Haemonetics
Annual Report 2019

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549Form 10-Kþ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended March 30, 2019o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from toCommission 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 Trading Symbol Name of Exchange on Which RegisteredCommon stock, $.01 par value per share HAE 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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No 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 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 29, 2018, the last business day of the registrant’s most recently completed second fiscal quarter was $5,887,313,926(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 20, 2019 was 51,205,703.Documents Incorporated By ReferencePortions of the definitive proxy statement for our Annual Meeting of Shareholders to be held on July 25, 2019 are incorporated by reference in Part III of this report.TABLE OF CONTENTS PageNumberItem 1.Business1Item 1A.Risk Factors13Item 1B.Unresolved Staff Comments21Item 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 Data24Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations25Item 7A.Quantitative and Qualitative Disclosures about Market Risk41Item 8.Financial Statements and Supplementary Data43Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure86Item 9A.Control and Procedures86Item 9B.Other Information88Item 10.Directors and Executive Officers of the Registrant and Corporate Governance88Item 11.Executive Compensation88Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters88Item 13.Certain Relationships and Related Transactions and Director Independence88Item 14.Principal Accounting Fees and Services88Item 15.Exhibits, Financial Statement Schedules89Table of ContentsITEM 1. BUSINESSCompany OverviewHaemonetics is a global healthcare company dedicated to providing 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 blood and plasma component collection, thesurgical suite, and hospital transfusion services. When used in this report, the terms “we,” “us,” “our” and “the Company” 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 biopharmaceutical companies to make life saving pharmaceuticals and also provides analytical devices formeasuring hemostasis that enable healthcare providers to better manage their patients’ bleeding risk. In addition, Haemonetics makes blood processingsystems and software that make blood donation more efficient and track life giving blood components. Finally, Haemonetics supplies systems and softwarethat facilitate blood transfusions and cell processing.Market and ProductsProduct LinesOur products are organized in three categories for purposes of evaluating and developing their growth potential: Plasma, Blood Center, and Hospital. For thatpurpose, “Plasma” includes plasma collection devices and disposables, plasma donor management software and anticoagulant and saline sold to plasmacustomers. “Blood Center” includes blood collection and processing devices and disposables for red cells, platelets and whole blood as well as related donormanagement software. “Hospital”, which is comprised of Hemostasis Management and Cell Processing products, includes devices and methodologies formeasuring coagulation characteristics of blood, surgical blood salvage systems, specialized blood cell processing systems, disposables and blood transfusionmanagement software.We believe that Plasma and Hospital have growth potential, while Blood Center competes in challenging markets which require us to manage the businessdifferently, including reducing costs, shrinking the scope of the current product line, and evaluating opportunities to exit unfavorable customer contracts.•PlasmaOur Plasma business offers automated plasma collection and donor management software systems that improve the plasma centers’ yield, efficiency,quality, 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, plasma1Table of Contentscan be separated at the same time as red cells and platelets and stored for future use. The second is as part of an apheresis procedure that also collectsanother blood component. These two methods are mainly used by blood centers to collect plasma for transfusions. The third method is a dedicatedapheresis procedure that only collects plasma and returns the other blood components to the donor. This method is mainly used for source plasma.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 collection devices and software solutions that support efficient operation ofthese types of centers.Over the last 20 years, the collection of source plasma has increasingly been done by vertically integrated biopharmaceutical companies such asCSL Behring, Grifols S.A. ("Grifols"), Octapharma AG and Takeda's BioLife business. With their global operations and management expertise, thesecompanies 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.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, related disposables and software, our portfolio of products and servicesis designed to support multiple facets of plasma collector operations. We have a long-standing commitment to understanding our customers'collection and manufacturing processes. As a result, we aim to design equipment that is durable, dependable and easy to use and to providecomprehensive training 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 PCS® and PCS2® plasmapheresis equipment andrelated disposables including plasma collection containers and intravenous solutions. We also offer a portfolio of integrated information technologyplatforms for plasma customers to manage their donors, operations and supply chain. Our software products, including our latest NexLynk DMS®donor management system, automate the donor interview and qualification process, streamline the workflow process in the plasma center, providethe controls necessary to evaluate donor suitability, determine the ability to release units collected and manage unit distribution. With our softwaresolutions, plasma collectors can manage processes across the plasma supply chain, ensure quality and compliance business process support, reactquickly to business changes and 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 fiscal 2018, we