Haemonetics Annual Report 2018

Plain-text annual report

UNITED STATESSECURITIES 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 31, 2018Commission 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 1934 during the preceding12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to the filing requirements for at least the past90 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 File required to be submitted andposted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit andpost 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 the best of registrant’sknowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this form 10-K. oIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growthcompany. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.(Check one):Large accelerated filer þ Accelerated filer oNon-accelerated filer o(Do not check if a smaller reporting company) Smaller reporting company o Emerging growth company oIf an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financialaccounting standards provided pursuant to Section 13(a) of the Exchange Act. oIndicate 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 all executive officers anddirectors are “affiliates” of the registrant) as of September 30, 2017, the last business day of the registrant’s most recently completed second fiscal quarter was $2,354,214,975(based on the closing sale price of the registrant’s common stock on that date as reported on the New York Stock Exchange).The number of shares of $0.01 par value common stock outstanding as of May 21, 2018 was 52,206,831.Documents Incorporated By ReferencePortions of the definitive proxy statement for our Annual Meeting of Shareholders to be held on July 26, 2018 are incorporated by reference in Part III of this report.TABLE OF CONTENTS PageNumberItem 1.Business1Item 1A.Risk Factors13Item 1B.Unresolved Staff Comments22Item 2.Properties22Item 3.Legal Proceedings22Item 4.Mine Safety Disclosures22Item 5.Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities23Item 6.Selected Financial Data25Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations26Item 7A.Quantitative and Qualitative Disclosures about Market Risk43Item 8.Financial Statements and Supplementary Data45Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure85Item 9A.Control and Procedures85Item 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 Schedules89Table of ContentsITEM 1. BUSINESSCompany OverviewHaemonetics is a global healthcare company dedicated to providing a suite of innovative hematology products and solutions to customers to help improvepatient care and reduce the cost of healthcare. Our technology addresses important medical markets including commercial plasma collection, hospital-baseddiagnostics, blood and blood component collection and devices and software products. When used in this report, the terms “we,” “us,” “our” and “theCompany” mean Haemonetics.Blood is essential to a modern healthcare system. Blood and its components (plasma, platelets and red cells) have many vital and frequently life-savingclinical applications. Plasma is used for patients with major blood loss and is manufactured into biopharmaceuticals to treat a variety of illnesses, includingimmune diseases and coagulation disorders. Red cells treat trauma patients or patients undergoing surgery with high blood loss, such as open heart surgery ororgan transplant. Platelets have many uses in patient care, including supporting cancer patients undergoing chemotherapy.Haemonetics develops and markets a wide range of devices and solutions to serve our customers. We provide plasma collection systems and software thatenable the collection of plasma used by fractionators to make life saving pharmaceuticals. We provide analytical devices for measuring hemostasis thatenable healthcare providers to better manage their patients’ bleeding risk. Haemonetics makes blood processing systems and software that make blooddonation more efficient and track life giving blood components. Finally, Haemonetics supplies systems and software that facilitate blood transfusions andcell processing.Market and ProductsProduct LinesOur products are organized in four categories for purposes of evaluating and developing their growth potential: Plasma, Blood Center, Cell Processing andHemostasis Management. For that purpose, “Plasma” includes plasma collection devices and disposables, plasma donor management software andanticoagulant and saline sold to plasma customers. “Blood Center” includes blood collection and processing devices and disposables for red cells, plateletsand whole blood as well as related donor management software. “Hemostasis Management” includes devices and methodologies for measuring coagulationcharacteristics of blood, such as our TEG® Hemostasis Analyzer. “Cell Processing” includes surgical blood salvage systems, specialized blood cell processingsystems, disposables and blood transfusion management software.We believe that Plasma and Hemostasis Management have the greatest growth potential, while Cell Processing innovation offers an opportunity to increasemarket share and expand into new segments. Blood Center competes in challenging markets that require us to manage the business differently, includingreducing costs, shrinking the scope of the current product line and evaluating opportunities to exit unfavorable customer contracts. We are progressingtoward a streamlined operating model with a management and cost structure that can bring about sustainable productivity improvement across theorganization. Overall implementation of our new operating model began in fiscal 2017 and will continue into fiscal 2019.•PlasmaOur Plasma business offers automated plasma collection and donor management software systems that improve the plasma centers’ yield, efficiency,quality and safety and overall plasma donor experience. We continue to invest in technology that lowers the overall cost to collect plasma whilemaintaining high standards of quality and safety.Plasma Collection Market for Fractionation — Human plasma is collected for two purposes. First, it is used for transfusions in patients withextreme blood loss, such as trauma victims, and second, it is processed into pharmaceuticals that aid in the treatment of immune diseases andcoagulation disorders.Plasma for transfusion is almost exclusively collected by blood centers as part of their broader mission to supply blood components. Plasma that isfractionated and manufactured into pharmaceuticals - frequently referred to as source plasma - is mainly collected by vertically integratedbiopharmaceutical companies who operate their own collection centers and recruit donors specifically for source plasma donation. The markets fortransfusion plasma and source plasma have different participants, product requirements and growth profiles. We serve the market for transfusionplasma through our Blood Center products.One of the distinguishing features of the source plasma market is the method of collection. There are three primary ways to collect plasma. The firstis to collect it from whole blood donations. When whole blood is processed, plasma can be separated at the same time as red cells and platelets andstored for future use. The second is as part of an1Table of Contentsapheresis procedure that also collects another blood component. These two methods are mainly used by blood centers to collect plasma fortransfusions. The third method is a dedicated apheresis procedure that only collects plasma and returns the other blood components to the donor.This method is mainly used for source plasma.Over the last 20 years, the collection of source plasma has increasingly been done by vertically integrated biopharmaceutical companies such asCSL Behring, Grifols, Octapharma AG and Shire Plc's BioLife Plasma Services business. With their global operations and management expertise,they are focused on efficient plasma supply chain management and leveraging information technology to manage operations from the point ofplasma donation to fractionation to the production of the final product.Our Plasma business unit focuses on the collection of plasma for pharmaceutical production using apheresis devices that collect plasma and softwaresolutions that support the efficient operation of source plasma collection centers. Our Blood Center business unit supports the collection of plasmafor transfusion using both whole blood and multi-component apheresis collections.Demand for source plasma has continued to grow as an expanding end user market for plasma-derived biopharmaceuticals - in particular, therapiesthat require a significant quantity of plasma to create - has fueled an increase in the number of donations and dedicated collection centers. Asignificant portion of this growth has occurred in the United States with U.S. produced plasma now meeting an increasing percentage of plasmavolume demand worldwide. The U.S. has regulations that are significantly favorable relative to other markets for plasma collectors. The frequencywith which a donor may donate, the volume of plasma that may be donated each time and the ability to remunerate donors are all optimal in the U.S.,leading to approximately 80% of worldwide source plasma collections occurring in the U.S. Plasma collectors have long sought changes to plasmacollection regulations outside of the U.S. to allow for greater frequency, volume per donation and remuneration but achievements have been meagerand slow and no changes are foreseen in the prevalence of U.S. collections.Plasma Products — Built around our automated plasma collection devices and related disposables, our portfolio of products and services isdesigned to support multiple facets of plasma collector operations. We have a long-standing commitment to understanding our customers' collectionand manufacturing processes. As a result, we aim to design equipment that is durable, dependable and easy to use and provide comprehensivetraining and support to our plasma collection customers.Today, the vast majority of plasma collections worldwide are performed using automated collection technology at dedicated facilities. We offermultiple products to support these dedicated source plasma operations, including our NexSys PCSTM plasmapheresis system (formerly referred to asPCS 300) and PCS2 equipment and disposables, plasma collection containers and intravenous solutions. We also offer a portfolio of integratedinformation technology platforms for plasma customers to manage their donors, operations and supply chain. Our software products, including ourlatest NexLynk™ DMS donor management system, automate the donor interview and qualification process, streamline the workflow process in theplasma center, provide the controls necessary to evaluate donor suitability, determine the ability to release units collected and manage unitdistribution. With our software solutions, plasma collectors can manage processes across the plasma supply chain, react quickly to business changesand implement opportunities to reduce costs.With our PCS brand, we have provided an automated platform dedicated to the collection of plasma for over 20 years. In July 2017, we received U.S.Food and Drug Administration ("FDA") 510(k) clearance for our next generation device, the NexSys PCS. In March 2018, we received FDA clearancefor the enhancement of our NexSys PCS embedded software that activates YESTM technology, a yield-enhancing solution that enables increases inplasma yield per collection by an additional 18-26 mL per donation. We also received CE mark clearance of the NexSys PCS device in the EuropeanUnion and Australia, subject to additional local requirements, during fiscal 2018. We expect to pursue further regulatory clearances for additionalenhancements to the overall product offering.NexSys PCS is designed to improve plasma center productivity, enhance quality and compliance, improve donor engagement and enable yieldenhancing solutions. NexSys PCS includes bi-directional connectivity to the NexLynk DMS donor management system to improve operationalefficiency within plasma centers, automated programming of donation procedures and automated data capture of procedure data.We have begun limited production of NexSys PCS and expect a ramp-up of our commercial launch to occur throughout the second half of fiscal2019. In fiscal 2018, we began donor center experience programs to introduce the features of NexSys PCS to our customers.2Table of ContentsOur Plasma business unit represented 48.2%, 46.4% and 42.0% of our total revenue in fiscal 2018, 2017 and 2016, respectively.•Blood CenterOur Blood Center business offers a range of solutions that improve donor collections centers ability for acquiring blood, filtering blood andseparating blood components. We continue to look for solutions to improve donor safety and control costs through the existing product portfolio.Our products and technologies help donor collection centers optimize blood collection capabilities and donor processing management.Blood Center Market — There are millions of blood donations throughout the world every year that produce blood products for transfusion tosurgical, trauma, or chronically ill patients. Patients typically receive only the blood components necessary to treat a particular clinical condition.Platelet therapy is frequently used to alleviate the effects of chemotherapy and to help patients with bleeding disorders. Red cells are oftentransfused to patients to replace blood lost during surgery and 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 replace blood volume in trauma victimsand surgical patients.When collecting blood components there are two primary collection methods, manual whole blood donations and automated component bloodcollections. While most donations are manual whole blood, the benefit of automated component blood collections is the ability to collect more thanone unit of the targeted blood component. Manual whole blood donations are collected from the donor and then transported to a laboratory wherethe blood is separated into its components. Automated component blood collections separate the blood component real-time while a person isdonating blood. In this method, only the specific target blood component is collected and the remaining components are returned to the blooddonor.The demand for blood components varies across the world. While overall we expect total demand to remain stable to slightly declining, demand inindividual markets can vary greatly. Mature markets have developed more minimally invasive procedures with lower associated blood loss, as wellas better blood management that have more than offset the increasing demand from aging populations. Emerging markets are seeing demand growthwith expanded healthcare coverage and greater access to more advanced medical treatments.Blood Center Products — We offer automated blood component and manual whole blood collection systems to blood collection centers to collectblood products efficiently and cost effectively. In addition, we offer software solutions that help blood collection centers with blood drive planning,donor recruitment and retention, blood collection, component manufacturing and distribution.•We market the MCS® brand apheresis equipment which is designed to collect specific blood components from the donor. Utilizing theMCS automated platelet collection protocols, blood centers collect one or more therapeutic “doses” of platelets during a single donation.•Our portfolio of disposable whole blood collection and component storage sets offer flexibility in collecting a unit of whole blood and thesubsequent production and storage of blood components, including options for in-line or dockable filters for leukoreduction.•Our SafeTrace Tx® and El-Dorado Donor® donation and blood unit management systems span blood center operations and automate andtrack operations from the recruitment of the blood donor to the disposition of the blood product.•Our Hemasphere® software solution provides support for more efficient blood drive planning and Donor Doc® and e-Donor® software helpto improve donor recruitment and retention.Our Blood Center business unit represented 31.5%, 34.3% and 39.1% of our total revenue in fiscal 2018, 2017 and 2016, respectively.•HospitalHospitals are called upon to provide the highest standard of patient care while at the same time reduce operating costs. Haemonetics' Hospitalbusiness has three product lines - Hemostasis Management, Cell Salvage and Transfusion Management - that help decision makers in hospitalsoptimize blood acquisition, storage and usage in critical settings.3Table of ContentsHemostasis ManagementHemostasis Management Market — Hemostasis refers to a patient's ability to form and maintain blood clots. The clinical management ofhemostasis requires that physicians have the most complete information to make decisions on how to best maintain a patient’s coagulationequilibrium between hemorrhage (bleeding) and thrombosis (clotting). Hemostasis is a critical challenge in various medical procedures, includingcardiovascular surgery, organ transplantation, trauma, post-partum hemorrhage and percutaneous coronary intervention. By understanding apatient’s hemostasis status, clinicians can better plan for the patient’s care pathway. For example, they may decide whether to start or discontinue theuse of certain drugs or to determine the need for a transfusion and which specific blood components would be most effective in minimizing bloodloss and reducing clotting risk. Such planning supports better care, which can lead to lower hospital costs through a reduction in unnecessary bloodproduct transfusions, reduced adverse transfusion reactions and shorter intensive care unit and hospital stays.Hemostasis Management Products — Our portfolio of TEG® diagnostic systems enables clinicians to holistically assess the coagulation status of apatient at the point-of-care or laboratory setting. We have two device platforms that we market to hospitals and laboratories as an alternative toroutine blood tests: the TEG 5000 hemostasis analyzer system, which we acquired in the 2007 acquisition of assets from Haemoscope Corporationand the TEG 6s hemostasis analyzer system, the underlying technology for which we license from Cora Healthcare, Inc., a company established byHaemoscope's founders. Under the license from Cora Healthcare, we have exclusive perpetual rights to manufacture and commercialize the TEG 6ssystem in the field of hospitals and hospital laboratories.Each TEG system consists of an analyzer that is used with single-use reagents and disposables. In addition, TEG Manager® software connectsmultiple TEG analyzers throughout the hospital, providing clinicians remote access to both active and historical test results that inform treatmentdecisions.The TEG 5000 system is approved for a broad set of indications in all of our markets. The TEG 6s system is approved for the same set of indicationsas the TEG 5000 in Europe, Australia and Japan. In the U.S., the TEG 6s system is approved for cardiovascular surgery and cardiology. We arepursuing a broader set of indications for the TEG 6s system in the U.S., including trauma.Cell ProcessingCell SalvageCell Salvage Market — The Cell Salvage market represents autotransfusion devices designed to transfuse back a patient’s own blood during or aftersurgery. Loss of blood is common in many surgical procedures, including open heart, trauma, transplant, vascular and orthopedic procedures, andthe need for transfusion of oxygen-carrying red cells to make up for lost blood volume is routine. Patients commonly receive donor blood whichcarries various risks for transfusion reactions including chills, fevers or other side effects that can prolong a patient’s recovery.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 or 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 toanesthesiologists and surgical suite service providers.Cell Salvage Products — Our Cell Saver® Elite®+ autologous blood recovery system is a surgical blood salvage system targeted to medium to highblood loss procedures, such as cardiovascular, orthopedic, trauma, transplant, vascular, obstetrical and gynecological surgeries. The Cell Saver Elite+ is designed to minimize allogeneic blood use and reliably recover and transfuse a patient’s own high-quality blood.Our OrthoPAT® perioperative autotranfusion system is targeted to orthopedic procedures and is designed to remain with the patient followingsurgery, to recover blood and produce a washed red cell product for autotransfusion. The OrthoPAT product line will be discontinued effectiveMarch 31, 2019. We will offer the Cell Saver Elite + as an alternative autotransfusion system for orthopedics or other medium to low blood lossprocedures.4Table of ContentsTransfusion ManagementTransfusion Management Market — Hospital transfusion services professionals and clinicians are facing cost restraints in addition to the pressureto enhance patient safety, compliance and operational efficiency. Managing the safety and traceability of the blood supply chain andcomprehensive management of patients, orders, specimens, blood products, derivatives and accessories across the hospital network is challenging. Inaddition, providing clinicians with the vital access to blood when needed most while maintaining traceability is a key priority. Frequently whenblood products leave the blood bank, the transfusion management staff loses control and visibility of the blood components. They often do notknow if the blood was handled, stored or transfused properly, which may lead to negative effects on patient safety, product quality, inventoryavailability and staff efficiency as well as increased waste.Transfusion Management Products — Our Transfusion Management solutions are designed to help provide safety, traceability and compliancefrom the hospital blood bank to the patient bedside and enable consistent care across the hospital network. The SafeTrace Tx transfusionmanagement software is considered the system of record for all hospital blood bank and transfusion service information. BloodTrack® bloodmanagement software is a modular suite of blood management and bedside transfusion solutions that combines software with hardware componentsand acts as an extension of the hospital’s blood bank information system. The software is designed to work with storage devices, including theBloodTrack HaemoBank® blood storage device.Our Hospital business unit represented 20.3%, 19.4% and 18.9% of our total revenue in fiscal 2018, 2017 and 2016, respectively.Although we address our customers' needs through multiple product lines, we manage our business as five operating segments based primarily on geography:(a) North America Plasma, (b) Americas Blood Center and Hospital, (c) Europe, Middle East and Africa (collectively "EMEA"), (d) Asia Pacific and (e) Japan.The North America Plasma reporting unit is a separate operating segment with dedicated segment management due the size and scale of the Plasma business.For financial reporting purposes, we aggregate our five operating segments into four reportable segments:•Japan•EMEA•North America Plasma•All OtherWe have aggregated the Americas Blood Center and Hospital and Asia - Pacific operating segments into the All Other reportable segment based upon theirsimilar operational and economic characteristics, including similarity of operating margin.Segment AssetsOur assets by segment are set forth below:(In thousands)March 31, 2018 April 1, 2017 April 2, 2016Japan$99,237 $91,346 $129,551EMEA278,581 259,863 249,504North America Plasma342,028 313,934 453,212All Other517,493 573,566 486,861Total assets$1,237,339 $1,238,709 $1,319,128The financial information required for segments is included herein in Note 17, Segment and Enterprise-Wide Information, to our consolidated financialstatements contained in Item 8 of this Annual Report on Form 10-K.Marketing/Sales/DistributionWe market and sell our products to biopharmaceutical 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.5Table of ContentsUnited StatesIn fiscal 2018, 2017 and 2016, 60.7%, 59.0% and 57.2%, respectively, of consolidated net revenues were generated in the U.S., where we primarily use adirect sales force to sell our products. See Note 17, Segment and Enterprise-Wide Information, to our consolidated financial statements contained in Item 8 ofthis Annual Report on Form 10-K for additional information.Outside the United StatesIn fiscal 2018, 2017 and 2016, 39.3%, 41.0% and 42.8%, respectively, of consolidated net revenues were generated through sales to non-U.S. customers.Outside the U.S., we use a combination of direct sales force and distributors. See Note 17, Segment and Enterprise-Wide Information, to our consolidatedfinancial statements contained in Item 8 of this Annual Report on Form 10-K for additional information.Research and DevelopmentOur research and development centers in the U.S. ensure that protocol variations are incorporated to closely match local customer requirements. In addition,Haemonetics maintains software 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, hemostasis analyzers and software has required us to maintain technical expertise in variousengineering disciplines, including mechanical, electrical, software, biomedical engineering and chemistry. Innovations resulting from these variousengineering efforts enable us to develop systems that are faster, smaller and more user-friendly, or that incorporate additional features important to ourcustomer base.In fiscal 2018, research and development resources were primarily allocated to supporting our Hemostasis Management product line, including investmentsin clinical programs. A key element of our strategy in the U.S. for our Hemostasis Management product line has been to invest in clinical trials to supportexpanded FDA labeling including a trauma indication for our TEG 6s. Additionally, we continue to invest resources in next generation plasma collection andsoftware systems, as well as Transfusion Management software solutions.In fiscal 2018, 2017 and 2016, our research and development costs were $39.2 million, $37.6 million and $45.0 million, respectively.ManufacturingOur principal manufacturing operations are located in the United States, Mexico and Malaysia.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. The manufacturing sites for our equipment and disposables are certified to the ISO 13485 standard and to the Medical DeviceDirective, as applicable.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, equipment and liquid solutions according to our specifications. We maintain important relationships withtwo Japanese manufacturers that produce finished disposables in Singapore, Japan and Thailand. We have also engaged Sanmina Corporation to manufacturecertain equipment and are engaging a second supplier to increase capacity and improve manufacturing efficiency as we launch NexSys PCS.Our equipment is designed in-house and assembled by us or our contracted manufacturers 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 a combination of patent, trademark, copyright and trade secret laws,as well as provisions in our agreements with third parties, to protect our intellectual property rights.6Table of ContentsWe hold numerous patents in the United States and have applied for numerous additional U.S. patents relating to our products and related technologies. Wealso own or have applied for corresponding patents in selected foreign countries. These patents cover certain elements of our products and processes,including protocols employed in our equipment and aspects of certain our disposables. Our patents may cover current products, products in markets we planto enter, or products in markets we plan to license to others, or the patents may be defensive in that they are directed to technologies not currently embodiedin our current products. We also license patent rights from third parties that cover technologies that we use or plan to use in our business.We own various trademarks that have been registered in the United States and certain other countries.Our policy is to obtain patent and trademark rights in the U.S. and foreign countries where such rights are available and we believe it is 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.To maintain our competitive position, we also rely on the technical expertise and know-how of our personnel. We believe that unpatented know-how andtrade secrets relied upon in connection with our business and products are generally as important as patent protection in establishing and maintaining acompetitive advantage.CompetitionTo remain competitive, we must continue to develop and acquire new cost-effective products, information technology platforms and business services. Webelieve that our ability to maintain a competitive advantage will continue to depend on a combination of factors. Some factors are largely within our controlsuch as: (i) maintenance of a positive reputation among our customers, (ii) development of new products that meet our customer's needs, (iii) obtainingregulatory approvals for our products in key markets, (iv) obtaining patents that protect our innovations, (v) development and protection of proprietaryknow-how in important technological areas, (vi) product quality, safety and cost effectiveness and (vii) continual and rigorous documentation of clinicalperformance. Other factors are outside of our control. We could see changes in regulatory standards or clinical practice that favor a competitor's technology orreduce revenues in key areas of our business.Our technical staff is highly skilled, but certain competitors have substantially greater financial resources and larger technical staff 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.In addition, we face competition from several large, global companies with product offerings similar to ours. Terumo BCT and Fresenius SE & Co. KGaA, inparticular, have significantly greater financial and other resources than we do and are strong competitors in a number of our businesses. The followingprovides an overview of the key competitors in each of our four global product enterprises.•PlasmaIn the automated plasma collection market, we principally compete with Fresenius' Fenwal Aurora and Aurora Xi product line, on the basis of speed,plasma yield per donation, quality, reliability, ease of use, services and technical features of the collection systems and on the long-term cost-effectiveness of equipment and disposables. In China, the market is populated by local producers of a product that is intended to be similar to ours.Recently, those competitors have expanded to markets beyond China, including European and South American countries. In the field of plasmarelated software, MAK Systems is the primary source competitor along with applications developed internally by our customers.•Blood CenterMost donations worldwide are traditional manual whole blood collections and approximately 40% of the Blood Center portfolio competes in thisspace. We face intense competition in our whole blood business on the basis of quality and price. Our main competitors are Fresenius, MacoPharmaand Terumo.Our MCS automated component blood collections, which represents approximately 50% of the Blood Center portfolio, not only compete againstthe traditional manual whole blood collection market (particularly in red cells) but also compete with Terumo and Fresenius. Technology is the keydifferentiator in automated component blood collections, as measured by the time to collect more than one unit of a specific targeted bloodcomponent. While not all donors are eligible to donate more than one unit, it continues to become more prevalent in markets with a significantnumber of eligible donors. Therefore, both Haemonetics and our competitors continue to experience downward pressure on collection of singleplatelet collection procedures.7Table of ContentsIn Blood Center software, MAK Technologies is a competitor along with systems developed internally by our customers. Our software portfolio ispredominately a U.S. based business.•HospitalHemostasis ManagementThe TEG hemostasis analyzer system is used primarily in surgical applications. Competition includes routine coagulation tests, such as prothrombintime, partial thromboplastin time and platelet count marketed by various manufacturers, such as Instrumentation Laboratory, Diagnostica Stago SASand Sysmex. The TEG analyzer competes with these routine laboratory tests based on its ability to provide a more complete picture of a patient'shemostasis at a single point in time and to measure the clinically relevant platelet function for an individual patient.In addition, TEG systems compete more directly with other advanced blood test systems, including ROTEM® analyzers, the VerifyNow® System andHemoSonics Quantra™. ROTEM and VerifyNow instruments are marketed by Instrumentation Laboratory, a subsidiary of Werfen. HemoSonics wasrecently acquired by Diagnostica Stago. There are also additional technologies being explored to assess viscoelastic and other characteristics thatcan provide insights into the coagulation status of a patient.Cell ProcessingCell SalvageIn the intraoperative autotransfusion market, competition is based on reliability, ease of use, service, support and price. For high-volume platforms,each manufacturer's technology is similar and our Cell Saver technology competes principally with products offered by LivaNova Plc, Medtronicand Fresenius.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,principally tranexamic acid. In recent years, the widespread adoption of tranexamic acid has significantly impacted OrthoPAT sales. Effective March31, 2019, our OrthoPAT products will be discontinued and we will offer the Cell Saver Elite + as an alternative autotransfusion system fororthopedics or other medium to low blood loss procedures.Transfusion ManagementSafeTrace Tx and BloodTrack compete in the transfusion management software market within the broader category of hospital informationsystems. SafeTrace Tx is an FDA regulated blood bank information system ("BBIS") that integrates and communicates with other healthcareinformation systems such as the electronic health record and laboratory information system within the hospital. The BloodTrack software, also FDAregulated, is an extension of the BBIS and provides secure, traceable blood units at the point-of-care, including trauma, surgery, outpatient andcritical care settings. Growth drivers for these markets include patient safety, operational efficiencies and compliance.SafeTrace Tx competition primarily consists of stand-alone BBIS including Mediware and some Electronic Health Record software that includes abuilt-in transfusion management solution including Cerner. Global competition for BloodTrack varies by country including MSoft in Europe andestablished blood practices in the U.S. such as using standard refrigerators and manual movement of blood products. BloodTrack integrates with thehospital’s existing lab or blood bank system allowing for greater market acceptance.Significant CustomersIn fiscal 2018, 2017 and 2016, our ten largest customers accounted for approximately 45%, 42% and 36% of our net revenues, respectively. In both fiscal2018 and 2017, one plasma collection customer accounted for approximately 14% of our net revenues and in fiscal 2016 accounted for 11% of net revenues.Government RegulationDue to the variety of products that we manufacture, we and our products are subject to a wide variety of regulations by numerous government agencies,including the FDA, and similar agencies outside the U.S. To varying degrees, each of these agencies requires us to comply with laws and regulationsgoverning the development, testing, manufacturing, labeling, marketing and distribution of our products.8Table of ContentsMedical Device RegulationPremarket Requirements - U.S.Unless an exemption applies, all medical devices introduced to the U.S. market since 1976 are required by the FDA, as a condition of marketing, to secureeither a 510(k) pre-market notification clearance or an approved premarket approval application, or PMA. The FDA classifies medical devices into one ofthree classes. Devices deemed to pose a low or moderate risk are placed in class I or II, which requires the manufacturer to submit to the FDA a 510(k)premarket notification requesting clearance for commercial distribution, unless the device type is exempt from this requirement. Devices deemed by the FDAto pose the greatest risk or devices deemed not substantially equivalent to a previously cleared 510(k) device are placed in class III, requiring submission andapproval of a PMA. Both the 510(k) clearance and PMA processes can be resource intensive, expensive and lengthy and require payment of significant userfees. To obtain 510(k) clearance, we must submit a premarket notification demonstrating that the proposed device is “substantially equivalent” to a previouslycleared 510(k) device or a device that was in commercial distribution before May 28, 1976 for which the FDA has not yet called for the submission ofPMAs. The FDA’s 510(k) clearance pathway usually takes from three to 12 months from the date the notification is submitted, but it can take considerablylonger, depending on the extent of FDA's requests for additional information and the amount of time a sponsor takes to fulfill them. After a device receives510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, willrequire a new 510(k) clearance or could require premarket approval.A PMA must be submitted if a device cannot be cleared through the 510(k) clearance process. The PMA process is generally more detailed, lengthier andmore expensive than the 510(k) process. To date, we have no PMA approved products and do not have any class III products on our product pipeline.Postmarket Requirements - U.S.After the FDA permits a device to enter commercial distribution, numerous regulatory requirements continue to apply. These include, among others:•FDA's Quality System Regulation, which requires manufacturers, including third party manufacturers, to follow quality assuranceprocedures during all aspects of the manufacturing process;•Labeling regulations including unique device identification;•Clearance of a 510(k) for certain product modifications;•Medical device reporting, or MDR, regulations, which require that manufacturers report to the FDA if their device may have caused orcontributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if themalfunction were to recur;•Medical device correction and removal (recall) reporting regulations; and•An order of repair, replacement or refund.Additionally, we and the manufacturing facilities of our suppliers are subject to unannounced inspections by FDA to determine our compliance with the QSRand other applicable regulations described above. The FDA can issue warning letters or untitled letters, impose injunctions, suspend regulatory clearance orapprovals, ban certain medical devices, detain or seize adulterated or misbranded medical devices, order repair, replacement or refund of these devices andrequire notification of health professionals and others with regard to medical devices that present unreasonable risks of substantial harm to the public health.The FDA may also initiate action for criminal prosecution of such violations.Requirements Outside the U.S.The regulatory review process varies from country to country and may in some cases require the submission of clinical data. Our international sales aresubject to regulatory requirements in the countries in which our products are sold. These regulations will be significantly modified in the next couple ofyears. For example, in May 2017, the EU Medical Devices Regulation (Regulation 2017/745) was adopted. The EU Medical Devices Regulation (EU MDR)repeals and replaces the EU Medical Devices Directive. The EU MDR, among other things, is intended to establish a uniform, transparent, predictable andsustainable regulatory framework across the EEA for medical devices and ensure a high level of safety and health while supporting innovation. The EU MDRwill however only become applicable three years after publication (in May 2020). Once applicable, the new regulations will among other things:9Table of Contents•strengthen the rules on placing devices on the market and reinforce surveillance once they are available;•establish explicit provisions on manufacturers’ responsibilities;•improve the traceability of medical devices;•set up a central database to provide comprehensive information on products available in the EU; and•strengthen rules for the assessment of certain high-risk devices before they are placed on the market.In the meantime, the current EU Medical Devices Directive continues to apply.Drug RegulationDevelopment and ApprovalUnder the Federal Food, Drug and Cosmetic Act, FDA approval of a new drug application, or NDA, is required before any new drug can be marketed in theU.S. Under the Public Health Service Act, or PHSA, FDA licensure of a biologics license application, or BLA, is required before a biologic can be marketed inthe U.S. NDAs and BLAs require extensive studies and submission of a large amount of data by the applicant.A generic version of an approved drug is approved by means of an abbreviated new drug application, or ANDA, by which the sponsor demonstrates that theproposed product is the same as the approved, brand-name drug, which is referred to as the “reference listed drug,” or RLD. Generally, an ANDA must containdata and information showing that the proposed generic product and RLD have the same active ingredient, in the same strength and dosage form, to bedelivered via the same route of administration, are intended for the same uses and are bioequivalent. This is instead of independently demonstrating theproposed product’s safety and effectiveness, which are inferred from the fact that the product is the same as the RLD, which the FDA previously found to besafe and effective. We currently hold ANDAs for liquid solutions (including anticoagulants, intravenous saline and a red blood cell storage solution), whichwe sell with our blood component and whole blood collection systems. Post-Approval RegulationAfter the FDA permits a drug to enter commercial distribution, numerous regulatory requirements continue to apply. These include FDA's current GoodManufacturing Practices, which include a series of requirements relating to organization and training of personnel, buildings and facilities, equipment,control of components and drug product containers and closures, production and process controls, quality control and quality assurance, packaging andlabeling controls, holding and distribution, laboratory controls and records and reports; labeling regulations; advertising and promotion requirements andrestrictions; and regulations regarding conducting recalls of product.Failure to comply with applicable FDA requirements and restrictions in this area may subject a company to adverse publicity and enforcement action by theFDA, the Department of Justice, or the Office of the Inspector General of the Department of Health and Human Services, as well as state authorities. This couldsubject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and agreements that materiallyrestrict the manner in which a company promotes or distributes drug or biological products.Requirements Outside the U.S.We must obtain the requisite marketing authorizations from regulatory authorities in foreign countries prior to marketing of a product in those countries. Therequirements and process governing product licensing vary from country to country. If we fail to comply with applicable foreign regulatory requirements, wemay be subject to, among other things, warning letters or untitled letters, injunctions, civil, administrative, or criminal penalties, monetary fines orimprisonment, suspension or withdrawal of regulatory approvals, suspension of ongoing clinical studies, refusal to approve pending applications orsupplements to applications filed by us, suspension or the imposition of restrictions on operations, product recalls, the refusal to permit the import or exportof our products or the seizure or detention of products.