Form 10-K of Haemonetics Corporation;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for theregistrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; andd)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting.Date : May 22, 2015 /s/ Brian Concannon Brian Concannon, President and Chief Executive Officer (Principal Executive Officer) EXHIBIT 31.2CERTIFICATIONI, Christopher Lindop, certify that:1.I have reviewed this Annual Report on Form 10-K of Haemonetics Corporation;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for theregistrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; andd)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting.Date : May 22, 2015 /s/ Christopher Lindop Christopher Lindop, Chief Financial Officer and Executive Vice President Business Development(Principal Financial Officer) EXHIBIT 32.1Certification Pursuant To18 USC. Section 1350,As Adopted Pursuant ToSection 906 of the Sarbanes/Oxley Act of 2002In connection with the Annual Report of Haemonetics Corporation (the “Company”) on Form 10-K for the period ended March 28, 2015 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Brian Concannon, President and Chief Executive Officer of the Company, certify,pursuant to Section 1350 of Chapter 63 of Title 18, United States Code, that this Report fully complies with the requirements of Section 13(a) or 15(d) of theSecurities Exchange Act of 1934 and that the information contained in this Report fairly presents, in all material respects, the financial condition and resultsof operations of the Company.Date : May 22, 2015 /s/ Brian Concannon Brian Concannon, President and Chief Executive Officer A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signaturethat appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Haemonetics and will beretained by Haemonetics and furnished to the Securities and Exchange Commission or its staff upon request.EXHIBIT 32.2Certification Pursuant To18 USC. Section 1350,As Adopted Pursuant ToSection 906 of the Sarbanes/Oxley Act of 2002In connection with the Annual Report of Haemonetics Corporation (the “Company”) on Form 10-K for the period ended March 28, 2015 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Christopher Lindop, Chief Financial Officer and Vice President BusinessDevelopment of the Company, certify, pursuant to Section 1350 of Chapter 63 of Title 18, United States Code, that this Report fully complies with therequirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in this Report fairly presents, in all materialrespects, the financial condition and results of operations of the Company.Date : May 22, 2015 /s/ Christopher Lindop Christopher Lindop, Chief Financial Officer and Executive Vice PresidentBusiness Development A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signaturethat appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Haemonetics and will beretained by Haemonetics and furnished to the Securities and Exchange Commission or its staff upon request.

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