receivedU.S. Food and Drug Administration ("FDA") 510(k) clearance for our next generation device, the NexSys PCS and for the enhancement of ourNexSys PCS embedded software that activates YESTM technology, a yield-enhancing solution that enables increases in plasma yield per collectionby an additional 18-26 mL per donation, on average. We also received CE mark clearance of the NexSys PCS device in the European Union andAustralia, 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 enable higher plasma yield collections, improve productivity in our customers’ centers, enhance the overall donorexperience and provide safe and reliable collections that will become life-changing medicines for patients. NexSys PCS includes bi-directionalconnectivity to the NexLynk DMS donor management system to improve operational efficiency within plasma centers, through automatedprogramming of donation procedures and automated data capture of procedure data.2Table of ContentsWe have entered into several long-term commercial contracts and are continuing the rollout and support of NexSys PCS devices and NexLynk DMSdonor management software for these Plasma customers.Our Plasma business unit represented 51.9%, 48.2% and 46.4% of our total revenue in fiscal 2019, 2018 and 2017, 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.While overall we expect total demand for blood to remain stable to slightly declining, demand in individual markets can vary greatly. Maturemarkets have developed more minimally invasive procedures with lower associated blood loss, as well as better blood management that have morethan offset the increasing demand from aging populations. Emerging markets are seeing demand growth with expanded healthcare coverage andgreater 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 27.8%, 31.5% and 34.3% of our total revenue in fiscal 2019, 2018 and 2017, 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.3Table 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 obtained in the 2007 acquisition of assets from Haemoscope Corporation,and 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. We continue to pursue a broader set of indications for TEG 6s in the U.S. In May 2019, we receivedFDA clearance for the use of TEG 6s in adult trauma settings. This clearance builds on the current indication for the TEG 6s system in cardiovascularsurgery and cardiology procedures, making it the first cartridge-based system available in the U.S. to evaluate the hemostasis condition in adulttrauma patients.Cell ProcessingCell SalvageCell Salvage Market — The Cell Salvage market is mainly comprised of 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 (or allogeneic)blood which carries 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. We discontinued the sale of our OrthoPAT products effectiveMarch 31, 2019. We offer the Cell Saver Elite + as an alternative autotransfusion system for orthopedics or other medium to low blood lossprocedures.4Table 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%, 20.3% and 19.4% of our total revenue in fiscal 2019, 2018 and 2017, respectively.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.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 2019, research and development resources were allocated to support innovation across our portfolio, including investments in clinical programs forour Hemostasis Management product line. A key element of our strategy in the U.S. for our Hemostasis Management product line has been to invest inclinical trials to support expanded FDA labeling including a trauma indication for our TEG 6s. In May 2019, we received FDA clearance for the use of TEG6s in adult trauma settings. This clearance builds on the current indication for the TEG 6s system in cardiovascular surgery and cardiology procedures,making it the first cartridge-based system available in the U.S. to evaluate the hemostasis condition in adult trauma patients. Additionally, we continue toinvest resources in next generation plasma collection and software systems.ManufacturingWe endeavor to supply products that are both high quality and cost competitive for our customers by leveraging continuous improvement methodologies,focusing on our core competencies and partnering with strategic suppliers that complement our capabilities. In general, we design our equipment andconsumables and use contract manufacturers to build the devices, while the majority of consumables are manufactured by us. Our production activities occur in controlled settings or “clean room” environments and have built-in quality checks throughout the manufacturingprocesses. Our manufacturing teams are focused on continuously improving our productivity, product cost and product quality through change controlprocedures, validations and strong supplier management programs. We regularly review our logistics capabilities, inventory and safety stock levels andmaintain business continuity plans to address supply disruptions that may occur. 5Table of Contents Our primary consumable manufacturing operations are located in North America and Malaysia. Contract manufacturers also supply component sets andliquid solutions according to our specifications and manufacture in Mexico, Japan, Singapore, Thailand and the Philippines. Our devices are principallymanufactured in Malaysia, Australia and the U.S. Plastics and other petroleum-based products are the principal component of our disposable products and can be affected by oil and gas prices. Contracts withour suppliers help to mitigate some of the short term effects of price volatility in this market. However, increases in the price of petroleum derivatives couldresult in corresponding increases in our costs to procure plastic raw materials.