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 determining10Table of Contentsthe 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.Fraud and Abuse LawsWe are subject to fraud and abuse and other healthcare laws and regulations that constrain the business or financial arrangements and relationships throughwhich we market, sell and distribute our products. In addition, we are subject to transparency laws and patient privacy regulation by U.S. federal and stategovernments and by governments in foreign jurisdictions in which we conduct our business. We have described below some of the key federal, state andforeign healthcare laws and regulations that apply to our business.The federal healthcare program Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receivingremuneration, directly or indirectly, in cash or in kind, to induce or in return for purchasing, leasing, ordering or arranging for or recommending the purchase,lease or order of any healthcare item or service reimbursable, in whole or in part, under Medicare, Medicaid or other federally financed healthcare programs.This statute has been interpreted to apply to arrangements between manufacturers of federally reimbursed products on one hand and prescribers, purchasersand others in a position to recommend, refer, or order federally reimbursed products on the other. Although there are a number of statutory exemptions andregulatory safe harbors protecting certain common activities from prosecution, the exemptions and safe harbors are drawn narrowly and practices that involveremuneration to those who prescribe, purchase, or recommend medical devices or pharmaceutical and biological products, including certain discounts, orengaging consultants as speakers or consultants, may be subject to scrutiny if they do not fit squarely within the exemption or safe harbor. Our practices maynot in all cases meet all of the criteria for safe harbor protection from anti-kickback liability. Moreover, there are no safe harbors for many common practices,such as educational and research grants. Liability may be established without a person or entity having actual knowledge of the federal Anti-KickbackStatute or specific intent to violate it. In addition, the government may assert that a claim including items or services resulting from a violation of the federalAnti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act.The federal civil False Claims Act prohibits, among other things, any person from knowingly presenting, or causing to be presented, a false, fraudulent ormaterially incomplete claim for payment of government funds, or knowingly making, using, or causing to be made or used, a false record or statementmaterial to an obligation to pay money to the government or knowingly concealing or knowingly and improperly avoiding, decreasing, or concealing anobligation to pay money to the federal government. In recent years, companies in the healthcare industry have faced enforcement actions under the federalFalse Claims Act for, among other things, allegedly providing free product to customers with the expectation that the customers would bill federal programsfor the product or causing false claims to be submitted because of the company’s marketing the product for unapproved and thus non-reimbursable, uses.False Claims Act liability is potentially significant in the healthcare industry because the statute provides for treble damages and mandatory penalties of tensof thousands of dollars per false claim or statement. Healthcare companies also are subject to other federal false claims laws, including, among others, federalcriminal healthcare fraud and false statement statutes that extend to non-government health benefit programs.The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic andClinical Health Act, or HITECH, among other things, imposes criminal and civil liability for knowingly and willfully executing a scheme to defraud anyhealthcare benefit program, including private third party payors and knowingly and willfully falsifying, concealing or covering up a material fact or makingany materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.In addition, the Physician Payment Sunshine Act, implemented as the Open Payments program, requires manufacturers of certain products reimbursed byMedicare, Medicaid, or the Children’s Health Insurance Program to track and report to the federal government payments and transfers of value that they maketo physicians and teaching hospitals and ownership interests held by physicians and their family and provides for public disclosures of these data.Many states have adopted analogous laws and regulations, including state anti-kickback and false claims laws, which may apply to items or servicesreimbursed under Medicaid and other state programs or, in several states, regardless of the payor. Several states have enacted legislation requiringpharmaceutical and medical device companies to, among other things, establish marketing compliance programs; file periodic reports with the state,including reports on gifts and payments to individual health care providers; make periodic public disclosures on sales, marketing, pricing, clinical trials andother activities; and/or register their sales representatives. Some states prohibit specified sales and marketing practices, including the provision of gifts,meals, or other items to certain health care providers and/or offering co-pay support to patients for certain prescription drugs.Other countries, including a number of EU Member States, have laws of similar application.11Table of ContentsEnvironmental 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 31, 2018, we employed the full-time equivalent of 3,136 persons.Availability of Reports and Other InformationAll of our corporate governance materials, including the Principles of Corporate Governance, Code of Conduct and the charters of the Audit, Compensationand Governance and Compliance Committees are published on the Investor Relations section of our website at www.haemonetics.com. On this web site thepublic can also access, free of charge, our annual, quarterly and current reports and other documents filed or furnished to the Securities and ExchangeCommission, or SEC, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.Cautionary Statement Regarding Forward-Looking InformationStatements contained in this report, as well as oral statements we make that 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 materiallyfrom those projected or anticipated. Factors that may influence or contribute to the inaccuracy of the forward-looking statements or cause actual results todiffer materially from expected or desired results may include, without limitation, demand for whole blood and blood components, changes in executivemanagement, changes in operations, restructuring and turnaround plans, the impact of the Tax Cuts and Jobs Act, the share repurchase program, assetrevaluations to reflect current business conditions, asset sales, technological advances in the medical field and standards for transfusion medicine and ourability to successfully offer products that incorporate such advances and standards, product quality, market acceptance, regulatory uncertainties, including inthe receipt or timing of regulatory approvals, the effect of economic and political conditions, the impact of competitive products and pricing, blood productreimbursement policies and practices, foreign currency exchange rates, changes in customers’ ordering patterns including single-source tenders, the effect ofindustry consolidation as seen in the plasma and blood center markets, the effect of communicable diseases and the effect of uncertainties in markets outsidethe U.S. (including Europe and Asia) in which we operate and other risks detailed under Part II, Item 1A. Risk Factors of this Annual Report on Form 10-K.The foregoing list should not be construed as exhaustive.12Table of ContentsITEM 1A. RISK FACTORSIn addition to the other information contained in this Annual Report on Form 10-K and the exhibits hereto, the following risk factors should be consideredcarefully in evaluating our business. Our business, financial condition, cash flows or results of operations could be materially adversely affected by any ofthese risks. This section contains forward-looking statements. You should refer to the explanation of the qualifications and limitations on forward-lookingstatements at the end of Item 1 of this Annual Report on Form 10-K.If our business strategy does not yield the expected results or we fail to implement the necessary changes to our operations, we could see material adverseeffects on our business, financial condition or results of operations.Our products are organized in four categories for purposes of evaluating and developing their growth potential: Plasma, Blood Center, Cell Processing andHemostasis Management. We believe that Plasma and Hemostasis Management have the greatest growth potential, while Cell Processing innovation offers anopportunity to increase market share and expand into new segments. We believe Blood Center competes in challenging markets that require us to manage thebusiness differently, including reducing costs, shrinking the scope of the current product line and evaluating opportunities to exit unfavorable customercontracts.If we have not correctly identified the product categories with greatest growth potential, we will not allocate our resources appropriately which could have amaterial adverse effect on our business, financial condition or results of operations. Further, if we are unable to reduce costs and complexity in our BloodCenter business unit, we will obtain lower than expected cash flows to fund our future growth and capital needs. This could have a material adverse effect onour liquidity and results of operations.If we are unable to successfully launch our NexSys PCS plasmapheresis system, our business may be materially and adversely affected.In July 2017, we received FDA 510(k) clearance for the NexSys PCS plasmapheresis system. In March 2018, we received FDA clearance for the enhancementof our NexSys PCS embedded software that activates YESTM technology, a yield-enhancing solution. We have begun limited production of NexSys PCS andexpect a ramp-up of the commercial launch to occur throughout the second half of fiscal 2019.If our customers do not adopt the NexSys PCS device, or if they do and we are unable to procure sufficient devices from our contract manufacturers to meetdemand or receive a price that provides an adequate return on our investment, our revenues, gross margin, operating income and return on invested capitalcould be negatively impacted and create a materially adverse effect on our results of operations.Loss of a significant customer could adversely affect our business.In fiscal 2018, one plasma collection customer accounted for approximately 14% of our net revenues and our ten largest customers accounted forapproximately 45% of our net revenues. If any of our largest customers materially reduce their purchases from us or terminate their relationship with us forany reason, we could experience an adverse effect on our results of operations or financial condition.Three of our four largest Plasma customers have contracts that expire before the end of fiscal 2020. As a result, we will need to amend current contracts orenter into new contracts for the NexSys PCS. A failure to extend our current contracts or enter into new contracts with these customers on acceptable termscould have a material adverse effect on our business, financial condition and results of operations.We may not realize the benefits we expect from our Complexity Reduction Initiative.On November 1, 2017, we committed to and commenced our Complexity Reduction Initiative, also referred to in this report as the 2018 Program, a company-wide restructuring program designed to improve operational performance and reduce cost, freeing up resources to invest in accelerated growth. We anticipatethe majority of the savings generated by the 2018 Program will result from cost reductions such as direct materials, indirect spending, facilities, freight andworkforce reduction that is being accomplished primarily through voluntary and involuntary separations. The successful implementation of the 2018Program presents organizational challenges and in many cases will require successful negotiations with third parties, including suppliers and other businesspartners. Events and circumstances, such as financial or strategic difficulties, delays and unexpected costs may occur that could result in our not realizing allof the anticipated benefits or our not realizing the anticipated benefits on our expected timetable. As a result, we may not be able to realize all of theanticipated benefits from our 2018 Program.The 2018 Program could also yield unintended consequences, such as distraction of our management and employees, business disruption, inability to attractor retain key personnel, the loss of institutional knowledge as a result of turnover and reduced employee productivity, which could negatively affect ourbusiness, sales, financial condition and results of operations. If we are13Table of Contentsunable to realize the anticipated savings of the 2018 Program, our ability to fund new business initiatives may be adversely affected. Any failure toimplement the 2018 Program in accordance with our expectations could have a material adverse effect on our business, results of operations, cash flows andfinancial condition.We outsource certain aspects of our business to a single third-party vendor that subjects us to risks, including disruptions in business and increased costs. Currently, we rely on a single vendor to support several of our business processes, including customer service and support and elements of enterprisetechnology, procurement, accounting and human resources. We make diligent efforts to ensure that the provider of these outsourced services is observingproper internal control practices. However, there are no guarantees that failures will not occur. Accordingly, we are subject to the risks associated with thevendor’s ability to successfully provide the necessary services to meet our needs. If our vendor is unable to adequately protect our data or information is lost, if our ability to deliver our services is interrupted (including as a result of naturaldisasters, strikes, terrorism attacks or other adverse events in the countries in which the vendor operates), if our vendor's fees are higher than expected, or ifour vendor makes mistakes in the execution of operations support, then our business and operating results may be negatively affected.A significant portion of our revenue derives from the sale of blood collection supplies. Declines in the number of blood collection procedures haveadversely impacted our business and future declines may have an adverse effect on our business, financial condition and results of operations.The demand for whole blood disposable products in the U.S. continued to decrease in fiscal 2018 due to a sustained decline in transfusion rates and actionstaken by hospitals to improve blood management techniques and protocols. In response to this trend, U.S. blood center collection groups prefer single sourcevendors for their whole blood collection products and are primarily focused on obtaining the lowest average selling prices. While we continued to see amoderation in the rate of market decline in the U.S. during fiscal 2018, we expect to see continued declines in transfusion rates and the market to remainprice-focused and highly competitive for the foreseeable future. Continued declines in this market could have a material adverse effect on our liquidity andresults of operations.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.Political, economic and policy influences are causing the healthcare and blood collection industries to make substantial structural and financial changes thataffect our results of operations. Government and private sector initiatives limiting the growth of healthcare costs and causing structural reforms in healthcaredelivery, including the reduction in blood use and reduced payments for care. These trends have placed greater pricing pressure on suppliers, decreasedaverage selling prices and increased the number of sole source relationships. This pressure impacts our Hemostasis Management, Cell Processing and BloodCenter businesses.The expansion of group purchasing organizations in the U.S., integrated delivery networks and large single accounts puts direct price pressure on ourHospital business. It also puts price pressure on our U.S. Blood Center customers who are also facing reduced demand for red cells. Our Blood Centercustomers have responded to this pressure by creating their own group purchasing organizations and resorting to single source tenders to create incentives forsuppliers, 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.Quality 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.In fiscal 2018, one of our suppliers began production of our new plasmapheresis device, the NexSys PCS. We expect to significantly expand production infiscal 2019. If our suppliers fail to produce sufficient devices that meet our quality standards, we could have delays in customer adoption and costs toremediate the deficient quality which would have a negative effect on our revenues, gross margins, operating income and return on invested capital.14Table of ContentsA recall of our products, either voluntarily or at the direction of the FDA, another governmental authority, or a foreign competent authority, or thediscovery of serious safety issues with our products, could have a significant adverse impact on us.The FDA and similar foreign governmental authorities such as the competent authorities of the EEA countries have the authority to require the recall ofcommercialized products in the event of material deficiencies or defects in design or manufacture or in the event that a product poses an unacceptable risk tohealth. Manufacturers may, under their own initiative, recall a product if any material deficiencies in our products are found. A government-mandated orvoluntary recall by us or one of our distributors could occur as a result of an unacceptable risk to health, component failures, manufacturing errors, design orlabeling defects or other deficiencies and issues.An interruption in our ability to manufacture our products, obtain key components or raw materials, or the failure of a sole source supplier may adverselyaffect our business.Certain key disposables are manufactured at single locations with limited alternate facilities. If an event occurs that results in damage to one or more of thesefacilities, we may be unable to supply 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 Sanmina Corporation, which is the primary manufacturer of our apheresis equipment. Our newplasmapheresis device, the NexSys PCS, is made entirely by contract manufacturers located outside the U.S. If there are delays increasing the production ofthese devices or their delivery, it would delay customer adoption.Due to the stringent regulations and requirements of the FDA and other similar non-U.S. regulatory agencies regarding the manufacture of our products, wemay not be able to quickly establish additional or replacement sources for certain components or materials. A reduction or interruption in manufacturing, oran inability to secure alternative sources of raw materials or components, could have a material adverse effect on our business, results of operations, financialcondition and cash flows.Ongoing delays in expanding our liquid solutions production capacity could reduce our revenue, increase our costs, or prevent us from meeting contractedobligations, which could result in financial penalties and have an adverse effect on our results of operations.We primarily produce two solutions for use in apheresis procedures: anti-coagulant and saline. Anti-coagulant is required for each apheresis procedure,including the collection of platelets and plasma. Saline is used by our Plasma customers to provide fluid replacement after a donation.We have been working to expand the capacity of our Union, South Carolina facility to produce both anti-coagulant and saline. We have experienced delaysin the completion of the project that have required us and a customer to rely on alternative sources of supply. If we are unable to successfully complete thecapacity expansion or obtain additional supplies at an appropriate price, our results of operations could continue to be adversely affected.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 face risks related to price, composition and availability of the plastic raw materials used in our business.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 also may affect our procurement costs to a lesser degree.The composition of the plastic we purchase is also important. Today, we purchase plastics that contain phthalates, which are used to make plastic malleable.Should plastics with phthalates become unavailable due to regulatory changes, we may be required to obtain regulatory approvals from FDA and foreignauthorities for a number 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 that represent a significant portion of our revenues.We have a complex global supply chain. Disruptions to this system could delay our ability to deliver finished products. We have a complex global supply chain that involves integrating key suppliers and our manufacturing capacity into a global movement of components andfinished goods. We have certain key suppliers, including JMS Co. Ltd., Kawasumi Laboratories and Sanmina Corporation, who have their own complexsupply chains throughout Asia. Any disruption to one or more of our suppliers’ production or delivery of sufficient volumes of components conforming toour specifications could disrupt or delay our ability to deliver finished products to our customers. For example, we purchase components in Asia for use in15Table of Contentsmanufacturing in the U.S., Puerto Rico and Mexico. We source all of our apheresis equipment from Asia and regularly ship finished goods from the U.S.,Puerto Rico and Mexico to the rest of the world.Due to the high standards and FDA requirements applicable to manufacturing our products, such as the FDA's Quality System Regulation and GoodManufacturing Practices, we may not be able to quickly establish additional or replacement sources for certain raw materials, components or finished goods.We might be forced to purchase substantial inventory, if available, to last until we are able to qualify an alternate supplier. If we cannot obtain a necessary component, we may need to find, test and obtain regulatory approval or clearance for a replacement component, produce thecomponent ourselves or redesign the related product, which would cause significant delay and could increase our manufacturing costs.In the event that we are unable to obtain sufficient quantities of raw materials, components or finished goods on commercially reasonable terms or in a timelymanner, our ability to manufacture our products on a timely and cost-competitive basis may be compromised, which may have a material adverse effect onour business, financial condition and results of operations.If we are unable to successfully expand our product lines through internal research and 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 the development or acquisition of newproducts. The creation and adoption of technological advances is only one step. We must also efficiently develop the technology into a product that confersa competitive advantage, represents a cost effective solution or provides improved patient care. Finally, as a part of the regulatory process of obtainingmarketing clearance for new products, we conduct and participate in numerous clinical trials, the results of which may be unfavorable, or perceived asunfavorable by the market, and could have a material adverse effect on our business, financial condition or results of operations.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.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.As 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-U.S. regulatory bodies. Our operations arealso subject to continuous review and monitoring by the FDA and other regulatory authorities. Failure to substantially comply with applicable regulationscould subject our products to recall or seizure by government authorities, or an order to suspend manufacturing activities. If our products were determined tohave design or manufacturing flaws, this could result in their recall or seizure. Either of these situations could also result in the imposition of fines.The European Union regulatory bodies finalized a new Medical Device Regulation (MDR) in calendar year 2017, replacing the existing directives andproviding three years for transition and compliance. The MDR is expected to change several aspects of the existing regulatory framework, such as clinicaldata requirements, and introduce new ones, such as Unique Device Identification. We, and the notified bodies who will oversee compliance to the new MDR,face uncertainties as the MDR is rolled out and enforced, creating risks in several areas including the CE marking process and data transparency in theupcoming years.16Table of ContentsIf we or our suppliers fail to comply with ongoing regulatory requirements, our products could be subject to restrictions or withdrawal from the market.Any product for which we obtain clearance or approval, and the manufacturing processes, reporting requirements, post- approval clinical data andpromotional activities for such product, will be subject to continued regulatory review, oversight and periodic inspection by the FDA and other domestic andforeign regulatory bodies. In particular, we and our third-party suppliers must comply with the QSR or cGMP requirements (depending on the products atissue).Any future failure by us or one of our suppliers to comply with applicable statutes and regulations administered by the FDA, or the failure to timely andadequately respond to any adverse inspectional observations or product safety issues, could result in enforcement actions.Any FDA sanctions could have a material adverse effect on our reputation, business, results of operations and financial condition. Furthermore, our keycomponent suppliers may not currently be or may not continue to be in compliance with all applicable regulatory requirements, which could result in ourfailure to produce our products on a timely basis and in the required quantities, if at all.Our inability to obtain, or any delay in obtaining, any necessary U.S. or foreign regulatory clearances or approvals for our newly developed products orproduct enhancements could harm our business and prospects.Our products are subject to a high level of regulatory oversight. Most medical devices cannot be marketed in the U.S. without 510(k) clearance or premarketapproval by the FDA. Our inability to obtain, or any delay in obtaining, any necessary U.S. or foreign regulatory clearances or approvals for newly developedproducts or product enhancements could harm our business and prospects. The process of obtaining clearances and approvals can be costly and timeconsuming. In addition, there is a risk that any approvals or clearances, once obtained, may be withdrawn or modified.Delays in receipt of, or failure to obtain, necessary clearances or approvals for our new products could delay or preclude realization of product revenues fromnew products or result in substantial additional costs which could decrease our profitability.Our relationships with customers and third-party payors are subject to applicable anti-kickback, fraud and abuse, transparency and other healthcare lawsand regulations, which could expose us to criminal sanctions, civil penalties, exclusion, contractual damages, reputational harm and diminished profitsand future earnings.We are subject to fraud and abuse and other healthcare laws and regulations that constrain the business or financial arrangements and relationships throughwhich we market, sell and distribute our products. In addition, we are subject to transparency laws and patient privacy regulation by U.S. federal and stategovernments and by governments in foreign jurisdictions in which we conduct our business.The shifting commercial compliance environment and the need to build and maintain robust and expandable systems to comply with different compliance orreporting requirements in multiple jurisdictions increase the possibility that a healthcare or pharmaceutical company may fail to comply fully with one ormore of these requirements. Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulationsmay involve substantial costs. It is possible that governmental authorities will conclude that our business practices do not comply with applicable fraud andabuse or other healthcare laws and regulations or guidance. If our operations are found to be in violation of any of these laws or any other governmentalregulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, exclusion from governmentfunded healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations. If any of the physicians or other providersor entities with whom we expect to do business is found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrativesanctions, including exclusions from government funded healthcare programs. Even if we are not determined to have violated these laws, governmentinvestigations into these issues typically require the expenditure of significant resources and generate negative publicity, which could harm our financialcondition and divert resources and the attention of our management from operating our business.As a substantial amount of our revenue comes from outside the U.S., we are subject to geopolitical events, economic volatility, violations of anti-corruptionlaws, export and import restrictions and tariffs, decisions by local regulatory authorities and the laws and medical practices in foreign jurisdictions. We do business in over 90 countries and have distributors in approximately 80 of these 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.17Table of ContentsIf there are sanctions or restrictions on the flow of capital that 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, or 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 approximately 80 countries, several of which are considered high risk for corruption. As a result, our global operations carrysome risk of unauthorized impermissible activity on the part of one of our distributors, employees, agents or consultants. Any alleged or actual violationcould subject us to government scrutiny, severe criminal or civil fines, or sanctions on our ability to export product outside the U.S., which could adverselyaffect our reputation and financial condition.Export of U.S. technology or goods manufactured in the U.S. to some jurisdictions requires special U.S. export authorization or local market controls that maybe 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.We sell our products in certain emerging economies which exposes us to less mature regulatory systems, more volatile markets for our products andgreater credit risks. A loss of funding for our products or changes to the regulatory regime could lead to lost revenue or account receivables. 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 healthcare 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.In many of the international markets in which we do business, including certain parts of Europe, South America, the Middle East and Asia, our employees,agents or distributors offer to sell our products in response to public tenders issued by various governmental agencies. There is additional risk in selling our products through agents or distributors, particularly in public tenders. If they misrepresent our products, do not 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.Our success depends on our ability to attract and retain key personnel needed to successfully operate the business.We constantly monitor the dynamics of the economy, the healthcare industry and the markets in which we compete; and we continue to assess our keypersonnel whom we believe are essential to our long-term success. In addition, we must also continue to attract and retain other qualified managerial andtechnical personnel. Competition for such personnel is intense. We may not be able to attract and retain personnel necessary for the development of ourbusiness.Over the last year, we have also effected significant organizational and strategic changes, including our Complexity Reduction Initiative, which has resultedin workforce reductions. If we fail to effectively manage our ongoing organizational and strategic changes in a manner that allows us to retain and attracttalent, our financial condition, results of operations and reputation, as well as our ability to successfully attract, motivate and retain key employees, could beharmed.We recorded goodwill and other asset impairment charges that reduced our income during fiscal 2017 and may record additional charges in futureperiods.We evaluate goodwill for impairment at least annually, or on an interim basis between annual tests when events or circumstances indicate that it is morelikely than not that the fair value of a reporting unit is less than its carrying value.Goodwill impairment charges or other asset impairment charges, if any, could materially adversely impact our results of operations in the period in whichthey are recorded. We will continue to monitor our intangible assets for potential impairments in future periods. Refer to Critical Accounting Policies withinour Management's Discussion and Analysis of Financial Condition and Results of Operations contained in Item 7 of this Annual Report on Form 10-K for adiscussion of key assumptions used in our testing.18Table of ContentsWe are increasingly dependent on information technology systems and subject to privacy and security laws and a cyber-attack or other breach of thesesystems could have a material adverse effect on our business, financial condition or results of operations.We increasingly rely on information technology systems to process, transmit and store electronic information in our day-to-day operations, includingsensitive personal information and proprietary or confidential information. Additionally, certain of our products collect data regarding patients and donorsand some connect to our systems for maintenance and other purposes. Similar to other large multi-national companies, the size and complexity of ourinformation technology systems makes them vulnerable to a cyber-attack, malicious intrusion, breakdown, destruction, loss of data privacy, or othersignificant disruption. We also outsource certain elements of our information technology systems to third parties that, as a result of this outsourcing, couldhave access to certain confidential information and whose systems may also be vulnerable to these types of attacks or disruptions. Our information systemsrequire an ongoing commitment of significant resources to maintain, protect and enhance existing systems and develop new systems to keep pace withcontinuing changes in information processing technology, evolving systems and regulatory standards, the increasing need to protect patient and customerinformation and changing customer patterns. In addition, third parties may attempt to hack into our products to obtain data relating to patients with ourproducts or our proprietary information. Any failure by us or third parties we work with to maintain or protect our respective information technology systemsand data integrity, including from cyber-attacks, intrusions or other breaches, could result in the unauthorized access to patient data and personallyidentifiable information, theft of intellectual property or other misappropriation of assets, or otherwise compromise our confidential or proprietaryinformation and disrupt our operations. Any of these events, in turn, may cause us to lose existing customers, have difficulty preventing, detecting andcontrolling fraud, have disputes with customers, physicians and other healthcare professionals, be subject to legal claims and liability, have regulatorysanctions or penalties imposed, have increases in operating expenses, incur expenses or lose revenues as a result of a data privacy breach or theft ofintellectual property, or suffer other adverse consequences, any of which could have a material adverse effect on our business, financial condition or results ofoperations.Additionally, the legal and regulatory environment surrounding information security and privacy is increasingly demanding, with the imposition of new andchanging requirements across businesses. We are required to comply with increasingly complex and changing legal and regulatory requirements that governthe collection, use, storage, security, transfer, disclosure and other processing of personal data, including The Health Insurance Portability and AccountabilityAct, The Health Information Technology for Economic and Clinical Health Act and the European Union’s General Data Protection Regulation (“GDPR”). InMay 2018, the GDPR will supersede current European Union data protection legislation, impose more stringent European Union data protectionrequirements and provide for greater penalties for noncompliance. We or our third-party providers and business partners may also be subjected to audits orinvestigations by one or more domestic or foreign government agencies relating to compliance with information security and privacy laws and regulations.We operate in an industry susceptible to significant product liability claims. Product liability claims could damage our reputation and impair our abilityto market our products or obtain professional or product liability insurance, or increase the cost of such insurance.Our products are relied upon by medical personnel in connection with the treatment of patients and the collection of blood or blood components fromdonors. In the event that patients or donors sustain injury or death in connection with their condition or treatment, we, along with others, may be sued andwhether or not we are ultimately determined to be liable, we may incur significant legal expenses. These claims may be brought by individuals seeking reliefon their own behalf or purporting to represent a class. In addition, product liability claims may be asserted against us in the future based on events we are notaware of at the present time.Such litigation could damage our reputation and, therefore, impair our ability to market our products or obtain professional or product liability insurance, orincrease the cost of such insurance. While we believe that our current product liability insurance coverage is sufficient, there is no assurance that suchcoverage will be adequate to cover incurred liabilities or that we will be able to obtain acceptable product and professional liability coverage in the future.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 or cost of borrowing.We have $253.7 million of debt outstanding at March 31, 2018 due for repayment before July 1, 2019 under our $379.4 million term loan. The obligations topay interest and repay the borrowed amounts may restrict our ability to adjust to adverse economic conditions and our ability to fund working capital, capitalexpenditures, acquisitions or other general corporate requirements. The interest rate on the loan is variable and subject to change based on market forces.Fluctuations in interest rates could adversely affect our profitability and cash flows.In addition, as a global corporation, we have significant cash reserves held in foreign countries. Some of these balances may not be immediately available torepay our debt.19Table of ContentsOur 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. No assurance can be made that our lenders would grant such waiverson favorable terms, or at all and we could be required to repay any borrowed amounts on short notice.Our operations and plans for future growth may require additional capital that may not be available to us, or only available to us on unfavorable terms.Our future capital requirements will depend on many factors, including operating requirements, product placements, current and future acquisitions and theneed to refinance existing debt. Our ability to issue additional debt or enter into other financing arrangements on acceptable terms could be adverselyaffected by our debt levels, unfavorable changes in economic conditions generally or uncertainties that affect the capital markets. Higher borrowing costs orthe inability to access capital markets could adversely affect our ability to support future growth and operating requirements and, as a result, our business,financial condition and results of operations could be adversely affected. As of March 31, 2018, we had $253.7 million of debt obligations due before July 1,2019 under our Term Loan. Refer to Liquidity and Capital Resources within our Management's Discussion and Analysis of Financial Condition and Resultsof Operations contained in Item 7 of this Annual Report on Form 10-K for further discussion of our debt obligations.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. In fiscal 2018, our international revenues accounted for 39.3% of ourtotal revenues. The exposure to fluctuations in currency exchange rates takes different forms. Reported revenues, as well as manufacturing and operationalcosts denominated in foreign currencies by our international businesses, fluctuate due to exchange rate movement when translated into U.S. dollars forfinancial reporting purposes. Fluctuations in exchange rates could adversely affect our profitability in U.S. dollars of products and services sold by us intointernational markets, where payment for our products and services and related manufacturing and operational costs is made in local currencies.Our effective tax rate may fluctuate and we may incur obligations in tax jurisdictions in excess of amounts that have been accrued.We are subject to taxation in numerous countries, states and other jurisdictions. In preparing our financial statements, we record the amount of tax payable ineach of the jurisdictions in which we operate. Our future effective tax rate, however, may be lower or higher than prior years due to numerous factors,including a change in our geographic earnings mix, changes in the measurement of our deferred taxes and recently enacted and future tax law changes injurisdictions in which we operate. Changes in our operations, including headcount in Switzerland, Puerto Rico or Malaysia, could adversely affect our taxrate due to favorable tax rulings in these jurisdiction. We are also subject to tax audits in various jurisdictions and tax authorities may disagree with certainpositions we have taken and assess additional taxes. Any of these factors could cause us to experience an effective tax rate significantly different fromprevious periods or our current expectations, which could adversely affect our business, results of operations and cash flows.Changes in tax laws or exposure to additional income tax liabilities could have a material impact on our financial condition, results of operations and/orliquidity.We are subject to income taxes, non-income based taxes and tax audits, in both the U.S. and various foreign jurisdictions. Tax authorities may disagree withcertain positions we have taken and assess additional taxes. We regularly assess the likely outcomes of these audits in order to determine the appropriatenessof our tax provision and have established contingency reserves for material, known tax exposures. However, the calculation of such tax exposures involvesthe application of complex tax laws and regulations in many jurisdictions, as well as interpretations as to the legality under various rules in certainjurisdictions. Therefore, there can be no assurance that we will accurately predict the outcomes of these disputes or other tax audits or that issues raised by taxauthorities will be resolved at a financial cost that does not exceed our related reserves and the actual outcomes of these disputes and other tax audits couldhave a material impact on our results of operations or financial condition.Changes in tax laws and regulations, or their interpretation and application, in the jurisdictions where we are subject to tax could materially impact oureffective tax rate. The U.S. enacted the Tax Cuts and Jobs Act, or the Act, on December 22, 2017, and we expect the U.S. Treasury to issue future notices andregulations under the Act. Certain provisions of the Act and the regulations issued thereunder could have a significant impact on our future results ofoperations as could interpretations made by the Company in the absence of regulatory guidance and judicial interpretations.Additionally, the U.S. Congress, government agencies in non-U.S. jurisdictions where we and our affiliates do business and the Organization for EconomicCo-operation and Development, or OECD, have recently focused on issues related to the taxation of20Table of Contentsmultinational corporations. One example is in the area of “base erosion and profit shifting,” where profits are claimed to be earned for tax purposes in low-taxjurisdictions, or payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower tax rates. The OECD has releasedseveral components of its comprehensive plan to create an agreed set of international rules for fighting base erosion and profit shifting. As a result, the taxlaws in the U.S. and other countries in which we and our affiliates do business could change on a prospective or retroactive basis and any such changes couldmaterially adversely affect our business.Our share repurchase program could affect the price of our common stock and increase volatility and may be suspended or terminated at any time, whichmay result in a decrease in the trading price of our common stock.On February 6, 2018, we announced that our Board of Directors authorized the repurchase of up to $260 million of our outstanding common stock throughMarch 30, 2019. Under the share repurchase program, the Company is authorized to repurchase, from time to time, outstanding shares of common stock inaccordance with applicable laws both on the open market, including under trading plans established pursuant to Rule 10b5-1 under the Securities ExchangeAct of 1934, as amended and in privately negotiated transactions. The actual timing, number and value of shares repurchased will be determined by theCompany at its discretion and will depend on a number of factors, including market conditions, applicable legal requirements and compliance with the termsof loan covenants. The share repurchase program may be suspended, modified or discontinued at any time and the Company has no obligation to repurchaseany amount of its common stock under the program. Repurchases pursuant to our share repurchase program could affect our stock price and increase itsvolatility. The existence of a share repurchase program could also cause our stock price to be higher than it would be in the absence of such a program andcould potentially reduce the market liquidity for our common stock. There can be no assurance that any share repurchases will enhance stockholder valuebecause the market price of our common stock may decline below the levels at which we repurchased our common stock. Although our share repurchaseprogram is intended to enhance long-term stockholder value, short-term stock price fluctuations could reduce the program’s effectiveness.In May 2018, we completed an accelerated share repurchase agreement, or ASR, with Citibank N.A. The total number of shares repurchased under the ASRwas approximately 1.4 million at an average price per share of $73.36. As of May 23, 2018, the total remaining authorization outstanding for repurchases ofthe Company’s common stock under our share repurchase program was $160 million. Refer to Note 6, Earnings Per Share, to our consolidated financialstatements contained in Item 8 of this Annual Report on Form 10-K for further discussion.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 our intellectual property may be subject to misappropriation in some countries. Certain countries, particularly China, do not enforce compliance with laws that protect intellectual property rights with the same degree of vigor as isavailable under the U.S. and European systems of justice. Further, certain of our intellectual property rights are not registered in China, or if they were, havesince expired. This may permit others to produce copies of products in China that are not covered by currently valid patent registrations. There is also a riskthat such products may be exported from China to other countries.In order to aggressively protect our intellectual property throughout the world, we have a program of patent disclosures and filings in markets where weconduct significant business. While we believe this program is reasonable and adequate, the risk of loss is inherent in litigation as different legal systemsoffer different levels of protection to intellectual property and it is still possible that even patented technologies may not be protected absolutely frominfringement.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.Our products may be determined to infringe another party's patent, which could lead to financial losses or adversely affect our ability to market ourproducts. 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 market21Table of Contentsthe affected product or otherwise have an adverse effect on our results of operations. In addition, competitors may patent technological advances that maygive them a competitive advantage or create barriers to entry.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESOur owned headquarters facility is located in Braintree, Massachusetts and is approximately 224,000 square feet. As of March 31, 2018, we owned or leased atotal of 51 facilities. Our owned and leased facilities consist of approximately 1.7 million square feet. Included within these properties are 7 manufacturingfacilities. We believe all of these facilities are well-maintained and suitable for the operations conducted in them. We consider the following manufacturingfacilities to be material to the business.Leetsdale, Pennsylvania, is an approximately 82,000 square foot leased facility used for warehousing, distribution and manufacturing operations primarilysupporting our Plasma business unit. Annual lease expense is approximately $0.4 million for this facility.Draper, Utah, is an approximately 100,000 square foot owned facility used for distribution and manufacturing operations supporting our Plasma businessunit. During fiscal 2015, we purchased this facility for $6.6 million.We lease a 115,000 square foot facility in Fajardo, Puerto Rico, under an agreement with Pall Corporation executed in connection with our acquisition ofPall's transfusion medicine business on August 1, 2012. This facility is used for production of blood filters.We lease 127,000 square feet of space in Tijuana, Mexico, with an annual lease expense of approximately $0.8 million. We also own a facility in Tijuana,Mexico that is approximately 182,000 square feet. These facilities are used for the production of whole blood collection kits, plasma, blood center andhospital disposables and intra-plant components.We own approximately 240,000 square feet of space in Penang, Malaysia, used to manufacture disposable products for our European and Asian customers.We lease the land on which the facility was built and the lease payments have been prepaid. The lease term of 30 years expires in 2043 with an option torenew for a period of no less than 10 years.Union, South Carolina, is an approximately 86,000 square feet owned facility used to manufacture sterile solutions that support our plasma business.We own two facilities in Covina, California, that occupy approximately 65,000 square feet, dedicated to manufacturing and engineering functions. Thefacilities also include general administration space. We also lease approximately 40,000 square feet of space for warehousing and logistic operations. Annuallease expense is approximately $0.3 million. These facilities are used for the production of whole blood collection kits.Our facilities are used by the following business segments: Number of FacilitiesJapan8EMEA12North America Plasma3All Other28Total51ITEM 3. LEGAL PROCEEDINGSInformation with respect to this Item may be found in Note 15, Commitments and Contingencies to the Consolidated Financial Statements in Item 8 of thisAnnual Report on Form 10-K, which is incorporated herein by reference.ITEM 4. MINE SAFETY DISCLOSURESNone.22Table of ContentsPART IIITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OFEQUITY SECURITIESMarket InformationHaemonetics' common stock is listed on the New York Stock Exchange ("NYSE") under the symbol HAE. The following table sets forth for the periodsindicated the high and low 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 31, 2018: Market price of Common Stock: High$43.62 $44.97 $58.99 $75.45Low$38.54 $38.47 $44.61 $60.51Fiscal year ended April 1, 2017: Market price of Common Stock: High$35.67 $38.06 $41.41 $41.65Low$25.98 $29.08 $32.76 $36.44HoldersThere were 156 holders of record of the Company’s common stock as of March 31, 2018.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.Issuer Purchases of Equity SecuritiesThe following table provides information on the Company’s share repurchases during the fourth quarter of fiscal 2018: TotalNumber of SharesPurchased Average Price Paidper Share(1) Total Number ofShares Purchased asPart of PubliclyAnnounced Program Approximate DollarValue of Shares thatMay Yet BePurchased Under theProgramDecember 31, 2017 - January 27, 2018— $ — $—January 28, 2018 - February 24, 20181,161,608 $68.87 1,161,608 $160,000,000February 25, 2018 - March 31, 2018— $— — $—(1) This amount reflects the price per share based on the initial delivery of approximately 1.2 million shares under the ASR. Upon settlement of the ASR, including the delivery ofapproximately 0.2 million shares during the first quarter of fiscal 2019, the average price per share was $73.36On February 6, 2018, we announced that our Board of Directors authorized the repurchase of up to $260 million of our outstanding common stock throughMarch 30, 2019. Under the share repurchase program, the Company is authorized to repurchase, from time to time, outstanding shares of common stock inaccordance with applicable laws both on the open market, including under trading plans established pursuant to Rule 10b5-1 under the Securities ExchangeAct of 1934, as amended and in privately negotiated transactions. The actual timing, number and value of shares repurchased will be determined by theCompany at its discretion and will depend on a number of factors, including market conditions, applicable legal requirements and compliance with the termsof loan covenants. The share repurchase program may be suspended, modified or discontinued at any time and the Company has no obligation to repurchaseany amount of its common stock under the program.23Table of ContentsSubsequent to announcing the share repurchase program, in February 2018, we entered into an accelerated share repurchase agreement (“ASR”) with CitibankN.A. (“Citibank”) to repurchase approximately $100.0 million of the Company’s common stock. Pursuant to the terms of the ASR, in February 2018, theCompany paid Citibank $100.0 million in cash and received an initial delivery of approximately 1.2 million shares of our common stock based on a closingmarket price of $68.87, which represented, based on the closing price of our common stock on the NYSE on February 8, 2018, approximately 80% of thenotional amount of the ASR. On May 7, 2018, the ASR with Citibank was completed. Pursuant to the ASR settlement terms, Citibank delivered to usapproximately 0.2 million additional shares of our common stock on May 9, 2018. The total number of shares repurchased under the ASR was approximately1.4 million at an average price per share of $73.36.As of May 23, 2018, the total remaining authorization outstanding for repurchases of the Company’s common stock under our share repurchase program was$160 million.24Table of ContentsITEM 6. SELECTED FINANCIAL DATAHaemonetics Corporation Five-Year Review(In thousands, except per share and employee data)2018 2017 2016 2015 2014Summary of Operations: Net revenues$903,923 $886,116 $908,832 $910,373 $938,509Cost of goods sold492,015 507,622 502,918 475,955 470,144Gross profit411,908 378,494 405,914 434,418 468,365Operating expenses: Research and development39,228 37,556 44,965 54,187 54,200Selling, general and administrative316,523 301,726 317,223 337,168 365,977Impairment of assets— 58,593 92,395 5,441 1,711Contingent consideration (income) expense— — (4,727) (2,918) 45Total operating expenses355,751 397,875 449,856 393,878 421,933Operating income (loss)56,157 (19,381) (43,942) 40,540 46,432Gain on divestiture8,000 — — — —Interest and other expense, net(4,525) (8,095) (9,474) (9,375) (10,031)Income (loss) before provision (benefit) for incometaxes59,632 (27,476) (53,416) 31,165 36,401Provision (benefit) for income taxes14,060 (1,208) 2,163 14,268 1,253Net income (loss)$45,572 $(26,268) $(55,579) $16,897 $35,148Income (loss) per share: Basic$0.86 $(0.51) $(1.09) $0.33 $0.68Diluted$0.85 $(0.51) $(1.09) $0.32 $0.67Weighted average number of shares52,755 51,524 50,910 51,533 51,611Common stock equivalent shares746 — — 556 766Weighted average number of shares and common stockequivalent shares53,501 51,524 50,910 52,089 52,3772018 2017 2016 2015 2014Financial and Statistical Data: Working capital$136,474 $298,850 $302,535 $368,985 $391,944Current ratio1.4 2.4 2.6 3.0 2.8Property, plant and equipment, net$332,156 $323,862 $337,634 $321,948 $271,437Capital expenditures$74,799 $76,135 $102,405 $122,220 $73,648Depreciation and amortization$89,247 $89,733 $89,911 $86,053 $81,740Total assets$1,237,339 $1,238,709 $1,319,128 $1,485,417 $1,514,178Total debt$253,682 $314,647 $408,000 $427,891 $437,687Stockholders’ equity$752,429 $739,610 $721,565 $826,122 $837,888Debt as a % of stockholders’ equity33.7% 42.5% 56.5% 51.8% 52.2%Employees3,136 3,107 3,225 3,383 3,78225Table of ContentsITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSOur BusinessHaemonetics is a global healthcare company dedicated to providing a suite of innovative hematology products and solutions to customers to help improvepatient care and reduce the cost of healthcare. Our technology addresses important medical markets including commercial plasma collection, hospital-baseddiagnostics, blood and blood component collection and devices and software products. When used in this report, the terms “we,” “us,” “our” and “theCompany” mean Haemonetics.Blood is essential to a modern healthcare system. Blood and its components (plasma, platelets and red cells) have many vital and frequently life-savingclinical applications. Plasma is used for patients with major blood loss and is manufactured into biopharmaceuticals to treat a variety of illnesses, includingimmune diseases and coagulation disorders. Red cells treat trauma patients or patients undergoing surgery with high blood loss, such as open heart surgery ororgan transplant. Platelets have many uses in patient care, including supporting cancer patients undergoing chemotherapy.Recent DevelopmentsShare Repurchase ProgramOn February 6, 2018, we announced that our Board of Directors authorized the repurchase of up to $260 million of our outstanding common stock throughMarch 30, 2019. Subsequent to announcing the share repurchase program, in February 2018, we entered into an accelerated share repurchase agreement(“ASR”) with Citibank N.A. (“Citibank”) to repurchase approximately $100.0 million of the Company’s common stock. Pursuant to the terms of the ASR, inFebruary 2018, the Company paid Citibank $100.0 million in cash and received an initial delivery of approximately 1.2 million shares of our common stockbased on a closing market price of $68.87, which represented, based on the closing price of our common stock on the New York Stock Exchange on February8, 2018, approximately 80% of the notional amount of the ASR. On May 7, 2018, the ASR with Citibank was completed. Pursuant to the ASR settlementterms, Citibank delivered to us approximately 0.2 million additional shares of our common stock on May 9, 2018. The total number of shares repurchasedunder the ASR was approximately 1.4 million at an average price per share of $73.36.As of May 23, 2018, the total remaining authorization for repurchases of the Company’s common stock under our share repurchase program was $160million.Income Tax ReformOn December 22, 2017, the Tax Cuts and Jobs Act (the "Act") was enacted in the United States. The Act reduces the U.S. federal corporate tax rate from 35%to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxeson certain foreign sourced earnings. As of March 31, 2018, we have not yet completed our accounting for the tax effects of the enactment of the Act.However, we have made a reasonable estimate of the effects on our existing deferred tax balances and one-time transition tax. During the fiscal year endedMarch 31, 2018, we recognized a provisional tax expense amount of $2.0 million, which is included as a component of income tax expense in ourconsolidated statements of income (loss). Refer to Note 5, Income Taxes, to our consolidated financial statements contained in Item 8 of this Annual Reporton Form 10-K for further discussion.In addition to the reduction in the federal corporate tax rate and the one-time transition tax, which we have accounted for with provisional estimates as ofMarch 31, 2018, we will also continue to analyze and monitor the other impacts of the Act that become effective for the Company in fiscal 2019 includingthe provisions related to Global Intangible Low Taxed Income, Foreign Derived Intangible Income, Base Erosion Anti-Abuse Tax, as well as other provisionsthat would limit the deductibility of future expenses.NexSys PCSTMIn July 2017, we received FDA 510(k) clearance for our NexSys PCSTM plasmapheresis system (formerly referred to as PCS 300). In March 2018, we receivedFDA clearance for the enhancement of our NexSys PCS embedded software that activates YESTM technology, a yield-enhancing solution. We also receivedCE mark clearance of the NexSys PCS device in the European Union and Australia, subject to additional local requirements, during fiscal 2018. We havebegun limited production of the devices.Our planned roll out of this new platform includes the placement of a significant number of new devices. These placements will require meaningful capitalexpenditures and new customer contracts that reflect pricing and volumes appropriate to these investments. As of March 31, 2018, approximately 21,000 ofour Haemonetics owned PCS2 devices are placed with customers.26Table of ContentsLong-Term Supply AgreementAs part of our acquisition of the whole blood business from Pall Corporation (“Pall”) in fiscal 2012, Pall agreed to manufacture and install in one of ourfacilities a filter media manufacturing line (the “HDC line”) for which we agreed to pay Pall approximately $15.0 million (plus pre-approved overages). Pallalso agreed to supply media to us for use in leukoreduction filters until such time as we accepted the HDC line.On May 21, 2018, we entered into a long-term supply agreement with Pall under which Pall will continue to supply media to us for usein leukoreduction filters. As a condition of the supply agreement, we agreed to accept the HDC line from Pall and will make a final payment of $9.0 millionto Pall for the HDC line during May 2018.As a result of the decision to continue to source media for our leukoreduction filters from Pall rather than producing them internally, we do not expect toutilize the HDC line for future production and expect that the asset’s future cash flows will not be sufficient to recover its carrying value of $12.5 million.Accordingly, during the first quarter of fiscal 2019 we recorded $21.5 million of total charges associated with this transaction, consisting of a $12.5 millionimpairment charge for the HDC line and a $9.0 million charge for the final payment to Pall.DivestitureOn April 27, 2017, we sold our SEBRA® line of benchtop and hand sealers to Machine Solutions Inc. because it was no longer aligned with our long-termstrategic objectives. In connection with this transaction, we received net proceeds of $9.0 million and recorded a pre-tax gain of $8.0 million. The proceedsreceived were subject to a post-closing adjustment based on final asset values as determined during the 90 day transition period. During fiscal 2018, the 90day transition period ended and there were no post-close adjustments necessary.The SEBRA portfolio included a suite of products that primarily include radio frequency sealers that are used to seal tubing as part of the collection of wholeblood and blood components, particularly plasma. The SEBRA product line generated approximately $6.5 million of revenue in our Plasma business unit infiscal 2017.Restructuring InitiativeOn November 1, 2017, we launched the Complexity Reduction Initiative (the "2018 Program"), a company-wide restructuring program designed to improveoperational performance and reduce cost, freeing up resources to invest in accelerated growth. This program includes a reduction of headcount and operatingcosts that will enable a more streamlined organizational structure. We expect to incur aggregate charges between $50 million and $60 million associated withthese actions, of which we expect $35 million to $40 million will consist of severance and other employee costs and the remainder will consist of other exitcosts, primarily related to third party services. These charges, substantially all of which will result in cash outlays, will be incurred as the specific actionsrequired to execute on these initiatives are identified and approved and are expected to continue through fiscal 2020. We expect savings from this program ofapproximately $80 million on an annualized basis once the program is completed. During the fiscal year ended March 31, 2018, we incurred $36.6 million ofrestructuring and turnaround costs under this program.Product RecallIn June 2016, we issued a voluntary recall of certain whole blood collection kits sold to our Blood Center customers in the U.S. The recall resulted from somecollection sets' filters failing to adequately remove leukocytes from collected blood. As a result of the recall, our Blood Center customers may haveconducted tests to confirm that the collected blood was adequately leukoreduced, sold the collected blood labeled as non-leukoreduced at a lower price ordiscarded the collected blood. During fiscal 2018, we entered into a settlement agreement with a group of customers responsible for substantially all of thetotal outstanding claims against us. As of March 31, 2018, we had recorded a cumulative total of $7.2 million of net charges associated with this recall, whichconsisted of $3.7 million of charges associated with customer returns and inventory reserves and $8.5 million of other customer claims, partially offset by$5.0 million of insurance proceeds. Substantially all of these claims have been paid as of March 31, 2018.Market TrendsPlasma MarketThere are two key aspects to the market for our plasma products - the growth in demand for plasma-derived biopharmaceuticals and the limited number ofsignificant biopharmaceutical companies in this market.Changes in demand for plasma-derived biopharmaceuticals, particularly immunoglobulin, are the key driver of plasma collection volumes in thebiopharmaceutical market. Various factors related to the supply of plasma and the production of plasma-derived biopharmaceuticals also affect collectionvolume, including the following:27Table of Contents•Biopharmaceutical companies are seeking more yield from the collected plasma to meet growing demand for biopharmaceuticals without requiringan equivalent increase in plasma supply.•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 2018 continued to grow in North America as collection volumes benefited from an expanding end user market forplasma-derived biopharmaceuticals with U.S. produced plasma meeting an increasing percentage of plasma volume demand worldwide. As a result, ourPlasma business’ revenues are primarily from the U.S.Despite the overall growth in the market, the number of biopharmaceutical companies that collect and fractionate the majority of source plasma is low andindustry consolidation is ongoing. Significant barriers to entry exist for new entrants due to high capital outlay requirements for fractionation, longregulatory pathways to the licensing of fractionation facilities and FDA approval of biopharmaceuticals. With these factors, we do not expect meaningful newentries or diversification. As a result, there are relatively few customers for our Plasma products, especially in the U.S. where 80% of source plasma iscollected and only a few customers provide the majority of our U.S. revenue.Blood Center MarketIn the Blood Center market, we sell automated blood component and manual whole blood collection systems, as well as software solutions that include blooddrive planning, donor recruitment and retention, blood collection, component manufacturing and distribution. While we sell products around the world, asignificant portion of our sales are to a limited number of customers due to relatively limited number of blood collectors.Within the Blood Center market, we have seen three trends that have negatively impacted our growth of the overall marketplace despite the overall increasein aging populations. Overall we continue to expect a decline in this business in the low to mid single-digits.▪Declining transfusion rates in mature markets due to the development of more minimally invasive procedures with lower associated blood loss, aswell as better blood management.▪Competition in multi-unit collection technology for automated blood component collection systems has intensified and has negatively impact oursales in markets where these collections are prevalent.▪Industry consolidation through group purchasing organizations has intensified pricing competition particularly in the manual whole bloodcollection systems, as well as impacting our software business where switching large customers to new or emerging technology platforms has arelatively high cost.Hospital MarketHemostasis ManagementHemostasis Management Market - The use of routine coagulation testing is well established throughout the world in various medical procedures, includingcardiovascular surgery, organ transplantation, trauma, post-partum hemorrhage and percutaneous coronary intervention. While standard tests likeprothrombin time, partial thromboplastin time and platelet count have limited ability to reveal a patient’s risk for bleeding, they do not provide informationon the patient’s risk for thrombosis. In addition, these routine tests do not provide specific data about clot quality or stability. As a result of these limitations,clinicians are increasingly utilizing advanced hemostasis testing to provide more information about a patient’s hemostasis status, resulting in improvedclinical decision-making. In addition, advanced hemostasis testing supports hospital efforts to reduce the risks, complications and costs associated withunnecessary blood component transfusions.Haemonetics’ TEG® hemostasis analyzer systems are advanced diagnostic tools that provide a comprehensive assessment of a patient’s overall hemostasis.This information enables clinicians to decide the most appropriate clinical treatment for the patient to minimize blood loss and reduce clotting risk. Forexample, TEG analyzers have been used to support clinical decision making in open cardiovascular surgery and organ transplantation, becoming the “goldstandard” in liver transplants. In more recent years, interest has grown into the utilization of TEG in trauma and other procedures in which the risk ofhemorrhage and thrombosis are high.Geographically, TEG systems have achieved the highest market penetration in North America, Europe and China. However, there are considerable growthopportunities in these as well as other markets, as TEG systems become more established as the standard of care around the world.28Table of ContentsCell ProcessingCell Salvage Market - In recent years, more efficient blood use and less invasive surgeries have reduced demand for autotransfusion in these procedures andcontributed to intense competition in mature markets, while increased access to healthcare in emerging economies has provided new markets and sources ofgrowth.Orthopedic procedures have seen similar changes with improved blood management practices, including the use of tranexamic acid to treat and prevent post-operative bleeding, have significantly reduced the number of transfusions and autotransfusion.Geographically, the Cell Saver® has achieved the highest market penetration in North America, Europe and Japan. However, there are considerable growthopportunities in certain Asia Pacific and other emerging markets as addressable procedure volumes grow and the use of autotransfusion is becoming acceptedas a standard of care.Transfusion Management Market - Revenues from BloodTrack® have increased in the U.S. and Europe recently as hospitals seek means to improveefficiencies and meet compliance guidelines for tracking and dispositioning blood components to patients. SafeTrace Tx® leading market share in the U.S.remains steady with potential opportunity to expand internationally.Financial Summary Fiscal Year (In thousands, except per share data)2018 2017 2016 % Increase/(Decrease) 18 vs. 17 % Increase/(Decrease) 17 vs. 16Net revenues$903,923 $886,116 $908,832 2.0 % (2.5)%Gross profit$411,908 $378,494 $405,914 8.8 % (6.8)%% of net revenues45.6% 42.7 % 44.7 % Operating expenses$355,751 $397,875 $449,856 (10.6)% (11.6)%Operating income (loss)$56,157 $(19,381) $(43,942) n/m (55.9)%% of net revenues6.2% (2.2)% (4.8)% Gain on divestiture$8,000 $— $— 100.0 % — %Interest and other expense, net$(4,525) $(8,095) $(9,474) (44.1)% (14.6)%Income (loss) before taxes$59,632 $(27,476) $(53,416) n/m (48.6)%Tax expense (benefit)$14,060 $(1,208) $2,163 n/m n/m% of pre-tax income23.6% 4.4 % (4.0)% Net income (loss)$45,572 $(26,268) $(55,579) n/m (52.7)%% of net revenues5.0% (3.0)% (6.1)% Net income (loss) per share - basic$0.86 $(0.51) $(1.09) n/m (53.2)%Net income (loss) per share - diluted$0.85 $(0.51) $(1.09) n/m (53.2)%Our fiscal year ends on the Saturday closest to the last day of March. Fiscal 2018 and 2017 include 52 weeks with each quarter having 13 weeks. Fiscal 2016includes 53 weeks with each of the first three quarters having 13 weeks and the fourth quarter having 14 weeks.Net revenues for fiscal 2018 increased 2.0% compared with fiscal 2017. Without the effects of foreign exchange, net revenues increased 1.1% compared withfiscal 2017 as revenue increases in Plasma, Hemostasis Management and Cell Processing were partially offset by declines in our Blood Center business unit.Net revenues for fiscal 2017 decreased 2.5% compared with fiscal 2016. Without the effects of foreign exchange, net revenues decreased 1.2% compared withfiscal 2016. Revenue increases in Plasma and Hemostasis Management were offset by declines in Blood Center and Cell Processing for the fiscal year endedApril 1, 2017. The 53rd week in fiscal 2016 also contributed to the decrease, as it accounted for approximately 2% of additional revenue as compared withfiscal 2017.We recorded operating income during fiscal 2018, as compared with an operating loss during fiscal 2017. Operating income increased primarily as a result ofa decrease in asset impairments in fiscal 2018 as compared with fiscal 2017, as well as an increase in gross profit. This operating income was partially offsetby increased restructuring and turnaround costs associated with the 2018 Program and increased investments in research and development and sales andmarketing primarily in our Hospital and Plasma business units.29Table of ContentsDuring fiscal 2017, operating loss decreased 55.9% compared with fiscal 2016. Without the effects of foreign currency, operating loss decreased 68.9%compared with fiscal 2016. Operating loss decreased primarily as a result of savings realized in fiscal 2017 from cost reduction initiatives, a decrease ingoodwill and other asset impairment charges and a reduction in research and development spending as compared with fiscal 2016. These savings werepartially offset by increased inventory charges and reserves and losses from Plasma liquid solutions.Management's Use of Non-GAAP MeasuresManagement uses non-GAAP financial measures, in addition to financial measures in accordance with accounting principles generally accepted in the UnitedStates of America ("U.S. GAAP"), to monitor the financial performance of the business, make informed business decisions, establish budgets and forecastfuture results. These non-GAAP financial measures should be considered supplemental to, and not a substitute for, our reported financial results prepared inaccordance with U.S. GAAP. Constant currency growth, a non-GAAP financial measure, measures the change in revenue between the current and prior yearperiods using a constant currency conversion rate. We have provided this non-GAAP financial measure because we believe it provides meaningfulinformation regarding our results on a consistent and comparable basis for the periods presented.RESULTS OF OPERATIONSNet Revenues by Geography Fiscal Year Fiscal 2018 versus 2017 Fiscal 2017 versus 2016(Dollars inthousands)2018 2017 2016 ReportedGrowth Currencyimpact Constantcurrencygrowth (1) ReportedGrowth Currencyimpact Constantcurrencygrowth (1)United States$548,731 $522,686 $519,440 5.0 % —% 5.0 % 0.6 % — % 0.6 %International355,192 363,430 389,392 (2.3)% 2.0% (4.3)% (6.7)% (3.1)% (3.6)%Net revenues$903,923 $886,116 $908,832 2.0 % 0.9% 1.1 % (2.5)% (1.3)% (1.2)%(1) Constant currency growth, a non-GAAP financial measure, measures the change in sales between the current and prior year periods using a constant currency. See "Management'sUse of Non-GAAP Measures."International Operations and the Impact of Foreign ExchangeOur principal operations are in the United States, Europe, Japan and other parts of Asia. Our products are marketed in approximately 90 countries around theworld through 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: Fiscal Year2018 2017 2016United States60.7% 59.0% 57.2%Japan7.5% 9.0% 9.0%Europe18.2% 18.7% 20.7%Asia12.7% 12.4% 12.3%Other0.9% 0.9% 0.8%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 based on estimates of future revenues to reduce the impacts of currency fluctuations. As compared with fiscal 2017,the effects of foreign exchange resulted in a 0.9% increase in sales in fiscal 2018. The primary reason is the relative strength of the Euro to the U.S. Dollar. Forfiscal 2017, as compared with fiscal 2016, the effects of foreign exchange accounted for a 1.3% 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.30Table of ContentsNet Revenues by Business Unit Fiscal Year Fiscal 2018 versus 2017 Fiscal 2017 versus 2016(Dollars in thousands) 2018 2017 2016 ReportedGrowth Currencyimpact Constantcurrencygrowth (1) ReportedGrowth Currencyimpact Constantcurrencygrowth (1)Plasma $435,956 $410,727 $381,776 6.1% 0.6% 5.5% 7.6% (1.0)% 8.6%Blood Center 284,902 303,890 355,108 (6.2)% 1.3% (7.5)% (14.4)% (0.9)% (13.5)%Cell Processing 107,562 105,376 112,483 2.1% 1.6% 0.5% (6.3)% (2.5)% (3.8)%HemostasisManagement 75,503 66,123 59,465 14.2% 0.6% 13.6% 11.2% (2.6)% 13.8%Net revenues $903,923 $886,116 $908,832 2.0% 0.9% 1.1% (2.5)% (1.3)% (1.2)%(1) Constant currency growth, a non-GAAP financial measure, measures the change in sales between the current and prior year periods using a constant currency. See"Management's Use of Non-GAAP Measures."PlasmaPlasma revenue increased 6.1% during fiscal 2018 compared with fiscal 2017. Without the effect of foreign exchange, Plasma revenue increased 5.5% duringfiscal 2018. This revenue growth was primarily driven by an increase in sales of plasma disposables and software due to continued strong performance in theU.S. This increase was partially offset by a decline in liquid solutions revenue and a decrease in equipment revenue resulting from the divestiture of ourSEBRA product line, which contributed $6.5 million in Plasma revenue during fiscal 2017.We have continuing delays in the expansion of our liquid solutions production capacity that require us or our customers to continue to obtain alternativesources of supply. We expect purchases from these alternate sources to continue until we can complete the expansion and produce solutions at the necessarylevel.Plasma revenue increased 7.6% during fiscal 2017 compared with fiscal 2016. Without the effect of foreign exchange, Plasma revenue increased 8.6% duringfiscal 2017. The revenue growth was primarily driven by an increase in sales of Plasma disposables during fiscal 2017 due to continued strong performance inthe U.S. and increased sales of Plasma liquid solutions, which contributed approximately $16 million to the growth.Blood CenterBlood Center revenue decreased 6.2% during fiscal 2018 compared with fiscal 2017. Without the effect of foreign exchange, Blood Center revenue decreased7.5% during fiscal 2018. The decrease, excluding the impact of foreign exchange, was primarily due to declines in whole blood revenue in both Europe andthe U.S. resulting from continued moderation in the rate of collections and declines in platelet revenue driven by the continued market shift toward doubledose collection techniques in Japan, as well as decreased sales in Europe. Decreases in equipment revenue due to a one-time sale of equipment to theAmerican Red Cross in the prior year period and declines in red cell revenue due to the loss of a customer contract in a prior year also contributed to theoverall decrease in Blood Center.Blood Center revenue decreased 14.4% during fiscal 2017 compared with fiscal 2016. Without the effect of foreign exchange, Blood Center revenuedecreased 13.5% during fiscal 2017. The decrease was primarily driven by the decline in platelet revenue due to the impact of double dose collections inJapan as well as order timing in Asia and the Middle East. Decreases in red cell revenue due to price reductions in our principle red cell market in the U.S. anddecreases in whole blood revenue due to declining transfusion rates and pricing pressures also contributed to the overall decline in Blood Center.31Table of ContentsCell ProcessingCell Processing revenue increased 2.1% during fiscal 2018 compared with fiscal 2017. Without the effect of foreign exchange, Cell Processing revenueincreased 0.5% during fiscal 2018. The increase, excluding the impact of foreign exchange, was primarily due to BloodTrack growth in the U.S. and Europeand SafeTrace Tx growth in the U.S as well as equipment growth in the U.S. This increase was mostly offset by declines in OrthoPAT revenue due to betterblood management which has reduced orthopedic blood loss and declines in Cell Saver revenue, primarily in Japan and Western Europe. Effective March 31,2019, our OrthoPAT products will be discontinued and we will offer the Cell Saver Elite + as an alternative autotransfusion system for orthopedics or othermedium to low blood loss procedures.Cell Processing revenue decreased 6.3% during fiscal 2017 compared with fiscal 2016. Without the effect of foreign exchange, Cell Processing revenuedecreased 3.8% during fiscal 2017. The decrease, excluding the impact of foreign exchange, was primarily due to declines in OrthoPAT revenue in the U.S.and declines in Cell Saver revenue in Europe, partially offset by growth in China. These decreases were partially offset by increases in BloodTrack revenue inEurope.Hemostasis ManagementRevenue from our Hemostasis Management products increased 14.2% during fiscal 2018 compared with fiscal 2017. Without the effect of foreign exchange,Hemostasis Management revenues increased 13.6% during fiscal 2018. This revenue increase was primarily attributable to the growth of TEG disposables,principally in the U.S. and China. The TEG 6s and TEG Manager® are approved for the same set of indications as the TEG 5000 in Europe, Australia andJapan. In the U.S., TEG 6s is approved for limited indications, including cardiovascular surgery and cardiology. TEG 6s continues to contribute significantlyto the overall growth in Hemostasis Management in the U.S. and Europe. We are pursuing a broader set of indications for the TEG 6s in the U.S., includingtrauma.Revenue from our Hemostasis Management products increased 11.2% during fiscal 2017 compared with fiscal 2016. Without the effect of foreign exchange,Hemostasis Management revenues increased 13.8% during fiscal 2017. This revenue increase was primarily attributable to the growth of TEG disposables,principally in the U.S. and China.Gross Profit Fiscal Year (Dollars in thousands)2018 2017 2016 % Increase/(Decrease) 18 vs. 17 Increase/(Decrease) 17 vs. 16Gross profit$411,908 $378,494 $405,914 8.8% (6.8)%% of net revenues45.6% 42.7% 44.7% Gross profit increased 8.8% during fiscal 2018 as compared with fiscal 2017. Without the effects of foreign exchange, gross profit increased 6.4% duringfiscal 2018. Gross profit margin percentage increased by 290 basis points for fiscal 2018 as compared with fiscal 2017. The increase in the gross profit marginduring fiscal 2018 was primarily due to favorable mix, partially offset by continued manufacturing challenges, the impact of the divestiture of SEBRA andincreased depreciation expense. The negative impact of asset impairments, inventory charges and the whole blood filter recall on the prior year period alsocontributed to the overall increase in fiscal 2018 as compared with fiscal 2017. Gross profit margin continues to be impacted by the inefficiency ofunderutilized production capacity. We continue to seek opportunities to rationalize our manufacturing network.In fiscal 2018, we incurred costs associated with inventory purchases from alternate sources as a result of delays in the expansion of our liquid solutionsproduction capacity. We expect purchases from these alternate sources to continue until we can complete the expansion and produce solutions at thenecessary level.Gross profit decreased 6.8% during fiscal 2017 as compared with fiscal 2016. Without the effects of foreign exchange, gross profit decreased 4.3% duringfiscal 2017. Gross profit margin percentage decreased by 200 basis points for fiscal 2017 as compared with fiscal 2016. The decrease in the gross profitmargin during fiscal 2017 was primarily due to inventory reserves and impairment charges recorded during fiscal 2017, losses from Plasma liquid solutionsand price reductions in our Blood Center business. The negative impact of currency and the 53rd week in fiscal 2016 as well as the effect of the whole bloodfilter recall and the inefficiency of underutilized productive capacity also contributed to the overall decline. These decreases were partially offset by costsavings initiatives and a reduction in restructuring and turnaround costs.32Table of ContentsOperating Expenses Fiscal Year (In thousands)2018 2017 2016 % Increase/(Decrease) 18 vs. 17 Increase/(Decrease) 17 vs. 16Research and development$39,228 $37,556 $44,965 4.5 % (16.5)%% of net revenues4.3% 4.2% 4.9 % Selling, general and administrative$316,523 $301,726 $317,223 4.9 % (4.9)%% of net revenues35.0% 34.1% 34.9 % Impairment of assets$— $58,593 $92,395 (100.0)% (36.6)%% of net revenues—% 6.6% 10.2 % Contingent consideration income$— $— $(4,727) — % (100.0)%% of net revenues—% —% (0.5)% Total operating expenses$355,751 $397,875 $449,856 (10.6)% (11.6)%% of net revenues39.4% 44.9% 49.5 % Research and DevelopmentResearch and development expenses increased 4.5% during fiscal 2018 as compared with fiscal 2017. Without the effects of foreign exchange, research anddevelopment expenses increased 5.5% during fiscal 2018. The increase in fiscal 2018 was primarily driven by higher restructuring and turnaround costsassociated with the 2018 Program and our continued investment of resources in clinical programs, primarily in Hemostasis Management. These increasedcosts were partially offset by reduced spending on certain software projects and several projects in Blood Center to better align with our long-term productplans.Research and development expenses decreased 16.5% during fiscal 2017 as compared with fiscal 2016. Without the effects of foreign exchange, research anddevelopment expenses decreased 16.6% during fiscal 2017. The decrease in fiscal 2017 was primarily driven by reduced spending on several projects in ourBlood Center business unit to better align with our long-term product plans and global strategic review. Changes in the timing of spending from fiscal 2017to fiscal 2018 also contributed to the decline. This decrease was partially offset by increased restructuring and turnaround costs.Selling, General and AdministrativeSelling, general and administrative expenses increased 4.9% during fiscal 2018 as compared with fiscal 2017. Without the effects of foreign exchange,selling, general and administrative expenses increased 4.4% during fiscal 2018. The increase in fiscal 2018 was primarily the result of higher restructuringand turnaround costs associated with the 2018 Program, an increase in investments, primarily in Hemostasis Management and next generation plasmacollection and software systems, and an increase in variable compensation and stock-based compensation expense. This increase was partially offset byannualized savings as a result of the prior year restructuring initiative.During fiscal 2017, selling, general and administrative expenses decreased 4.9% with and without the effects of foreign exchange. The decrease in fiscal 2017was primarily the result of cost reduction initiatives and a reduction in restructuring and turnaround costs. This decrease was partially offset by an increase invariable compensation.Impairment of AssetsDuring fiscal 2018, we did not record any material asset impairments within operating expenses.We recorded asset impairments of $58.6 million in fiscal 2017, which consisted of $57.0 million of goodwill impairment, $0.8 million of intangible assetimpairments and $0.8 million of property, plant and equipment impairments.Interest and Other Expense, NetInterest and other expense, net, decreased 44.1% during fiscal 2018 as compared with fiscal 2017 and decreased 14.6% during fiscal 2017 as compared withfiscal 2016. These decreases were primarily due to a decrease in interest expense as a result of principal payments on our term loan and a reduction inborrowings on our revolving credit line. The effective interest rate on total debt outstanding for the fiscal year ended March 31, 2018 was approximately3.19%.33Table of ContentsTaxes Fiscal Year 2018 2017 2016 % Increase/(Decrease) 18 vs. 17 Increase/(Decrease) 17 vs. 16Reported income tax rate23.6% 4.4% (4.0)% 19.2% 8.4%Reported Tax RateWe report our results of operations in a number of foreign jurisdictions and the United States. Historically, our reported 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 subsidiaries is generally taxed at a lower tax rate. Infiscal 2015, we established a valuation allowance against our U.S. deferred tax assets that are not more-likely-than-not realizable due to cumulative losses inthe U.S. In fiscal 2017, we established a valuation allowance against our net deferred tax assets in four additional jurisdictions. These jurisdictions are locatedin the countries of Switzerland, Puerto Rico, Luxembourg and France. The decision to establish a valuation allowance in these additional jurisdictions waslargely based upon our worldwide cumulative loss position, resulting from significant impairment and restructuring charges incurred in fiscal 2017 and 2016.We maintain a partial valuation allowance against our net U.S. deferred tax assets and net deferred tax assets of certain foreign subsidiaries.For the year ended March 31, 2018, we recorded an income tax provision of $14.1 million on our worldwide pre-tax income of $59.6 million, resulting in areported tax rate of 23.6%. Our effective tax rate for the year ended March 31, 2018 is higher than our effective tax rates of 4.4% and (4.0)% for the yearsended April 1, 2017 and April 2, 2016, respectively. Our increase in tax rate for fiscal 2018, as compared with fiscal 2017, is primarily the result of the impactof U.S. tax reform (tax expense related to the transition tax liability partially offset by the release of valuation allowance against certain deferred tax assets)changes in the jurisdictional mix of earnings and the impact of goodwill impairments in fiscal 2017. The fiscal 2017 rate was higher than the fiscal 2016 taxrate due to the establishment of valuation allowances in certain foreign jurisdictions fiscal 2017, changes in the jurisdictional mix of earnings and the impactof goodwill impairments recorded in the prior years.Income Tax ReformOn December 22, 2017, the Tax Cuts and Jobs Act was enacted in the United States. The Act reduces the U.S. federal corporate tax rate from 35% to 21%,requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes oncertain foreign sourced earnings. As of March 31, 2018, we have not yet completed our accounting for the tax effects of the enactment of the Act. However,we have made a reasonable estimate of the effects on our existing deferred tax balances and one-time transition tax. During the fiscal year ended March 31,2018, we recognized a provisional tax expense amount of $2.0 million, which is included as a component of income tax expense in our consolidatedstatements of income (loss).In addition to the reduction in the federal corporate tax rate and the one-time transition tax, which we have accounted for with provisional estimates as ofMarch 31, 2018, we will also continue to analyze and monitor the other impacts of the Act that become effective for the Company in fiscal 2019 includingthe provisions related to Global Intangible Low Taxed Income, Foreign Derived Intangible Income, Base Erosion Anti-Abuse Tax, as well as other provisionsthat would limit the deductibility of future expenses.Liquidity and Capital ResourcesThe following table contains certain key performance indicators we believe depict our liquidity and cash flow position:(In thousands)March 31, 2018 April 1, 2017Cash and cash equivalents$180,169 $139,564Working capital$136,474 $298,850Current ratio1.4 2.4Net debt position(1)$(73,513) $(175,083)Days sales outstanding (DSO)58 60Disposables finished goods inventory turnover4.5 4.2(1)Net debt position is the sum of cash and cash equivalents less total debt.34Table of ContentsOn November 1, 2017, we launched the 2018 Program. Under this restructuring initiative, we expect to incur aggregate charges between $50 million and $60million, of which we expect $35 million to $40 million will consist of severance and other employee costs and the remainder will consist of other exit costs,primarily related to third party services. These charges, substantially all of which will result in cash outlays, will be incurred as the specific actions required toexecute on these initiatives are identified and approved and are expected to continue through fiscal 2020. During fiscal 2018, we incurred $36.6 million ofrestructuring and turnaround costs under this program.During fiscal 2017, we launched a multi-year restructuring initiative (the "2017 Program") designed to reposition our organization and improve our coststructure. During fiscal 2018 and 2017, we incurred $7.2 million and $28.7 million, respectively, of restructuring and turnaround charges under this program.As of March 31, 2018, charges associated with the 2017 Program were substantially complete.Our primary sources of liquidity are cash and cash equivalents, internally generated cash flow from operations and proceeds from employee stock optionexercises. Although cash flow from operations could be negatively impacted by continued declines in our Blood Center business, we believe these sourcesare sufficient to fund our cash requirements over at least the next twelve months. Our expected cash outlays relate primarily to investments, capitalexpenditures, including production of the NexSys PCS, Plasma plant capacity expansions, share repurchases, cash payments under the loan agreement,restructuring and turnaround initiatives and other acquisitions. These are described in more detail in Contractual Obligations below.As of March 31, 2018, we had $180.2 million in cash and cash equivalents, the majority of which is held in the U.S. or in countries from which it can be freelyrepatriated to the U.S. We currently have a credit agreement ("Credit Agreement") with certain lenders (together, “Lenders”) that provides for a $379.4 millionterm loan ("Term Loan") and a $100.0 million revolving loan ("Revolving Credit Facility" and together with the Term Loan, the "Credit Facilities"). Interestis based on the Adjusted LIBOR plus a range of 1.125% to 1.500% depending on achievement of leverage ratios and customary credit terms that includefinancial and negative covenants. The Credit Facilities mature on July 1, 2019. At March 31, 2018, $253.7 million was outstanding under the Term Loan andno amount was outstanding on the Revolving Credit Facility. We also have $45.9 million of uncommitted operating lines of credit to fund our globaloperations under which there are no outstanding borrowings as of March 31, 2018.During fiscal 2018, we paid $61.7 million in scheduled principal repayments for the Term Loan. We have scheduled principal payments of $194.4 millionrequired during of fiscal 2019. We were in compliance with the leverage and interest coverage ratios specified in the Credit Agreement as well as all otherbank covenants as of March 31, 2018.Cash Flow Overview Fiscal Year (In thousands)2018 2017 2016 % Increase/(Decrease)18 vs. 17 Increase/(Decrease) 17 vs. 16Net cash provided by (used in): Operating activities$220,350 $159,738 $121,865 $60,612 $37,873Investing activities(63,041) (73,313) (104,768) (10,272) (31,455)Financing activities(120,643) (60,413) (62,624) 60,230 (2,211)Effect of exchange rate changes on cash and cashequivalents(1)3,939 (1,571) (12) 5,510 (1,559)Net increase (decrease) in cash and cash equivalents$40,605 $24,441 $(45,539) (1)The balance sheet is affected by spot exchange rates used to translate local currency amounts into U.S. dollars. In accordance with U.S. GAAP, we have eliminated the effect offoreign currency throughout our cash flow statement, except for its effect on our cash and cash equivalents.Operating ActivitiesNet cash provided by operating activities was $220.4 million during fiscal 2018, an increase of $60.6 million as compared with fiscal 2017. Cash providedby operating activities increased primarily due to an increase in net income, as adjusted for depreciation and amortization, and a working capital inflowresulting from a decrease in inventories due to an overall improvement in our demand planning process. An increase in accounts payable and accruedexpenses, which was largely driven by restructuring and turnaround reserves associated with the 2018 Program and variable compensation, as well asdecreases in other current assets also contributed to the cash inflow.35Table of ContentsNet cash provided by operating activities was $159.7 million during fiscal 2017, an increase of $37.9 million as compared with fiscal 2016. Cash providedby operating activities increased primarily due to an increase in accounts payable and accrued expenses which was driven largely by an increase in variablecompensation and an accrual recorded in fiscal 2017 for the product recall claims. The increase in cash provided by operating activities was partially offsetby an increase in other current assets including a receivable related to stock options exercised near the period end date and an insurance receivable associatedwith the product recall.Investing ActivitiesNet cash used in investing activities was $63.0 million during fiscal 2018, a decrease of $10.3 million as compared with fiscal 2017. The decrease in cashused in investing activities was primarily the result of the proceeds received related to the divestiture of our SEBRA product line and to a lesser extent areduction in capital expenditures in fiscal 2018 as compared with fiscal 2017.Net cash used in investing activities was $73.3 million during fiscal 2017, a decrease of $31.5 million as compared with fiscal 2016. The decrease in cashused in investing activities was largely the result of a reduction in capital expenditures of $26.3 million in fiscal 2017 as compared with fiscal 2016 primarilydue to the completion of certain manufacturing initiatives in the prior year and decreased spending in capitalized research and development projects.Acquisition costs of $3.0 million incurred in fiscal 2016 also contributed to the decrease.Financing ActivitiesNet cash used in financing activities was $120.6 million during fiscal 2018, an increase of $60.2 million as compared with fiscal 2017. This increase wasprimarily due to $100.0 million of share repurchases and an incremental $19.0 million of principal repayments on our Term Loan as compared with the prioryear. These increases in net cash used in financing activities were partially offset by a reduction in borrowings on our Revolving Credit Facility of $50.0million in fiscal 2017 and an incremental $7.7 million of proceeds from the exercise of stock options in fiscal 2018 as compared with fiscal 2017.Net cash used in financing activities was $60.4 million during fiscal 2017, a decrease of $2.2 million as compared with fiscal 2016, primarily due to $61.0million of share repurchases and $21.3 million principal repayments on our Term Loan in the prior year. Fiscal 2017 also benefited by an incremental $15.4million of proceeds from the exercise of stock options over the prior year. These decreases in net cash used in financing activities were partially offset by areduction in borrowings on our Revolving Credit Facility of $50.0 million and $42.7 million principal repayments on our Term Loan in fiscal 2017.Contractual ObligationsA summary of our contractual and commercial commitments as of March 31, 2018 is as follows: Payments Due by Period(In thousands)Total Less than 1 year 1-3 years 3-5 years More than 5 yearsDebt$253,682 $194,259 $59,402 $21 $—Operating leases20,283 3,905 6,245 4,937 5,196Purchase commitments(1)130,914 130,914 — — —Expected retirement plan benefit payments14,876 2,770 2,715 2,970 6,421Total contractual obligations$419,755 $331,848 $68,362 $7,928 $11,617(1) Includes amounts we are committed to spend on purchase orders entered in the normal course of business for capital equipment and for the purpose of manufacturing our productsincluding contract manufacturers, specifically JMS Co. Ltd., Kawasumi Laboratories and Sanmina Corporation for the manufacture of certain disposable products and equipment. Themajority of our operating expense spending does not require any advance commitment.Included within purchase commitments in the table above is an additional $9.0 million that was paid to Pall Corporation in May 2018 upon the delivery andacceptance of certain manufacturing assets related to the filter media business. Refer to Note 20, Subsequent Event to the Consolidated Financial Statementsin this Annual Report on Form 10-K for further information.The above table does not reflect our long-term liabilities associated with unrecognized tax benefits of $2.9 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.36Table of ContentsConcentration of Credit RiskWhile approximately 45% of our revenue is generated by our ten largest customers, concentrations of credit risk with respect to trade accounts receivable aregenerally limited due to our large number of customers and their diversity across many geographic areas. A portion of our trade accounts receivable outsidethe United States, however, include sales to government-owned or supported healthcare systems in several countries, which are subject to payment delays andlocal economic conditions. Payment is dependent upon the financial stability and creditworthiness of those countries' national economies.We have not incurred significant losses on receivables. We continually evaluate all receivables for potential collection risks associated with the availabilityof government funding and reimbursement practices. If the financial condition of customers or the countries' healthcare systems deteriorate such that theirability to make payments is uncertain, allowances may be required in future periods.Legal ProceedingsIn accordance with U.S. GAAP, we record a liability in our consolidated financial statements for these matters when a loss is known or considered probableand the amount may be reasonably estimated. Actual settlements may be different than estimated and could have a material impact on our consolidatedearnings, financial position and/or cash flows. For a discussion of our material legal proceedings refer to Note 15, Commitments and Contingencies to theConsolidated Financial Statements in this Annual Report on Form 10-K.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 2018, 39.3% of our sales were generated outside the U.S., generally in foreign currencies, yet our reporting currency is the U.S. Dollar. We alsoincur certain manufacturing, marketing and selling costs in international markets in local currency. Our primary foreign currency exposures relate to salesdenominated in Euro, Japanese Yen, Chinese Yuan and Australian Dollars. We also have foreign currency exposure related to manufacturing and otheroperational costs denominated in Swiss Francs, Canadian Dollars, Mexican Pesos and Malaysian Ringgit. The Yen, Euro, Yuan and Australian Dollar salesexposure is partially mitigated by costs and expenses for foreign operations and sourcing products denominated in foreign currencies.Since our foreign currency denominated Yen, Euro, Yuan and Australian Dollar sales exceed the foreign currency denominated costs, whenever the U.S.Dollar strengthens relative to the Yen, Euro, Yuan or Australian Dollar, there is an adverse effect on our results of operations and, conversely, whenever theU.S. Dollar weakens relative to the Yen, Euro, Yuan or Australian Dollar, there is a positive effect on our results of operations. For Swiss Francs, CanadianDollars Mexican Pesos and Malaysian Ringgit our primary cash flows relate to product costs or costs and expenses of local operations. Whenever the U.S.Dollar strengthens relative to these foreign currencies, there is a positive effect on our results of operations. Conversely, whenever the U.S. Dollar weakensrelative to these currencies, there is an adverse effect on our results of operations.We have a program in place that is designed to mitigate our exposure to changes in foreign currency exchange rates. That program includes the use 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, Australian Dollars, Canadian Dollars and Mexican Pesos. This does not eliminate the volatility of foreignexchange 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. These contracts are designated as cash flow hedges. The final impact of currency fluctuations on the results of operations isdependent on the local currency amounts hedged and the actual local currency results.37Table of ContentsRecent Accounting PronouncementsStandards to be ImplementedRevenue from Contracts with Customers (Topic 606)In May 2014, the Financial Accounting Standards Board (FASB) issued ASC Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASCUpdate No. 2014-09 stipulates that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount thatreflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, an entity shouldapply the following steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transactionprice; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies aperformance obligation. ASC Update No. 2014-09 will be effective for annual reporting periods beginning after December 15, 2017, including interimperiods within those reporting periods. Early adoption is permitted for annual reporting periods beginning after December 15, 2016, including interimreporting periods within that reporting period.In March 2016, the FASB issued ASC Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations(Reporting Revenue Gross versus Net). The purpose of ASC Update No. 2016-08 is to clarify the guidance on principal versus agent considerations. Itincludes indicators that help to determine whether an entity controls the specified good or service before it is transferred to the customer and to assist indetermining when the entity satisfied the performance obligation and as such, whether to recognize a gross or a net amount of consideration in theirconsolidated statement of operations. The effective date and transition requirements are consistent with ASC Update No. 2014-09.In April 2016, the FASB issued ASC Update No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations andLicensing. The guidance clarifies that entities are not required to assess whether promised goods or services are performance obligations if they are immaterialin the context of the contract. ASC Update No. 2016-10 also addresses how to determine whether promised goods or services are separately identifiable andpermits entities to make a policy election to treat shipping and handling costs as fulfillment activities. In addition, it clarifies key provisions in Topic 606related to licensing. The effective date and transition requirements are consistent with ASC Update No. 2014-09.We have reached conclusions on our accounting assessments related to the standard and finalized updates to our accounting policies, processes and controlsand will adopt the new standard on April 1, 2018 using the modified retrospective approach. We expect to record a net increase to opening retained earningsof up to $5 million upon adoption of Topic 606 in April 2018, primarily related to deferred revenue associated with software revenue. Software revenueaccounts for approximately 8.6% of our total revenue. Overall, the adoption of Topic 606 is expected to have an immaterial impact on our fiscal 2019 resultsof operations. The timing of revenue recognition for our primary revenue stream, disposables, will not materially change.Additionally, we completed our assessment of new disclosure requirements. Upon adoption of Topic 606, we will provide additional disclosures in the notesto the consolidated financial statements, specifically related to disaggregated revenue, contract balances and performance obligations. We designed newinternal controls that will be implemented in the first quarter of 2019 to address risks associated with applying the five-step model. Additionally, weestablished monitoring controls to identify new sales arrangements and changes in our business environment that could impact our current accountingassessment.Other Recent Accounting PronouncementsIn February 2016, the FASB issued ASC Update No. 2016-02, Leases (Topic 842). ASC Update No. 2016-02 is intended to increase the transparency andcomparability among organizations by recognizing lease asset and lease liabilities on the balance sheet, including those previously classified as operatingleases under current U.S. GAAP and disclosing key information about leasing arrangements. ASC Update No. 2016-02 is effective for fiscal years beginningafter December 15, 2018, including interim periods within those fiscal years, and is applicable to us in fiscal 2020. Earlier adoption is permitted. The impactof adopting ASC Update No. 2016-02 on our financial position and results of operations is being assessed by management.In August 2016, the FASB issued ASC Update No. 2016-15, Statement of Cash Flow (Topic 230). The guidance reduces diversity in how certain cash receiptsand cash payments are presented and classified in the consolidated statements of cash flows. The guidance is effective for annual periods beginning afterDecember 15, 2017, and is applicable to us in fiscal 2019. Early adoption is permitted. The adoption of ASC Update 2016-15 is not expected to have amaterial effect on our consolidated financial statements.In October 2016, the FASB issued ASC Update No. 2016-16, Income Taxes (Topic 740). The guidance requires companies to recognize the income tax effectsof intercompany sales and transfers of assets, other than inventory, in the income statement as income tax expense (or benefit) in the period in which thetransfer occurs. The guidance is effective for annual periods38Table of Contentsbeginning after December 15, 2017, and is applicable to us in fiscal 2019. Early adoption is permitted for all entities as of the beginning of an annualreporting period. The impact of adopting ASC Update No. 2016-16 is not expected to have a material effect on our consolidated financial statements.In March 2017, the FASB issued ASC Update No. 2017-07, Compensation - Retirement Benefits (Topic 715). The guidance revises the presentation of netperiodic pension cost and net periodic post-retirement benefit cost. The guidance is effective for annual periods beginning after December 15, 2018, and isapplicable to us in fiscal 2020. Early adoption is permitted for all entities as of the beginning of an annual reporting period. The impact of adopting ASCUpdate No. 2017-07 is not expected to have a material effect on our consolidated financial statements.In May 2017, the FASB issued ASC Update No. 2017-09, Compensation - Stock Compensation: Scope of Modification Accounting (Topic 718). Theguidance clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. The guidance is effective forannual periods beginning after December 15, 2017, and is applicable to us in fiscal 2019. Early adoption is permitted for all entities as of the beginning of anannual reporting period. The impact of adopting ASC Update No. 2017-09 is not expected to have a material effect on our consolidated financial statements.In August 2017, the FASB issued ASC Update No. 