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.We 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 three 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 competitor along with applications developed internally by our customers.6Table of Contents•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 55% of the Blood Center portfolio, not only compete againstthe traditional manual whole blood collection market (particularly in red cells) but also compete with products from Terumo and Fresenius.Technology is the key differentiator in automated component blood collections, as measured by the time to collect more than one unit of a specifictargeted blood component. While not all donors are eligible to donate more than one unit, it continues to become more prevalent in markets with asignificant number of eligible donors. Therefore, both Haemonetics and our competitors continue to experience downward pressure on collection ofsingle platelet collection procedures.In 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 isowned and offered 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.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 WellSky 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 2019, 2018 and 2017, our ten largest customers accounted for approximately 52%, 45% and 42% of our net revenues, respectively. In fiscal 2019,2018 and 2017, two of our Plasma customers, CSL Plasma Inc. ("CSL") and Grifols, each were greater than 10% of total net revenues and in total accountedfor approximately 27%, 26% and 24% of our net revenues,7Table of Contentsrespectively. Additionally, one of our Blood Center customers accounted for greater than 10% of our Japan segment’s net revenues in fiscal 2019, 2018 and2017.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.Medical 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, or QSR, 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.8Table of ContentsRequirements 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, or EUMDR, repeals and replaces the EU Medical Devices Directive. The EU MDR, among other things, is intended to establish a uniform, transparent, predictableand sustainable regulatory framework across the EEA for medical devices and ensure a high level of safety and health while supporting innovation. The EUMDR will, however, only become applicable three years after publication (in May 2020). Once applicable, the new regulations will among other things:•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 NDAs and ANDAs for liquid solutions (including anticoagulants, intravenous saline and a red blood cell storage solution), which we sellwith 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 untitled9Table of Contentsletters, injunctions, civil, administrative, or criminal penalties, monetary fines or imprisonment, suspension or withdrawal of regulatory approvals, suspensionof ongoing clinical studies, refusal to approve pending applications or supplements to applications filed by us, suspension or the imposition of restrictionson operations, product recalls, the refusal to permit the import or export of 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 determiningthe source of any conflict minerals used in our products. Our supply chain is complex and we may be unable to verify the origins for all metals used in ourproducts.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 the10Table of Contentsfederal government payments and transfers of value that they make to physicians and teaching hospitals and ownership interests held by physicians and theirfamily 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.Environmental MattersFailure to comply with international, federal and local environmental protection laws or regulations could have an adverse impact on our business or couldrequire material capital expenditures. We continue to monitor changes in U.S. and international environmental regulations that may present a significant riskto the business, including laws or regulations relating to the manufacture or sale of products using plastics.EmployeesAs of March 30, 2019, we employed the full-time equivalent of 3,216 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. The SEC maintains an internetsite (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file documents electronically.Cautionary Statement Regarding Forward-Looking InformationCertain statements that we make from time to time, including statements contained in this Annual Report on Form 10-K and incorporated by reference intothis report, constitute “forward looking-statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the SecuritiesExchange Act of 1934. Forward-looking statements do not relate strictly to historical or current facts and reflect management’s assumptions, views, plans,objectives and projections about the future. Forward-looking statements may be identified by the use of words such as “may,” “will,” “should,” “could,”“would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential” and other words of similar meaning in conjunctionwith, among other things: discussions of future operations; expected operating results and financial performance; the Company’s strategy for growth; productdevelopment, commercialization and anticipated performance and benefits; regulatory approvals; impact of planned acquisitions or dispositions; marketposition and expenditures.Because forward-looking statements are based on current beliefs, expectations and assumptions regarding future events, they are subject to uncertainties,risks and changes that are difficult to predict and many of which are outside of the Company's control. Investors should realize that if underlying assumptionsprove inaccurate, or known or unknown risks or uncertainties materialize, the Company’s actual results and financial condition could vary materially fromexpectations and projections expressed or implied in its forward-looking statements. Investors are therefore cautioned not to rely on these forward-lookingstatements.The following are some important factors that could cause our actual results to differ from our expectations in any forward-looking statements. For furtherdiscussion of these and other factors, see Item 1A. Risk Factors in this report.