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities (Topic815). The new guidance will make more financial and non-financial hedging strategies eligible for hedge accounting as well as amend the presentation anddisclosure requirements and change how companies assess effectiveness. The guidance is effective for annual periods beginning after December 15, 2018,and is applicable to us in fiscal 2020. Early adoption is permitted for all entities as of the beginning of an annual reporting period. The impact of adoptingASC Update No. 2017-12 on our financial position and results of operations is being assessed by management.Critical Accounting PoliciesOur significant accounting policies are summarized in Note 2, Summary of Significant Accounting Policies, to our consolidated financial statementscontained in Item 8 of this Annual Report on Form 10-K. While all of these significant accounting policies impact our financial condition and results ofoperations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on ourfinancial statements and require management to use a greater degree of judgment and/or estimates. Actual results may differ from those estimates.The accounting policies identified as critical are as follows:Revenue RecognitionOur revenue recognition policy is to recognize revenues from product sales, software and services in accordance with Financial Accounting Standards Board("FASB") Accounting Standards Codification ("ASC") Topic 605, Revenue Recognition, and ASC Topic 985-605, Software. These standards require thatrevenues are recognized when persuasive evidence of an arrangement exists, product delivery, including customer acceptance, has occurred or services havebeen rendered, the price is fixed or determinable and collectability is reasonably assured. We may have multiple contracts with the same customer and eachcontract is typically treated as a separate arrangement. When more than one element such as equipment, disposables and services are contained in a singlearrangement, we allocate revenue between the elements based on each element’s relative selling price, provided that each element meets the criteria fortreatment as a separate unit of accounting. An item is considered a separate unit of accounting if it has value to the customer on a stand-alone basis. Theselling price of the undelivered elements is determined by the price charged when the element is sold separately, or in cases when the item is not soldseparately, by third-party evidence of selling price or by management's best estimate of selling price. For our software arrangements accounted for under theprovisions of ASC 985-605, Software, we establish fair value of undelivered elements based upon vendor specific objective evidence.We offer sales rebates and discounts to certain customers. We treat sales rebates and discounts as a reduction of revenue and classify the correspondingliability as current. We estimate rebates for products where there is sufficient historical information available to predict the volume of expected future rebates.If we are unable to estimate the expected rebates reasonably, we record a liability for the maximum potential rebate or discount that could be earned. Incircumstances where we provide upfront rebate payments to customers, we capitalize the rebate payments and amortize the resulting asset as a reduction ofrevenue using a systematic method over the life of the contract.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.39Table of ContentsGoodwill and Intangible AssetsGoodwill represents the excess purchase price over the fair value of the net tangible and other identifiable intangible assets acquired. Goodwill is notamortized. Instead goodwill is reviewed for impairment at least annually, or on an interim basis between annual tests when events or circumstances indicatethat it is more likely than not that the fair value of a reporting unit is less than its carrying value. We perform our annual impairment test on the first day of thefiscal fourth quarter for each of our reporting units.In fiscal 2017, we early adopted ASC Update No. 2017-04, Intangibles - Goodwill and Other Topics ("Topic 350"): Simplifying the Test for GoodwillImpairment. Under this amendment, entities perform their goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.An impairment charge is recognized for the amount by which the carrying value exceeds the reporting unit's fair value. A reporting unit is defined as anoperating segment or one level below an operating segment, referred to as a component. We determine our reporting units by first identifying our operatingsegments, and then by assessing whether any components of these segments constitute a business for which discrete financial information is available andwhere segment management regularly reviews the operating results of that component. We aggregate components within an operating segment that havesimilar economic characteristics. Our reporting units for purposes of assessing goodwill impairment are organized primarily based on operating segments andgeography and include: (a) North America Plasma, (b) North America Blood Center, (c) North America Hospital, (d) Europe, Middle East and Africa(collectively "EMEA"), (e) Asia-Pacific and (f) Japan. The North America Plasma reporting unit is a separate operating segment with dedicated segmentmanagement due to the size and scale of the Plasma business unit.When allocating goodwill from business combinations to our reporting units, we assign goodwill to the reporting units that we expect to benefit from therespective business combination at the time of acquisition. In addition, for purposes of performing our goodwill impairment tests, assets and liabilities,including corporate assets that relate to a reporting unit’s operations and would be considered in determining its fair value, are allocated to the individualreporting units. We allocate assets and liabilities not directly related to a specific reporting unit, but from which the reporting unit benefits, based primarilyon the respective revenue contribution of each reporting unit.We use the income approach, specifically the discounted cash flow method, to derive the fair value of each of our reporting units in preparing our goodwillimpairment assessments. This approach calculates fair value by estimating the after-tax cash flows attributable to a reporting unit and then discounting theseafter-tax cash flows to a present value using a risk-adjusted discount rate. We selected this method as being the most meaningful in preparing our goodwillassessments because the use of the income approach typically generates a more precise measurement of fair value than the market approach. In applying theincome approach to our accounting for goodwill, we make assumptions about the amount and timing of future expected cash flows, terminal value growthrates and appropriate discount rates. The amount and timing of future cash flows within our discounted cash flow analysis is based on our most recentoperational budgets, long range strategic plans and other estimates. The terminal value growth rate is used to calculate the value of cash flows beyond the lastprojected period in our discounted cash flow analysis and reflects our best estimates for stable, perpetual growth of our reporting units. We use estimates ofmarket-participant risk adjusted weighted average cost of capital as a basis for determining the discount rates to apply to our reporting units’ future expectedcash flows. We corroborated the valuations that arose from the discounted cash flow approach by performing both a market multiple valuation and byreconciling the aggregate fair value of our reporting units to our market capitalization at the time of the test.During the fourth quarter of fiscal 2018, we performed our annual goodwill impairment test under the guidelines of ASC Update No. 2017-04. The results ofthe goodwill impairment test performed indicated that the estimated fair value of all of our reporting units exceeded their respective carrying values. Therewere no reporting units at risk of impairment as of the fiscal 2018 annual test date.During fiscal 2017, we recorded a goodwill impairment charge of $57.0 million associated with our North America Blood Center reporting unit, whichrepresented the entire goodwill balance associated with this reporting unit. During fiscal 2016, we recorded a goodwill impairment charge of $66.3 millionassociated with the EMEA reporting unit. At the time the impairment assessment was performed, this represented the entire goodwill balance of this reportingunit. During the first quarter of fiscal 2017, management reorganized its operating segments such that certain components of the All Other operating segmentbecame components of the EMEA operating segment. As a result, we transferred $20.5 million of goodwill to the EMEA operating segment, whichrepresented the portion of the goodwill associated with these components. Refer to Note 9, Goodwill and Intangible Assets, to our consolidated financialstatements contained in Item 8 of this Annual Report on Form 10-K for additional details regarding the goodwill impairments recorded.We review intangible assets subject to amortization for impairment at least annually or more frequently if certain conditions arise to determine if any adverseconditions exist 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 isrequired. Conditions indicating that an impairment exists include40Table of Contentsbut are not limited to a change in the competitive landscape, internal decisions to pursue new or different technology strategies, a loss of a significantcustomer or a significant change in the marketplace including prices paid for our products or the size of the market for our products.When an impairment indicator exists, we test the intangible asset for recoverability. For purposes of the recoverability test, we group our amortizableintangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independentof other assets and liabilities. If the carrying value of the intangible asset (asset group) exceeds the undiscounted cash flows expected to result from the useand eventual 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.We did not incur any intangible asset impairments during fiscal 2018. During 2017 and 2016, we determined that there were potential impairment indicatorsfor certain intangible assets subject to amortization. As such, we performed the recoverability test described above for the relevant asset groups. In fiscal 2017and 2016, we determined that the undiscounted cash flows did not support the carrying value of certain identified asset groups and made the decision todiscontinue the use of and investment in these assets. Accordingly, we recorded impairment charges of $4.8 million and $25.8 million, respectively, in fiscal2017 and 2016. See Note 9, Goodwill and Intangible Assets, to our consolidated financial statements contained in Item 8 of this Annual Report on Form 10-K for additional information.Inventory 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 with forecasted amounts may result in recording additional provisions for excess, expired and obsoleteinventory in the future. Additionally, uncertain timing of next-generation product approvals, variability in product launch strategies, product recalls andvariation in product 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 that 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. All available evidence, both positive and negative, has been considered to determine whether, based onthe weight of that evidence, a valuation allowance is needed against the deferred tax assets. Significant weight has been given to our consolidated worldwidecumulative loss position for the current and prior two years. Refer to Note 5, Income Taxes for further information and discussion of our income tax provisionand balances including a discussion of the impact of the Tax Cuts and Jobs Act enacted in December 2017.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 that 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.We evaluate at the end of each reporting period whether some or all of the undistributed earnings of our foreign subsidiaries are permanently reinvested. Werecognize deferred income tax liabilities to the extent that management asserts that undistributed earnings of its foreign subsidiaries are not permanentlyreinvested or will not be permanently reinvested in the future. Our position is based upon several factors including management’s evaluation of the Companyand its subsidiaries’ financial requirements, the short term and long-term operational and fiscal objectives of the Company and the tax consequencesassociated with the repatriation of earnings.Contingencies41Table of ContentsWe 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, employee related litigation, self-insurance and other claims are based on judgment, the probability of losses and, where applicable, the consideration of opinions of internal and/or externallegal counsel and actuarially determined estimates. When a loss is probable and a range of loss is established but a best estimate cannot be made, we recordthe minimum loss contingency amount. These estimates are often initially developed substantially earlier than the ultimate loss is known and the estimatesare reevaluated each accounting period, as additional information is available. When we are initially unable to develop a best estimate of loss, we record theminimum amount of loss, which could be zero. As information becomes known, additional loss provision is recorded when either a best estimate can be madeor the minimum loss amount is increased. When events result in an expectation of a more favorable outcome than previously expected, our best estimate ischanged to a lower amount.42Table 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.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 $5.0 millionincrease in the fair value of the forward contracts, whereas a 10% weakening of the U.S. dollar would result in a $5.1 million decrease in the fair value of theforward contracts.Interest Rate RiskOur exposure to changes in interest rates is associated with borrowings on our Credit Agreement, all of which is variable rate debt. Total outstanding debtunder our Credit Facilities for the fiscal year ended March 31, 2018 was $253.7 million with an interest rate of 3.2% based on prevailing Adjusted LIBORrates. An increase of 100 basis points in Adjusted LIBOR rates would result in additional annual interest expense of $2.5 million.43Table of ContentsReport of Independent Registered Public Accounting FirmTo the Stockholders and Board of Directors of Haemonetics CorporationOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Haemonetics Corporation and subsidiaries (the Company) as of March 31, 2018 and April1, 2017, the related consolidated statements of income (loss), comprehensive income (loss), stockholders' equity and cash flows for each of the three years inthe period ended March 31, 2018, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the“consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of theCompany at March 31, 2018 and April 1, 2017, and the results of its operations and its cash flows for each of the three years in the period ended March 31,2018, in conformity with U.S. generally accepted accounting principles.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company'sinternal control over financial reporting as of March 31, 2018, based on criteria established in Internal Control-Integrated Framework issued by theCommittee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated May 23, 2018 expressed an unqualifiedopinion thereon.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financialstatements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Companyin accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing proceduresto assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also includedevaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financialstatements. We believe that our audits provide a reasonable basis for our opinion./s/ Ernst & Young LLPWe have served as the Company’s auditor since 2002.Boston, MassachusettsMay 23, 201844Table of ContentsITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHAEMONETICS CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME (LOSS)(In thousands, except per share data) Year Ended March 31, 2018 April 1, 2017 April 2, 2016 Net revenues$903,923 $886,116 $908,832Cost of goods sold492,015 507,622 502,918Gross profit411,908 378,494 405,914Operating expenses: Research and development39,228 37,556 44,965Selling, general and administrative316,523 301,726 317,223Impairment of assets— 58,593 92,395Contingent consideration income— — (4,727)Total operating expenses355,751 397,875 449,856Operating income (loss)56,157 (19,381) (43,942)Gain on divestiture8,000 — —Interest and other expense, net(4,525) (8,095) (9,474)Income (loss) before provision (benefit) for income taxes59,632 (27,476) (53,416)Provision (benefit) for income taxes14,060 (1,208) 2,163Net income (loss)$45,572 $(26,268) $(55,579) Net income (loss) per share - basic$0.86 $(0.51) $(1.09)Net income (loss) per share - diluted$0.85 $(0.51) $(1.09) Weighted average shares outstanding Basic52,755 51,524 50,910Diluted53,501 51,524 50,910The accompanying notes are an integral part of these consolidated financial statements.45Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)(In thousands) Year Ended March 31, 2018 April 1, 2017 April 2, 2016 Net income (loss)$45,572 $(26,268) $(55,579) Other comprehensive income (loss): Impact of defined benefit plans, net of tax1,949 5,220 1,431Foreign currency translation adjustment13,430 (7,336) (1,987)Unrealized loss on cash flow hedges, net of tax(2,796) (364) (3,938)Reclassifications into earnings of cash flow hedge losses (gains), net of tax1,299 4,647 (8,822)Other comprehensive income (loss)13,882 2,167 (13,316)Comprehensive income (loss)$59,454 $(24,101) $(68,895)The accompanying notes are an integral part of these consolidated financial statements.46Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In thousands, except share data) March 31, 2018 April 1, 2017 ASSETS Current assets: Cash and cash equivalents$180,169 $139,564Accounts receivable, less allowance of $2,111 at March 31, 2018 and $2,184 at April 1, 2017151,226 152,683Inventories, net160,799 176,929Prepaid expenses and other current assets28,983 40,853Total current assets521,177 510,029Property, plant and equipment, net332,156 323,862Intangible assets, less accumulated amortization of $249,278 at March 31, 2018 and $215,772 at April 1, 2017156,589 177,540Goodwill211,395 210,841Deferred tax asset3,961 3,988Other long-term assets12,061 12,449Total assets$1,237,339 $1,238,709LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Notes payable and current maturities of long-term debt$194,259 $61,022Accounts payable55,265 42,973Accrued payroll and related costs69,519 43,534Other current liabilities65,660 63,650Total current liabilities384,703 211,179Long-term debt, net of current maturities59,423 253,625Deferred tax liability6,526 12,114Other long-term liabilities34,258 22,181Stockholders’ equity: Common stock, $0.01 par value; Authorized — 150,000,000 shares; Issued and outstanding — 52,342,965 shares at March31, 2018 and 52,255,495 shares at April 1, 2017523 523Additional paid-in capital503,955 482,044Retained earnings266,942 289,916Accumulated other comprehensive loss(18,991) (32,873)Total stockholders’ equity752,429 739,610Total liabilities and stockholders’ equity$1,237,339 $1,238,709The accompanying notes are an integral part of these consolidated financial statements.47Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY(In thousands, except share data) Common Stock AdditionalPaid-in Capital Retained Earnings AccumulatedOtherComprehensiveIncome/(Loss) TotalStockholders’ Equity Shares Par Value Balance, March 28, 201551,671 $517 $426,964 $420,365 $(21,724) $826,122Employee stock purchase plan145 1 4,340 — — 4,341Exercise of stock options492 6 14,026 — — 14,032Shares repurchased(1,488) (15) (12,367) (48,602) — (60,984)Issuance of restricted stock, net of cancellations112 — — — — —Stock-based compensation expense— — 6,949 — — 6,949Net loss— — — (55,579) — (55,579)Other comprehensive loss— — — — (13,316) (13,316)Balance, April 2, 201650,932 $509 $439,912 $316,184 $(35,040) $721,565Employee stock purchase plan141 2 3,557 — — 3,559Exercise of stock options1,048 12 29,425 — — 29,437Issuance of restricted stock, net of cancellations134 — — — — —Stock-based compensation expense— — 9,150 — — 9,150Net loss— — — (26,268) — (26,268)Other comprehensive income— — — — 2,167 2,167Balance, April 1, 201752,255 $523 $482,044 $289,916 $(32,873) $739,610Employee stock purchase plan102 1 3,245 — — 3,246Exercise of stock options1,014 11 37,083 — — 37,094Shares repurchased(1,162) (12) (31,442) (68,546) — (100,000)Issuance of restricted stock, net of cancellations134 — — — — —Stock-based compensation expense— — 13,025 — — 13,025Net income— — — 45,572 — 45,572Other comprehensive income— — — — 13,882 13,882Balance, March 31, 201852,343 $523 $503,955 $266,942 $(18,991) $752,429The accompanying notes are an integral part of these consolidated financial statements.48Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands) Year Ended March 31, 2018 April 1, 2017 April 2, 2016Cash Flows from Operating Activities: Net income (loss)$45,572 $(26,268) $(55,579)Adjustments to reconcile net income (loss) to net cash provided by operating activities: Non-cash items: Depreciation and amortization89,247 89,733 89,911Impairment of assets2,673 75,348 101,243Stock-based compensation expense13,025 9,150 6,949Gain on divestiture(8,000) — —Deferred tax benefit(5,828) (6,800) (1,038)Unrealized (gain) loss from hedging activities(649) 517 (2,645)Changes in fair value of contingent consideration— — (4,727)Provision for losses on accounts receivable and inventory2,639 11,381 13,053Other non-cash operating activities1,692 860 899Change in operating assets and liabilities: Change in accounts receivable5,087 3,155 (10,328)Change in inventories14,385 (1,552) 11,896Change in prepaid income taxes1,436 1,395 (651)Change in other assets and other liabilities17,670 (18,253) 3,121Change in accounts payable and accrued expenses41,401 21,072 (30,239)Net cash provided by operating activities220,350 159,738 121,865Cash Flows from Investing Activities: Capital expenditures(74,799) (76,135) (102,405)Proceeds from divestiture9,000 — —Proceeds from sale of property, plant and equipment2,758 2,822 637Other acquisitions and investments— — (3,000)Net cash used in investing activities(63,041) (73,313) (104,768)Cash Flows from Financing Activities: Repayment of term loan borrowings(61,654) (42,683) (21,342)Net increase (decrease) in short-term loans671 (50,727) 2,272Proceeds from employee stock purchase plan3,246 3,560 4,341Proceeds from exercise of stock options37,094 29,437 14,032Share repurchases(100,000) — (60,984)Other financing activities— — (943)Net cash used in financing activities(120,643) (60,413) (62,624)Effect of exchange rates on cash and cash equivalents3,939 (1,571) (12)Net Change in Cash and Cash Equivalents40,605 24,441 (45,539)Cash and Cash Equivalents at Beginning of Year139,564 115,123 160,662Cash and Cash Equivalents at End of Year$180,169 $139,564 $115,123Supplemental Disclosures of Cash Flow Information: Interest paid$7,663 $7,850 $8,511Income taxes paid$9,083 $6,957 $7,829Transfers from inventory to fixed assets for placement of Haemonetics equipment$8,963 $6,255 $9,663The accompanying notes are an integral part of these consolidated financial statements.49Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATIONHaemonetics Corporation ("Haemonetics" or the "Company") is a global healthcare company dedicated to providing a suite of innovative hematologyproducts and solutions to customers to help improve patient care and reduce the cost of healthcare. Our technology addresses important medical marketsincluding commercial plasma collection, hospital-based diagnostics, blood and blood component collection and devices and software products.Blood is essential to a modern healthcare system. Blood and its components (plasma, platelets and red cells) have many vital and frequently life-savingclinical applications. Plasma is used for patients with major blood loss and is manufactured into biopharmaceuticals to treat a variety of illnesses, includingimmune diseases and coagulation disorders. Red cells treat trauma patients or patients undergoing surgery with high blood loss, such as open heart surgery ororgan transplant. Platelets have many uses in patient care, including supporting cancer patients undergoing chemotherapy.Haemonetics develops and markets a wide range of devices and solutions to serve our customers. We provide plasma collection systems and software thatenable the collection of plasma used by fractionators to make life saving pharmaceuticals. We provide analytical devices for measuring hemostasis thatenable healthcare providers to better manage their patients’ bleeding risk. Haemonetics makes blood processing systems and software that make blooddonation more efficient and track life giving blood components. Finally, Haemonetics supplies systems and software that facilitate blood transfusions andcell processing.The accompanying consolidated financial statements present separately our consolidated financial position, results of operations, cash flows and changes inshareholders’ equity. The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S.GAAP”). All amounts presented, except per share amounts, are stated in thousands of U.S. dollars, unless otherwise indicated. We have assessed our ability tocontinue as a going concern. As of March 31, 2018, we have concluded that substantial doubt about our ability to continue as a going concern does not exist.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. Refer to Note 6, Earnings Per Share, for information pertaining to theshare repurchase that occurred after the balance sheet date but prior to the issuance of the financial statements and refer to Note 20, Subsequent Event forinformation pertaining to a settlement with Pall Corporation that occurred in May 2018.2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESFiscal YearOur fiscal year ends on the Saturday closest to the last day of March. Fiscal 2018 and 2017 include 52 weeks with each quarter having 13 weeks. Fiscal 2016includes 53 weeks with each of the first three quarters having 13 weeks and the fourth quarter having 14 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.Use of EstimatesThe preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues andexpenses during the reporting period. Actual results could vary from the amounts derived from our estimates and assumptions. We consider estimates to becritical if we are required to make assumptions about material matters that are uncertain at the time of estimation or if materially different estimates couldhave been made or it is reasonably likely that the accounting estimate will change from period to period. The following are areas considered to be critical andrequire management’s judgment: revenue recognition, allowance for doubtful accounts, inventory provisions, intangible asset and goodwill valuation, legaland other judgmental accruals and income taxes.ReclassificationsCertain reclassifications have been made to prior years' amounts to conform to the current year's presentation.50Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)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, employee related litigation, self-insurance and other claims are based on judgment, the probability of losses and, where applicable, the consideration of opinions of internal and/or externallegal counsel and actuarially determined estimates. When a loss is probable and a range of loss is established but a best estimate cannot be made, we recordthe minimum loss contingency amount, which could be zero. These estimates are often initially developed substantially earlier than the ultimate loss isknown and the estimates are reevaluated each accounting period, as additional information is available. As information becomes known, an additional lossprovision is recorded when either a best estimate can be made or the minimum loss amount is increased. When events result in an expectation of a morefavorable 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 Financial Accounting Standards Board("FASB") Accounting Standards Codification ("ASC") Topic 605, Revenue Recognition, and ASC Topic 985-605, Software. These standards require thatrevenues are recognized when persuasive evidence of an arrangement exists, product delivery, including customer acceptance, has occurred or services havebeen rendered, the price is fixed or determinable and collectability is reasonably assured. We may have multiple contracts with the same customer and eachcontract is typically treated as a separate arrangement. When more than one element such as equipment, disposables and services are contained in a singlearrangement, we allocate revenue between the elements based on each element’s relative selling price, provided that each element meets the criteria fortreatment as a separate unit of accounting. An item is considered a separate unit of accounting if it has value to the customer on a stand-alone basis. Theselling price of the undelivered elements is determined by the price charged when the element is sold separately, or in cases when the item is not soldseparately, by third-party evidence of selling price or by management's best estimate of selling price. For our software arrangements accounted for under theprovisions of ASC 985-605, Software, we establish fair value of undelivered elements based upon vendor specific objective evidence.We offer sales rebates and discounts to certain customers. We treat sales rebates and discounts as a reduction of revenue and classify the correspondingliability as current. We estimate rebates for products where there is sufficient historical information available to predict the volume of expected future rebates.If we are unable to estimate the expected rebates reasonably, we record a liability for the maximum potential rebate or discount that could be earned. Incircumstances where we provide upfront rebate payments to customers, we capitalize the rebate payments and amortize the resulting asset as a reduction ofrevenue using a systematic method over the life of the contract.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. We also place equipment at customer sites. While we retain ownership ofthis equipment, the customer has the right to use it for a period of time provided they meet certain agreed to conditions. We recover the cost of providing theequipment from the sale of disposables.Software RevenuesWe offer a variety of software solutions to support 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 revenues also include revenue from software sales that includes per collection or monthly subscription fees for the license and support of thesoftware as well as hosting services. A significant portion of our software sales are perpetual licenses typically accompanied with significant implementationservice fees related to software customization as well as other professional and technical service fees.51Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)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.Revenue from Contracts with Customers (Topic 606)In May 2014, the Financial Accounting Standards Board (FASB) issued ASC Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASCUpdate No. 2014-09 stipulates that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount thatreflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, an entity shouldapply the following steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transactionprice; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies aperformance obligation. ASC Update No. 2014-09 will be effective for annual reporting periods beginning after December 15, 2017, including interimperiods within those reporting periods. Early adoption is permitted for annual reporting periods beginning after December 15, 2016, including interimreporting periods within that reporting period.In March 2016, the FASB issued ASC Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations(Reporting Revenue Gross versus Net). The purpose of ASC Update No. 2016-08 is to clarify the guidance on principal versus agent considerations. Itincludes indicators that help to determine whether an entity controls the specified good or service before it is transferred to the customer and to assist indetermining when the entity satisfied the performance obligation and as such, whether to recognize a gross or a net amount of consideration in theirconsolidated statement of operations. The effective date and transition requirements are consistent with ASC Update No. 2014-09.In April 2016, the FASB issued ASC Update No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations andLicensing. The guidance clarifies that entities are not required to assess whether promised goods or services are performance obligations if they are immaterialin the context of the contract. ASC Update No. 2016-10 also addresses how to determine whether promised goods or services are separately identifiable andpermits entities to make a policy election to treat shipping and handling costs as fulfillment activities. In addition, it clarifies key provisions in Topic 606related to licensing. The effective date and transition requirements are consistent with ASC Update No. 2014-09.We have reached conclusions on our accounting assessments related to the standard and finalized updates to our accounting policies, processes and controlsand will adopt the new standard on April 1, 2018 using the modified retrospective approach. We expect to record a net increase to opening retained earningsof up to $5 million upon adoption of Topic 606 in April 2018, primarily related to deferred revenue associated with software revenue. Software revenueaccounts for approximately 8.6% of our total revenue. Overall, the adoption of Topic 606 is expected to have an immaterial impact on our fiscal 2019 resultsof operations. The timing of revenue recognition for our primary revenue stream, disposables, will not materially change.Additionally, we completed our assessment of new disclosure requirements. Upon adoption of Topic 606, we will provide additional disclosures in the notesto the consolidated financial statements, specifically related to disaggregated revenue, contract balances and performance obligations. We designed newinternal controls that will be implemented in the first quarter of 2019 to address risks associated with applying the five-step model. Additionally, weestablished monitoring controls to identify new sales arrangements and changes in our business environment that could impact our current accountingassessment.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. InDecember 2015, this tax was suspended for two years, beginning on January 1, 2016. In January 2018, another temporary two year suspension of the excisetax was passed, extending the suspension to December 31, 2019.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,52Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)including those resulting from intercompany transactions, are charged directly to earnings and included in other expense, net on the consolidated statementsof income (loss). The impact of foreign exchange on long-term intercompany loans, for which repayment has not been scheduled or planned, are recorded inaccumulated other comprehensive loss 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 31, 2018, 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.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. We have based our provisions for excess, expired and obsolete inventory primarily on our estimates of forecasted net sales. Significantchanges in the timing or level of demand for our products results in recording additional provisions for excess, expired and obsolete inventory. Additionally,uncertain timing of next-generation product approvals, variability in product launch strategies, non-cancelable purchase commitments, product recalls andvariation in product utilization all affect our estimates related to excess, expired and obsolete inventory.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 30-40 YearsBuilding improvements 5-20 YearsPlant equipment and machinery 3-15 YearsOffice equipment and information technology 3-10 YearsHaemonetics equipment 3-7 YearsWe 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. We also consider product life cycle in our evaluation of useful life and recoverability. Changes in expecteddemand53Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)can result in additional depreciation expense, which is classified as cost of goods sold. Any significant unanticipated changes in demand could impact thevalue 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 consolidated statements of income (loss).Goodwill and Intangible AssetsGoodwill represents the excess purchase price over the fair value of the net tangible and other identifiable intangible assets acquired. Goodwill is notamortized. Instead goodwill is reviewed for impairment at least annually, or on an interim basis between annual tests when events or circumstances indicatethat it is more likely than not that the fair value of a reporting unit is less than its carrying value. We perform our annual impairment test on the first day of thefiscal fourth quarter for each of our reporting units.In fiscal 2017, we early adopted ASC Update No. 2017-04, Intangibles - Goodwill and Other Topics ("Topic 350"): Simplifying the Test for GoodwillImpairment. Under this amendment, entities perform their goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.An impairment charge is recognized for the amount by which the carrying value exceeds the reporting unit's fair value. A reporting unit is defined as anoperating segment or one level below an operating segment, referred to as a component. We determine our reporting units by first identifying our operatingsegments and then by assessing whether any components of these segments constitute a business for which discrete financial information is available andwhere segment management regularly reviews the operating results of that component. We aggregate components within an operating segment that havesimilar economic characteristics. Our reporting units for purposes of assessing goodwill impairment are organized primarily based on operating segments andgeography and include: (a) North America Plasma, (b) North America Blood Center, (c) North America Hospital, (d) Europe, Middle East and Africa(collectively "EMEA"), (e) Asia-Pacific and (f) Japan. The North America Plasma reporting unit is a separate operating segment with dedicated segmentmanagement due to the size and scale of the Plasma business unit.When allocating goodwill from business combinations to our reporting units, we assign goodwill to the reporting units that we expect to benefit from therespective business combination at the time of acquisition. In addition, for purposes of performing our goodwill impairment tests, assets and liabilities,including corporate assets, which relate to a reporting unit’s operations and would be considered in determining its fair value, are allocated to the individualreporting units. We allocate assets and liabilities not directly related to a specific reporting unit, but from which the reporting unit benefits, based primarilyon the respective revenue contribution of each reporting unit.We use the income approach, specifically the discounted cash flow method, to derive the fair value of each of our reporting units in preparing our goodwillimpairment assessments. This approach calculates fair value by estimating the after-tax cash flows attributable to a reporting unit and then discounting theseafter-tax cash flows to a present value using a risk-adjusted discount rate. We selected this method as being the most meaningful in preparing our goodwillassessments because the use of the income approach typically generates a more precise measurement of fair value than the market approach. In applying theincome approach to our accounting for goodwill, we make assumptions about the amount and timing of future expected cash flows, terminal value growthrates and appropriate discount rates. The amount and timing of future cash flows within our discounted cash flow analysis is based on our most recentoperational budgets, long range strategic plans and other estimates. The terminal value growth rate is used to calculate the value of cash flows beyond the lastprojected period in our discounted cash flow analysis and reflects our best estimates for stable, perpetual growth of our reporting units. We use estimates ofmarket-participant risk adjusted weighted average cost of capital as a basis for determining the discount rates to apply to our reporting units’ future expectedcash flows. We corroborated the valuations that arose from the discounted cash flow approach by performing both a market multiple valuation and byreconciling the aggregate fair value of our reporting units to our market capitalization at the time of the test.During the fourth quarter of fiscal 2018, we performed our annual goodwill impairment test under the guidelines of ASC Update No. 2017-04. The results ofthe goodwill impairment test performed indicated that the estimated fair value of all of our reporting units exceeded their respective carrying values. Therewere no reporting units at risk of impairment as of the fiscal 2018 annual test date.During fiscal 2017, we recorded a goodwill impairment charge of $57.0 million associated with our North America Blood Center reporting unit, whichrepresented the entire goodwill balance associated with this reporting unit. During fiscal 2016, we recorded a goodwill impairment charge of $66.3 millionassociated with the EMEA reporting unit. At the time the impairment54Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)assessment was performed, this represented the entire goodwill balance of this reporting unit. During fiscal 2017, management reorganized its operatingsegments such that certain components of the All Other operating segment became components of the EMEA operating segment. As a result, we transferred$20.5 million of goodwill to the EMEA operating segment, which represented the portion of the goodwill associated with these components. Refer to Note 9,Goodwill and Intangible Assets, for additional details regarding the goodwill impairments recorded.We review intangible assets subject to amortization for impairment at least annually or more frequently if certain conditions arise to determine if any adverseconditions exist 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 isrequired. Conditions indicating that an impairment exists include but are not limited to a change in the competitive landscape, internal decisions to pursuenew or different technology strategies, a loss of a significant customer or a significant change in the marketplace including prices paid for our products or thesize of the market for our products.When an impairment indicator exists, we test the intangible asset for recoverability. For purposes of the recoverability test, we group our amortizableintangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independentof other assets and liabilities. If the carrying value of the intangible asset (asset group) exceeds the undiscounted cash flows expected to result from the useand eventual 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.During fiscal 2018 we did not incur any intangible asset impairments. During fiscal 2017 and 2016, we recorded impairment charges of $4.8 million and$25.8 million, respectively. See Note 9, Goodwill and Intangible Assets, to our consolidated financial statements contained in Item 8 for additionalinformation.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 capitalize costs associated with both software that we sell as a separate product and software that isembedded in a device.We review the net realizable value of capitalized assets periodically to assess the recoverability of amounts capitalized. During fiscal 2017 and fiscal 2016,we recorded $4.0 million and $6.0 million, respectively, of impairment charges related to the discontinuance of certain capitalized software projects. Therewere no impairment charges recorded during fiscal 2018. In the future, the net realizable value may be adversely affected by the loss of a significant customeror a significant change in the market place, which could result in an impairment being recorded.55Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Other Current LiabilitiesOther current 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 31, 2018 April 1, 2017VAT liabilities$2,932 $4,051Forward contracts1,583 966Deferred revenue25,814 26,485Accrued taxes5,340 4,407All other29,991 27,741Total$65,660 $63,650Other Long-Term LiabilitiesOther long-term liabilities represent items that are not payable or expected to settle within the next twelve months. The items included in the fiscal year endbalances were:(In thousands)March 31, 2018 April 1, 2017Unfunded pension liability14,045 14,060Unrecognized tax benefit2,850 1,627Transition tax liability7,837 —All other9,526 6,494Total$34,258 $22,181Research 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(loss). Advertising expenses were $3.1 million, $2.5 million and $3.9 million in fiscal 2018, 2017 and 2016, respectively.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 that 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. All available evidence, both positive and negative, has been considered to determine whether, based onthe weight of that evidence, a valuation allowance is needed against the deferred tax assets. Significant weight has been given to our consolidated worldwidecumulative loss position for the current and prior two years. Refer to Note 5, Income Taxes for further information and discussion of our income tax provisionand balances including a discussion of the impact of the Tax Cuts and Jobs Act (the "Act") enacted in December 2017.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 that we have determined are not more-likely-than-not realizable. These tax reserves have56Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)been established based on management's assessment as to the potential exposure attributable to our uncertain tax positions as well as interest and penaltiesattributable to these uncertain tax positions. All tax reserves are analyzed quarterly and adjustments are made as events occur that result in changes injudgment.We evaluate at the end of each reporting period whether some or all of the undistributed earnings of our foreign subsidiaries are permanently reinvested. Werecognize deferred income tax liabilities to the extent that management asserts that undistributed earnings of its foreign subsidiaries are not permanentlyreinvested or will not be permanently reinvested in the future. Our position is based upon several factors including management’s evaluation of the Companyand its subsidiaries’ financial requirements, the short term and long-term operational and fiscal objectives of the Company and the tax consequencesassociated with the repatriation of earnings.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, ASC 815provides that, for derivative instruments that qualify for hedge accounting, changes in the fair value are either (a) offset against the change in fair value of thehedged assets, liabilities, or firm commitments through earnings or (b) recognized in equity until the hedged item is recognized in earnings, depending onwhether 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 is immediatelyrecognized in earnings. We do not use derivative financial instruments for trading or speculation purposes.When the underlying hedged transaction affects earnings, the gains or losses on the forward foreign exchange rate contracts designated as hedges arerecorded in net revenues, cost of goods sold, operating expenses and other expense, net in our consolidated statements of income (loss), depending on thenature of the underlying hedged transactions. The cash flows related to the gains and losses are classified in the consolidated statements of cash flows as partof cash flows from operating activities. For those derivative instruments that are not designated as part of a hedging relationship we record the gains or lossesin earnings currently. These gains and losses are intended to offset the gains and losses recorded on net monetary assets or liabilities that are denominated inforeign currencies. We recorded foreign currency losses of $0.2 million, $1.8 million and $1.4 million in fiscal 2018, 2017 and 2016, 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 CompensationWe expense the fair value of stock-based awards granted to employees, board members and others, net of estimated forfeitures. To calculate the grant-date fairvalue of our stock options we use the Black-Scholes option-pricing model and for performance share units we use Monte Carlo simulation models.Costs Associated with Exit ActivitiesWe record employee termination costs in accordance with FASB ASC Topic 712, Compensation - Nonretirement andPostemployment Benefits, if we pay the benefits as part of an on-going benefit arrangement, which includes benefits provided as part of our establishedseverance policies or that we provide in accordance with international statutory requirements. We accrue employee termination costs associated with an on-going benefit arrangement if the obligation is attributable to prior services rendered, the rights to the benefits have vested, the payment is probable and wecan reasonably estimate the liability. We account for employee termination benefits that represent a one-time benefit in accordance with FASB ASC Topic420, Exit or Disposal Cost Obligations. We record such costs into expense over the employee’s future service period, if any.Other costs associated with exit activities may include contract termination costs, including costs related to leased facilities to be abandoned or subleased,consultant fees and impairments of long-lived assets. The costs are expensed in accordance with57Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)FASB ASC Topic 420 and FASB ASC Topic 360, Property, Plant and Equipment and are included primarily in selling, general and administrative costs inour consolidated statement of income (loss). Additionally, costs directly related to our active restructuring initiatives, including program management costs,accelerated depreciation and costs to transfer product lines among facilities are included within costs of goods sold and selling, general and administrativecosts in our consolidated statement of income (loss). See Note 3, Restructuring, for further information and discussion of our restructuring plans.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.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 2018 and 2017 one plasma collection customer accounted for 14% of our net revenues. In fiscal 2016, one plasma collection customer accounted for11% of our net revenues.Certain other markets and industries can expose us to concentrations of credit risk. For example, in our Plasma business unit, our sales are concentrated withseveral large customers. As a result, our accounts receivable extended to any one of these biopharmaceutical 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.Recent Accounting PronouncementsStandards ImplementedIn March 2016, the FASB issued ASC Update No. 2016-09, Compensation- Stock Compensation ("Topic 718"): Improvements to Employee Share-BasedPayment Accounting. The purpose of the update is to simplify several areas of the accounting for share-based payment transactions. We adopted ASC UpdateNo. 2016-09 on a prospective basis in our first quarter of fiscal 2018; therefore, prior periods have not been adjusted. The adoption of ASC Update No. 2016-09 did not have a material effect on our financial position or results of operations.ASC Update No. 2016-09 allows a company to elect to account for award forfeitures as they occur or to continue to estimateforfeitures. We have elected to continue to estimate potential forfeitures. In addition, ASC Update No. 2016-09 eliminates additional paid in capital poolsand requires excess tax benefits and tax deficiencies to be recorded in the consolidated statement of operations when the awards vest or are settled.Amendments related to accounting for excess tax benefits resulted in an immaterial tax benefit in fiscal 2018. In connection with the adoption of this newstandard, we also recorded a cumulative-effect adjustment to retained earnings and deferred tax assets for certain off balance sheet federal and state netoperating loss carry-forwards totaling $1.6 million as of April 1, 2017, with an equal offsetting adjustment to the valuation allowance.3. RESTRUCTURINGOn an ongoing basis, we review the global economy, the healthcare industry and the markets in which we compete to identify opportunities for efficiencies,enhance commercial capabilities, align our resources and offer our customers better solutions. In order to realize these opportunities, we undertakerestructuring-type activities to transform our business.On November 1, 2017, we launched a Complexity Reduction Initiative (the "2018 Program"), a company-wide restructuring program designed to improveoperational performance and reduce cost, freeing up resources to invest in accelerated growth. This program includes a reduction of headcount and operatingcosts which will enable a more streamlined organizational structure. We expect to incur aggregate charges between $50 million and $60 million associatedwith these actions, of which we expect $35 million to $40 million will consist of severance and other employee costs and the remainder will consist of otherexit costs, primarily related to third party services. These charges, substantially all of which will result in cash outlays, will be58Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)incurred as the specific actions required to execute on these initiatives are identified and approved and are expected to continue through fiscal 2020. Duringfiscal 2018 we incurred, $36.6 million of restructuring and turnaround costs under this program.During fiscal 2017, we launched a restructuring program (the "2017 Program") designed to reposition our organization and improve our cost structure. Duringfiscal 2018 and 2017, we incurred $7.2 million and $28.7 million, respectively, of restructuring and turnaround charges under this program. As of March 31,2018, charges associated with the 2017 Program were substantially complete.The following table summarizes the activity for restructuring reserves related to the 2018 Program and the 2017 and Prior Programs for the fiscal years endedMarch 31, 2018, April 1, 2017 and April 2, 2016, substantially all of which relates to employee severance and other employee costs:(In thousands)2018 Program 2017 and PriorPrograms TotalBalance at March 28, 2015$— $16,612 $16,612Costs incurred, net of reversals— 23,055 23,055Payments— (26,413) (26,413)Non-cash adjustments— (4,502) (4,502)Balance at April 2, 2016$— $8,752 $8,752Costs incurred, net of reversals— 21,833 21,833Payments— (22,317) (22,317)Non-cash adjustments— (800) (800)Balance at April 1, 2017$— $7,468 $7,468Costs incurred, net of reversals29,694 835 30,529Payments(1,363) (6,897) (8,260)Non-cash adjustments(1,202) — (1,202)Balance at March 31, 2018$27,129 $1,406 $28,535The substantial majority of restructuring costs during fiscal 2018, 2017 and 2016 have been included as a component of selling, general and administrativeexpenses in the accompanying consolidated statements of income (loss). As of March 31, 2018, we had a restructuring liability of $28.5 million, of which,approximately $24.6 million is payable within the next twelve months.In addition to the restructuring expenses included in the table above, we also incurred costs of $13.6 million, $12.5 million and $19.2 million in fiscal 2018,2017 and 2016, respectively, that do not constitute as restructuring under ASC 420, Exit and Disposal Cost Obligations, which we refer to as turnaroundcosts. These costs, substantially all of which have been included as a component of selling, general and administrative expenses in the accompanyingconsolidated statements of income (loss), consist primarily of expenditures directly related to our restructuring actions and include program management,costs associated with the implementation of outsourcing initiatives and recent accounting standards and accelerated depreciation.The tables below present restructuring and turnaround costs by reportable segment:59Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Restructuring costs (In thousands)2018 2017 2016Japan$514 $819 $9EMEA1,496 4,272 3,210North America Plasma565 366 —All Other27,954 16,376 19,836Total$30,529 $21,833 $23,055 Turnaround costs (In thousands)2018 2017 2016Japan$— $2 $416EMEA(107) 94 961North America Plasma976 972 —All Other12,727 11,415 17,852Total$13,596 $12,483 $19,229 Total restructuring and turnaround$44,125 $34,316 $42,2844. DIVESTITUREOn April 27, 2017, we sold our SEBRA® line of benchtop and hand sealers to Machine Solutions Inc. because it was no longer aligned with our long-termstrategic objectives. In connection with this transaction, we received net proceeds of $9.0 million and recorded a pre-tax gain of $8.0 million. The proceedswere subject to a post-closing adjustment based on final asset values as determined during the 90 day transition period. During fiscal 2018, the 90 daytransition period ended and there were no post-close adjustments necessary.The SEBRA portfolio included a suite of products that primarily include radio frequency sealers that are used to seal tubing as part of the collection of wholeblood and blood components, particularly plasma.60Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)5. INCOME TAXESDomestic and foreign income before provision for income tax is as follows:(In thousands)2018 2017 2016Domestic$3,534 $(44,724) $(18,526)Foreign56,098 17,248 (34,890)Total$59,632 $(27,476) $(53,416)The income tax provision from continuing operations contains the following components:(In thousands)2018 2017 2016Current Federal$9,927 $(1,424) $12State1,024 436 (660)Foreign8,937 6,580 3,842Total current$19,888 $5,592 $3,194Deferred Federal(5,350) (8,711) 3,532State344 (953) 319Foreign(822) 2,864 (4,882)Total deferred$(5,828) $(6,800) $(1,031)Total$14,060 $(1,208) $2,163During the third quarter of fiscal 2018, the Tax Cuts and Jobs Act was enacted in the United States. The Act reduces the U.S. federal corporate tax rate from35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates newtaxes on certain foreign sourced earnings. In December 2017, the Securities and Exchange Commission issued guidance under Staff Accounting Bulletin No.118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act that directs taxpayers to consider the impact of the U.S. legislation as “provisional”when it does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting forthe change in tax law.As of March 31, 2018, we have not completed our accounting for the tax effects of the enactment of the Act, however, as described below, we have made areasonable estimate of the effects on our existing deferred tax balances and the one-time transition tax. During fiscal 2018, we recognized a provisionalamount of $2.0 million as our reasonable estimate of the impact of the provisions of the Act, which is included as a component of income tax expense in ourconsolidated statements of income (loss). We will continue to refine our calculations as additional analysis is completed. In addition, our estimates may alsobe affected as we gain a more thorough understanding of the tax law.Provisional amountsAs a result of the Act, we re-measured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which isgenerally 21%. However, we are still analyzing certain aspects of the Act and refining our calculations, which could potentially affect the measurement ofthese balances or potentially give rise to changes in deferred tax amounts. In addition, certain of our deferred tax assets against which we had previouslymaintained a valuation allowance became more-likely-than-not realizable as a result of the source of income associated with the transition tax and changes inthe tax law which resulted in net operating losses generated in future periods having an indefinite carryforward period (as we have existing indefinite liveddeferred tax liabilities which can serve as a source of income for indefinite lived deferred tax assets). As we continue to analyze the Act and refine ourcalculations it could give rise to additional changes in our valuation allowance.The one-time transition tax associated with the Act is based on our total post-1986 earnings and profits ("E&P") that we previously deferred from U.S. federaltaxation. During fiscal 2018, we recorded a provisional amount for our one-time transition tax liability for our foreign subsidiaries of $25.8 million, resultingin an increase in income tax expense. The income61Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)tax expense increase was partially offset by the release of the valuation allowance on attributes utilized to offset a portion of the transition tax liability. Wehave not yet completed our calculation of the total post-1986 E&P for our foreign subsidiaries or the tax pools of our foreign subsidiaries. Further, thetransition tax is based in part on the amount of those earnings held in cash and other specified assets. This amount may change when we finalize thecalculation of post-1986 foreign E&P previously deferred from U.S. federal taxation and finalize the amounts held in cash or other specified assets. Wecontinue to provide for an additional withholding tax liability on the undistributed foreign earnings of certain foreign subsidiaries. No additional incometaxes have been provided for any additional outside basis differences inherent in these entities, as these amounts continue to be indefinitely reinvested inforeign operations. Determining the amount of unrecognized deferred tax liability related to any remaining undistributed foreign earnings not subject to thetransition tax and additional outside basis difference in these entities (i.e., basis difference in excess of that subject to the one-time transition tax) is notpracticable. We are still in the process of analyzing the impact of the Act on our indefinite reinvestment assertion.In addition to the reduction in the federal corporate tax rate and the one-time transition tax, which we have accounted for with provisional estimates as ofMarch 31, 2018, we will also continue to analyze and monitor the other impacts of the Act that become effective for the Company in fiscal 2019 includingthe provisions related to Global Intangible Low Taxed Income, Foreign Derived Intangible Income, Base Erosion Anti-Abuse Tax, as well as other provisionswhich would limit the deductibility of future expenses.Our subsidiary in Puerto Rico has been granted a fifteen year tax grant that expires in calendar 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 Malaysia has been granted a full income tax exemption to manufacture whole blood and apheresis devices that could be in effect for up toten years, provided certain conditions are satisfied. The income tax exemption was in effect beginning June 1, 2016.Tax affected, significant temporary differences comprising the net deferred tax liability are as follows:(In thousands)March 31, 2018 April 1, 2017Deferred tax assets: Depreciation$1,345 $934Amortization of intangibles964 1,150Inventory3,183 7,419Accruals, reserves and other deferred tax assets16,939 13,907Net operating loss carry-forward10,810 11,742Stock based compensation3,292 6,014Tax credit carry-forward, net3,479 17,852Gross deferred tax assets40,012 59,018Less valuation allowance(11,090) (25,872)Total deferred tax assets (after valuation allowance)28,922 33,146Deferred tax liabilities: Depreciation(17,732) (30,422)Amortization of goodwill and intangibles(11,942) (7,732)Unremitted earnings(274) (1,065)Other deferred tax liabilities(1,539) (2,053)Total deferred tax liabilities(31,487) (41,272)Net deferred tax liabilities$(2,565) $(8,126)The valuation allowance decreased by $14.8 million during fiscal 2018, primarily as the result of the release of valuation allowance against U.S. taxattributes that were utilized to offset the transition tax. These tax attribute carryforwards were deemed not realizable prior to the enactment of tax reform. Indetermining the need for a valuation allowance, we have given consideration to our worldwide cumulative loss position, resulting from significantimpairment and restructuring charges incurred in fiscal 2017 and 2016, when assessing the weight of the sources of taxable income that can be used tosupport the62Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)realization of our deferred tax assets. We have assessed, on a jurisdictional basis, the available means of recovering deferred tax assets, including the abilityto carry-back net operating losses, the existence of reversing temporary differences, the availability of tax planning strategies and available sources of futuretaxable income. We have also considered the ability to implement certain strategies that would, if necessary, be implemented to accelerate taxable incomeand 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 all of the availableevidence. The worldwide net deferred tax liability as of March 31, 2018 includes deferred tax liabilities related to amortizable tax basis in goodwill, whichare indefinite lived and can only be used as a source of income to benefit other indefinite lived assets.As of March 31, 2018, we maintain a valuation allowance against our U.S. net deferred tax assets that are not more-likely-than-not realizable and maintain afull valuation allowance against the net deferred tax assets of certain foreign subsidiaries.As of March 31, 2018, we have U.S. federal net operating loss carry-forwards of approximately $30.1 million, U.S. state net operating loss carry-forwards of$35.5 million and state tax credit carry-forwards of $4.2 million that are available to reduce future taxable income. The federal and state net operating lossesbegin to expire in fiscal 2029 and fiscal 2019, respectively. The state tax credits begin to expire in fiscal 2025.Our net operating loss and tax credit carry-forwards may become subject to an annual limitation in the event of certain cumulative changes in the ownershipinterest of significant shareholders over a three-year period in excess of 50 percent as defined under Section 382 and 383 of the U.S. Internal Revenue Codeof 1986, respectively, as well as similar state provisions. The amount of the annual limitation is determined based on the value of the Company immediatelyprior to the ownership change. The Company conducted a Section 382 study covering the period April 2, 2011 through December 31, 2017. The studyconcluded that there were no limitations on the company’s net operating losses and tax credit carryforwards as of December 31, 2017. Subsequent ownershipchanges may further affect the limitation in future years.As of March 31, 2018, we have foreign net operating losses of approximately $15.8 million that are available to reduce future income and have an unlimitedcarry-forward.As of March 31, 2018, we have provided $0.3 million of net foreign withholding taxes on approximately $12.4 million of unremitted earnings that are notindefinitely reinvested. We have not provided U.S. deferred income taxes or foreign withholding taxes on unremitted earnings of foreign subsidiaries ofapproximately $343.8 million as such amounts are considered to be indefinitely reinvested in the business. The accumulated earnings in the foreignsubsidiaries are primarily utilized to fund working capital requirements as our subsidiaries continue to expand their operations, to service existing debtobligations and to fund future foreign acquisitions. We do not believe it is practicable to estimate the amount of income taxes payable on the earnings thatare indefinitely reinvested in foreign operations. The Company is still in the process of completing its analysis of the impact of the Act on its indefinitereinvestment assertion.The income tax provision from continuing operations differs from tax provision computed at the U.S. federal statutory income tax rate due to the following:(In thousands)2018 2017 2016Tax at federal statutory rate$18,807 31.5 % $(9,616) 35.0 % $(18,695) 35.0 %Difference between U.S. and foreign tax(9,264) (15.5)% 137 (0.5)% 10,645 (19.9)%State income taxes net of federal benefit29 — % (495) 1.8 % 134 (0.3)%Change in uncertain tax positions1,095 1.8 % 862 (3.1)% (1,820) 3.4 %Unremitted earnings(791) (1.3)% 330 (1.2)% 735 (1.4)%Deferred statutory rate changes(3,193) (5.4)% (383) 1.4 % (2,653) 5.0 %Non-deductible goodwill impairment— — % 3,703 (13.5)% 2,861 (5.4)%Non-deductible expenses243 0.4 % 896 (3.2)% 1,491 (2.8)%Stock compensation benefits(2,544) (4.3)% — — % — — %Research credits(763) (1.3)% (561) 2.0 % (672) 1.3 %One-time transition tax from tax reform25,798 43.3 % — — % — — %Tax amortization of goodwill— — % (10,564) 38.4 % 4,185 (7.8)%Valuation allowance(15,541) (25.9)% 13,505 (49.2)% 5,194 (9.7)%Other, net184 0.3 % 978 (3.5)% 758 (1.4)%Income tax (benefit) provision$14,060 23.6 % $(1,208) 4.4 % $2,163 (4.0)%63Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)We recorded an income tax provision of $14.1 million, representing an effective tax rate of 23.6%. The effective tax rate differs from the U.S. statutory rate of31.5% primarily as a result of the impacts of U.S. tax reform (including the impact of the tax reduction, an increase to tax expense for the transition taxliability and the tax benefit recorded associated with the release of valuation allowance against certain tax attributes which were previously not deemedrealizable) and the jurisdictional mix of earnings. We have recorded a $0.8 million tax benefit associated with the portion of unremitted foreign earnings thatare not considered indefinitely reinvested.Unrecognized Tax BenefitsUnrecognized tax benefits represent uncertain tax positions for which reserves have been established. As of March 31, 2018, we had $4.5 million ofunrecognized tax benefits, of which $3.8 million would impact the effective tax rate, if recognized. As of April 1, 2017, we had $3.4 million of unrecognizedtax benefits, of which $1.5 million would impact the effective tax rate, if recognized. At April 2, 2016, we had $2.5 million of unrecognized tax benefits, ofwhich $0.6 million would impact the effective tax rate, if recognized.During the fiscal year ended March 31, 2018 our unrecognized tax benefits were increased by $1.1 million, primarily relating to uncertain tax positionsestablished against various federal and state tax credits.The following table summarizes the activity related to our gross unrecognized tax benefits for the fiscal years ended March 31, 2018, April 1, 2017 andApril 2, 2016:(In thousands)March 31, 2018 April 1, 2017 April 2, 2016Beginning Balance$3,370 $2,523 $7,070Additions for tax positions of current year289 — —Additions for tax positions of prior years1,203 1,279 340Reductions of tax positions(252) (29) (4,158)Settlements with taxing authorities— — —Closure of statute of limitations(160) (403) (729)Ending Balance$4,450 $3,370 $2,523As of March 31, 2018 we anticipate that the liability for unrecognized tax benefits for uncertain tax positions could change by up to $1.4 million in the nexttwelve months, as a result of closure of various statutes of limitations and potential settlements with tax authorities.Our historical 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 $0.2 million of gross interest and penalties were accrued at both March 31, 2018 and April 1, 2017 and is not included in theamounts above. There was no benefit included in tax expense associated with accrued interest and penalties during the fiscal year ended March 31, 2018.There was a benefit included in tax expense associated with accrued interest and penalties of $0.2 million and $0.3 million for the periods ended April 1,2017 and April 2, 2016, 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, we are no longer subject to U.S.federal, state, or local income tax examinations for years before fiscal 2015 and foreign income tax examinations for years before fiscal 2013. To the extentthat we have tax attribute carry-forwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal RevenueService, state, or foreign tax authorities to the extent utilized in a future period.64Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)6. EARNINGS PER SHAREThe following table provides a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations.(In thousands, except per share amounts)2018 2017 2016Basic EPS Net income (loss)$45,572 $(26,268) $(55,579)Weighted average shares52,755 51,524 50,910Basic income(loss) per share$0.86 $(0.51) $(1.09)Diluted EPS Net income (loss)$45,572 $(26,268) $(55,579)Basic weighted average shares52,755 51,524 50,910Net effect of common stock equivalents746 — —Diluted weighted average shares53,501 51,524 50,910Diluted income (loss) per share$0.85 $(0.51) $(1.09)Basic earnings per share is calculated using our weighted-average outstanding common shares. Diluted earnings per share is calculated using our weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method. For fiscal 2018, weightedaverage shares outstanding, assuming dilution, excludes the impact of 0.4 million anti-dilutive shares. For fiscal 2017 and 2016, we recognized a net loss;therefore we excluded the impact of outstanding stock awards from the diluted loss per share calculation as their inclusion would have an anti-dilutive effect.Share Repurchase PlanOn February 6, 2018, we announced that our Board of Directors authorized the repurchase of up to $260 million of our outstanding common stock throughMarch 30, 2019. Under the share repurchase program, the Company is authorized to repurchase, from time to time, outstanding shares of common stock inaccordance with applicable laws both on the open market, including under trading plans established pursuant to Rule 10b5-1 under the Securities ExchangeAct of 1934, as amended and in privately negotiated transactions. The actual timing, number and value of shares repurchased will be determined by theCompany at its discretion and will depend on a number of factors, including market conditions, applicable legal requirements and compliance with the termsof loan covenants. The share repurchase program may be suspended, modified or discontinued at any time and the Company has no obligation to repurchaseany amount of its common stock under the program.Subsequent to announcing the share repurchase program, in February 2018, we entered into an accelerated share repurchase agreement (“ASR”) with CitibankN.A. (“Citibank”) to repurchase approximately $100.0 million of the Company’s common stock. Pursuant to the terms of the ASR, in February 2018, theCompany paid Citibank $100.0 million in cash and received an initial delivery of approximately 1.2 million shares of our common stock based on a closingmarket price of $68.87, which represented, based on the closing price of our common stock on the New York Stock Exchange on February 8, 2018,approximately 80% of the notional amount of the ASR. On May 7, 2018, the ASR with Citibank was completed. Pursuant to the ASR settlement terms,Citibank delivered to us approximately 0.2 million additional shares of our common stock on May 9, 2018. The total number of shares repurchased under theASR was approximately 1.4 million at an average price per share of $73.36.As of May 23, 2018, the total remaining authorization outstanding for repurchases of the Company’s common stock under our share repurchase program was$160 million.65Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)7. 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 31, 2018 April 1, 2017Raw materials$46,450 $52,052Work-in-process10,774 10,400Finished goods103,575 114,477Total Inventories$160,799 $176,9298. PROPERTY, PLANT AND EQUIPMENTProperty and equipment consisted of the following:(In thousands) March 31, 2018 April 1, 2017Land $7,450 $7,389Building and building improvements 114,646 109,933Plant equipment and machinery 291,537 253,693Office equipment and information technology 134,412 129,753Haemonetics equipment 325,401 306,714 Total 873,446 807,482Less: accumulated depreciation and amortization (541,290) (483,620)Property, plant and equipment, net $332,156 $323,862During fiscal 2018, we impaired $2.2 million of property, plant and equipment as a result of our review of non-core and underperforming assets and ourdecision to discontinue the use of or investment in certain assets, of which $0.3 million was included within selling, general and administrative expense onthe consolidated statements of income (loss) and the remaining $1.9 million was included within cost of goods sold. These impairments impacted the NorthAmerica Plasma and All Other segments by $1.9 million and $0.3 million, respectively. During fiscal 2017 and 2016, we impaired $13.3 million and $9.1million of property, plant and equipment, respectively.Depreciation expense was $57.7 million, $66.5 million and $56.8 million in fiscal 2018, 2017 and 2016, respectively, which includes $0.3 million, $10.0million and $0.8 million, respectively, of additional depreciation expense due to asset impairments.9. GOODWILL AND INTANGIBLE ASSETSGoodwill Impairment Testing and ChargesUnder ASC Topic 350, Intangibles - Goodwill and Other, goodwill and intangible assets determined to have indefinite useful lives are not amortized. Insteadthese assets are evaluated for impairment at least annually, or on an interim basis between annual tests when events or circumstances indicate that it is morelikely than not that the fair value of a reporting unit is less than its carrying value. We perform our annual impairment test on the first day of the fiscal fourthquarter for each of our reporting units. Our reporting units for purposes of assessing goodwill impairment are organized primarily based on operatingsegments and geography and include: (a) North America Plasma, (b) North America Blood Center, (c) North America Hospital, (d) EMEA, (e) Asia-Pacific and(f) Japan. The North America Plasma reporting unit is a separate operating segment with dedicated segment management due the size and scale of the Plasmabusiness unit.In fiscal 2017, we early adopted ASC Update No. 2017-04, Intangibles - Goodwill and Other Topics (Topic 350): Simplifying the Test for GoodwillImpairment. Under this amendment, entities perform their goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.An impairment charge is recognized for the amount by which the carrying value exceeds the reporting unit's fair value. We utilized a discounted cash flowapproach in order to value our reporting units for the test, which required that we forecast future cash flows of the reporting units and discount the cash flowstream based upon a weighted average cost of capital that was derived, in part, from comparable companies within similar industries. The discounted cashflow calculations also included a terminal value calculation that was based upon an expected long-term growth rate for the applicable reporting unit. Webelieve that our procedures for estimating discounted future cash flows, including the66Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)terminal valuation, were reasonable and consistent with market conditions at the time of estimation. We corroborated the valuations that arose from thediscounted cash flow approach by performing both a market multiple valuation and by reconciling the aggregate fair value of our reporting units to ourmarket capitalization at the time of the test.The results of the goodwill impairment test performed in the fourth quarter of fiscal 2018 indicated that the estimated fair value of all of our reporting unitsexceeded their respective carrying values. There were no reporting units at risk of impairment as of the fiscal 2018 annual test date.During fiscal 2017, we recorded a goodwill impairment charge of $57.0 million, which represented the entire goodwill balance associated with the NorthAmerica Blood Center reporting unit. There were no other reporting units at risk of impairment as of the fiscal 2017 annual test date. During fiscal 2016, werecorded a goodwill impairment charge of $66.3 million associated with the EMEA reporting unit. At the time the impairment assessment was performed, thisrepresented the entire goodwill balance of this reporting unit. During fiscal 2017, management reorganized its operating segments such that certaincomponents of the All Other operating segment became components of the EMEA operating segment. As a result, we transferred $20.5 million of goodwill tothe EMEA operating segment, which represented the portion of the goodwill associated with these components.The changes in the carrying amount of goodwill by operating segment for fiscal 2018 and 2017 are as follows:(In thousands)Japan EMEA North AmericaPlasma All Other TotalCarrying amount as of April 2, 2016$24,883 $— $26,415 $216,542 $267,840Impairment charge— — — (56,989) (56,989)Transfer of goodwill between segments— 20,545 — (20,545) —Currency translation(3) (2) — (5) (10)Carrying amount as of April 1, 2017$24,880 $20,543 $26,415 $139,003 $210,841Currency translation162 134 — 258 554Carrying amount as of March 31, 2018$25,042 $20,677 $26,415 $139,261 $211,395The gross carrying amount of intangible assets and the related accumulated amortization as of March 31, 2018 and April 1, 2017 is as follows:(In thousands)Gross CarryingAmount AccumulatedAmortization NetAs of March 31, 2018 Amortizable: Patents$9,301 $8,262 $1,039Capitalized software54,095 27,117 26,978Other developed technology117,959 80,622 37,337Customer contracts and related relationships197,266 127,338 69,928Trade names7,178 5,939 1,239Total$385,799 $249,278 $136,521Non-amortizable: In-process software development$17,717 In-process patents2,351 Total$20,068 67Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(In thousands)Gross CarryingAmount AccumulatedAmortization NetAs of April 1, 2017 Amortizable: Patents$9,183 $8,043 $1,140Capitalized software49,948 21,563 28,385Other developed technology117,712 72,594 45,118Customer contracts and related relationships194,876 108,073 86,803Trade names7,017 5,499 1,518Total$378,736 $215,772 $162,964Non-amortizable: In-process software development$12,743 In-process patents1,833 Total$14,576 Intangible 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 5 to 18 years. The changes to the net carrying value of our intangible assets from April 1, 2017to March 31, 2018 reflect the impact of amortization expense, partially offset by the investment in capitalized software.Aggregate amortization expense for amortized intangible assets for fiscal 2018, 2017 and 2016 was $31.9 million, $37.2 million and $59.3 million,respectively. During fiscal 2017 and 2016, we impaired $4.8 million and $25.8 million of intangible assets, respectively. Amortization expense for fiscal2017 and 2016 included $4.0 million and $25.4 million, respectively, of amortization expense resulting from these intangible asset impairments. There wereno intangible asset impairments during fiscal 2018.Future annual amortization expense on intangible assets is estimated to be as follows:(In thousands) Fiscal 2019 $30,731Fiscal 2020 $29,076Fiscal 2021 $26,898Fiscal 2022 $24,941Fiscal 2023 $10,71410. 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, we capitalize costs incurred during the application development stage of software developed for internal use and expense costs incurredduring the preliminary project and the post-implementation operation stages of development. The costs capitalized for each project are included inintangible assets in the consolidated financial statements.For costs incurred related to the development of software to be sold, leased, or otherwise marketed, we apply 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 computer software productshould be charged to expense until technological feasibility has been established for the product. Once technological feasibility is established, all softwarecosts should be capitalized until the product is available for general release to customers.We capitalized $9.3 million and $11.0 million in software development costs for ongoing initiatives during the fiscal years ended March 31, 2018 andApril 1, 2017, respectively. At March 31, 2018 and April 1, 2017, we had a total of $71.8 million and $62.7 million of software costs capitalized, of which$17.7 million and $12.7 million are related to in process software development initiatives, respectively, and the remaining balance represents in-serviceassets that are being amortized over their useful lives. The costs capitalized for each project are included in intangible assets in the consolidated financialstatements. In68Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)connection with these development activities, we capitalized interest of $0.3 million in both fiscal 2018 and 2017. We amortize capitalized costs when theproducts are released for sale. During fiscal 2018, $4.4 million of capitalized costs were placed into service, compared to $9.5 million of capitalized costsplaced into service during fiscal 2017. Amortization of capitalized software development cost expense was $6.8 million, $9.7 million and $10.9 million forfiscal 2018, 2017 and 2016, respectively and has been included as a component of cost of goods sold within the accompanying consolidated statements ofincome (loss). There were no impairment charges recorded during fiscal 2018. Amortization expense in fiscal 2017 and 2016 includes $4.0 million and $6.0million of impairment charges.11. DERIVATIVES AND FAIR VALUE MEASUREMENTSWe manufacture, market and sell our products globally. For the fiscal year ended March 31, 2018, 39.3% of our sales were generated outside the U.S. in localcurrencies. 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 impact on our financial results from changes in foreign exchange rates. We utilizeforeign currency forward contracts to hedge the anticipated cash flows from transactions denominated in foreign currencies, primarily the Japanese Yen andthe Euro and to a lesser extent the Swiss Franc, Australian Dollar, Canadian Dollar and the Mexican Peso. This does not eliminate the impact of the 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.Designated Foreign Currency Hedge ContractsAll of our designated foreign currency hedge contracts as of March 31, 2018 and April 1, 2017 were cash flow hedges under ASC 815, Derivatives andHedging ("ASC 815"). We record the effective portion of any change in the fair value of designated foreign currency hedge contracts in other comprehensiveincome (loss) until the related third-party transaction occurs. Once the related third-party transaction occurs, we reclassify the effective portion of any relatedgain or loss on the designated foreign currency hedge contracts to earnings. In the event the hedged forecasted transaction does not occur, or it becomesprobable that it will not occur, we would reclassify the amount of any gain or loss on the related cash flow hedge to earnings at that time. We had designatedforeign currency hedge contracts outstanding in the contract amount of $86.0 million as of March 31, 2018 and $68.4 million as of April 1, 2017. AtMarch 31, 2018, losses of $2.7 million, net of tax, will be reclassified to earnings within the next twelve months. Substantially all currency cash flow hedgesoutstanding as of March 31, 2018 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 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 815 outstanding in the contract amount of $36.3 million as of March 31, 2018 and $55.4 million asof April 1, 2017.Interest Rate SwapsOn December 21, 2012, we entered into two interest rate swap agreements (the "Swaps") on a total notional value of $250.0 million of debt. We designatedthe Swaps as cash flow hedges of variable interest rate risk associated with $250.0 million of indebtedness. For fiscal 2018, 2017 and 2016, we recordednominal activity in accumulated other comprehensive loss to recognize the effective portion of the fair value of the Swaps that qualify as cash flow hedges.The Swaps matured on August 1, 2017.69Table 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 815 in our consolidated statements of income (loss) and comprehensive income (loss) for the fiscal year ended March 31, 2018.Derivative Instruments Amount of Gain(Loss) Recognized inAccumulated OtherComprehensive Loss Amount of GainReclassified fromAccumulated OtherComprehensive Lossinto Earnings Location in ConsolidatedStatements of Income(Loss) andComprehensive Income(Loss) Amount of GainExcluded fromEffectivenessTesting (*) Location inConsolidatedStatements ofIncome (Loss) andComprehensiveIncome (Loss)(In thousands) Designated foreign currency hedge contracts,net of tax $(2,732) $(1,299) Net revenues, COGSand SG&A $1,118 Other expense,netNon-designated foreign currency hedgecontracts — — $(1,488) Other expense,netDesignated interest rate swaps, net of tax $(64) $— Other 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 31, 2018 or April 1, 2017. As of March 31, 2018, no deferred tax assetswere recognized for designated foreign currency hedges.The following tables present the fair value of our derivative instruments as they appear in our consolidated balance sheets:(In thousands)Location inBalance Sheet March 31, 2018 April 1, 2017Derivative Assets: Designated foreign currency hedge contractsOther current assets $780 $1,645Non-designated foreign currency hedge contractsOther current assets 324 218Designated interest rate swapsOther current assets — 64 $1,104 $1,927Derivative Liabilities: Designated foreign currency hedge contractsOther current liabilities $1,445 $894Non-designated foreign currency hedge contractsOther current liabilities $138 $72 $1,583 $966Other Fair Value MeasurementsFair value is defined as the exit price that would be received from the sale of an asset or paid to transfer a liability, using assumptions that market participantswould use in pricing an asset or liability. The fair value guidance establishes the following three-level hierarchy used for measuring fair value:•Level 1 — Inputs to the valuation methodology are quoted market prices for identical assets or liabilities.•Level 2 — Inputs to the valuation methodology are other observable inputs, including quoted market prices for similar assets or liabilities 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. Wehave classified our derivative assets and liabilities within Level 2 of the fair value hierarchy70Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)prescribed by ASC 815 because these observable inputs are available for substantially the full term of our derivative instruments.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 31, 2018Level 1 Level 2 Total(In thousands) Assets Money market funds$75,450 $— $75,450Designated foreign currency hedge contracts— 780 780Non-designated foreign currency hedge contracts— 324 324 $75,450 $1,104 $76,554Liabilities Designated foreign currency hedge contracts$— $1,445 $1,445Non-designated foreign currency hedge contracts— 138 138 $— $1,583 $1,583As of April 1, 2017Level 1 Level 2 Total(In thousands) Assets Money market funds$80,676 $— $80,676Designated foreign currency hedge contracts— 1,645 1,645Non-designated foreign currency hedge contracts— 218 218Designated interest rate swaps— 64 64 $80,676 $1,927 $82,603Liabilities Designated foreign currency hedge contracts$— $894 $894Non-designated foreign currency hedge contracts— 72 72 $— $966 $966Other Fair Value DisclosuresThe Term Loan (which is carried at amortized cost), accounts receivable and accounts payable approximate fair value. Details pertaining to the Term Loancan be found in Note 12, Notes Payable and Long-Term Debt.71Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)12. NOTES PAYABLE AND LONG-TERM DEBTNotes payable and long-term debt consisted of the following:(In thousands)March 31, 2018 April 1, 2017Term loan, net of financing fees$253,305 $314,218Bank loans and other borrowings377 429Less current portion(194,259) (61,022)Long-term debt$59,423 $253,625We currently have a credit agreement ("Credit Agreement") with certain lenders (together, “Lenders”) that provides for a $379.4 million term loan ("TermLoan") and a $100.0 million revolving loan ("Revolving Credit Facility" and together with the Term Loan, the "Credit Facilities"). Interest is based on theAdjusted LIBOR plus a range of 1.125% to 1.500% depending on achievement of leverage ratios and customary credit terms that include financial andnegative covenants. The Credit Facilities mature on July 1, 2019. At March 31, 2018, $253.7 million was outstanding under the Term Loan with an interestrate of 3.1875% and no amount was outstanding on the Revolving Credit Facility. The fair value of debt approximates its current value of approximately$253.7 million as of March 31, 2018.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 that 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 31, 2018, we were in compliance with the covenants.Commitment FeePursuant to the Credit Agreement, we are required to pay, on the last day of each calendar quarter, a commitment fee on the unused portion of the RevolvingCredit Facility. The commitment fee is subject to a pricing grid based on our Consolidated Total Leverage Ratio. The commitment fee ranges from 0.175% to0.300%. The current commitment fee on the undrawn portion of the Revolving Credit Facility is 0.200%.Debt Issuance Costs and InterestExpenses associated with the issuance of the Term Loan were capitalized and are amortized to interest expense over the life of the term loan using theeffective interest method. As of March 31, 2018, the $253.7 million term loan balance was netted down by the $0.4 million of remaining debt discount,resulting in a net note payable of $253.3 million.Interest expense was $7.7 million, $7.9 million and $8.5 million for fiscal 2018, 2017 and 2016, respectively. Accrued interest associated with ouroutstanding debt is included as a component of other current liabilities in the accompanying consolidated balance sheets. As of both March 31, 2018 andApril 1, 2017, we had an insignificant amount of accrued interest associated with our outstanding debt.72Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The aggregate amount of debt maturing during the next five fiscal years and thereafter are as follows:Fiscal year (In thousands) 2019$194,617202059,41220215520221420235Thereafter213. 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 31, 2018 April 1, 2017Warranty accrual as of the beginning of the year$176 $420Warranty provision1,082 400Warranty spending(942) (644)Warranty accrual as of the end of the year$316 $17614. RETIREMENT PLANSDefined Contribution PlansWe have a Savings Plus Plan (the "401k Plan") that is a 401(k) plan that allows our U.S. employees to accumulate savings on a pre-tax basis. In addition,matching contributions are made to the 401k Plan based upon pre-established rates. Our matching contributions amounted to approximately $5.5 million,$5.1 million and $5.4 million in fiscal 2018, 2017 and 2016, respectively. Upon Board approval, additional discretionary contributions can also be made. Nodiscretionary contributions were made for the 401k Plan in fiscal 2018, 2017, or 2016.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 $0.7 million in fiscal 2018 and $0.8 million in both fiscal 2017 and 2016.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 loss on its consolidated statement ofstockholders’ equity and consolidated statement of comprehensive income (loss).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 that aresubject to change.73Table 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)2018 2017 2016Service cost$2,651 $3,404 $3,560Interest cost on benefit obligation293 287 371Expected return on plan assets(215) (308) (330)Actuarial loss186 532 598Amortization of unrecognized prior service cost(121) (119) (38)Amortization of unrecognized transition obligation— 37 42Plan settlements and curtailments(445) 289 —Totals$2,349 $4,122 $4,203The activity under those defined benefit plans are as follows:(In thousands)March 31, 2018 April 1, 2017Change in Benefit Obligation: Benefit Obligation, beginning of year$(31,345) $(37,919)Service cost(2,651) (3,404)Interest cost(293) (287)Benefits paid518 1,291Actuarial gain2,381 4,615Employee and plan participants contribution(3,441) (2,463)Plan settlements and curtailments5,064 6,960Foreign currency changes(709) (138)Benefit obligation, end of year$(30,476) $(31,345)Change in Plan Assets: Fair value of plan assets, beginning of year$17,285 $19,852Company contributions1,542 1,788Benefits paid(434) (1,192)(Loss) gain on plan assets(200) 414Employee and plan participants contributions3,490 2,424Plan settlements(4,531) (6,850)Foreign currency changes(830) 849Fair value of plan assets, end of year$16,322 $17,285Funded Status*$(14,154) $(14,060)Unrecognized net actuarial loss2,187 4,319Unrecognized prior service cost(698) (1,019)Net amount recognized$(12,665) $(10,760)* Substantially all of the unfunded status is non-currentOne of the benefit plans is funded by benefit payments made by the Company through the purchase of reinsurance contracts that do not qualify as plan assetsunder ASC Topic 715. Accordingly that plan has no assets included in the information presented above. The total liability for this plan was $9.9 million and$8.8 million as of March 31, 2018 and April 1, 2017, respectively, and the total asset value associated with the reinsurance contracts was $6.5 million and$5.4 million at March 31, 2018 and April 1, 2017, respectively.74Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The accumulated benefit obligation for all plans was $29.6 million and $28.7 million for the fiscal year ended March 31, 2018 and April 1, 2017,respectively. There were no plans where the plan assets were greater than the accumulated benefit obligation as of March 31, 2018 and April 1, 2017.The components of the change recorded in our accumulated other comprehensive loss related to our defined benefit plans, net of tax, are as follows (inthousands):Balance, March 28, 2015$(8,923)Obligation at transition33Actuarial loss681Prior service cost717Balance as of April 2, 2016$(7,492)Obligation at transition32Actuarial loss5,126Prior service cost62Balance as of April 1, 2017$(2,272)Actuarial loss1,922Prior service cost(125)Plan settlements and curtailments152Balance as of March 31, 2018$(323)We expect to amortize $0.2 million from accumulated other comprehensive loss to net periodic benefit cost during fiscal 2019.The weighted average rates used to determine the net periodic benefit costs and projected benefit obligations were as follows: 2018 2017 2016Discount rate1.07% 0.76% 0.72%Rate of increased salary levels1.73% 1.43% 1.58%Expected long-term rate of return on assets0.90% 1.10% 1.20%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 31, 2018. Using the same three-level valuation hierarchy for disclosure of fair value measurements as described in Note 11,Derivatives and Fair Value Measurements, all of the assets of the Company’s plan are classified within Level 2 of the fair value hierarchy because the planassets 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 31,2018. 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.75Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Estimated future benefit payments are as follows:(In thousands) Fiscal 2019$2,770Fiscal 20201,351Fiscal 20211,364Fiscal 20221,529Fiscal 20231,441Fiscal 2024-20276,421 $14,876The Company's contributions for fiscal 2019 are expected to be consistent with the current year.15. 