•Failure to achieve our long-term strategic and financial-improvement goals;•Demand for and market acceptance risks for new and existing products, including material reductions in purchasing from or loss of a significantcustomer;11Table of Contents•Product quality or safety concerns, leading to product recalls, withdrawals, regulatory action by the FDA (or similar non-U.S. regulatory agencies),reputational damage, declining sales or litigation;•Security breaches of our information technology systems or our products, which could impair our ability to conduct business or compromisesensitive information of the Company or its customers, suppliers and other business partners, or of customers' patients;•Pricing pressures resulting from trends toward health care cost containment, including the continued consolidation among health care providers andother market participants;•The continuity, availability and pricing of plastic and other raw materials, finished goods and components used in the manufacturing of ourproducts (including those purchased from sole-source suppliers) and the related continuity of our manufacturing and distribution;•Our ability to develop new products or enhancements on commercially acceptable terms or at all;•The potential that the expected strategic benefits and opportunities from any planned or completed acquisition or divestiture by the Company maynot be realized or may take longer to realize than expected;•Our ability to obtain regulatory approvals in a timely manner consistent with cost estimates;•Our ability to comply with established and developing U.S. and foreign legal and regulatory requirements, including the U.S. Foreign CorruptPractices Act, or FCPA, and similar laws in other jurisdictions, as well as U.S. and foreign export and import restrictions and tariffs;•Our ability to execute and realize anticipated benefits from our investments in emerging economies;•Our ability to obtain the anticipated benefits of restructuring programs that we have or may undertake, including the Complexity ReductionInitiative;•Our ability to retain and attract key personnel;•Costs and risks associated with product liability and other litigation claims;•Our ability to meet our existing debt obligations and raise additional capital when desired on terms reasonably acceptable to us;•The potential effect of foreign currency fluctuations and interest rate fluctuations on our net sales, expenses and resulting margins;•The impact of changes in U.S. and international tax laws;•Market conditions and the possibility that the Company’s share repurchase program may be delayed, suspended or discontinued;•The effect of communicable diseases on demand for our products; and•Our ability to protect intellectual property and the outcome of patent litigation.Investors should understand that it is not possible to predict or identify all such factors and should not consider the risks described above and in Item 1A.Risk Factors to be a complete statement of all potential risks and uncertainties. The Company does not undertake to publicly update any forward-lookingstatement that may be made from time to time, whether as a result of new information or future events or developments.12Table 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. Please refer to the cautionary statements made under the heading "Cautionary StatementRegarding Forward-Looking Information" at the end of Item 1 of this Annual Report on Form 10-K for more information on the qualifications and limitationson forward-looking statements.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 three categories for purposes of evaluating and developing their growth potential: Plasma, Blood Center and Hospital. Webelieve that Plasma and Hospital have growth potential, while Blood Center competes in challenging markets that require us to manage the businessdifferently, including reducing costs, shrinking the scope of the current product line and evaluating opportunities to exit unfavorable customer contracts.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.Material reductions in purchasing from or loss of a significant customer could adversely affect our business.In fiscal 2019, our two largest Plasma customers each accounted for more than 10% of our net revenues and our ten largest customers accounted forapproximately 52% of our net revenues. If any of our largest customers materially reduce their purchases from us or terminate their relationship with us forany reason, including material decreases in demand for plasma or development of alternative processes, we could experience an adverse effect on our resultsof operations or financial condition.Two of our four largest Plasma customers have contracts that are subject to renewal before the end of fiscal 2021. In the event that we do not extend ourcurrent contracts or enter into new contracts with these customers on acceptable terms, our revenues and operating income could be negatively impacted in amanner that could have a material adverse effect on our results of operations or financial condition.Defects or quality issues associated with our products could adversely affect the results of operations.Quality is extremely important to us and our customers due to the serious and costly consequences of product failure. Manufacturing or design defects,component failures, unapproved or improper use of our products, or inadequate disclosure of risks or other information relating to the use of our products canlead to injury or other serious adverse events. These events could lead to recalls or safety alerts relating to our products (either voluntary or as required by theFDA or similar governmental authorities in other countries), and could result, in certain cases, in the removal of a product from the market. A recall couldresult in significant costs and lost sales and customers, enforcement actions and/or investigations by state and federal governments or other enforcementbodies, as well as negative publicity and damage to our reputation that could reduce future demand for our products. Personal injuries relating to the use ofour products can also result in significant product liability claims being brought against us. In some circumstances, such adverse events could also causedelays in regulatory approval of new products or the imposition of post-market approval requirements.In fiscal 2018, one of our suppliers began production of NexSys PCS and we expanded production utilizing a second supplier during fiscal 2019. If oursuppliers fail to produce NexSys PCS devices that meet our quality standards, we could have delays in customer adoption and costs to remediate the deficientquality which would have a negative effect on our revenues, gross margins, operating income and return on invested capital.If we are unable to successfully convert customers to our NexSys platform, meet customer