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 31, 2018 are as follows:Fiscal Year (In thousands) 2019$3,90520203,23020213,01520222,59920232,338Thereafter5,196 $20,283Rent expense in fiscal 2018, 2017 and 2016 was $6.4 million, $6.2 million and $6.8 million, respectively. Some of the Company's operating leases includerenewal provisions, escalation clauses and options to purchase the facilities that we lease.The Company is a party to various legal proceedings and claims arising out of the ordinary course of its business. We believe that except for those mattersdescribed below, there are no other proceedings or claims pending against us the ultimate resolution of which could have a material adverse effect on ourfinancial condition or results of operations. At each reporting period, management evaluates whether or not a potential loss amount or a potential range ofloss is probable and reasonably estimable under ASC 450, Contingencies, for all matters. Legal costs are expensed as incurred.Italian Employment LitigationOur Italian manufacturing subsidiary is party to several actions initiated by former employees of our facility in Ascoli-Piceno, Italy. We ceased operations atthe facility in fiscal 2014 and sold the property in fiscal 2017. These include actions claiming (i) working conditions and minimum salaries should have beenestablished by either a different classification under their national collective bargaining agreement or a different agreement altogether, (ii) certain solidarityagreements, which are arrangements between the Company, employees and the government to continue full pay and benefits for employees who wouldotherwise be terminated in times of low demand, are void and (iii) rights to payment of the extra time used for changing into and out of the working clothes atthe beginning and end of each shift.In addition, a union represented in the Ascoli plant filed an action claiming that the Company discriminated against it in favor of three other 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.76Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The total amount of damages claimed by the plaintiffs in these matters was approximately $4.8 million. During fiscal 2017, we recorded $0.4 million ofcharges associated with these claims. During fiscal 2018, we recorded an additional $0.7 million of charges upon entering into a settlement agreement.Substantially all of these claims have been paid. As of March 31, 2018, we have a remaining liability of $0.3 million that is expected to be paid during thefirst quarter of fiscal 2019.SOLX ArbitrationIn July 2016, H2Equity, LLC, formerly known as Hemerus Medical, LLC (“Hemerus”), filed an arbitration claim for $17 million relating to milestone androyalty payments allegedly owed as part of our acquisition of Hemerus' filter and storage solution business, referred to herein as "SOLX", in fiscal 2014.Upon closing of the acquisition in April 2013, Haemonetics paid Hemerus a total of $24 million and agreed to a $3 million milestone payment due when theUnited States Food and Drug Administration ("FDA") approved a new indication for SOLX (the “24-Hour Approval”) using a filter acquired from Hemerus.We also agreed to make future royalty payments up to a cumulative maximum of $14 million based on the sale of products incorporating SOLX over a tenyear period.Due to performance issues with the Hemerus filter, we filed for and received the 24-Hour Approval using a Haemonetics filter. Accordingly, we did not payHemerus the $3 million milestone payment because the 24-Hour Approval was obtained using a Haemonetics filter, not a Hemerus filter. Additionally, wehave not paid any royalties to date as we have not made any sales of products incorporating SOLX.H2Equity’s July 2016 arbitration claim alleged, in part, that we owed H2Equity $3 million for the receipt of the 24-Hour Approval despite the use of aHaemonetics filter to obtain the approval and that we have failed to make commercially reasonable efforts to market and sell products incorporating SOLX. InJanuary 2018, we entered into a settlement agreement with H2Equity that, together with corresponding settlement documents, provides for a release ofH2Equity’s claims against the Company in exchange for the payment of $0.4 million and transfer of SOLX-related intellectual property to H2Equity, alongwith the parties entry into a supply agreement providing for our supply to H2Equity of Haemonetics filters as used in the 24-Hour Approval. As of March 31,2018, we did not have any remaining liability associated with this claim.Product RecallIn June 2016, we issued a voluntary recall of certain whole blood collection kits sold to our Blood Center customers in the U.S. The recall resulted from somecollection sets' filters failing to adequately remove leukocytes from collected blood. As a result of the recall, our Blood Center customers may haveconducted tests to confirm that the collected blood was adequately leukoreduced, sold the collected blood labeled as non-leukoreduced at a lower price ordiscarded the collected blood. During fiscal 2017, we recorded $3.7 million of charges associated with customer returns and inventory reserves and $3.4million of charges associated with customer claims. We had an enforceable insurance policy in place that provided coverage for a portion of the customerclaims and as a result, we recorded $2.9 million of insurance receivables during fiscal 2017.During fiscal 2018, we entered into a settlement agreement with a group of customers responsible for substantially all of the total outstanding claims againstus and as a result, we recorded an additional $5.1 million of charges. These charges were partially offset by an additional $2.1 million of insurancereceivables also recorded during fiscal 2018.As of March 31, 2018, we had recorded a cumulative total of $7.2 million of net charges associated with this recall, which consisted of $3.7 million ofcharges associated with customer returns and inventory reserves and $8.5 million of other customer claims, partially offset by $5.0 million of insuranceproceeds. Substantially all of these claims have been paid as of March 31, 2018.Other MattersIn February 2017, we informed a customer of our intent to exit an existing contract. The customer made a demand for $4.6 million, which consisted of $2.8million in damages for non-performance under the contract and $1.8 million for the refund of two upfront payments that the customer had previously paid tous in connection with the development of a project. During fiscal 2018, we refunded the $1.8 million of upfront payments and entered into a settlementagreement under which we have paid $2.3 million in connection with this matter.77Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)16. 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 five independent members of our Board of Directors.The maximum number of shares available for award under the 2005 Incentive Compensation Plan is 19,824,920. 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 share for every one share issued. Any shares that are subject to awards other than stock options shall be counted against this limit as 3.02 sharesfor every one share granted. The total shares available for future grant as of March 31, 2018 were 4,534,161.Stock-Based CompensationCompensation cost related to stock-based transactions is recognized in the consolidated financial statements based on fair value. The total amount of stock-based compensation expense, which is recorded on a straight line basis, was as follows:(In thousands)2018 2017 2016Selling, general and administrative expenses$9,960 $6,894 $5,183Research and development2,114 1,549 1,060Cost of goods sold951 707 706 $13,025 $9,150 $6,949Stock OptionsOptions are granted to purchase ordinary shares at prices as determined by the Committee, but in no event shall such exercise price be less than the fairmarket value of the common stock at the time of the grant. Options generally vest in equal installments over a four year period for employees and one yearfrom grant for non-employee directors. Options expire not more than 7 years from the date of the grant. The grant-date fair value of options, adjusted forestimated forfeitures, is recognized as expense on a straight line basis over the requisite service period, which is generally the vesting period. Forfeitures areestimated based on historical experience.A summary of stock option activity for the fiscal year ended March 31, 2018 is as follows: OptionsOutstanding(shares) WeightedAverageExercise Priceper Share WeightedAverageRemainingLife (years) AggregateIntrinsicValue($000’s)Outstanding at April 1, 20172,038,795 $35.51 3.88 $10,963Granted368,507 41.96 Exercised(1,027,727) 36.64 Forfeited/Canceled(182,137) 34.51 Outstanding at March 31, 20181,197,438 $36.68 4.71 $43,685 Exercisable at March 31, 2018429,084 $36.24 2.92 $15,843 Vested or expected to vest at March 31, 20181,066,789 $36.55 4.57 $39,051The total intrinsic value of options exercised was $15.4 million, $8.3 million and $4.5 million during fiscal 2018, 2017 and 2016, respectively.As of March 31, 2018, there was $5.4 million of total unrecognized compensation cost related to non-vested stock options. This cost is expected to berecognized over a weighted average period of 2.71 years.78Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The fair value was estimated using the Black-Scholes option-pricing model based on the average of the high and low stock prices at the grant date and theweighted average assumptions specific to the underlying options. Expected volatility assumptions are based on the historical volatility of our common stockover the expected term of the option. The risk-free interest rate was selected based upon yields of U.S. Treasury issues with a term equal to the expected life ofthe option being valued. The expected life of the option was estimated with reference to historical exercise patterns, the contractual term of the option andthe vesting period.The assumptions utilized for option grants during the periods presented are as follows: 2018 2017 2016Volatility24.2% 24.0% 22.8%Expected life (years)4.8 4.9 4.9Risk-free interest rate1.7% 1.2% 1.4%Dividend yield0.0% 0.0% 0.0%Fair value per option$10.25 $7.61 $7.40Restricted Stock UnitsRestricted Stock Units ("RSUs") generally vest in equal installments over a four year period for employees and one year from grant for non-employeedirectors. The grant-date fair value of RSUs, adjusted for estimated forfeitures, is recognized as expense on a straight-line basis over the requisite serviceperiod, which is generally the vesting period. The fair market value of RSUs is determined based on the market value of the Company’s shares on the date ofgrant.A summary of RSU activity for the fiscal year ended March 31, 2018 is as follows: Shares WeightedAverageGrant Date Fair ValueUnvested at April 1, 2017341,641 $33.16Granted269,905 41.87Vested(133,906) 33.03Forfeited(59,926) 34.58Unvested at March 31, 2018417,714 $38.95The weighted-average grant-date fair value of RSUs granted and total fair value of RSUs vested were as follows: 2018 2017 2016Grant-date fair value per RSU$41.87 $32.61 $33.19Fair value of RSUs vested$33.03 $34.98 $36.07As of March 31, 2018, there was $12.2 million of total unrecognized compensation cost related to non-vested restricted stock units. This cost is expected tobe recognized over a weighted average period of 2.5 years.Performance Stock UnitsThe grant date fair value of Performance Stock Units ("PSUs"), adjusted for estimated forfeitures, is recognized as expense on a straight line basis from thegrant date through the end of the performance period. The value of these PSUs is generally based on relative shareholder return which equals totalshareholder return for the Company as compared to total shareholder return of the PSU comparison group, measured over a three year performance period.Depending on the Company's relative performance during the performance period, a recipient of the award is entitled to receive a number of ordinary sharesequal to a percentage, ranging from 0% to 200%, of the award granted. As a result, we may issue up to 751,789 shares related to these awards. If theCompany’s total shareholder return for the performance period is negative, then any share payout will be capped at 100% of the target award, regardless ofthe Company's performance relative to the Company's comparison group.PSUs granted in fiscal 2016 have a comparison group consisting of the Standard and Poor's ("S&P") Health Care Equipment Index, while PSUs granted infiscal 2018 and 2017 have a comparison group consisting of the S&P Small Cap 600 and the S&P Mid Cap 400 indices.79Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)In addition to these relative shareholder return PSUs, the Company's Chief Executive Officer received a PSU grant during both fiscal 2018 and 2017 withperformance conditions based on the financial results of the Company and other internal metrics.A summary of PSU activity for the fiscal year ended March 31, 2018 is as follows: Shares WeightedAverageGrant Date Fair ValueUnvested at April 1, 2017284,625 $33.66Granted179,616 46.49Vested(13,212) 35.09Forfeited(62,922) 33.16Unvested at March 31, 2018388,107 $39.63The Company uses the Monte Carlo model to estimate the probability of satisfying the performance criteria and the resulting fair value of PSU awards withmarket conditions. The assumptions used in the Monte Carlo model for PSUs granted during each year were as follows: 2018 2017 2016Expected stock price volatility26.11% 26.39% 22.27%Peer group stock price volatility34.13% 33.86% 31.95%Correlation of returns49.51% 51.17% 26.27%The weighted-average grant-date fair value of PSUs granted was $46.49, $34.07 and $29.20 in fiscal 2018, 2017 and 2016 respectively.As of March 31, 2018, there was $9.7 million of total unrecognized compensation cost related to non-vested performance share units. This cost is expected tobe recognized over a weighted average period of 1.9 years.Employee Stock Purchase PlanThe Company has an Employee Stock Purchase Plan (the “Purchase Plan”) under which a maximum of 3,200,000 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.The 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: 2018 2017 2016Volatility22.6% 31.3% 21.1%Expected life (months)6 6 6Risk-free interest rate1.2% 0.5% 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 $9.66, $7.79 and $7.80 during fiscal2018, 2017 and 2016, respectively.80Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)17. SEGMENT AND ENTERPRISE-WIDE INFORMATIONWe determine our reportable segments by first identifying our operating segments and then by assessing whether any components of these segmentsconstitute a business for which discrete financial information is available and where segment management regularly reviews the operating results of thatcomponent. Our operating segments are based primarily on geography. North America Plasma is a separate operating segment with dedicated segmentmanagement due the size and scale of the Plasma business unit. We aggregate components within an operating segment that have similar economiccharacteristics.The Company’s reportable segments are as follows:•Japan•EMEA•North America Plasma•All OtherThe Company has aggregated the Americas Blood Center and Hospital and Asia - Pacific operating segments into the All Other reportable segment basedupon their similar operational and economic characteristics, including similarity of operating margin.Management measures and evaluates the operating segments based on operating income. Management excludes certain corporate expenses from segmentoperating income. In addition, certain amounts that management considers to be non-recurring or non-operational are excluded from segment operatingincome because management evaluates the operating results of the segments excluding such items. These items include restructuring and turnaround costs,deal amortization, asset impairments and legal charges. Although these amounts are excluded from segment operating income, as applicable, they areincluded in the reconciliations that follow. Management measures and evaluates the Company's net revenues and operating income using internally derivedstandard currency exchange rates that remain constant from year to year; therefore, segment information is presented on this basis.During the first quarter of fiscal 2018, management changed the cost reporting structure such that a portion of corporate expenses were reclassified into theoperating segments. Accordingly, the prior year numbers have been updated to reflect this reclassification.Selected information by business segment is presented below:(In thousands)2018 2017 2016Net revenues Japan$68,172 $74,695 $84,270EMEA183,301 198,396 204,192North America Plasma333,831 309,718 279,803All Other324,013 316,771 342,249Net revenues before foreign exchange impact909,317 899,580 910,515Effect of exchange rates(5,394) (13,464) (1,683)Net revenues$903,923 $886,116 $908,83281Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(In thousands)2018 2017 2016Segment operating income Japan$37,243 $39,892 $43,619EMEA62,696 65,689 63,665North America Plasma119,003 98,254 109,220All Other128,945 127,834 127,493Segment operating income347,887 331,669 343,997 Corporate operating expenses(220,699) (211,481) (227,839) Effect of exchange rates4,059 (4,772) 3,546Restructuring and turnaround costs(44,125) (34,337) (42,185)Deal amortization(26,013) (27,107) (28,958)Impairment of assets(1,941) (73,353) (97,230)Legal charges(1)(3,011) — —Contingent consideration income— — 4,727Operating income (loss)$56,157 $(19,381) $(43,942)(1) Reflects net impact of settlement charges associated with the fiscal 2017 voluntary whole blood collection kits recall.(In thousands)2018 2017 2016Depreciation and amortization Japan$486 $827 $774EMEA4,464 4,255 5,146North America Plasma16,060 13,022 12,944All Other68,237 71,629 71,047Total depreciation and amortization (excluding impairment charges)$89,247 $89,733 $89,911(In thousands)March 31, 2018 April 1, 2017 April 2, 2016Long-lived assets(2) Japan$26,640 $21,412 $33,159EMEA74,783 63,854 63,861North America Plasma91,815 142,164 116,001All Other138,918 96,432 124,613Total long-lived assets$332,156 $323,862 $337,634(2) Long-lived assets are comprised of property, plant and equipment.Selected information by principle operating regions is presented below:(Dollars in thousands)2018 2017 2016Net Revenues United States$548,731 $522,686 $519,440Japan67,319 79,266 81,411Europe164,226 166,007 187,725Asia115,127 109,858 111,758Other8,520 8,299 8,498Net revenues$903,923 $886,116 $908,83282Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(Dollars in thousands)March 31, 2018 April 1, 2017 April 2, 2016Long-lived assets(2) United States$236,603 $241,610 $231,744Japan1,511 1,691 2,022Europe13,696 12,952 18,672Asia36,431 34,174 40,235Other43,915 33,435 44,961Total long-lived assets$332,156 $323,862 $337,634(2) Long-lived assets are comprised of property, plant and equipment.Our products are organized into four categories for purposes of evaluating their growth potential: Plasma, Blood Center, Cell Processing and HemostasisManagement. Management reviews revenue trends based on these business units, however, no other financial information is currently available on this basis.Net revenues by business unit are as follows:(Dollars in thousands)2018 2017 2016Plasma435,956 410,727 381,776Blood Center284,902 303,890 355,108Cell Processing107,562 105,376 112,483Hemostasis Management75,503 66,123 59,465Net revenues$903,923 $886,116 $908,83218. ACCUMULATED OTHER COMPREHENSIVE LOSSThe following is a roll-forward of the components of accumulated other comprehensive loss, net of tax, for the years ended March 31, 2018 and April 1, 2017:(In thousands) Foreign currency Defined benefitplans Net UnrealizedGain/loss onDerivatives TotalBalance, April 2, 2016 $(22,499) $(7,492) $(5,049) $(35,040)Other comprehensive (loss) income before reclassifications (7,336) 4,851 (364) (2,849)Amounts reclassified from accumulated other comprehensive loss(1) — 369 4,647 5,016Net current period other comprehensive (loss) income (7,336) 5,220 4,283 2,167Balance, April 1, 2017 $(29,835) $(2,272) $(766) $(32,873)Other comprehensive income (loss) before reclassifications 13,430 2,394 (2,796) 13,028Amounts reclassified from accumulated other comprehensive loss(1) — (445) 1,299 854Net current period other comprehensive income (loss) 13,430 1,949 (1,497) 13,882Balance, March 31, 2018 $(16,405) $(323) $(2,263) $(18,991) (1) Presented net of income taxes, the amounts of which are insignificant.83Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)19. SUMMARY OF QUARTERLY DATA (UNAUDITED)(In thousands, except per share data) Three months endedFiscal 2018 July 1, 2017 September 30, 2017 December 30, 2017 March 31, 2018Net revenues $210,951 $225,377 $234,043 $233,552Gross profit $91,665 $104,562 $111,295 $104,386Operating income $16,611 $24,258 $1,013 $14,275Net income (loss) $20,137 $20,102 $(6,547) $11,880Per share data: Net income (loss): Basic $0.38 $0.38 $(0.12) $0.22Diluted $0.38 $0.38 $(0.12) $0.22 (In thousands, except per share data) Three months endedFiscal 2017 July 2, 2016 October 1, 2016 December 31, 2016 April 1, 2017Net revenues $209,956 $220,253 $227,841 $228,066Gross profit $91,056 $104,248 $101,079 $82,111Operating (loss) income $(7,881) $24,794 $21,212 $(57,506)Net (loss) income $(10,346) $19,825 $15,393 $(51,140)Per share data: Net (loss) income: Basic $(0.20) $0.39 $0.30 $(0.98)Diluted $(0.20) $0.38 $0.30 $(0.98)The operating results for the third and fourth quarters of fiscal 2018 and the fourth quarter of fiscal 2017 include certain misstatements that were determinedto be immaterial both individually and in the aggregate. The misstatement in the fourth quarter of fiscal 2018 was primarily driven by an over accrual ofcertain professional fees in the third quarter of fiscal 2018. The misstatement in the fourth quarter of fiscal 2017 was primarily driven by the correction of anerror in capitalized manufacturing variances, which resulted in an overstatement of net loss in the fourth quarter of fiscal 2017.Below is a summary of the net overstatement/(understatement) of the Company’s reported operating income and net income for the third and fourth quartersof fiscal 2018 and the fourth quarter of fiscal 2017. In the fourth quarter of fiscal 2017 the Company reported both an operating loss and a net loss. For thisperiod, an understatement of income means that the reported loss was too high, while an overstatement of income means that the reported loss was too low.(In thousands) Overstatement/(Understatement)Three Months Ended Operating (Loss)Income Net (Loss) IncomeMarch 31, 2018 (2,014) (1,786)December 30, 2017 1,589 1,239April 1, 2017 (3,720) (4,032)20. SUBSEQUENT EVENTAs part of our acquisition of the whole blood business from Pall Corporation (“Pall”) in fiscal 2012, Pall agreed to manufacture and install in one of ourfacilities a filter media manufacturing line (the “HDC line”) for which we agreed to pay Pall approximately $15.0 million (plus pre-approved overages). Pallalso agreed to supply media to us for use in leukoreduction filters until such time as we accepted the HDC line.84Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)On May 21, 2018, we entered into a long-term supply agreement with Pall under which Pall will continue to supply media to us for usein leukoreduction filters. As a condition of the supply agreement, we agreed to accept the HDC line from Pall and will make a final payment of $9.0 millionto Pall for the HDC line during May 2018.As a result of the decision to continue to source media for our leukoreduction filters from Pall rather than producing them internally, we do not expect toutilize the HDC line for future production and expect that the asset’s future cash flows will not be sufficient to recover its carrying value of $12.5 million.Accordingly, during the first quarter of fiscal 2019 we recorded $21.5 million of total charges associated with this transaction, consisting of a $12.5 millionimpairment charge for the HDC line and a $9.0 million charge for the final payment to Pall.ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURENone.ITEM 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 that date, our disclosure controlsand procedures were effective.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 31, 2018. 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, the Company's management believes that its internal controls over financial reporting were effectiveas of March 31, 2018.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 ControlsAs disclosed in our 2017 Annual Report on Form 10-K and in our Quarterly Reports on Form 10-Q for each of the first three quarters of fiscal 2018, wereported a material weakness in our internal control over financial reporting related to the accounting for inventory. Specifically, we identified a deficiencyin the internal controls executed to appropriately account for manufacturing variances in inventory on our consolidated balance sheet and cost of goods soldon our consolidated statements of operations. Management determined that its accounting process for amortizing manufacturing variances to cost of goodssold lacked adequate levels of monitoring and review to appropriately identify and correct errors in the calculation in a timely manner.As of March 31, 2018, we have remediated the previously reported material weakness in our internal control over financial reporting related to accounting forinventory by implementing the following changes:•We increased oversight by our management in the calculation and reporting of certain inventory balances;85Table of Contents•We enhanced policies and procedures relating to account reconciliation and analysis;•We strengthened communication and information flows between the inventory operations department and the corporate controller's group.We have evaluated and tested the effectiveness of our controls as of March 31, 2018 and determined that our previously reported material weakness in theaccounting for inventory has been remediated. Other than the remediation efforts described above, there have been no changes in our internal control overfinancial reporting that have materially affected, or are likely to materially affect, our internal control over financial reporting.86Table of ContentsReport of Independent Registered Public Accounting FirmTo the Stockholders and Board of Directors of Haemonetics CorporationOpinion on Internal Control over Financial ReportingWe have audited Haemonetics Corporation and subsidiaries' internal control over financial reporting as of March 31, 2018, based on criteria established inInternal Control- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSOcriteria). In our opinion, Haemonetics Corporation and subsidiaries (the Company) maintained, in all material respects, effective internal control overfinancial reporting as of March 31, 2018, based on the COSO criteria.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2018 consolidatedfinancial statements of the Company and our report dated May 23, 2018 expressed an unqualified opinion thereon.Basis for OpinionThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness ofinternal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Ourresponsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firmregistered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and theapplicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether effective internal control over financial reporting was maintained in all material respects.Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing andevaluating 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.Definition and Limitations of Internal Control over Financial ReportingA 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./s/ Ernst & Young LLPBoston, MassachusettsMay 23, 201887Table of ContentsITEM 9B. OTHER INFORMATIONLong-Term Supply AgreementAs part of our acquisition of the whole blood business from Pall Corporation (“Pall”) in fiscal 2012, Pall agreed to manufacture and install in one of ourfacilities a filter media manufacturing line (the “HDC line”) for which we agreed to pay Pall approximately $15.0 million (plus pre-approved overages). Pallalso agreed to supply media to us for use in leukoreduction filters until such time as we accepted the HDC line.On May 21, 2018, we entered into a long-term supply agreement with Pall under which Pall will continue to supply media to us for usein leukoreduction filters. As a condition of the supply agreement, we agreed to accept the HDC line from Pall and will make a final payment of $9.0 millionto Pall for the HDC line during May 2018.As a result of the decision to continue to source media for our leukoreduction filters from Pall rather than producing them internally, we do not expect toutilize the HDC line for future production and expect that the asset’s future cash flows will not be sufficient to recover its carrying value of $12.5 million.Accordingly, during the first quarter of fiscal 2019 we recorded $21.5 million of total charges associated with this transaction, consisting of a $12.5 millionimpairment charge for the HDC line and a $9.0 million charge for the final payment to Pall.PART IIIITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT AND CORPORATE GOVERNANCEWe have adopted a Code of Ethics that applies to our Chief Executive Officer, Chief Financial Officer and senior financial officers. The Code of Ethics isincorporated into the Company’s Code of Conduct located on the Company’s website www.haemonetics.com, under the “About Haemonetics” menu, underthe “Investor Relations Home” caption and under the “Corporate Governance” sub-caption. A copy of the Code of Conduct will be provided free of chargeby making a written request and mailing it to our corporate headquarters offices to the attention to our Investor Relations Department. Any amendments to, orwaivers from, a provision of our Code of Ethics that applies to our Chief Executive Officer, Chief Financial Officer or senior financial officers will bedisclosed on the Company’s website promptly following the date of such amendment or waiver.The additional information required by this item is incorporated by reference to our Definitive Proxy Statement for our annual meeting of stockholders to befiled with the Securities and Exchange Commission within 120 days after the close of our fiscal year.ITEM 11. EXECUTIVE COMPENSATIONThe information required by this Item is incorporated by reference to our Definitive Proxy Statement for our annual meeting of stockholders to be filed withthe Securities and Exchange Commission within 120 days after the close of our fiscal year. Notwithstanding the foregoing, the Compensation CommitteeReport included within the Proxy Statement is only being “furnished” hereunder and shall not be deemed “filed” for purposes of Section 18 of the SecuritiesExchange 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 to our Definitive Proxy Statement for our annual meeting of stockholders to be filed withthe Securities and Exchange Commission within 120 days after the close of our fiscal year.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPEDENCEThe information required by this Item is incorporated by reference to our Definitive Proxy Statement for our annual meeting of stockholders to be filed withthe Securities and Exchange Commission within 120 days after the close of our fiscal year.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESThe information required by this Item is incorporated by reference to our Definitive Proxy Statement for our annual meeting of stockholders to be filed withthe Securities and Exchange Commission within 120 days after the close of our fiscal year.88Table 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 Firm44Consolidated Statements of Income (Loss)45Consolidated Statements of Comprehensive Income (Loss)46Consolidated Balance Sheets47Consolidated Statements of Stockholders’ Equity48Consolidated Statements of Cash Flows49Notes to Consolidated Financial Statements50Schedules 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.89Table of ContentsEXHIBITS FILED WITH SECURITIES AND EXCHANGE COMMISSIONNumber and Description of Exhibit1. Articles of Organization3A* Amended and Restated Articles of Organization of the Company reflecting Articles of Amendment dated August 23, 1993 and August 21,2006 (filed as Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the Quarter ended December 29, 2012 and incorporatedherein 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, 2015and incorporated herein by reference). 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 10-Kto 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 April 30, 1991 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 Ninth Amendment to lease dated July 17, 1990, made as of March 12, 2014 between Buncher Company and the Company for the propertyin Pittsburgh, Pennsylvania filed herewith as Exhibit 10J to the Company's Form 10-K, for the year ended March 31, 2018.10K Tenth Amendment to lease dated July 17, 1990, made as of May 31, 2017 between Buncher Company and the Company for the property inPittsburgh, Pennsylvania filed herewith as Exhibit 10K to the Company's Form 10-K, for the year ended March 31, 2018.10L Eleventh Amendment to lease dated July 17, 1990, made as of March 2, 2018 between Buncher Company and the Company for the propertyin Pittsburgh, Pennsylvania and filed herewith as Exhibit 10L to the Company's Form 10-K, for the year ended March 31, 2018.90Table of Contents10M* 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).10N* 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).10O* 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).10P* 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).10Q* 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).10R Amendment to Lease dated February 21, 2000 made as of January 1, 2018 between MEGA2013, S.A.P.I. de CV (as successor in interest toABBVA Bancomer Servicios, S.A., as Trustee of 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.10S* 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).10T* 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).10U Amendment to Lease Agreement effective December 3, 2007, made in 2017 between Mrs. Blanca Estela Colunga Santelices, by her ownright, Pall Life Sciences Mexico, S.de R.L. de C.V. (“Assignor”) and Haemonetics Mexico Manufacturing, S. de R.L. de C.V. as successor ininterest to Pall Mexico Manufacturing S. de R.L. de C.V., (“Assignee”) assigned in favor of the property located in Tijuana, Mexico.10V* 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).10W* 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).10X* Lease dated September 19, 2013 between the Penang Development Corporation and Haemonetics Malaysia Sdn Bhd of the property locatedin Penang, Malaysia (filed as Exhibit 10D to the Company's 10-Q for the quarter ended June 28, 2014 and incorporated herein by reference).10Y*† Haemonetics Corporation 2005 Long-Term Incentive Compensation Plan, reflecting amendments dated July 31, 2008, July 29, 2009, July21, 2011, November 30, 2012, July 24, 2013, January 21, 2014, and July 23, 2014 (filed as Exhibit 10.1 to the Company's Form 8-K datedJuly 25, 2014 and incorporated herein by reference).10Z*† 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).91Table of Contents10AA*† 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 fiscal year ended March 30, 2010 and incorporated herein by reference).10AB*† 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, 2010 and incorporated herein by reference).10AC*† Amended and Restated 2007 Employee Stock Purchase Plan (as amended and restated on July 21, 2016 incorporated as Exhibit 10.2 to theCompany’s Form 10-Q, for the quarter ended July 2, 2016 and incorporated herein by reference).10AD*† Amended and Restated Non-Qualified Deferred Compensation Plan as amended and restated on July 24, 2013 (filed as Exhibit 10.2 to theCompany's Form 8-K dated July 26, 2013 and incorporated herein by reference).10AE*† Employment Agreement effective as of May 16, 2016 between the Company and Christopher Simon (filed as Exhibit 10.1 to the Company’sForm 8-K dated May 10, 2016 and incorporated herein by reference).10AF*† Executive Severance Agreement between the Company and Christopher A. Simon dated as of November 7, 2017 (filed as Exhibit 10.4 to theCompany’s Form 10-Q dated for the quarter ended September 30, 2017 and incorporated herein by reference).10AG*† Change in Control Agreement between the Company and Christopher A. Simon dated as of November 7, 2017 (filed as Exhibit 10.5 to theCompany’s Form 8-K dated 10-Q dated for the quarter ended September 30, 2017 and incorporated herein by reference).10AH*† Form of Executive Severance Agreement between the Company and executive officers other than Christopher A. Simon (filed as Exhibit10.2 to the Company’s Form 10-Q for the quarter ended September 30, 2017 and incorporated herein by reference).10AI*† Form of Change in Control Agreement between the Company and executive officers other than Christopher A. Simon (filed as Exhibit 10.3to the Company’s Form 10-Q for the quarter ended September 30, 2017 and incorporated herein by reference).10AJ*† Haemonetics Corporation Worldwide Executive Bonus Plan with an Effective Date of April 3, 2016 (filed as Exhibit 10.3 to the Company’sForm 10-Q for the quarter ended July 2, 2016 and incorporated herein by reference).10AK*† Amended and Restated Performance Share Unit Agreement between Haemonetics Corporation and Christopher Simon dated June 6, 2017,amending and restating Performance Share Unit Agreement dated June 29, 2016 (filed as Exhibit 10.2 to the Company’s Form 10-Q for thequarter ended July 1, 2017 and incorporated herein by reference).10AL*† Form of Performance Share Unit Award Agreement Under 2005 Long-Term Incentive Compensation Plan (Internal Financial Metrics,adopted fiscal 2018) (filed as Exhibit 10.3 to the Company’s Form 10-Q for the quarter ended July 1, 2017 and incorporated herein byreference).10AM*† Form of Performance Share Unit Award Agreement Under 2005 Long-Term Incentive Compensation Plan (rTSR Metrics, adopted fiscal2015) (filed as Exhibit 10AP to the Company’s Form 10-K for the fiscal year ended March 28, 2015 and incorporated herein by reference).10AN† Form of Performance Share Unit Award Agreement Under 2005 Long-Term Incentive Compensation Plan (rTSR Metrics, adopted fiscal2017) and filed herewith as Exhibit 10AN to the Company's Form 10-K, for the year ended March 31, 2018.10AO† Form of Performance Share Unit Award Agreement Under 2005 Long-Term Incentive Compensation Plan (rTSR Metrics, adopted fiscal2018) and filed herewith as Exhibit 10AO to the Company's Form 10-K, for the year ended March 31, 2018.10AP*† Agreement and General Release between Haemonetics Corporation and Byron Selman dated May 1, 2017 (filed as Exhibit 10AH to theCompany’s Form 10-K for the fiscal year ended April 1, 2017 and incorporated herein by reference).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*† Second Amended and Restated License Agreement by and among Cora Healthcare, Inc., CoraMed Technologies, LLC, and HaemoneticsCorporation dated August 14, 2013 (filed as Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended July 1, 2017 and incorporatedherein by reference).10AS* 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).92Table of Contents 4. Subsidiaries 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 Christopher Simon, President and Chief Executive Officer of theCompany.31.2 Certification pursuant to Section 302 of Sarbanes-Oxley of 2002 of William Burke, Executive Vice President, Chief Financial Officer of theCompany.32.1 Certification Pursuant to 18 United States Code Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, ofChristopher Simon, President and Chief Executive Officer of the Company.32.2 Certification Pursuant to 18 United States Code Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, ofWilliam Burke, Executive Vice President, Chief Financial Officer of the Company.101ˆ The following materials from Haemonetics Corporation on Form 10-K for the year ended March 31, 2018, formatted in Extensive BusinessReporting Language (XBRL): (i) Consolidated Statements of Income (Loss), (ii) Consolidated Statements of Comprehensive Income (Loss),(iii) Consolidated Balance Sheets, (iv) Consolidated Statement of Stockholders' Equity, (v) Consolidated Statements 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 directors‡Subject to a confidential treatment requestˆIn 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.93Table 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/ Christopher Simon Christopher Simon President, Director and Chief Executive OfficerDate : May 23, 2018Pursuant 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/ Christopher Simon President, Director and Chief Executive Officer May 23, 2018Christopher Simon (Principal Executive Officer) /s/ William Burke Executive Vice President, Chief Financial Officer May 23, 2018William Burke (Principal Financial Officer) /s/ Dan Goldstein Vice President, Corporate Controller May 23, 2018Dan Goldstein (Principal Accounting Officer) /s/ Robert Abernathy Director May 23, 2018Robert Abernathy /s/ Catherine Burzik Director May 23, 2018Catherine Burzik /s/ Charles Dockendorff Director May 23, 2018Charles Dockendorff /s/ Susan Bartlett Foote Director May 23, 2018Susan Bartlett Foote /s/ Ronald Gelbman Director May 23, 2018Ronald Gelbman /s/ Pedro Granadillo Director May 23, 2018Pedro Granadillo /s/ Mark Kroll Director May 23, 2018Mark Kroll /s/ Richard Meelia Director May 23, 2018Richard Meelia /s/ Ellen Zane Director May 23, 2018Ellen Zane 94Table 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 31, 2018 Allowance for Doubtful Accounts$2,184 $208 $281 $2,111For Year Ended April 1, 2017 Allowance for Doubtful Accounts$2,253 $103 $172 $2,184For Year Ended April 2, 2016 Allowance for Doubtful Accounts$1,749 $728 $(224) $2,25395Exhibit 10ANHAEMONETICS CORPORATION2005 LONG-TERM INCENTIVE COMPENSATION PLANPERFORMANCE SHARE UNIT AGREEMENTWITH«Participant Name»- 0 -HAEMONETICS CORPORATIONPERFORMANCE SHARE UNIT AGREEMENTUNDER 2005 LONG-TERM INCENTIVE COMPENSATION PLANTHIS PERFORMANCE SHARE UNIT AGREEMENT (“Agreement”), dated as of <> (“Grant Date”) byand between Haemonetics Corporation, a Massachusetts Corporation (“Company”), and <> (“Employee”), isentered into as follows: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 <> Performance Share Units (“PSUs”). Each unit represents the right toreceive one share of Stock. Subject to satisfaction of the terms and conditions of this Agreement and the Plan, the PSUs shall be settledin Stock. No dividend 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 <>, (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: - 1 -Company Relative TSRPercentile Rank at End of the Performance PeriodShare Payout as a Percentage of Target 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 a blended index of the S&P MidCap 400 and S&P SmallCap600 (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 <> and ending on <> (the “End ofthe Performance Period”).Subject to any earlier payment made under Section 2(f) below, any Share Payout shall be made by the Company in a single paymentof shares of Stock (subject to applicable tax withholding) no earlier than the Maturity Date and later than <> followingcertification by the Committee of the Company’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.- 2 -(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 the Company,then the continued employment requirement for the Employee shall cease to apply and the Share Payout as a Percentage of TargetAward 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 number of dayselapsed from the Grant Date to the date of the Employee’s Disability, and denominator of which is 1095.(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 1095.(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 aPercentage of Target Award for the PSUs shall be determined as of the Maturity Date and paid in accordance with Section 2(a) above;provided, however, that the number of shares of Stock to be paid to the Employee shall be multiplied by a fraction, the numerator ofwhich is the number of days elapsed from the Grant Date to the date of the Employee’s Qualifying Retirement, and the denominator ofwhich is 1095.(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:- 3 -(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).- 4 -3. Restrictions, Forfeiture and Clawback.(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 anyreason, the balance of the PSUs subject to the provisions of this Agreement which have not vested at the time of the Employee’stermination of employment shall be forfeited by the Employee, and the Employee shall have no future rights with respect to any suchunvested 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.The means of settlement of vested PSUs is that the Company shall deliver to the Employee a certificate or certificates, or at the electionof the Company make an appropriate book entry, for the number of shares of Stock equal to the number of the Employee’s PSUs thatvest and are payable as specified in Section 2. An Employee shall have no further rights with regard to PSUs once the underlyingStock has been so delivered. 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 Stock.6. 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.- 5 -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- 6 -consent, the Employee understands that the Employee may contact the Employee’s local 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 benecessary to 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 Commonwealthof Massachusetts and applicable federal law, without regard to applicable conflicts of laws.[Remainder of this page intentionally left blank]- 7 -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__________________________________________________Signature of Employee__________________________Date: RETAIN A COPY OF THIS AGREEMENT FOR YOUR RECORDS- 8 -Exhibit 10AOHAEMONETICS CORPORATION2005 LONG-TERM INCENTIVE COMPENSATION PLANPERFORMANCE SHARE UNIT AGREEMENTWITH«Name»1HAEMONETICS CORPORATION PERFORMANCE SHARE UNIT AGREEMENTTHIS 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 Company’s Board of Directors (“Committee”) has determined that theEmployee shall be granted a Performance Share Unit award pursuant to Article 10 (Other Stock Unit Awards) of the Plan settled inShares (as defined under the Plan), 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 Share.Subject to satisfaction of the terms and conditions of this Agreement and the Plan, the PSUs shall be settled in Shares. No dividendequivalent rights are payable with respect to the PSUs.2. Vesting.(a) Performance Measure and Vesting Dates. The performance measure for the PSUs under this Agreement shall be based onthe Company’s TSR (as defined below) with respect to a Share as compared to the TSR of a share of stock of each of the companieslisted in the combined indexes of the S&P MidCap 400 and the S&P SmallCap 600 (collectively, the “Combined Index”), as adjustedas set forth below, in each case over the three (3) year period beginning on «Start Date» and ending on «End Date» (the“Performance Period”). The interest of the Employee in the PSUs shall vest, if at all, on the last day of the Performance Period (the“Maturity Date”) according to the vesting schedule set forth on the following page (“Vesting Schedule”), and also conditioned uponthe Employee’s continued employment with the Company through the Maturity Date:2Company Relative TSR Percentile Rankat Maturity DateShare Payout as a Percentage of Target Award40th Percentile or lower0%41st to 60th Percentile50% to 99%61st to 80th Percentile100% to 200%81st Percentile 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 to the nearest whole percentage (i.e., below 0.5round down, at or above 0.5 round up). Notwithstanding the Vesting Schedule above, if the Company’s Total Shareholder Return forthe Performance Period is negative, then any Share Payout shall be capped at 100% of the Target Award.For purposes of calculating the Company Relative TSR Percentile Rank, the Company and each other company in the IndexPopulation (as defined below) at the end of the Performance Period will be ranked in order of their TSR. The Company’s RelativeTSR Percentile Rank will be equal to the percentage of companies in the Index Population at the end of the Performance Period thatranked equal to or lower than the Company, as calculated according to the following formula: N - R + 1, where “N” equals the totalnumber of companies in the Index Population at the end of the Performance Period (including the Company) and “R” equals theCompany’s rank against the other companies in the Index Population at the end of the Performance Period. For avoidance of doubt, inno event shall a company that is included in both the S&P MidCap 400 and the S&P SmallCap 600 be counted twice in determiningthe total number of companies in the Index Population at the end of the Performance Period.The companies constituting the Combined Index for purposes of calculating TSR for the Performance Period will be the population ofcompanies in the S&P MidCap 400 and the S&P SmallCap 600 as of the first day of the Performance Period (the “Index Population”),adjusted as follows: (i) companies that are removed from the Combined Index during the Performance Period but whose stockcontinued to be publicly traded on a major U.S. stock exchange during the entire Performance Period shall be included in the IndexPopulation, (ii) companies that are added to the Combined Index during the Performance Period that were not part of the IndexPopulation on the first day of the Performance Period shall be excluded from the Index Population, (iii) companies that have beenacquired or gone private during the Performance Period such that their stock is no longer included in the Combined Index and failed tobe publicly traded on a major U.S. stock exchange during the entire Performance Period shall be excluded from the Index Population;and (iv) companies that are no longer in existence or declare bankruptcy or whose stock ceases to be publicly traded on a major U.S.stock exchange as a result of a business failure shall be included in the Index Population but will be ranked at negative 100% (-100%)TSR for the Performance Period.“Total Shareholder Return” or “TSR” for the Company and each member of the Index Population shall be calculated according to thefollowing formula:3(Ending Average Price - Beginning Average Price) + Dividends PaidBeginning Average PriceWhere:“Ending Average Price” shall mean the average Closing Price of the stock of the company being measured for the thirty (30)trading days at the end of the Performance Period,“Closing Price” means, for a given trading day, the closing price of the stock of the company being measured on its primaryU.S. stock exchange (or, if not traded on a U.S. exchange, its primary foreign securities exchange),“Beginning Average Price” means the average Adjusted Closing Price of the stock of the company being measured over theBeginning Average Period,“Beginning Average Period” means the thirty (30) trading days immediately preceding the first day of the Performance Period,“Adjusted Closing Price” means, for a given trading day, the Closing Price of the stock of the company being measured onsuch trading day, as adjusted as follows: if the company being measured has declared a dividend with respect to which the ex-dividend date is during the Beginning Average Period, the amount of such dividend shall be added to the Closing Price foreach trading day during the Beginning Average Period that is on or after such ex-dividend date, and“Dividends Paid” means the sum of all dividends paid by the company being measured during the Performance Period.Stock prices and dividends denominated in non-U.S. dollars for any member of the Index Population shall be converted to U.S.dollars using the currency exchange rates in effect on each relevant trading day and/or date of dividend payment, as applicable.Calculations shall be adjusted by the Committee as provided under Section 6 below.Subject to any earlier payment made under Section 2(f) below, the vested number of PSUs determined under this Section 2(a) shall besettled by the Company in a single payment of Shares (subject to applicable tax withholding) as soon as reasonably practicable after theMaturity Date following certification by the Committee of the Company’s Relative TSR Percentile Rank, but in no event later than twoand one-half months after the end of the Performance Period except as specifically permitted under IRS regulations without resulting ina violation of Section 409A of the Code (as defined under the Plan).4In situations where there is not continued employment through the Maturity Date, notwithstanding the foregoing, the interest of theEmployee in the Shares subject to this award 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 or one of its Subsidiaries (as defined in the Plan) prior to the Maturity Date, the PSUs granted to the Employee hereundershall not vest and instead shall be forfeited. In such event, vesting shall not be pro-rated between the Grant Date and the Maturity Date.For avoidance of doubt, employment with an entity that is a Subsidiary shall be deemed to terminate once the Company no longer hasa majority interest in such entity.