placement demands or negotiate competitive pricing, we may notrealize the intended benefits of our investment.We have focused heavily on the development and commercialization of our NexSys platform, comprised of both the NexSys PCS plasmapheresis system andNexLynk DMS software. After the commercial launch of our NexSys platform in fiscal 2019, we entered into several customer contracts providing forconversion to NexSys during fiscal 2019. If additional customers do not adopt NexSys or they do and we are unable to procure sufficient NexySys PCSdevices from our contract manufacturers to13Table of Contentsmeet demand or receive a price that provides an inadequate return on our investment, or if such customer adoption does not occur within the expectedtimeframe, we may not realize the full intended benefits of our investment.We 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 for our day-to-day operations and for ourcustomers, including sensitive personal information and proprietary or confidential information. Additionally, certain of our products collect data regardingpatients and donors and some connect to our systems for maintenance and other purposes. Similar to other large multi-national companies, the size andcomplexity of our information technology systems makes them vulnerable to a cyber-attack, malicious intrusion, breakdown, destruction, loss of dataprivacy, or other significant disruption. We also outsource certain elements of our information technology systems to third parties that, as a result of thisoutsourcing, could have access to certain confidential information and whose systems may also be vulnerable to these types of attacks or disruptions.Security threats, including cyber and other attacks are becoming increasingly sophisticated, frequent, and adaptive. Accordingly, 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, or GDPR. InMay 2018, the GDPR superseded current European Union data protection legislation, imposing more stringent European Union data protection requirementsand providing for greater penalties for noncompliance. We or our third-party providers and business partners may also be subjected to audits or investigationsby one or more domestic or foreign government agencies relating to compliance with information security and privacy laws and regulations, andnoncompliance with the laws and regulations could results in material fines or litigation.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.14Table of ContentsA 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 2019 due to sustained declines in transfusion rates caused byhospitals' improved blood management techniques and protocols. In response to this trend, U.S. blood center collection groups prefer single source vendorsfor their whole blood collection products and are primarily focused on obtaining the lowest average selling prices. We expect to see continued declines intransfusion rates and the market to remain price-focused and highly competitive for the foreseeable future. Continued declines in this market could have amaterial adverse effect on our liquidity and results 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 and, in somecases, decreased average selling prices and increased the number of sole source relationships. This pressure impacts our Hospital and Blood Centerbusinesses.The influence of group purchasing organizations in the U.S., integrated delivery networks and large single accounts has the potential to put price pressure onour Hospital 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.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.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 manufacture certain key disposables 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 for some period. Additionally, for reasons of quality assurance or costeffectiveness, we purchase certain finished goods, components and raw materials from sole suppliers, notably JMS Co. Ltd., Kawasumi Laboratories, LeicaBiosystems Melbourne Pty. Ltd. and Sparton Medical Systems Colorado LLC, who have their own complex supply chains. Any disruption to one or more ofour suppliers’ production or delivery of sufficient volumes of components conforming to our specifications could disrupt or delay our ability to deliverfinished products to our customers. For example, we purchase components in Asia for use in manufacturing in the U.S., Puerto Rico and Mexico. We sourceall 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 stringent requirements of the FDA and other similar non-U.S. regulatory agencies applicable to manufacturing our products,such as the FDA's Quality System Regulation and Good Manufacturing Practices, we may not be able to quickly establish additional or replacement sourcesfor certain raw materials, components or finished goods. A reduction or interruption in manufacturing, or an inability to secure alternative sources of rawmaterials, components or finished goods on commercially reasonable terms or in a timely manner, could compromise our ability to manufacture our productson a timely and cost-competitive basis, which may have a material adverse effect on our business, financial condition and results of operations.15Table of ContentsPlastics 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 or resins 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. Climate change (including laws or regulationspassed in response thereto) could increase our costs, in particular our costs of supply, energy and transportation/freight. Material or sustained increases in theprice of petroleum or petroleum derivatives could have an adverse impact on the costs to procure plastic raw materials and the costs of ourtransportation/freight. Increases in the costs of other 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. These outcomes may in turn result in customerstransitioning to available competitive products, loss of market share, negative publicity, reputational damage, loss of customer confidence or other negativeconsequences (including a decline in stock price).If we are unable to successfully expand our product lines through internal research and development, our business may be materially and adverselyaffected. A significant element of our strategy is to increase revenue growth by focusing on