(c) Disability. If such termination of employment is because of the Employee’s Disability (as defined in Section 2(g) below)while in the employ of the Company or its Subsidiaries, then the continued employment requirement for the Employee shall cease toapply and the Share Payout as a Percentage of Target Award for the PSUs shall be determined as of the Maturity Date and paid inaccordance with Section 2(a) above; provided, however, that number of Shares paid to the Employee shall be multiplied by a fraction,the numerator of which is the number of days elapsed from the Grant Date to the date of the Employee’s Disability, and denominatorof which is 1095.(d) Death. If the termination of employment is because of the death of the Employee while in the employ of the Company or itsSubsidiaries, then the continued employment requirement for the Employee shall cease to apply and the Share Payout as a Percentageof Target Award for the PSUs shall be determined as of the Maturity Date and paid in accordance with Section 2(a) above; provided,however, that the number of Shares to be paid to the Employee’s estate shall be multiplied by a fraction, the numerator of which is thenumber of days elapsed from the Grant Date to the date of the Employee’s death, and the denominator of which is 1095.(e) Qualifying Retirement. If such termination of employment is because of the Employee’s Qualifying Retirement (as definedin Section 2(g) below) while in the employ of the Company or its Subsidiaries, 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 as of theMaturity Date and paid in accordance with Section 2(a) above; provided, however, that the number of Shares to be paid to theEmployee shall be multiplied by a fraction, the numerator of which is the number of days elapsed from the Grant Date to the date ofthe Employee’s Qualifying Retirement, and the denominator of which is 1095.(f) Qualifying Change in Control.(1) Notwithstanding anything to the contrary contained in any employment agreement, severance agreement, change incontrol agreement or other agreement with the Employee, this Section 2(f) shall apply if a Change in Control (as defined inSection 2(g) below) occurs prior to the Maturity Date (a “Qualifying Change in Control”) and while the Employee is in theemploy of the Company or a Subsidiary.5(2) Effective as of immediately prior to a Qualifying Change in Control, but subject to the occurrence of such Changein Control, the number of PSUs eligible to be vested shall be equal to the greater of the number of Shares under (i) the TargetAward multiplied by a fraction, the numerator of which is the number of days elapsed from the Grant Date to the date of theQualifying Change in Control, and denominator of which is 1095, or (ii) the Share Payout as determined by the Committeeunder Section 2(a) above through the latest practicable date prior to such Change in Control. For purposes of this Section 2(f)(2), the Company Relative TSR Percentile Rank shall be determined by reference to the Company’s average relative TSR rankon the thirty (30) consecutive trading days immediately preceding the Qualifying Change in Control. The number of PSUsdetermined in accordance with this Section 2(f)(2) is referred to as the “CIC Adjusted PSUs.”(3) The CIC Adjusted PSUs shall become vested on a Qualifying Change in Control and settled within five daysfollowing the occurrence of such Change in Control if a replacement or substitute award meeting the requirements of thisSection 2(f)(3) is not provided to the Employee in respect of such PSUs. An award meeting the requirements of this Section2(f)(3) is referred to below as a “Replacement Award”. An award shall qualify as a Replacement Award if:(A) it is comprised of restricted stock units with respect to a publicly traded equity security of the Company orthe surviving corporation or the ultimate parent of the applicable entity following the Qualifying Change in Control,(B) it has a fair market value at least equal to the fair market value of the CIC Adjusted PSUs establishedpursuant to Section 2(f)(2) as of the date of the Qualifying Change in Control,(C) it contains terms relating to service-based vesting (including with respect to termination of employment) thatare substantially identical to the terms set forth in this Agreement and does not contain any terms related toperformance-based vesting, and(D) its other terms and conditions are not less favorable to the Employee than the terms and conditions set forthin this Agreement or in the Plan (including provisions that apply in the event of a subsequent Change in Control) as ofthe date of the Qualifying Change in Control.The determination of whether the conditions of this Section 2(f)(3) are satisfied shall be made by the Committee, as constitutedimmediately prior to a Qualifying Change in Control, in its sole discretion, prior to such Change in Control. If a ReplacementAward is provided, the CIC Adjusted PSUs shall not be settled upon a Qualifying Change in Control, but instead as providedunder Section 2(f)(4) below.6(4) If, in connection with a Qualifying Change in Control, the Employee is provided with a Replacement Award, suchReplacement Award shall vest on the Maturity Date and be settled at the time as set forth in Section 2(a), subject to theEmployee having not incurred a termination of employment with the Company and its Subsidiaries prior to the Maturity Date;provided that, if, within two years following such Change in Control, the Employee incurs a termination of employment due tobeing a Good Leaver (as defined in Section 2(g) below), then the Replacement Award shall become fully vested effective as ofsuch termination of employment, and the Company shall issue one share to the Employee for each share under theReplacement Award as soon as reasonably practicable, and in no event more than 10 days, following such termination ofemployment. For purposes of determining the time of an accelerated payout under this Section 2(f)(4), a termination ofemployment shall mean a “separation of service” within the meaning of Section 409A of the Code.(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, whoprior to such 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 anunrelated person or entity, and(C) the consummation of any merger, reorganization, consolidation or share exchange unless the persons whowere the 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 stock ofthe successor or survivor entity in such transaction immediately following the consummation of such transaction. Forpurposes of this definition, the percentage of the beneficially owned shares of the successor or survivor entity describedabove shall be determined exclusively by reference to the shares of the successor or survivor entity which result fromthe beneficial ownership of shares of Common Stock by the persons described above immediately before theconsummation of such transaction.Notwithstanding the foregoing, none of the above events or conditions shall constitute a Change in Control for purposes of thisAgreement unless the event or condition also constitutes a “Change in Control Event” for purposes of Treas. Reg. §1. 409A-3(i)(5).7(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) “Good Leaver” means the involuntary termination of the Employee’s employment by the Company other than aTermination for Cause, the Employee’s resignation for Good Reason, or the Employee’s termination of employment due todeath, Disability or a Qualifying Retirement.(4) “Good Reason” shall have the meaning given to such term in an employment agreement, severance or change incontrol agreement or, if there is no such agreement or if it does not define Good Reason, then Good Reason shall mean theoccurrence of any one of the following, in the absence of Employee’s written consent:(A) a material diminution in the Employee’s annual base salary or target annual incentive compensation fromthat in effect immediately prior to a Qualifying Change in Control,(B) the assignment to the Employee of any duties materially inconsistent with Employee’s positions (includingstatus, offices, titles, and reporting requirements), authority, duties, or responsibilities, or any other action by theCompany that results in a material diminution in such positions, authority, duties, or responsibilities, in each case, fromthose in effect immediately prior to a Qualifying Change in Control or(C) the relocation of the Employee to a work location more than 50 miles from the Employee’s current worklocation (unless, as a result of such relocation, the Employee’s work location is closer to his or her place of residence);provided that, in each case, (i) the Employee provides written notice to the Company of the existence of one or more of theconditions described in clauses described above within 30 days following the Employee’s knowledge of the initial existence ofsuch condition or conditions, specifying in reasonable detail the conditions constituting Good Reason, (ii) the Company and itsSubsidiaries fail to cure such event or condition within 30 days following the receipt of such notice and (iii) the Employeeincurs a termination of Employment within 30 days following the expiration of such cure period.(5) “Qualifying Retirement” shall mean that the Employee voluntarily retires from the employ of the Company or itsSubsidiaries at or after both attaining age fifty-five (55) and completing five (5) consecutive years of service. For purposes ofthis Agreement, a “year of service” shall mean a twelve (12) month period of continuous full-time employment with theCompany (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). For the avoidance of doubt, termination of the Employee’s employment by8the Company, either with or without Cause, shall not be treated as a Qualifying Retirement.(6) “Termination for Cause” Unless otherwise provided under the termination with cause provisions of an individualemployment agreement or change in control agreement, to invoke a Termination with Cause, the Company must providewritten notice to the Employee of the existence of one or more grounds for termination as set forth below within 30 daysfollowing the Company’s knowledge of the existence of such grounds, specifying in reasonable detail the grounds constitutingcause, and, with respect to the grounds enumerated in clauses (B), (C) and (D) below, the Employee shall have 30 daysfollowing receipt of such written notice during which to remedy any such ground if it is reasonably subject to cure. “Cause”shall have the meaning given to such term in an employment agreement or change in control agreement covering the Employeeor, if there is no such agreement or if it does not define Cause, then Cause shall mean the occurrence of any one of thefollowing:(A) Employee’s conviction of (or a plea of guilty or nolo contendere to) a felony or any other crime involvingmoral turpitude, dishonesty, fraud, theft or financial impropriety,(B) the Employee’s failure to perform substantially the Employee’s duties (other than any such failure resultingfrom Disability),(C) the Employee engaging in gross misconduct, or(D) the Employee willfully violating a material Company policy.3. Restrictions.(a) No Transfer. The PSUs granted hereunder may not be sold, transferred, pledged, assigned, encumbered, or otherwisealienated or hypothecated by the Employee other than by will or by the laws of descent and distribution, and any such purported sale,transfer, pledge, assignment or encumbrance, alienation or hypothecation shall be void and unenforceable against the Company and itsSubsidiaries.(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 settlement of this award in Shares is subject to set-off, recoupment, or otherrecovery or “clawback” policy as required by applicable law, including any national exchange listing standards, or by any other futureCompany policy on the clawback of compensation for other reasons, as may be in place from time to time. The9foregoing provisions of this Section 3(c) shall cease to apply following a Change in Control, except as otherwise required byapplicable law, including any national exchange listing standards.4. Delivery of Shares.The means of settlement of vested PSUs is that the Company shall deliver to the Employee a certificate or certificates, or at the electionof the Company make an appropriate book entry, for the number of Shares equal to the number of the Employee’s PSUs that vest andare payable as specified in Section 2. An Employee shall have no further rights with regard to PSUs once the underlying Stock hasbeen so delivered.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.6. Adjustments or Changes in Capitalization.Adjustments as a result of an event referenced in Section 4.5 of the Plan (including a change in corporate capitalization or a corporatetransaction) shall be made under Section 4.5 of the Plan in a manner consistent with meeting the performance goal requirements underSection 162(m) of the Code.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 Company’s obligation to deliver any certificates evidencing the Shares provided upon settlement of the vested PSUs (or to make abook-entry or other electronic notation indicating ownership of such Shares) is subject to the condition precedent that the Employeeeither pay or provide for the amount of any such withholding obligations in such manner as may be authorized by the Committee or asmay otherwise be permitted under Article 17 of the Plan. The Employee acknowledges and agrees that any income or other taxes duefrom the Employee with respect to the PSUs issued pursuant to this Agreement, including Social Security and Medicare taxes that maybe owed on account of the vesting of the PSUs (unless the Company elects to withhold such payroll taxes at a later time in accordancewith applicable law), and federal, state and local10income taxes that may be owed on account of payment of the PSUs, shall be the Employee’s responsibility. By accepting this Grant,the Employee agrees and acknowledges that the Company promptly may withhold from the Employee’s compensation, including butnot limited to Stock delivered pursuant to Section 4, the amount of taxes the Company is required to withhold pursuant to thisAgreement, unless the Employee shall satisfy such withholding obligation to the Company as provided in Article 17 of the Plan. TheEmployee acknowledges that the tax laws and regulations applicable to the PSUs and the disposition of the Shares provided uponsettlement of the vested PSUs are complex and subject to change, and it is the Employee’s sole responsibility to obtain his or her ownadvice as to the tax treatment of the terms of this Agreement.119. Section 409A.It is intended that the rights to receive Shares granted under this Agreement and the provisions of this Agreement be exempt from orcomply with Section 409A of the Code, and all provisions of this Agreement shall be construed and interpreted in a manner consistentwith Section 19.10 of the Plan and the requirements for avoiding taxes or penalties under Section 409A of the Code. Notwithstandingthe foregoing, in no event whatsoever shall the Company or its Subsidiaries be liable for any additional tax, interest, or penalties thatmay be imposed on the Employee as a result of Section 409A of the Code or any damages for failing to comply with Section 409A ofthe Code.10. 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 10. The Employee understands that the Company and its Subsidiaries hold certain personal information about theEmployee, 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 or directorships held in the Company (or any of its Subsidiaries), detailsof all options or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in the Employee’s favor,for the purpose of implementing, managing and administering the Plan (“Data”). The Employee further understands that the Companyand/or a Subsidiary may transfer Data amongst themselves as necessary for the purpose of implementation, administration andmanagement of the Employee’s participation in the Plan, and that the Company and/or a Subsidiary may each further transfer Data toany third parties assisting the Company in the implementation, administration and management of the Plan. The Employee understandsthat these recipients may be located in the European Economic Area, or elsewhere, such as the United States or Canada, and that therecipient’s country may have different data privacy laws and protections than the Employee’s country. The Employee authorizes themto receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering andmanaging the Employee’s participation in the Plan, including any requisite transfer of such Data to a broker or other third party withwhom the Employee may elect to deposit any shares of Common Stock acquired pursuant to the Plan as may be required for theadministration of the Plan and/or the subsequent holding of shares of Common Stock on the Employee’s behalf. The Employeeunderstands that Data will be held only as long as is necessary to implement, administer and manage the Employee’s participation inthe Plan. The Employee understands that the Employee may, at any time, view Data, request additional information about the storageand processing of Data, require any necessary amendments to it or refuse or withdraw the consents herein, in any case without cost, bycontacting in writing the Employee’s local Human Resources representative. Refusal or withdrawal of consent may, however, affectthe Employee’s ability to exercise or realize benefits from this award or the Plan. For more information on the consequences of theEmployee’s refusal to consent or withdrawal of consent,12the Employee understands that the Employee may contact the Employee’s local Human Resources representative.1311. Miscellaneous.(a) Incorporation by Reference. The provisions of the Plan are incorporated herein by reference. Except as otherwise expresslyset forth herein, this Agreement shall be construed in accordance with the provisions of the Plan.(b) Enforcement. The Company shall not be required (i) to transfer on its books any Shares that shall have been sold ortransferred in violation of any of the provisions set forth in this Agreement, or (ii) to treat as owner of such shares or to accord the rightto vote as such owner or to pay dividends to any transferee to whom such shares shall have been so transferred.(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 or shall interfere with or restrict in any way the right of the Company and its Subsidiaries, which ishereby expressly reserved, to remove, terminate, or discharge Employee at any time for any reason whatsoever.(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) Successors. The terms of this Agreement shall be binding upon and inure to the benefit of the Company, its successors andassigns, and of the Employee and the Employee’s executors, administrators, heirs and successors.(g) 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 thereof, or principles of conflicts of laws ofany other jurisdiction that could cause the application of the laws of any jurisdiction other than the Commonwealth of Massachusetts.The parties agree that all disputes with respect to this agreement shall be resolved through courts of competent jurisdiction located inthe Commonwealth of Massachusetts.14[Remainder of this page intentionally left blank]15IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.HAEMONETICS CORPORATIONBy: _____________________________________Its: _____________________________________By signing this Agreement, Participant acknowledges that he or she has received a copy of the Plan and has had an opportunity toreview the Plan and agrees to be bound by all the terms and provisions of the Plan and this Agreement.PARTICIPANT_________________________________________ [Participant Name]1617Exhibit 10JNINTH AMENDMENT TO AGREEMENT OF LEASEDATED THIS 12th DAY OF MARCH, 2014BY AND BETWEENTHE BUNCHER COMPANY, as Landlord, a Pennsylvania corporation having an office in the City of Pittsburgh,Allegheny County, PennsylvaniaANDHAEMONETICS CORPORATION, as Tenant, a Massachusetts corporation having its principal place of businessin the City of Braintree, Norfolk County, MassachusettsWHEREAS, the parties hereto have entered into that certain Agreement of Lease dated July 17, 1990; asamended by First Amendment to Agreement of Lease dated April 30, 1991; by Second Amendment to Agreement ofLease dated October 18, 2000; by Third Amendment to Agreement of Lease dated March 23, 2004; by FourthAmendment to Agreement of Lease dated March 12, 2008; by Fifth Amendment to Agreement of Lease dated October 1,2008; by Sixth Amendment to Agreement of Lease dated January 8, 2010; by Seventh Amendment to Agreement ofLease dated March 31, 2011; by letter agreement dated January 27, 2012; along with the renewal letter dated June 8,2010, exercising the renewal option for the Fourth Renewal Term pursuant to paragraph 3 of the Sixth Amendment toAgreement of Lease; and by Eighth Amendment to Agreement of Lease dated February 26, 2013 (hereinafter collectivelycalled the “Lease”), covering certain property known as Buildings 18 and 18A, the Building 18 Expansion Space, and theBuilding #3 Space located in the Buncher Commerce Park, Borough of Leetsdale, Allegheny County, Pennsylvania, andmore particularly described in the Lease and called herein and therein the “Leased Premises;” and WHEREAS, all terms defined in the Lease and used herein shall have the same meaning herein as in the Leaseunless otherwise provided herein; andWHEREAS, the parties hereto desire to further amend the Lease to (i) extend the term for the Building #3 Spaceonly for one (1) additional year (the “Eighth Renewal Term”), (ii) establish the monthly rental during the Eighth RenewalTerm, and (iii) establish Tenant’s right to terminate the Lease with respect to the Building #3 Space only during theEighth Renewal Term.NOW, THEREFORE, in consideration of the premises and intending to be legally bound, the parties heretopromise, covenant and agree that the Lease be and is hereby amended as follows:11. TERM: The term of the Lease as it applies to the Building #3 Space only is hereby extended for the EighthRenewal Term to commence immediately following the expiration of the Seventh Renewal Term, i.e., April 1, 2014. Theexpiration date of the term of the Lease for the Building #3 Space only, as extended by the Eighth Renewal Term, ishereby changed from March 31, 2014, to March 31, 2015.2. RENT: Tenant shall pay to Landlord as monthly rental for the Leased Premises the following amounts at thefollowing times:A.Tenant shall, for the balance of the Seventh Renewal Term, during the Eighth Renewal Term, and for thebalance of the Second Extended Term, continue to pay to Landlord on the first (1st) day of each calendarmonth to and including March 1, 2015, as monthly rental for the Leased Premises (i.e. Buildings 18 and18A, the Building 18 Expansion Space and the Building #3 Space), the amount of $42,707.73.B.In the event the term of the Lease terminates or expires for the Building #3 Space only for whatever cause,beginning on the first (1st) day of the month following the termination or expiration of the term of the Leasefor the Building #3 Space only, and on the first (1st) day of each calendar month thereafter during thebalance of the Second Extended Term, Tenant shall pay to Landlord as monthly rental for the LeasedPremises, excluding the Building #3 Space (i.e. Buildings 18 and 18A and the Building 18 ExpansionSpace), the amount of $31,997.49.The rentals under this paragraph 2 shall be payable in advance, without demand, deduction or set off. All rentalsand other sums payable as additional rental under the Lease shall be paid to The Buncher Company at 1300 PennAvenue, P.O. Box 768, Pittsburgh, PA 15230-0768 or at such other place or to such other person as may be designatedby Landlord in writing.3. RIGHT OF TERMINATION: Tenant shall have the right and option during the Eighth Renewal Term toterminate the Lease and the term thereof as to the Building #3 Space only, subject to the following terms and conditions:A.Tenant shall notify Landlord in writing at least three (3) months prior to the date Tenant desires to terminatethe Lease and the term thereof (the2“Termination Date”), provided, however, the Termination Date shall not occur prior to June 30, 2014;B.Tenant shall not be in default of the Lease; andC.Tenant shall pay to Landlord as a fee for said termination, and not as a penalty, the amount of $32,130.71payable on the first day of the calendar month immediately following the date of the termination notice byTenant to Landlord. Said fee shall be in addition to the rental and additional rental due under the Lease.If the conditions precedent are fully satisfied, the Lease and the term thereof as to the Building #3 Space only,shall expire on the Termination Date with the same force and effect as though such date was the scheduledexpiration date of the term of the Lease, and the Lease for Buildings 18 and 18A and the Building 18 ExpansionSpace shall remain in full force and effect.4. BROKER: Except as provided below, Landlord and Tenant each hereby warrants to the other that no realestate broker has been involved in this transaction on its behalf and that no finder's fees or real estate commissions havebeen earned by any third party. Tenant hereby agrees to indemnify Landlord and Landlord hereby agrees to indemnifyTenant for any liability or claims for commissions or fees arising from a breach of this warranty by it. The only real estatebroker involved in this transaction is Cassidy Turley Commercial Real Estate Services, whose commission or fee withrespect to this transaction shall be paid by Landlord in accordance with that certain letter to Mr. Sean M. Teague datedJanuary 8, 2014.5. NO OTHER MODIFICATIONS: Except as amended and supplemented hereby, all terms and conditions of theLease shall remain in full force and effect.WITNESS the due execution hereof on the day and year first written above.ATTEST: THE BUNCHER COMPANYBy: _/s/ Bernita Buncher__________ By: /s/ Thomas J. BalestrieriBernita Buncher Thomas J. Balestrieri Secretary President/CEO (Corporate Seal)3ATTEST: HAEMONETICS CORPORATION By: /s/ James McInerny By: /s/ Dorothy Barr Name: James McInerny Name: Dorothy BarrTitle: Director Global RE Title: VP Global Planning and Logistics(Corporate Seal)4Exhibit 10KTENTH AMENDMENT TO AGREEMENT OF LEASEDATED AS OF THE 31ST DAY OF MAY, 2017BY AND BETWEENTHE BUNCHER COMPANY, as Landlord, a Pennsylvania corporation having principal offices in the City ofPittsburgh, Allegheny County, Pennsylvania,ANDHAEMONETICS CORPORATION, as Tenant, a Massachusetts corporation having its principal place of businessin the City of Braintree, Norfolk County, Massachusetts.WHEREAS, the parties hereto have entered into that certain Agreement of Lease dated July 17, 1990; asamended by First Amendment to Agreement of Lease dated April 30, 1991; by Second Amendment to Agreement ofLease dated October 18, 2000; by Third Amendment to Agreement of Lease dated March 23, 2004; by FourthAmendment to Agreement of Lease dated March 12, 2008; by Fifth Amendment to Agreement of Lease dated October 1,2008; by Sixth Amendment to Agreement of Lease dated January 8, 2010; by Seventh Amendment to Agreement ofLease dated March 31, 2011; by letter agreement dated January 27, 2012; along with the renewal letter dated June 8,2010, exercising the renewal option for the Fourth Renewal Term pursuant to paragraph 3 of the Sixth Amendment toAgreement of Lease; by Eighth Amendment to Agreement of Lease dated February 26, 2013; and by Ninth Amendmentto Agreement of Lease dated March 12, 2014 (hereinafter collectively called the “Lease”), covering certain propertyknown as Buildings 18 and 18A, the Parking Area, the Building 18 Expansion Space, and the Building #3 Space locatedin Buncher Commerce Park, Borough of Leetsdale, Allegheny County, Pennsylvania, and more particularly described inthe Lease and collectively called therein the “Leased Premises;” andWHEREAS, pursuant to that certain letter dated March 24, 2014, Tenant exercised its right pursuant to paragraph9 (Right of Termination) of the Ninth Amendment to Agreement of Lease to terminate the term of the Lease as of June 30,2014, as it applied to the Building #3 Space only, thereby causing the Leased Premises to consist of Buildings 18 and18A, the Parking Area, and the Building 18 Expansion Space, collectively called herein the “Leased Premises”; and WHEREAS, all terms defined in the Lease and used herein shall have the same meaning herein as in the Leaseunless otherwise provided herein; andWHEREAS, the parties hereto desire to further amend the Lease to (i) expand the Leased Premises to include anoutside area containing three (3) new silos to be installed by Tenant on 767 agreed-upon rentable square feet of exteriorspace (the “Building 181Second Expansion Space”) as shown shaded in green on Exhibit A-10, which is attached hereto and made a parthereof; (ii) establish the monthly rental for the Leased Premises as expanded by the Building 18 Second ExpansionSpace; and (iii) provide additional provisions to the Lease to reflect the agreement of the parties.NOW, THEREFORE, in consideration of the premises and intending to be legally bound, the parties heretopromise, covenant and agree that the Lease be and is hereby amended as follows:1. LEASED PREMISES: Effective June 1, 2017, the Leased Premises shall be expanded to include the Building18 Second Expansion Space and the Building 18 Second Expansion Space shall be included in and become a part ofthe Leased Premises. Tenant shall accept the Building 18 Second Expansion Space in its present condition AS IS/WITHALL FAULTS. After inclusion of the Building 18 Second Expansion Space, the Leased Premises shall consist of 89,177agreed-upon rentable square feet of space allocated as follows: (a) 81,929 agreed-upon rentable square feet of space inBuildings 18 and 18A; (b) 5,672 agreed-upon rentable square feet of space in the Parking Area; (c) 809 agreed-uponrentable square feet of space in the Building 18 Expansion Space; and (d) 767 agreed-upon rentable square feet ofspace in the Building 18 Second Expansion Space as collectively shown outlined in red on Exhibit A-10 attachedhereto.2. RENT: Beginning June 1, 2017, and continuing on the first day of each succeeding calendar month thereafterfor the balance of the Second Extended Term of the Lease, Tenant shall pay to Landlord as monthly rental for theLeased Premises the amount of $32,347.49.The monthly rentals under this paragraph 2 shall be payable in advance, without demand, deduction or set off. Allmonthly rentals and other sums payable as additional rental under the Lease shall be paid to The Buncher Company atP.O. Box 768, Pittsburgh, PA 15230-0768 or at such other place or to such other person as may be designated byLandlord in writing.3. INSURANCE: Section 8 (Insurance) of the Agreement of Lease dated July 17, 1990, as amended byparagraph 4 (Insurance) of the First Amendment to Agreement of Lease dated April 30, 1991, and by paragraph 3(Insurance) of the Second Amendment to Agreement of Lease dated October 18, 2000, is hereby further amended andsupplemented as follows:A. The replacement value of Buildings 18 and 18A is increased to $3,700,000.00.2B. Tenant shall maintain automobile liability insurance on Tenant-owned and Tenant-leased motor vehicleswhich shall have a minimum limit of $2,000,000 with respect to any occurrence upon, in or about the Leased Premises.Prior to June 1, 2017, Tenant shall furnish to Landlord certificates of insurance evidencing the increased propertyinsurance coverage and the automobile insurance coverage set forth above in this paragraph 3.By requiring insurance in the Lease, Landlord does not represent that coverage and limits will necessarily beadequate to protect Tenant, and such coverage and limits shall not be deemed as a limitation on Tenant’s liability underthe indemnities granted to Landlord in the Lease.4. RENEWAL OPTION: Paragraph 5 (Renewal Option) of the Fifth Amendment to Agreement of Lease datedOctober 1, 2008, is hereby deleted in its entirety.5. NEW RENEWAL OPTION: Tenant shall have the right and option to extend the Second Extended Term of theLease for the Leased Premises for two consecutive terms of five (5) years each (each a “New Renewal Term“) tocommence immediately following the expiration of the Second Extended Term, or first New Renewal Term, whichever isapplicable. Tenant may exercise the right to extend the term of the Lease for a New Renewal Term only by delivering toLandlord written notice of Tenant’s exercise of such right no less than nine (9) months prior to the expiration date of theSecond Extended Term or the first New Renewal Term, whichever is applicable, time being of the essence. The termsand conditions of the Lease shall continue in full force and effect for each New Renewal Term except for this paragraph5 and except that the monthly rental for each New Renewal Term shall be calculated pursuant to the following formula: The monthly rental for the New Renewal Term for which this calculation is made shall equal $32,347.49multiplied by a fraction, the numerator of which is the CPI in effect on the expiration date of the Second ExtendedTerm or the first New Renewal Term, whichever is applicable, and the denominator of which is the CPI in effect forJune 2011.Notwithstanding the result of the above calculation, the monthly rental for each applicable New Renewal Termshall not be less that the monthly rental in effect for the immediately preceding term.The CPI, as referred to herein, means the Consumer Price Index for all Urban Consumers 1984=100 relating tothe United States City Average, as issued by the Bureau of Labor Statistics of the United States Department of Labor, orany successor to the function thereof. In the event of the conversion of the CPI to a different standard reference base orany other revision thereof, the determination hereunder shall be made with the3use of such Bureau of Labor Statistics or successor to the functions thereof or in the absence of the publication of suchconversion factor, such formula or table as the parties shall mutually designate.Notwithstanding the above, if Haemonetics Corporation, itself or its affiliate is (a) in default under the Lease asdetermined under section 16 of the Lease, or any of the provisions of the Lease at the commencement of a NewRenewal Term, or (b) not in full possession of the Leased Premises continuously during the last nine (9) months of theSecond Extended Term or first New Renewal Term, whichever is applicable, and at the commencement of a NewRenewal Term, then Landlord may, at its option, terminate the Lease as of the last day of the Second Extended Term orfirst New Renewal Term, whichever is applicable, of the Lease.6.BROKER: Landlord and Tenant each hereby warrants to the other that no real estate broker has beeninvolved in this transaction on its behalf and that no finder's fees or real estate commissions have been earned by anythird party. If either party breaches the foregoing warranty, the breaching party shall indemnify, defend and hold harmlessthe other for any liability or claims for commissions or fees, including reasonable attorneys’ fees and costs, arising from abreach of this warranty.7. TENANT’S ACKNOWLEDGMENT: Tenant hereby acknowledges that as of the date of this TenthAmendment to Agreement of Lease, Landlord is not in default of any of its obligations under the Lease, and Tenant hasno claims, counterclaims, offsets or defenses with respect to Landlord’s obligations under the Lease as amended by thisTenth Amendment to Agreement of Lease.8. AUTHORIZATION: Tenant and Landlord each hereby represent and warrant that it has full authority to enterinto, deliver, and perform its obligations hereunder; that the individual executing this Tenth Amendment to Agreement ofLease on behalf of such party has full authority to legally bind such party; that nothing herein conflicts with any of theparty’s governing documents or any of its commitments or obligations; and that no consent or approval of any third partyis required to perform its obligations hereunder9. NO OTHER MODIFICATIONS: Except as amended and supplemented hereby, all terms and conditions of theLease shall remain in full force and effect.WITNESS the due execution hereof on the day and year first written above.ATTEST: THE BUNCHER COMPANYBy: /s/ Joseph M. Jackovic By: /s/ Thomas J. BalestrieriJoseph M. Jackovic Thomas J. Balestrieri Executive Vice President President/CEOand General Counsel4(Corporate Seal)ATTEST: HAEMONETICS CORPORATION By: /s/ James McInerny By: /s/ William Burke Name: James McInerny Name: William Burke Title: Manager Global Real Estate Title: CFO (Corporate Seal)5Exhibit 10LELEVENTH AMENDMENT TO AGREEMENT OF LEASEDATED AS OF THE 2ND DAY OF MARCH, 2018BY AND BETWEENTHE BUNCHER COMPANY, as Landlord, a Pennsylvania corporation having principal offices in the City ofPittsburgh, Allegheny County, Pennsylvania,ANDHAEMONETICS CORPORATION, as Tenant, a Massachusetts corporation having its principal place of businessin the City of Braintree, Norfolk County, Massachusetts.WHEREAS, the parties hereto have entered into that certain Agreement of Lease dated July 17, 1990; asamended by First Amendment to Agreement of Lease dated April 30, 1991; by Second Amendment to Agreement ofLease dated October 18, 2000; by Third Amendment to Agreement of Lease dated March 23, 2004; by FourthAmendment to Agreement of Lease dated March 12, 2008; by Fifth Amendment to Agreement of Lease dated October 1,2008; by Sixth Amendment to Agreement of Lease dated January 8, 2010; by Seventh Amendment to Agreement ofLease dated March 31, 2011; by letter agreement dated January 27, 2012; along with the renewal letter dated June 8,2010, exercising the renewal option for the Fourth Renewal Term pursuant to paragraph 3 of the Sixth Amendment toAgreement of Lease; by Eighth Amendment to Agreement of Lease dated February 26, 2013; by Ninth Amendment toAgreement of Lease dated March 12, 2014; and by Tenth Amendment to Agreement of Lease dated May 31, 2017(hereinafter collectively called the “Lease”);WHEREAS, the Tenant previously exercised its right to terminate the Lease as to certain space referred to as the“Building #3 Space,” thereby leaving the “Leased Premises” covered by the Lease as 89,177 agreed-upon rentablesquare feet of space as follows: (a) 81,929 agreed-upon rentable square feet of space in Buildings 18 and 18A; (b) 5,672agreed-upon rentable square feet of space in the Parking Area; (c) 809 agreed-upon rentable square feet of space in theBuilding 18 Expansion Space; and (d) 767 agreed-upon rentable square feet of space in the Building 18 SecondExpansion Space;WHEREAS, all terms defined in the Lease and used herein shall have the same meaning herein as in the Leaseunless otherwise provided herein; andWHEREAS, the parties hereto desire to amend the Lease to (i) extend the term of the Lease for three (3)additional years (the “Third Extended Term”); (ii) establish the1monthly rental for the Third Extended Term of the Lease; (iii) provide for further extensions of the term of the Lease; (iv)provide Tenant with an allowance (the “Additional Tenant Improvement Allowance”) to make certain improvements to theLeased Premises during the Third Extended Term (the “Additional Tenant’s Work”); (v) identify certain improvements tobe made to the Leased Premises by Landlord (“Landlord’s Work”); and (vi) provide additional provisions to the Lease toreflect the intentions of the parties.NOW, THEREFORE, in consideration of the premises and intending to be legally bound, the parties heretopromise, covenant and agree that the Lease be and is hereby amended as follows:1. TERM: The Lease and the term thereof are hereby extended for the Third Extended Term to commenceimmediately following the expiration of the Second Extended Term of the Lease, i.e., July 1, 2018. The expiration date ofthe term of the Lease, as extended by the Third Extended Term, is hereby changed from June 30, 2018, to June 30,2021.2. RENT: Tenant shall pay to Landlord as rental for the Leased Premises the following amounts at the followingtimes:A. Tenant shall continue to pay to Landlord on the first day of each calendar month during the balance of theSecond Extended Term of the Lease the amount of $32,347.49 as monthly rental for the Leased Premises.B. Beginning on July 1, 2018, and continuing on the first day of each succeeding calendar month thereafter forthe balance of the Third Extended Term of the Lease, Tenant shall pay to Landlord the amount of $38,325.44 as monthlyrental for the Building 18, Building 18A, and the Parking Area portions of the Leased Premises.C. Beginning on July 1, 2018, and continuing on the first day of each succeeding calendar month thereafter forthe balance of the Third Extended Term of the Lease, Tenant shall pay to Landlord the amount of $325.00 as monthlyrental for the Building 18 Expansion Space and the Building 18 Second Expansion Space portions of the LeasedPremises.The monthly rentals as set forth above shall be payable in advance, without demand, deduction or set off. Allmonthly rentals and sums due as additional rental payable under the Lease shall be paid to The Buncher Company atP.O. Box 768, Pittsburgh, PA 15230-0768, or at such other place or to such other person as may be designated byLandlord in writing.If any installment of monthly rental or additional rental becomes overdue for a period in excess of ten (10)business days, Tenant shall pay interest at a monthly rate equal to2one percent (1%) accruing from the due date to the date of payment thereof. Such interest shall constitute additionalrental due and payable to Landlord by Tenant. The interest charge will be in addition to, and not in lieu of, any otherremedy Landlord may have under the Lease. If there are accrued and unpaid rental amounts, all payments of monthlyrental and additional rental shall be applied in such order as Landlord shall determine.3. NEW RENEWAL OPTION: Paragraph 5 (New Renewal Option) of the Tenth Amendment to Agreement ofLease dated May 31, 2017, is hereby deleted in its entirety.4. RENEWAL OPTION: Tenant shall have the right and option to extend the Third Extended Term of the Leasefor the Leased Premises for one (1) additional term of three (3) years (the “Revised Renewal Term“) to commenceimmediately following the expiration of the Third Extended Term. Tenant may exercise the right to extend the term of theLease for the Revised Renewal Term only by delivering to Landlord written notice of Tenant’s exercise of such right noless than one (1) year prior to the expiration date of the Third Extended Term, time being of the essence. The terms andconditions of the Lease shall continue in full force and effect for the Revised Renewal Term except for this paragraph 4and except that the monthly rental for the Revised Renewal Term shall be calculated pursuant to the following formula: The monthly rental for the Revised Renewal Term for which this calculation is made shall equal the monthly rentalpaid during the Third Extended Term (i.e., $38,650.44) multiplied by a fraction, the numerator of which is the CPIin effect for the month of June 2021and the denominator of which is the CPI in effect for June 2018Notwithstanding the result of the above calculation, the monthly rental for the Revised Renewal Term shall not beless than $38,650.44.The CPI, as referred to herein, means the Consumer Price Index for all Urban Consumers 1984=100 relating tothe United States City Average, as issued by the Bureau of Labor Statistics of the United States Department of Labor, orany successor to the function thereof. In the event of the conversion of the CPI to a different standard reference base orany other revision thereof, the determination hereunder shall be made with the use of such Bureau of Labor Statistics orsuccessor to the functions thereof or in the absence of the publication of such conversion factor, such formula or table asthe parties shall mutually designate.Notwithstanding the above, if Haemonetics Corporation, itself or its affiliate or subsidiary is in default under theLease or is not in full possession of the Leased Premises continuously during the last twelve (12) months of the ThirdExtended Term and the3commencement of the Revised Renewal Term, Landlord may, at its option and upon written notice to Tenant, terminatethe Lease as of the last day of the Third Extended Term.5. TENANT IMPROVEMENT ALLOWANCE: Landlord shall pay to Tenant the Additional Tenant ImprovementAllowance in the amount of $60,000.00 to be utilized by Tenant for improvements to the Leased Premises to be made byTenant’s contractors during the Third Extended Term (i.e., the Additional Tenant’s Work). Landlord shall reimburseTenant for said costs within thirty (30) days after receipt of paid invoice from Tenant with supporting documentation. Anyunused amount of the Additional Tenant Improvement Allowance shall be credited against rental in reverse orderbeginning with the last month of the Third Extended Term. Any additional cost of the Additional Tenant’s Work that ispaid by Landlord to Tenant exceeding the Additional Tenant Improvement Allowance may be amortized over the ThirdExtended Term and Revised Renewal Term at the prime rate of interest as published by PNC Bank, N.A. at thecommencement of the Third Extended Term plus three percent (3%) per annum. If Tenant does not exercise its option toextend the term of the Lease for the Revised Renewal Term, then Tenant shall pay to Landlord any unamortized balanceof said additional cost prior to the expiration of the Third Extended Term.6. TENANT’S WORK: Tenant shall have the right to perform any or all of the Additional Tenant’s Work, subjectto Landlord’s prior reasonable approval, which shall be given to Tenant within ten (10) business days upon Landlord’sreceipt of detailed plans and specifications from Tenant; however, Landlord’s approval shall be deemed to have beengiven if Landlord fails to respond to Tenant within said ten (10) business day approval period. Tenant shall not becharged by Landlord for any supervisory, management, or review fees in connection with review or monitoring of theAdditional Tenant’s Work. Tenant shall have the right to select all contractors, subcontractors, architects, engineers,consultants, etc. in connection with the Additional Tenant’s Work, subject to Landlord’s prior reasonable approval.However, Landlord shall be provided an opportunity to submit to Tenant a bid for construction of any or all of theAdditional Tenant’s Work. Subject to Landlord’s prior reasonable approval, Tenant shall have the right to constructcomputer rooms, interconnecting stairs, and any other specialized facilities, provided such work does not jeopardize thestructural integrity of Building 18 and/or Building 18A. Tenant and Landlord shall agree on a mutually acceptableconstruction schedule with respect to the Additional Tenant’s Work.The Additional Tenant’s Work shall be made in a good and workmanlike manner, and all contracts for theAdditional Tenant’s Work that is not constructed by Landlord shall4require signed releases against mechanics liens upon payment in full for such Additional Tenant’s Work.If any of the Additional Tenant’s Work is constructed by contractors other than Landlord, Tenant shall cause itscontractors to provide Landlord with evidence of commercial general liability insurance at the limits set forth in section 8(Insurance) of the Agreement of Lease dated July 17, 1990, and shall name Landlord as an additional insured. Saidcontractor(s) shall also provide Landlord with evidence of Workers’ Compensation and Employers Liability Insurance.Tenant shall indemnify, defend, and save harmless Landlord from all expense, liens, claims, damages or injuriesto either persons or property arising out of, or resulting from activities related to any of the Additional Tenant’s Work notconstructed by Landlord. The Additional Tenant’s Work shall be subject to the terms and conditions set forth in section 5(Alterations) of the Agreement of Lease dated July 17, 1990.7. LANDLORD’S WORK: As an inducement for Tenant entering into this Eleventh Amendment to Agreement ofLease and the faithful performance of its obligations under the Lease, Landlord shall, at its sole cost and expense,perform the following work upon receipt of a fully executed Eleventh Amendment to Agreement of Lease (“Landlord’sWork”):A.Furnish and install five (5) additional light poles with concrete bases and LED light fixtures within theparking lot of the Leased Premises. The location of such additional light poles shall be mutually agreed toby Tenant and Landlord.B.Remove existing fixtures and furnish and install eight (8) exterior mount LED wall light fixtures on the frontof Building 18 and/or Building 18A.The parties hereto acknowledge, understand, and agree that Landlord will be performing Landlord’s Work in theLeased Premises during the time Tenant occupies the Leased Premises and when weather conditions permit. Tenantshall take reasonable steps to protect its property from loss or damage during the time Landlord’s Work is beingperformed and Tenant shall conduct its operations in such a manner so as not to unreasonably interfere or delayLandlord or its contractors in the performance of Landlord’s Work.58. RESERVATION: UTILITIES: In addition to the rights set forth in section 33 (Reservations: Roads and Utilities)of the Agreement of Lease dated July 17, 1990, Landlord shall have the right, upon notifying Tenant, to enter upon theLeased Premises at any reasonable time and from time to time during the term of the Lease for the purpose of installing,repairing, and removing utility and mechanical facilities below the roof, above ceilings and below floors, and in thecommon areas of the Buildings, and any other building(s) which may become a portion of the Leased Premises,provided, however, such work shall be performed by Landlord, and its contractors, in such a manner as not tounreasonably interfere with the operations and property of Tenant.9. BROKERAGE: Except as provided below, Landlord and Tenant each hereby warrants to the other that no realestate broker has been involved in this transaction on its behalf and that no finder's fees or real estate commissions havebeen earned by any third party. Tenant hereby agrees to indemnify Landlord and Landlord hereby agrees to indemnifyTenant for any liability or claims for commissions or fees, including reasonable attorneys’ fees and costs, arising from abreach of this warranty by it. The only real estate broker involved in this transaction is Cushman & Wakefield U.S., Inc.,whose commission or fee with respect to this transaction shall be paid by Landlord in accordance with that certain letterto Mr. Sean M. Teague dated December 20, 2017.10. TENANT’S ACKNOWLEDGMENT: Tenant hereby acknowledges that as of the date of this EleventhAmendment to Agreement of Lease, Landlord is not in default of any of its obligations under the Lease, and Tenant hasno claims, counterclaims, offsets or defenses with respect to Landlord’s obligations under the Lease as amended by thisEleventh Amendment to Agreement of Lease.11. AUTHORIZATION: Tenant and Landlord each hereby represent and warrant that it has full authority to enterinto, deliver, and perform its obligations hereunder; that the individual executing this Eleventh Amendment to Agreementof Lease on behalf of such party has full authority to legally bind such party; that nothing herein conflicts with any of theparty’s governing documents or any of its commitments or obligations; and that no consent or approval of any third partyis required to perform its obligations hereunder12. NO OTHER MODIFICATIONS: Except as amended and supplemented hereby, all terms and conditions ofthe Lease shall remain in full force and effect.WITNESS the due execution hereof on the day and year first written above.ATTEST: THE BUNCHER COMPANYBy: /s/ Joseph M. Jackovic By: /s/ Thomas J. BalestrieriJoseph M. Jackovic Thomas J. Balestrieri Executive Vice President President/CEO6and General Counsel(Corporate Seal)ATTEST: HAEMONETICS CORPORATION By: /s/ Kris Alaerts By: /s/ William P. Burke Name: Kris Alaerts Name: William P. Burke Title: Global Category Manager Real Estate Title: CFO (Corporate Seal)7Exhibit 10RCONVENIO (EL “CONVENIO”) CON EFECTOS AL 1º DE ENERODE 2018 QUE CELEBRAN POR UNA PARTE MEGA2013, S.A.P.I.DE C.V., A QUIEN EN LO SUCESIVO SE LE DENOMINARÁ COMOEL “ARRENDADOR”, REPRESENTADA EN ESTE ACTO POR LADRA. GEORGINA SERRANO CUEVAS Y EL LIC. JOSÉ LUISNORIEGA BALCÁRCEL; Y POR LA OTRA HAEMONETICSMÉXICO MANUFACTURING, S. DE R.L. DE C.V., A QUIEN EN LOSUCESIVO SE LE DENOMINARÁ COMO EL “ARRENDATARIO”,REPRESENTADA EN ESTE ACTO POR LOS SEÑORES WILLIAMPATRICK BURKE Y DAN GOLDSTEIN; CON LA COMPARECENCIADE HAEMONETICS CORPORATION, A QUIEN EN LO SUCESIVOSE LE DENOMINARÁ COMO EL “GARANTE” REPRESENTADAEN ESTE ACTO POR EL SR. WILLIAM PATRICK BURKE; DECONFORMIDAD CON LAS SIGUIENTES DECLARACIONES YCLÁUSULAS: AGREEMENT (THE “AGREEMENT”) EFFECTIVE AS OF JANUARY1st. 2018, ENTERED INTO ON ONE PART BY MEGA2013, S.A.P.I.DE C.V., HEREINAFTER REFERRED TO AS THE“LESSOR”, REPRESENTED HEREIN BY MRS. GEORGINASERRANO CUEVAS AND MR. JOSÉ LUIS NORIEGA BALCÁRCEL;AND ON THE OTHER PART BY HAEMONETICS MÉXICOMANUFACTURING, S. DE R.L. DE C.V., HEREINAFTERREFERRED TO AS THE “LESSEE”, REPRESENTED HEREIN BYMESSRS. WILLIAM PATRICK BURKE AND DAN GOLDSTEIN;WITH THE APPEARANCE OF HAEMONETICS CORPORATION,HEREINAFTER REFERRED TO AS THE“GUARANTOR”, REPRESENTED HEREIN BY MR. WILLIAMPATRICK BURKE; PURSUANT TO THE FOLLOWING RECITALSAND CLAUSES:DECLARACIONES: RECITALS:Las partes de este convenio manifiestan y hacen constar losiguiente: The parties to this agreement represent and certify the following:1. Que con fecha 21 de Febrero del año 2000, BANCO BILBAOVIZCAYA-MEXICO, SOCIEDAD ANÓNIMA, INSTITUCIÓN DEBANCA MÚLTIPLE, GRUPO FINANCIERO BBVA-PROBURSA,DIVISIÓN FIDUCIARIA, en su carácter de Fiduciario del Fideicomiso“Submetrópoli de Tijuana” y ENSATEC, S.A. DE C.V. celebraron uncontrato de arrendamiento respecto a la nave industrial y mejorasaccesorias ubicadas en la Calle Colinas 11730 del FraccionamientoParque Industrial El Florido, Sección Colinas, Delegación La Presa,Tijuana, Baja California, México (el “Contrato de ArrendamientoOriginal”). 