innovation and new product development. New product developmentrequires significant investment in research and development, clinical trials and regulatory approvals. The results of our product development efforts may beaffected by a number of factors, including our ability to anticipate customer needs, innovate and develop new products and technologies, successfullycomplete clinical trials, obtain regulatory approvals in the United States and abroad, manufacture products in a cost-effective manner, obtain appropriateintellectual property protection for our products, and gain and maintain market acceptance of our products. In addition, patents attained by others couldpreclude or delay our commercialization of a product. There can be no assurance that any products now in development or that we may seek to develop in thefuture will achieve technological feasibility, obtain regulatory approval or gain market acceptance.If our business development activities are unsuccessful, we may not realize the intended benefits.We may seek to supplement our organic growth through strategic acquisitions, investments and alliances. Such transactions are inherently risky and requiresignificant effort and management attention. The success of any acquisition, investment or alliance may be affected by a number of factors, including ourability to properly assess and value the potential business opportunity or to successfully integrate any business we may acquire into our existing business.Promising partnerships and acquisitions may also not be completed for reasons such as competition among prospective partners or buyers, the inability toreach satisfactory terms, the need for regulatory approvals or the existence of economic conditions affecting our access to capital for acquisitions and othercapital investments. If our business development activities are unsuccessful, we may not realize the intended benefits of such activities, including thatacquisition and integration costs may be greater than expected or the possibility that expected return on investment synergies and accretion will not berealized or will not be realized within the expected timeframe.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.Additionally, the European Union regulatory bodies finalized a new Medical Device Regulation (MDR) in calendar year 2017, replacing the existingdirectives and providing three years for transition and compliance. When implemented in 2020, the MDR will change several aspects of the existingregulatory framework, such as clinical data requirements, and introduce new ones, such as Unique Device Identification. We, and the notified bodies who willoversee compliance to the new MDR, face uncertainties as the MDR is rolled out and enforced, creating risks in several areas including the CE markingprocess and data transparency in the upcoming years.16Table 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 FDA's Quality System Regulation or current Goodmanufacturing Practices requirements (depending on the products at issue).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 payers 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.17Table of ContentsAs 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.If 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 frommaking improper payments to foreign governments and government officials in order to obtain or retain business. Global enforcement of such anti-corruptionlaws has increased in recent years, including aggressive investigations and enforcement proceedings. While we have an active compliance program andvarious other safeguards to discourage impermissible practices, we have distributors in approximately 80 countries, several of which are considered high riskfor corruption. As a result, our global operations carry some risk of unauthorized impermissible activity on the part of one of our distributors, employees,agents or consultants. Any alleged or actual violation could subject us to government scrutiny, severe criminal or civil fines, or sanctions on our ability toexport product outside the U.S., which could adversely affect 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.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. While costsavings from the 2018 Program to date have been consistent with our expectations, it is still possible that events and circumstances, such as financial orstrategic difficulties, delays and unexpected costs may occur that could result in our not realizing all of the anticipated benefits or our not realizing theanticipated benefits on our expected timetable. The 2018 Program could also yield unintended consequences, such as business disruption, the loss ofinstitutional knowledge as a result of turnover and reduced employee productivity, which could negatively affect our business, sales, financial condition andresults of operations. Our inability to realize all of the anticipated benefits from the 2018 Program could adversely affect our ability to fund new businessinitiatives and as a result have a material adverse effect on our business, results of operations, cash flows and financial condition.18Table of ContentsOur success depends on our ability to attract and retain key personnel needed to successfully operate the business.Our ability to compete effectively depends on our ability to attract and retain key employees, including people in senior management, sales, marketing andR&D positions. Our ability to recruit and retain such talent will depend on a number of factors, including hiring practices of our competitors, compensationand benefits, work location, work environment and industry economic conditions.In December 2018, we announced that we had entered into a lease for office space in Boston, Massachusetts that will serve as our new corporate headquartersand replace our existing location in Braintree, Massachusetts. Although we believe our move to Boston, which is anticipated to occur in the third quarter offiscal 2020, will help us to attract and retain key talent and provide a dynamic space to engage our employees, competition for top talent in the healthcaremarket, delays in and costs associated with development and occupancy of the new office, and the increased cost or commuting time for current employeesrelocating or traveling to Boston could impact our ability to realize the intended results of the move. If we cannot effectively recruit and retain qualifiedemployees, our business could suffer.We have also effected organizational and strategic changes in the last several years, including our Complexity Reduction Initiative, which have resulted inworkforce reductions. If we fail to effectively manage our ongoing organizational and strategic changes in a manner that allows us to retain and attract talent,our financial condition, results of operations and reputation, as well as our ability to successfully attract, motivate and retain key employees, could beharmed.