1. That on February 21st of year 2000, BANCO BILBAO VIZCAYA-MEXICO, SOCIEDAD ANÓNIMA, INSTITUCIÓN DE BANCAMÚLTIPLE, GRUPO FINANCIERO BBVA-PROBURSA, DIVISIÓNFIDUCIARIA, as trustee of the “Submetrópoli de Tijuana” trust andENSATEC, S.A. DE C.V. entered into a lease agreement over theindustrial facility and accesory improvements located at Calle Colinas11730 of Fraccionamiento Parque Industrial El Florido, SecciónColinas, Delegación La Presa, Tijuana, Baja California, Mexico (the“Original Lease Agreement”).12. Que mediante escritura pública de 16 de noviembre del año 2000,número 66,723 del Protocolo de la Notaría número 137 de la Ciudadde México, a cargo del señor Licenciado Carlos de Pablo Serna, de laque se tomó razón el 14 de diciembre del año 2000, en el FolioMercantil número 63,300, del Registro Público de la Propiedad y delComercio de la Ciudad de México, se hizo constar la protocolizacióndel acta de asamblea extraordinaria celebrada por BANCO BILBAOVIZCAYA-MEXICO, SOCIEDAD ANONIMA, INSTITUCION DEBANCA MULTIPLE, GRUPO FINANCIERO BBVA BANCOMER, el23 de octubre del año 2000, por virtud de la cual, entre otras cosas,se reformó el artículo Primero de los estatutos sociales de lamencionada institución bancaria, cambiando la denominación a la deBBVA BANCOMER SERVICIOS, SOCIEDAD ANONIMA,INSTITUCION DE BANCA MULTIPLE, GRUPO FINANCIERO BBVABANCOMER (“BBVA BANCOMER SERVICIOS, S.A”). 2. That through public instrument dated November 16th, 2000, number66,723 of Notary Public Number 137 of Mexico City, Mr. Carlos dePablo Serna, recorded on December 14th, 2000, under mercantilenumber 63,300 of the Public Registry of Property and Commerce ofMexico City, it was notarized the extraordinary shareholders meeting ofBANCO BILBAO VIZCAYA-MEXICO, SOCIEDAD ANONIMA,INSTITUCION DE BANCA MULTIPLE, GRUPO FINANCIERO BBVABANCOMER of October 23rd, 2000, under which, among others, articlefirst of the by-laws of referred banking institution was amended, tochange its denomination to BBVA BANCOMER SERVICIOS,SOCIEDAD ANONIMA, INSTITUCION DE BANCA MULTIPLE,GRUPO FINANCIERO BBVA BANCOMER (“BBVA BANCOMERSERVICIOS, S.A”).3. Que con fecha 18 de octubre de 2004, BBVA BANCOMERSERVICIOS, S.A., en su carácter de Fiduciario del Fideicomiso“Submetrópoli de Tijuana” y ENSATEC, S.A. DE C.V., con lacomparecencia de PALL CORPORATION, celebraron un convenio alContrato de Arrendamiento Original, mediante el cual se tomaron,entre otros, diversos acuerdos relacionados con ciertas mejoras yadecuaciones así como con respecto a la reparación ymantenimiento de la membrana techo del inmueble objeto de referidocontrato de arrendamiento (el “Primer Convenio Modificatorio”). 3. That on October 18th, 2004, BBVA BANCOMER SERVICIOS, S.A.,as trustee of the “Submetrópoli de Tijuana” trust and ENSATEC, S.A.DE C.V., with the appearance of PALL CORPORATION, entered intoan agreement to the Original Lease Agreement, through which theyagree, among others, on certain matters related to the improvementsand to the repair and maintenance of the roof membrane of the realestate property subject matter of referred lease agreement (the “FirstAmendment Agreement”).24. Que con fecha 14 de febrero de 2006, BBVA BANCOMERSERVICIOS, S.A., en su carácter de Fiduciario del Fideicomiso“Submetrópoli de Tijuana” y ENSATEC, S.A. DE C.V., con lacomparecencia de PALL CORPORATION, celebraron un convenio alContrato de Arrendamiento Original, mediante el cual se tomaron,entre otros, diversos acuerdos relacionados con ciertas mejoras yadecuaciones así como con respecto a la reparación ymantenimiento de la membrana techo del inmueble objeto de referidocontrato de arrendamiento (el “Segundo Convenio Modificatorio”). 4. That on February 14th, 2006, BBVA BANCOMER SERVICIOS,S.A., as trustee of the “Submetrópoli de Tijuana” trust and ENSATEC,S.A. DE C.V., with the appearance of PALL CORPORATION, enteredinto an agreement to the Original Lease Agreement, through which theyagree, among others, on certain matters related to the improvementsand to the repair and maintenance of the roof membrane of the realestate property subject matter of referred lease agreement (the“Second Amendment Agreement”).5. Que con fecha 25 de julio de 2008, BBVA BANCOMERSERVICIOS, S.A., en su carácter de Fiduciario del Fideicomiso“Submetrópoli de Tijuana” y ENSATEC, S.A. DE C.V., con lacomparecencia de PALL CORPORATION, celebraron un conveniomodificatorio al Contrato de Arrendamiento Original, mediante el cualconvinieron en prorrogar la vigencia de referido contrato dearrendamiento hasta el día 15 de agosto de 2011 (el “TercerConvenio Modificatorio”). 5. That on July 25th, 2008, BBVA BANCOMER SERVICIOS, S.A., astrustee of the “Submetrópoli de Tijuana” trust and ENSATEC, S.A. DEC.V., with the appearance of PALL CORPORATION, entered into anamendment to the Original Lease Agreement, through which they agreeto extend the term of referred lease up to August 15th, 2011 (the“Third Amendment Agreement”).6. Que mediante instrumento público 107,819 del volumen 1,370 defecha 10 de diciembre de 2010 del protocolo del Notario PúblicoNúmero 3 de Ensenada, Baja California, México, PROMOTORACALIFORNIANA DE DESARROLLOS, S.A.P.I. DE C.V. adquirió losderechos y obligaciones de arrendador bajo el Contrato deArrendamiento Original (la “Primer Cesión de Derechos deArrendamiento”). 6. That through public instrument number 107,819 of volume 1,370dated December 10th, 2010, of the protocol of Notary Public Number 3for Ensenada, Baja California, Mexico, PROMOTORA CALIFORNIANADE DESARROLLOS, S.A.P.I. DE C.V., acquired lessor´s rights andobligations under the Original Lease Agreement (the “First LeaseAssignment”).7. Que mediante instrumento público número 107,949 del volumen1,376 de fecha 10 de febrero de 2011, del protocolo del NotarioPúblico Número 3 de Ensenada, Baja California, PROCADEF 1,S.A.P.I. DE C.V. adquirió, entre otros, los derechos y obligaciones dearrendador bajo el Contrato de Arrendamiento Original (la “SegundaCesión de Derechos de Arrendamiento” y conjuntamente con laPrimer Cesión de Derechos de Arrendamiento, las “Cesiones deArrendamiento”).. 7. That through public instrument number 107,949 of volume 1,376dated February 10th, 2011, of the protocol of Notary Public Number 3for Ensenada, Baja California, Mexico, PROCADEF 1, S.A.P.I. DEC.V., acquired, among others, lessor´s rights and obligations under theOriginal Lease Agreement (the “Second Lease Assignment” andjointly with the First Lease Assignment, the “Lease Assignments”).38. Que mediante convenio que entró en vigor el día 14 de agosto de2011 celebrado entre PROCADEF 1, S.A.P.I. DE C.V., ENSATEC,S.A. DE C.V. y PALL CORPORATION, se convino entre otras cosasen prorrogar la vigencia del Contrato de Arrendamiento Original paraefectos de que el mismo continuara vigente hasta el día 16 de agostodel año 2018 (el “Cuarto Convenio Modificatorio” y conjuntamentecon el Primer, Segundo y Tercer Convenio Modificatorio y laCesiones de Arrendamiento, el “Contrato de Arrendamiento”). 8. That through agreement that was effective as of August 14th, 2011,entered into between PROCADEF 1, S.A.P.I. DE C.V., ENSATEC,S.A. DE C.V. and PALL CORPORATION, it was agreed, amongothers, to extend the term of the Original Lease Agreement in order forthe same to continue in effect until August 16th, 2018 (the “FourthAmendment Agreement” and jointly with the First, Second and ThirdAmendment Agreement, and the Lease Assignments, the “LeaseAgreement”).9. Que con fecha efectiva del 23 de febrero de 2012, ENSATEC, S.A.DE C.V., cedió todos y cada uno de sus derechos y obligacionesbajo el Contrato de Arrendamiento a favor del ARRENDATARIO,HAEMONETICS MÉXICO MANUFACTURING, S. DE R.L. DE C.V.(anteriormente Pall México Manufacturing, S. de R.L. de C.V.). 9. That effective as of February 23rd, 2012, ENSATEC, S.A. DE C.V.,assigned each and all of its rights and obligations under the LeaseAgreement in favor of LESSEE, HAEMONETICS MÉXICOMANUFACTURING, S. DE R.L. DE C.V. (formerly Pall MéxicoManufacturing, S. de R.L. de C.V.).10. Que con fecha 5 de octubre de 2012, el GARANTE paragarantizar el cumplimiento de todas y cada y una de las obligacionesdel ARRENDATARIO bajo el Contrato de Arrendamiento otorgó laGarantía de Arrendamiento que en copia se adjunta al presente comoAnexo “A”. 10. That on October 5th, 2012, the GUARANTOR to guarantee eachand all of LESSEE´s obligations under the Lease Agreement, grantedthe Guaranty of Lease that in copy is attached hereto as Exhibit “A”.11. Que mediante escritura pública de 29 de enero del año 2013,número 41,355 del Protocolo del Notario Público Número 13 deTijuana, Baja California, México, a cargo del señor Licenciado CarlosE. Ahumada Arruti, de la que se tomó razón en el Folio MercantilElectrónico 32944*2, del Registro Público de la Propiedad y deComercio de Tijuana, Baja California, se hizo constar laprotocolización del acta de asamblea de socios de PALL MEXICOMANUFACTURING, S. DE R.L. DE C.V. de fecha 29 de enero delaño 2013, por virtud de la cual, entre otras cosas, se acordó encambiar su denominación a la de HAEMONETICS MEXICOMANUFACTURING, S. DE R.L. DE C.V. 11. That through public instrument dated January 29, number 41,355 ofthe protocol of Notary Public Number 13 for Tijuana, Baja California,Mexico, Mr. Carlos E. Ahumada Arruti, which was recorded underMercantile Number 32944*2 of the Public Registry of Property andCommerce of Tijuana, Baja California, it was notarized the partner´smeeting of PALL MEXICO MANUFACTURING, S. DE R.L. DE C.V.dated January 29th, 2013, under which it was agreed to change itsdenomination to HAEMONETICS MEXICO MANUFACTURING, S. DER.L. DE C.V.412. Que a partir del día 10 de diciembre de 2013, MEGA2013,S.A.P.I. DE C.V., se convirtió en plena propietaria del inmuebleobjeto del Contrato de Arrendamiento, según consta en losinstrumentos públicos números 110,730 y 110,731 ambos delprotocolo del Notario Público Número 3 de Ensenada, Baja California,México, copia de los cuales se adjuntan al presente como Anexo “A-1”. 12. That as of December 10th, 2013, MEGA2013, S.A.P.I. DE C.V.,became the owner of the real estate property subject matter of theLease Agreement, as evidenced in public instruments number 110,730and 110,731 both of the protocol of Notary Public Number 3 forEnsenada, Baja California, Mexico, copy of which are attached heretoas Exhibit “A-1”.13. Que el ARRENDADOR es el actual titular de los derechos yobligaciones de arrendador bajo el Contrato de Arrendamiento y elARRENDATARIO es el actual titular de los derechos y obligacionesde arrendatario bajo el Contrato de Arrendamiento. 13. That LESSOR is the current holder of lessor´s rights andobligations under the Lease Agreement, and LESSEE is the currentholder of lessee´s rights and obligations under the Lease Agreement.14. La Dra. Georgina Serrano Cuevas y el Lic. José Luis NoriegaBalcárcel acreditan contar con facultades suficientes para representaral ARRENDADOR en la celebración del presente Convenio con ladocumentación que en copia se adjunta al presente como Anexo“B”. 14. Mrs. Georgina Serrano Cuevas and Mr. José Luis NoriegaBalcárcel evidence to have sufficient authority to represent LESSORfor the execution hereof, with the documentation that in copy isattached hereto as Exhibit “B”.15. El señor William Patrick Burke, declara que acredita contar confacultades suficientes para representar al ARRENDATARIO en lacelebración del presente Convenio con la documentación que encopia se adjunta al presente como Anexo “C”. 15. Mr. William Patrick Burke evidence to have sufficient authority torepresent LESSEE for the execution hereof, with the documentationthat in copy is attached hereto as Exhibit “C”.16. El señor Dan Goldstein, declara que acredita contar confacultades suficientes para representar al ARRENDATARIO en lacelebración del presente Convenio con la documentación que encopia se adjunta al presente como Anexo “C-1”. 15. Mr. Dan Goldstein evidence to have sufficient authority torepresent LESSEE for the execution hereof, with the documentationthat in copy is attached hereto as Exhibit “C-1”.17. El señor William Patrick Burke, declara que acredita contar confacultades suficientes para representar al GARANTE en lacelebración del presente Convenio con la documentación que encopia se adjunta al presente como Anexo “D”. 17. Mr. William Patrick Burke evidence to have sufficient authority torepresent GUARANTOR for the execution hereof, with thedocumentation that in copy is attached hereto as Exhibit “D”.518. Los suscritos declaran, que la representación con la que cadauno de ellos comparece a suscribir el presente Convenio no les hasido revocada o limitada de forma alguna. 18. The undersigned state that the capacity with which each of themappears to the execution hereof has not been revoked nor limited inany manner.19. Que la Cláusula Primera del Cuarto Convenio Modificatorio, a laletra establece lo siguiente: “PRIMERA. Prorroga del Contrato deArrendamiento. El ARRENDADOR y el ARRENDATARIO por mediodel presente convienen y acuerdan prorrogar la vigencia del Contratode Arrendamiento para efectos de que el mismo continúe vigentehasta el día 16 (dieciséis) de agosto del año 2018 (dos mildieciocho). En virtud de lo anterior, las partes de este Conveniomanifiestan y hacen constar que el Contrato de Arrendamientocontinuará vigente hasta el día 16 (dieciséis) de agosto del año2018 (dos mil dieciocho) fecha en la cual concluirá la vigencia dedicho Contrato de Arrendamiento, salvo que el mismo fuere ampliadoo renovado por un período adicional de 5 (cinco) años de conformidadcon el párrafo 6.2 del Contrato de Arrendamiento, o rescindido oterminado anticipadamente por el ARRENDADOR en los términos delmismo.” 19. That Clause First of the Fourth Amendment Agreement , reads asfollows: “FIRST. Extension of the Lease Agreement. The LESSORand the LESSEE agree to extend the term of the Lease Agreement upto August 16 (sixteen) of year 2018 (two thousand eighteen). Inview of the foregoing, the parties to this Agreement, state and certifythat the Lease Agreement will continue to be in effect until August 16(sixteen) of year 2018 (two thousand eighteen), date on which theeffectiveness of such Lease Agreement will expire, unless the same isextended or renewed for an additional 5 (five) year term pursuant toparagraph 6.2 of the Lease Agreement, or rescind or earlier terminatedby LESSOR under the terms thereof.”20. Que con anterioridad a la celebración del presente instrumento ycon efectos a partir del día 1º de Enero de 2018, convinieron yacordaron en: (i) renovar y prorrogar la vigencia del Contrato deArrendamiento para efectos de que el mismo continúe vigente hastael día 16 (dieciséis) de agosto del año 2023 (dos mil veintitrés)(la “Fecha de Vencimiento”); (ii) reducir el monto de la rentamensual para efectos de que a partir del día 1º de Enero de 2018 lamisma fuere la cantidad de $23,177.59 Dólares por mes más elImpuesto al Valor Agregado correspondiente; (iii) reducir el porcentajede incremento anual en la renta mensual para que en lugar de 3% porcada periodo de 12 meses sea de 2% por cada periodo de 12 meses;y (iv) que el ARRENDATARIO contaría con la opción de prorrogar lavigencia del Contrato de Arrendamiento por un plazo adicional de 5(cinco) años a partir de la Fecha de Terminación. 20. That prior to the execution hereof and effective as of January 1st 2018, they agree: (i) to renew and extend the term of the LeaseAgreement in order for the same to continue in effect until August 16(sixteen) of year 2023 (two thousand twenty three)(the “Termination Date”); (ii) to reduce the amount of the monthlyrent, as of January 1st 2018, in order for the same to be the amount of$23,177.59 Dollars per month plus applicable Value Added Tax; (iii) toreduce the percentage of yearly increase on the monthly rent, in orderthat instead of being of 3% per 12 month period, to be of 2% per 12month period; and (iv) that LESSEE will continue to have the option toextend the term of the Lease Agreement for an additional 5 (five) yearterm as from the Termination Date.621. Que desean formalizar por medio del presente instrumento losacuerdos a que se refiere la Declaración 20 anterior. 21. That they wish to hereby formalize the agreements referred to inRecital 20 above.22. Que desean celebrar el presente Convenio, conforme a lostérminos y condiciones que aquí se establecen. 22. That they wish to enter into this Agreement, pursuant to the termsand conditions herein set forth.En virtud de lo anterior, las partes convienen en las siguientes: In view of the foregoing, the parties agree on the following:CLÁUSULAS: CLAUSES:PRIMERA. Prórroga del Contrato de Arrendamiento. ElARRENDADOR y el ARRENDATARIO con efectos retroactivos apartir del día 1º de Enero de 2018 por medio del presente instrumentoformalizan su acuerdo previo de prorrogar y renovar la vigencia delContrato de Arrendamiento para efectos de que el mismo continúevigente hasta el día 16 (dieciséis) de agosto del año 2023 (dos milveintitrés). En virtud de lo anterior, las partes de este Conveniomanifiestan y hacen constar que el Contrato de Arrendamientocontinuará vigente hasta el día 16 (dieciséis) de agosto del año2023 (dos mil veintitrés) fecha en la cual concluirá la vigencia dedicho Contrato de Arrendamiento, salvo que el mismo fuere ampliadoo renovado por el período adicional de 5 (cinco) años a que se refierela Cláusula Segunda siguiente, o rescindido o terminadoanticipadamente por el ARRENDADOR en los términos del mismo. FIRST. Extension of the Lease Agreement. Effective as of January1st 2018, the LESSOR and the LESSEE hereby formalize their prioragreement to extend the term of the Lease Agreement for the same tocontinue in effect up to August 16 (sixteen) of year 2023 (twothousand twenty-three). In view of the foregoing, the parties to thisAgreement, state and certify that the Lease Agreement will continue tobe in effect until August 16 (sixteen) of year 2023 (two thousandtwenty-three), date on which the term of such Lease Agreement willexpire, unless the same is extended or renewed for the additional 5(five) year term referred to in Clause Second below, or rescind orearlier terminated by LESSOR under the terms thereof.7SEGUNDA. Opción de renovación. Para todos los efectos legalesprocedentes, el ARRENDADOR y el ARRENDATARIO manifiestan yhacen constar que el presente Convenio se celebra en virtud delejercicio por parte del ARRENDATARIO de su segundo derecho pararenovar el Término del Arrendamiento consignado en el párrafo 6.2 dela Cláusula Sexta del Contrato de Arrendamiento, acordando yratificando el ARRENDADOR y el ARRENDATARIO, que larenovación aquí formalmente acordada es por un periodo quefenecerá el día 16 (dieciséis) de agosto del año 2023 (dos milveintitrés). SECOND. Option to renew. For all legal purposes LESSOR andLESSEE state and certify that this Agreement is entered due to theexercise by LESSEE of its second right to renew the Term of theLease Agreement contained in paragraph 6.2 of Clause Sixth of theLease Agreement, agreeing and ratifying LESSOR and LESSEE thatthe renewal hereby formally agreed is for a period that will expire onAugust 16 (sixteen) of year 2023 (two thousand twenty-three).En adición a lo anterior, las partes convienen y acuerdan en que elARRENDATARIO tendrá derecho de prorrogar la Fecha deVencimiento por un periodo adicional de 5 (cinco) años, mismo queen su caso podrá ser ejercitado por el ARRENDATARIO mediantenotificación por escrita entregada al ARRENDADOR con cuandomenos 6 (seis) meses antes del día 16 (dieciséis) de agosto delaño 2023 (dos mil veintitrés). Lo anterior, en el entendido de quedicho derecho de prorroga estará sujeto única y exclusivamente aque el ARRENDATARIO se encuentre al corriente en el cumplimientode sus obligaciones bajo el Contrato de Arrendamiento. Furthermore, the parties covenant and agree that LESSEE will havethe right to extend the Termination Date for an additional 5 (five) yearterm, and that such right may be exercised by LESSEE through writtennotification delivered to LESSOR with at least 6 (six) months ofanticipation of August 16 (sixteen) of year 2023 (two thousandtwenty-three). The above in the understanding that such extensionright will be subject only and exclusively to the fact that LESSEE becurrent in the compliance of its obligations under the LeaseAgreement.Salvo por lo dispuesto en el párrafo anterior, las partes convienen yacuerdan desde ahora la improrrogabilidad del término pactado, por loque el ARRENDATARIO desde ahora renuncia a los beneficios que leconcede el Artículo 2359 del Código Civil para el Estado de BajaCalifornia. Except for that set forth in the above paragraph, the parties herebyexpressly agree on the non-extension of the agreed term, thereforeLESSEE waives the benefits granted under article 2359 of the CivilCode for the State of Baja California.8TERCERA. Renuncia al derecho de preferencia y al derecho deltanto. El ARRENDATARIO renuncia expresamente al derecho depreferencia y al derecho del tanto a que se refiere el Artículo 2321 delCódigo Civil para el Estado de Baja California. Más aún, elARRENDATARIO en este acto conviene en que el legítimopropietario del inmueble objeto del Contrato de Arrendamiento, asícomo quien en lo futuro asumiere tal carácter, estará facultado paravender, ceder o de cualquier otra manera transmitir libremente lapropiedad del inmueble objeto del Contrato de Arrendamiento. THIRD. Waiver to preferential rights and rights of firstrefusal. LESSEE expressly waives the right of first refusal andpreferential right referred to under Article 2321 of the Civil Code for theState of Baja California. Moreover, LESSEE hereby agrees that therightful owner of the leased premises and any other person that in thefuture assumes such role, is authorized to sell, assign or in any othermanner transfer title to the premises subject matter of the LeaseAgreement.CUARTA. Renta. Con efectos retroactivos a partir del día 1º de Enerode 2018, el ARRENDADOR y el ARRENDATARIO, por medio delpresente instrumento formalizan su acuerdo previo respecto al montode la renta mensual pagadera conforme al Contrato de Arrendamientoen el sentido de que a partir del día 1º de Enero de 2018, la rentamensual será la cantidad de US$23,177.59 Dólares (Veintitrés MilCiento Setenta y Siete Dólares 59/100 moneda de curso legal delos Estados Unidos de América) por mes, más el correspondienteImpuesto al Valor Agregado. FOURTH. Rent. With retroactive effects as of January 1st 2018,LESSOR and LESSEE hereby formalize their prior agreementregarding the amount of the rent payable pursuant to the LeaseAgreement in order that as of January 1st 2018, the monthly rent be theamount of US$23,177.59 Dollars (Twenty-Three Thousand OneHundred Seventy-Seven Dollars 59/100 legal currency of theUnited States of America) per month, plus the corresponding ValueAdded Tax.9Adicionalmente, queda entendido y acordado entre el ARRENDADORy el ARRENDATARIO en que la renta mensual durante el periodo deprorroga y renovación aquí formalmente convenido, se incrementaráen forma acumulativa a partir del día 1 (primero) de septiembre delaño 2018 (dos mil dieciocho) a razón de 2% (dos por ciento) porcada periodo de 12 (doce) meses. Es decir, la renta por cada mes delperiodo comprendido entre el día 1 (primero) de septiembre del año2018 (dos mil dieciocho) y el día 31 (treinta y uno) de agosto delaño 2019 (dos mil diecinueve) será la cantidad de US$23,641.14Dólares (Veintitrés Mil Seiscientos Cuarenta y Un Dólares 14/100moneda de curso legal de los Estados Unidos de América) pormes, más el correspondiente Impuesto al Valor Agregado, y la mismase incrementará en forma acumulativa para el siguiente periodo de 12(doce) meses y para los períodos subsecuentes de 12 (doce) mesesa razón de 2% (dos por ciento) por cada período de 12 (doce) meses. Additionally, it is agreed and understood by LESSOR and LESSEEthat the monthly rent during the extension term hereby formally agreed,will be increased in a cumulative manner as of September 1st (first) ofyear 2018 (two thousand eighteen) at a rate of 2% (two percent) pereach 12 (twelve) month period. This is, the monthly rent per eachmonth during the period between September 1st (first) of year 2018(two thousand eighteen) and August 31st (thirty first) of year 2019(two thousand nineteen) will be the amount of US$23,641.14 Dollars(Twenty-three Thousand Six Hundred Forty One Dollars 14/100legal currency of the United States of America) per month, plus thecorresponding Value Added Tax, and such amount will be increased ina cumulative manner for the following 12 (twelve) months and thesubsequent 12 (twelve) month periods at a rate of 2% (two percent) pereach 12 (twelve) month period.En virtud de que con anterioridad a la firma del presente instrumentoel ARRENDATARIO pagó al ARRENDADOR la renta correspondienteal mes de Enero 2018, sin considerar el ajuste al misma a que serefiere el primer párrafo de esta Cláusula, las partes convienen yacuerdan en que el ARRENDATARIO excepcionalmente yúnicamente por lo que respecta al pago de la renta por el mes deFebrero 2018 estará obligado a pagar la cantidad de US$16,559.28Dólares (Dieciséis Mil Quinientos Cincuenta y Nueve Dólares28/100 moneda de curso legal de los Estados Unidos deAmérica), más el correspondiente Impuesto al Valor Agregado. Loanterior toda vez que el ARRENDADOR expedirá una nota de créditopor el pago en exceso en la renta correspondiente al mes de Enero2018. Due to the fact that prior to the execution hereof LESSEE paidLESSOR the rent corresponding to the month of January 2018, withoutconsidering the adjustment to the same referred to in the firstparagraph of this Clause, the parties covenant and agree that solelyand exceptionally for the rental payment that correspond to the monthof February 2018, LESSEE shall only be obligated to pay the amountof US$16,559.28 Dollars (Sixteen Thousand Five Hundred FiftyNine Dollars 28/100 legal currency of the United States ofAmerica) plus the corresponding Value Added Tax. The above sinceLESSOR will issue a credit note for the payment in excess on rent forthe month of January 2018. 10QUINTA. Consentimiento de Haemonetics Corporation. Con lafirma del presente Convenio por parte de Haemonetics Corporation,Haemonetics Corporation manifiesta y hace constar: (i) que no tieneni tuvo inconveniente o problema alguno para que el ARRENDADORadquiriera y asumiera los derechos y obligaciones de arrendador bajoel Contrato de Arrendamiento; (ii) que reconoce y acepta alARRENDADOR como titular de los derechos y obligaciones dearrendador bajo el Contrato de Arrendamiento; (iii) que reconoce yacepta al ARRENDADOR como beneficiario de los derechosderivados de la Garantía de Arrendamiento relacionada en laDeclaración 10 del presente instrumento y como persona legitimadapara hacer valer la misma; (iv) que otorga su autorización yconsentimiento, como garante del ARRENDATARIO, con respecto ala celebración del presente Convenio; y (v) que reconoce y aceptaque la Garantía de Arrendamiento relacionada en la Declaración 10del presente instrumento continuará y permanecerá vigente durantetoda la vigencia del Contrato de Arrendamiento. FIFTH. Consent of Haemonetics Corporation. With the executionhereof by Haemonetics Corporation, Haemonetics Corporation statesand certifies: (i) that it didn´t had nor has any inconvenience or problemfor LESSOR to acquire and assume lessors rights and obligationsunder the Lease Agreement; (ii) that it recognizes and acceptsLESSOR as holder of lessor´s rights and obligations under the LeaseAgreement; (iii) that it recognizes and accepts LESSOR as beneficiaryof the rights derived from the Lease Guaranty referred to in Recital 10hereof and the person who may enforce the same; (iv) that it grants itsconsent and authorization, as LESSEE´s guarantor, for the executionhereof; and (v) that it recognizes and accepts that the Guaranty ofLease referred to in Recital 10 hereof, will continue in effect during theentire effectiveness of the Lease Agreement.SEXTA. Domicilios. Para los efectos de este Convenio y los delContrato de Arrendamiento, las partes señalan como sus domiciliospara oír y recibir toda clase de notificaciones y avisos, aún las decarácter personal, incluyendo entre estas las de emplazamiento, lossiguientes: SIXTH. Addresses. For the purposes of this Agreement and those ofthe Lease Agreement, the parties designate as their addresses to hearand receive all kind of notifications and notices, including those ofpersonal character and notices for trial, the following:Del ARRENDADOR: Boulevard Insurgentes 25420, Parque IndustrialEl Florido, C.P. 22244, Tijuana, Baja California, México. Of LESSOR: Boulevard Insurgentes 25420, Parque Industrial ElFlorido, C.P. 22244, Tijuana, Baja California, Mexico.Del ARRENDATARIO: Calle Colinas 11730 del FraccionamientoParque Industrial El Florido, Sección Colinas, Delegación La Presa,Tijuana, Baja California, México. Of LESSEE: Calle Colinas 11730 del Fraccionamiento ParqueIndustrial El Florido, Sección Colinas, Delegación La Presa, Tijuana,Baja California, Mexico.Del GARANTE: 400 Wood Road, Braintree, Massachusetts, E.U.A. Of GUARANTOR: 400 Wood Road, Braintree, Massachusetts, U.S.A.11SÉPTIMA. Declaraciones. Las partes convienen y acuerdan que lasdeclaraciones del presente Convenio forman parte integral delclausulado del mismo, por lo que por esta referencia se tienen aquípor reproducidas como si a la letra se insertasen. SEVENTH. Recitals. The parties covenant and agree that the recitalsof this Agreement form and integral part of the clauses and by thisreference are hereby as reproduced and inserted to the letter.OCTAVA. Alcance. (a) Las partes convienen y reconocen que elpresente Convenio deberá interpretarse conjuntamente con elContrato de Arrendamiento, en el entendido de que éstos constituyenuna sola unidad contractual(b) Con excepción de las modificaciones contenidas en esteConvenio, el resto del Contrato de Arrendamiento permanece envigor, surtiendo todos sus efectos y fuerza legales, obligando a laspartes en los mismos términos y condiciones originalmenteotorgados. EIGHTH. Scope. (a) The parties recognize and acknowledge that thisAgreement shall be interpreted together with the Lease Agreement, onthe understanding that they are one and the same..(b) With the exception of the amendments agreed to in this Agreement,the Lease Agreement remains in full force, and legal effects, bindingthe parties hereto in the original terms and conditions agreed upon.NOVENA. Idioma. El presente Convenio se redacta en los idiomasEspañol e Inglés para facilitar la referencia de las partesparticipantes; sin embargo, estas convienen que en caso dediscrepancia entre ambas versiones, será la redactada en idiomaEspañol la que prevalezca. NINTH. Language. This Agreement is written in the Spanish andEnglish languages to facilitate the reference of all parties involved;however, the all parties agree that in the event of discrepancybetween both versions, the Spanish version shall prevail.LEIDO QUE FUE POR LAS PARTES DE ESTE CONVENIO YENTERADOS DE SU CONTENIDO Y FUERZA LEGAL, LORATIFICARON Y FIRMARON A LOS 19 DÍAS DEL MES DE ENERODEL AÑO DOS MIL DIECIOCHO, ANTE LOS TESTIGOS QUE DANFE DEL ACTO. AFTER READING THIS AGREEMENT AND ACKNOWLEDGING ITSCONTENTS AND LEGAL EFFECTS, THE PARTIES RATIFY ANDSIGN IT ON JANUARY 19, OF YEAR TWO THOUSAND EIGHTEENBEFORE THE ATTESTING WITNESSES.EL ARRENDADOR / THE LESSORMEGA2013, S.A.P.I. DE C.V./s/ Georgina Serrano Cuevas /s/ José Luis Noriega BalcárcelDra. Georgina Serrano Cuevas Lic. José Luis Noriega BalcárcelApoderada / Attorney-in-fact Apoderado / Attorney-in-factEL ARRENDATARIO / THE LESSEEHAEMONETICS MÉXICO MANUFACTURING, S. DE R.L. DE C.V./s/ William P. Burke /s/ Dan GoldsteinWilliam Patrick Burke Dan GoldsteinApoderado / Attorney-in-fact Apoderado / Attorney-in-fact12EL GARANTE / THE GUARANTORHAEMONETICS CORPORATION/s/ William Patric BurkeWilliam Patrick BurkeApoderado / Attorney-in-factTESTIGOS / WITNESSES/s/ Kris Alaerts /s/ James Romeo13Exhibit 10U LEASE AMENDMENT AGREEMENT (THE“AGREEMENT”) ENTERED INTO BY AND BETWEENHAEMONETICS MEXICO MANUFACTURING, S. DE R.L.DE C.V., HEREINAFTER REFERRED TO AS“HAEMONETICS”, REPRESENTED BY MESSRS. DANGOLDSTEIN AND WILLIAM PATRICK BURKE; AND MRS.BLANCA ESTELA COLUNGA SANTELICES,HEREINAFTER REFERRED TO AS THE “MRS.COLUNGA”, IN ACCORDANCE WITH THE FOLLOWINGANTECEDENTS, RECITALS AND CLAUSES:CONVENIO MODIFICATORIA A CONTRATO DEARRENDAMIENTO (EL “CONVENIO”) QUE CELEBRANHAEMONETICS MEXICO MANUFACTURING, S. DE R.L. DEC.V., A QUIEN EN LO SUCESIVO SE LE DENOMINARÁ“HAEMONETICS”, REPRESENTADA POR LOS SRES. DANGOLDSTEIN Y WILLIAM PATRICK BURKE; Y LA SRA.BLANCA ESTELA COLUNGA SANTELICES, A QUIEN EN LOSUCESIVO SE LE DENOMINARÁ LA “SRA. COLUNGA”, ALTENOR DE LOS SIGUIENTES ANTECEDENTES,DECLARACIONES Y CLAUSULAS. A N T E C E D E N T SA N T E C E D E N T E S A. On December 3, 2007, Haemonetics as lessee, and Mrs.Colunga, as lessor executed a Real Estate Lease Agreementeffective as of January 1, 2008 with respect to the industrialfacilities located at Calle Colinas No. 11730, Parque IndustrialEl Florido, Sección Colinas, Delegación la Presa, Tijuana, B.C.22680, with a surface area of 62,000.00 square feet (asamended, restated or modified from time to time, the “LeaseAgreement”).A. Con fecha 3 de diciembre de 2007, Haemonetics, comoarrendatario, y la Sra. Colunga, como arrendadora, celebraron unContrato de Arrendamiento de Bien Inmueble con efectos a partirdel 1 de enero de 2008, con respecto a ciertas instalacionesindustriales ubicadas en Calle Colinas No. 11730, ParqueIndustrial El Florido, Sección Colinas, Delegación la Presa,Tijuana, B.C. 22680, con una superficie de 62,000.00 piescuadrados (según ha sido enmendado, re expresado ymodificado de tiempo en tiempo, el “Contrato de Arrendamiento”). B. On October 5, 2012, Haemonetics Corporation granted infavor of Mrs. Colunga an Absolute Guaranty of Lease toguarantee to her Haemonetics’ obligations under the LeaseAgreement (the “Lease Guaranty”).B. Con fecha 5 de octubre de 2012, Haemonetics Corporationotorgó a favor de la Sra. Colunga una Garantía Absoluta deArrendamiento (Absolute Guaranty of Lease) para garantizar elcumplimiento de las obligaciones de Haemonetics bajo elContrato de Arrendamiento (la “Garantía del Arrendamiento”). R E C I T A L SD E C L A R A C I O N E S Both parties, through their legal representatives, as applicable,state that:Declaran ambas partes por conducto de sus representanteslegales, según sea el caso, que: 1(a) Pursuant to third paragraph of Clause Second of the LeaseAgreement, Haemonetics has decided to exercise its rightto extend the current term of the Lease Agreement foradditional 5 (five) years in accordance with the termshereinafter set forth (the “Extension’s Right”).(a) En términos del párrafo tercero de la Cláusula Segunda delContrato de Arrendamiento, Haemonetics ha decidido ejercersu derecho de prorrogar el plazo actual del Contrato deArrendamiento por 5 (cinco) años adicionales, en los términosque más adelante se señalan (el “Derecho de Prórroga”). (b) They are aware of the scope and contents of thisAgreement.(b) Conocen el alcance y contenido del presente Convenio. (c) They mutually recognize each other’s personality andauthority to execute this Agreement.(c) Se reconocen mutuamente la personalidad y facultades conlas que comparecen a celebrar el presente Convenio. (d) Due to an involuntary misunderstanding, the LeaseAgreement includes an incorrect domicile of the LeasedPremises, so they are willing to include the correspondingamendment in this Agreement.(d) Debido a un mal entendido involuntario, el Contrato deArrendamiento incluye un domicilio incorrecto de lasInstalaciones Arrendadas, por los que es su deseo incluir lamodificación de dicho domicilio en el presente Convenio. In consideration of the above antecedent and recitals, theparties agree on the following:Habiendo declarado lo anterior, las partes otorgan el presenteConvenio de conformidad con las siguientes: C L A U S E SC L Á U S U L A S FIRST. DEFINITIONS. Unless specifically stated in thisAgreement, all capitalized terms used herein shall have thesame meaning ascribed to them in the Lease Agreement.PRIMERA. DEFINICIONES. A menos que se establezca demanera distinta, todos los términos utilizados con mayúsculainicial en este Convenio tendrán el significado atribuido a dichostérminos en el Contrato de Arrendamiento. SECOND. AMENDMENTS.SEGUNDA. MODIFICACIONES.(A) Pursuant to the Extension’s Right, effective as of the date ofexecution hereof, the parties agree to extend the current termof the Lease Agreement for a period of 5 (five) years,mandatory for both parties, counted as from January 1, 2018,and concluding on December 31, 2022 (the “Initial Term”).(A) De conformidad con el Derecho de Prórroga, con efectos apartir de la fecha de la firma del presente, las partes convienen enprorrogar el plazo actual del Contrato de Arrendamiento por unperiodo adicional de 5 (cinco) años, obligatorio para ambaspartes, contado a partir del 1 de enero de 2018, y concluyendo el31 de diciembre de 2022 (el “Periodo Inicial”).2(B) Notwithstanding the foregoing, Mrs. Colunga hereby grantsto Haemonetics the right to extend the Initial Term for additional3 (three) years (the “Additional Term”), in accordance with thefollowing: (B) No obstante lo anterior, la Sra. Colunga otorga en este acto aHaemonetics el derecho para prorrogar el Periodo Inicial por 3(tres) años adicionales (el “Periodo Adicional”), de conformidadcon lo siguiente:(i) The Additional Term shall be mandatory for both parties;(i) El Periodo Adicional será obligatorio para ambas partes;(ii) At least with 180 (hundred and eighty) natural daysprior the end of the Initial Period, Haemonetics shallnotify Mrs. Colunga in writing of its intent to extendthe term of this Agreement for the Additional Term(the “Notice of Extension”); and(ii) Al menos con 180 (ciento ochenta) días naturales deanticipación a la conclusión del Periodo Inicial,Haemonetics deberá notificar por escrito a la Sra.Colunga su deseo de prorrogar la vigencia de esteContrato por el Periodo Adicional (el “Aviso dePrórroga”); ySuch Notice of Extension must include a document executedby a duly authorized individual(s) with the required faculties, bywhich Haemonetics Corporation express its agreement andconsent in order for the terms and conditions of the LeaseGuaranty remain valid during the Additional Term (the“Guaranty’s Extension”). The signature(s) of such documentsmust be notarized and apostilled.Dicho Aviso de Prórroga, requerirá, de manera imprescindible,estar acompañado por un documento suscrito por persona(s)debidamente autorizada (s) que acredite (n) tener facultades paraello, a través del cual, Haemonetics Corporation exprese suconformidad y consentimiento, para que los términos ycondiciones de la Garantía Absoluta de Arrendamiento (AbsoluteGuaranty of Lease), se mantengan en pleno vigor durante elPeriodo Adicional (La “Extensión de Garantía”). La (s) firma dedicho documento, deberá (n), de estar notarizada (s) y apostillada(s)3(iii) Once Haemonetics delivers in due time and forms, theNotice of Extension and the Guaranty’s Extension toMrs. Colunga, the term of this Agreement will beautomatically extended without requiring additionalformality, same that shall commence as of the datethat the Initial Period concludes, adjusting theamount of Rent (as such term is defined below), asspecified in the following paragraph.(iii) Una vez que el Haemonetics entregue a la Sra. Colunga,en debido tiempo y formas, el Aviso de Prórroga y laExtensión de Garantía, el plazo de vigencia de esteContrato se entenderá prorrogado automáticamente,sin requerir formalidad adicional alguna, por el PeriodoAdicional, mismo que comenzará a correr a partir dela fecha en que concluya el Periodo Inicial,ajustándose el monto de la Renta (según dichotérmino se define más adelante), según se especificaen el siguiente párrafo.(C) (a) During the Initial Term, Haemonetics shall pay to Mrs.Colunga a monthly rent in the fixed amounts mentioned below(the “Rent”), plus the corresponding Value Added Tax:(C) (a) durante la vigencia del Periodo Inicial, Haemoneticspagará mensualmente a la Sra. Colunga una renta en lascantidades fijas que se describen a continuación (la “Renta”),más el correspondiente Impuesto al Valor Agregado: (b) The payable Rent during the Additional Term, shall be thefollowing fixed amounts:(b) La Renta pagadera durante el Periodo Adicional serán lassiguientes cantidades fijas: (D) Effective as of the date hereof, the parties agree that allreferences in the Lease Agreement to the domicile of theLeased Premises, shall be understood as references to thedomicile at Calle Colinas No. 11731, Parque Industrial ElFlorido, Sección Colinas, Delegación la Presa, Tijuana, B.C.22680.(D) Las partes convienen que a partir de la celebración delpresente Convenio, toda referencia al domicilio de lasInstalaciones Arrendada deberá entenderse como si se refiriera alubicado en Calle Colinas No. 11731, Parque Industrial El Florido,Sección Colinas, Delegación la Presa, Tijuana, B.C. 22680. 4THIRD. ENTIRE AGREEMENT. (a) This Agreement shall beinterpreted together with the Lease Agreement, in theunderstanding that both constitute one and the sameinstrument.(b) With the exception of the amendments contained herein, alland each of the provisions of the Lease Agreement remain infull force and legal effects.TERCERA. ACUERDO TOTAL. (a) El presente Conveniodeberá interpretarse conjuntamente con el Contrato deArrendamiento, en el entendido de que éstos constituyen una solaunidad contractual.(b) Con excepción de las modificaciones contenidas en esteConvenio, todas y cada una de las disposiciones del Contrato deArrendamiento permanecen en vigor, surtiendo todos sus efectosy fuerza legales. FOURTH. DOMICILES. The parties agree that all notices shallbe delivered to the same addresses provided in the LeaseAgreement for such purposes.CUARTA. DOMICILIOS. Las partes señalan como susdomicilios para efectos del presente Convenio los señalados enel Contrato de Arrendamiento. FIFTH. APPLICABLE LAW AND JURISDICTION. For theinterpretation and compliance of this Agreement, the partiesagree that the provisions of the Civil Code of the State of BajaCalifornia shall apply and hereby expressly submit themselvesto the jurisdiction of the competent courts of the City of Tijuana,State of Baja California, irrevocably waiving the right to anyother jurisdiction to which they may be entitled to by reason oftheir present or future domicile or for any other reason.QUINTA. LEYES APLICABLES Y JURISDICCIÓN. Para todo lorelativo a la interpretación y cumplimiento de este Convenio, laspartes convienen que aplicarán las disposiciones del Código Civildel Estado de Baja California y en este acto se sometenexpresamente a la jurisdicción de los tribunales de la Ciudad deTijuana, Baja California, renunciando irrevocablemente acualquier otra jurisdicción a la que pudieren tener derecho porrazón de su domicilio actual o futuro o por cualquier otra causa. This Agreement may be executed in counterparts and, when allcounterpart documents are executed, the counterparts willconstitute a single binding instrument.Este Convenio podrá ser firmado en distintos ejemplares, ycuando todos los ejemplares hayan sido firmados por las partes,constituirán un solo instrumento obligatorio. IN WITNESS WHEREOF, the undersigned parties, throughtheir duly authorized legal representatives, have executed thisAgreement in the place and date indicated underneath theirrespective signatures.EN TESTIMONIO DE LO ANTERIOR, las partes firmantes, através de sus representantes debidamente autorizados,suscriben este Convenio en el lugar y fecha indicados bajo susrespectivas firmas. [SIGNATURE PAGE FOLLOWS][SIGUE HOJA DE FIRMAS] 5HAEMONETICS MEXICO MANUFACTURING, S. DE R.L. DEC.V./s/ Dan GoldsteinBy: MR. DAN GOLDSTEINTitle: Legal representativePlace:Date:/s/ William Patrick BurkeBy: MR. WILLIAM PATRICK BURKETitle: Legal representativePlace:Date:HAEMONETICS MEXICO MANUFACTURING, S. DE R.L.DE C.V./s/ Dan GoldsteinPor: SR. DAN GOLDSTEINCargo: Representante legalLugar:Fecha:/s/ William Patrick BurkePor: SR. WILLIAM PATRICK BURKECargo: Representante legalLugar:Fecha:/s/ Blanca Estela Colunga SantelicesMRS. BLANCA ESTELA COLUNGA SANTELICESPlace:Date:/s/ Blanca Estela Colunga SantelicesSRA. BLANCA ESTELA COLUNGA SANTELICESLugar:Fecha:[Signature Page-Lease Amendment Agreement/Hoja de Firmas- Convenio Modificatorio al Arrendamiento]67Exhibit 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 (UK) LimitedUnited KingdomHaemonetics Asia IncorporatedDelawareHaemonetics Asia UK Ltd.United KingdomHaemonetics Australia PTY Ltd.VictoriaHaemonetics Belgium NVBelgiumHaemonetics BVNetherlandsHaemonetics Canada Ltd.British ColumbiaHaemonetics CZ, spol. s.r.o.Czech RepublicHaemonetics France S.a.r.lFranceHaemonetics GmbHGermanyHaemonetics Handelsgesellschaft m.b.H.AustriaHaemonetics Healthcare India Private LimitedIndiaHaemonetics Hospitalar Ltda.BrazilHaemonetics International Finance S.a.r.l.LuxembourgHaemonetics International Holdings GmbHSwitzerlandHaemonetics IP HC SarlSwitzerlandHaemonetics Italia s.r.l.ItalyHaemonetics Japan GKJapanHaemonetics Korea, Inc.Seoul, KoreaHaemonetics LimitedUnited KingdomHaemonetics Malaysia Sdn. Bhd.MalaysiaHaemonetics Manufacturing, Inc.DelawareHaemonetics (Shanghai) Management 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.SwitzerlandHaemonetics Scandinavia ABSwedenHaemonetics Singapore Pte. Ltd.SingaporeHaemoscope CorporationMassachusettsInlog SASFranceInlog Holdings France SASFranceExhibit 23.1Consent of Independent Registered Public Accounting Firm We consent to the incorporation by reference in the following Registration Statements: (1) Registration Statement (Form S-8 No. 333-222877) of Haemonetics Corporation, pertaining to the 2007 Employee Stock Purchase Plan;(2) Registration Statement (Form S-8 No. 333-200226) of Haemonetics Corporation, pertaining to the 2005 Long-Term Incentive CompensationPlan;(3) Registration Statement (Form S-8 No. 333-181847) of Haemonetics Corporation, pertaining to the 2005 Long-Term Incentive CompensationPlan;(4) Registration Statement (Form S-8 No. 333-159434) of Haemonetics Corporation, pertaining to the 2005 Long-Term Incentive CompensationPlan;(5) Registration Statement (Form S-8 No. 333-149205) of Haemonetics Corporation pertaining to the 2007 Employee Stock Purchase Plan, and(6) Registration Statement (Form S-8 No. 333-136839) of Haemonetics Corporation pertaining to the 2005 Long-Term Incentive CompensationPlan; of our reports dated May 23, 2018, 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 31, 2018. /s/ Ernst & Young LLPBoston, MassachusettsMay 23, 2018EXHIBIT 31.1CERTIFICATIONI, Christopher Simon, 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 23, 2018 /s/ Christopher Simon Christopher Simon, President, Director and Chief Executive Officer (Principal Executive Officer) EXHIBIT 31.2CERTIFICATIONI, William Burke, 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 23, 2018 /s/ William Burke William Burke, Executive Vice President, Chief Financial Officer(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 31, 2018 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Christopher Simon, 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 23, 2018 /s/ Christopher Simon Christopher Simon, President, Director and Chief Executive Officer(Principal 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 31, 2018 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, William Burke, Chief Financial Officer and Executive Vice President of theCompany, certify, pursuant to Section 1350 of Chapter 63 of Title 18, United States Code, that this Report fully complies with the requirements of Section13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in this Report fairly presents, in all material respects, the financialcondition and results of operations of the Company.Date : May 23, 2018 /s/ William Burke William Burke, Executive Vice President, Chief Financial Officer(Principal Financial 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.

Continue reading text version or see original annual report in PDF format above