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 $336.9 million of debt outstanding at March 30, 2019 that matures on June 15, 2023 under our $350.0 million term loan. The obligations to payinterest 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.Our credit facilities contain financial covenants that require us to maintain specified financial ratios and make interest and principal payments. If we areunable to satisfy these covenants, we may be required to obtain waivers from our lenders. 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 operations and plans for future growth may require us to raise additional capital in the future. Our ability to issue additional debt or enter into otherfinancing arrangements on acceptable terms could be adversely affected by our debt levels, unfavorable19Table of Contentschanges in economic conditions generally or uncertainties that affect the capital markets. Higher borrowing costs or the inability to access capital marketscould adversely affect our ability to support future growth and operating requirements and, as a result, our business, financial condition and results ofoperations could be adversely affected. Refer to Liquidity and Capital Resources within our Management's Discussion and Analysis of Financial Conditionand Results of 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 2019, our international revenues accounted for 37.3% 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 jurisdictions. 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. For example, the U.S. enacted the Tax Cuts and Jobs Act, or the Act, on December 22, 2017, as a result of which we recognized in fiscal2018 a provisional amount of $2.0 million as reasonable estimate of the impact of the provisions of the Act. As of December 29, 2018, we completed ouraccountings for the tax effects of the enactment of the Act and did not recognize any material adjustments to the provisional tax expense previously recorded.Certain provisions of the Act and the regulations issued thereunder could have a significant impact on our future results of operations.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 of multinational 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-tax jurisdictions, or payments are made between affiliatesfrom a jurisdiction with high tax rates to a jurisdiction with lower tax rates. The OECD has released several components of its comprehensive plan to create anagreed set of international rules for fighting base erosion and profit shifting. As a result, the tax laws in the U.S. and other countries in which we and ouraffiliates do business could change on a prospective or retroactive basis and any such changes could materially adversely affect our business.20Table of ContentsOur 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 May 7, 2019, we announced that our Board of Directors authorized the repurchase of up to $500 million of our outstanding common stock over the nexttwo years. Under the share repurchase program, we are authorized to repurchase, from time to time, outstanding shares of common stock in accordance withapplicable laws both on the open market, including under trading plans established pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, asamended and in privately negotiated transactions. The actual timing, number and value of shares repurchased will be determined by us and will depend on anumber of factors, including market conditions, applicable legal requirements and compliance with the terms of loan covenants. The share repurchaseprogram may be suspended, modified or discontinued at any time and we have obligation to repurchase any amount of its common stock under the program.Repurchases pursuant to our share repurchase program could affect our stock price and increase its volatility. The existence of a share repurchase programcould also cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for ourcommon stock. There can be no assurance that any share repurchases will enhance stockholder value because the market price of our common stock maydecline below the levels at which we repurchased our common stock. Although our share repurchase program is intended to enhance long-term stockholdervalue, short-term stock price fluctuations could reduce the program’s effectiveness. Refer to Note 5, 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 market the affected product or otherwise have an adverse effect onour results of operations. In addition, competitors may patent technological advances that may give them a competitive advantage or create barriers to entry.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.21Table of ContentsITEM 2. PROPERTIESOur owned headquarters facility is located in Braintree, Massachusetts and is approximately 224,000 square feet. In December 2018, we announced our planto sell the Braintree facility and relocate our global headquarters to a 62,000 square foot leased facility in Boston, Massachusetts.As of March 30, 2019, we owned or leased a total of 49 facilities. Our owned and leased facilities consist of approximately 1.7 million square feet. Includedwithin these properties are 7 manufacturing facilities. We believe all of these facilities are well-maintained and suitable for the operations conducted in them.We consider the following manufacturing facilities to be material to the business.We lease our facility in Leetsdale, Pennsylvania, which is approximately 82,000 square feet and is used for warehousing, distribution and manufacturingoperations primarily supporting our Plasma business unit.We own our facility in Draper, Utah, which is approximately 100,000 square feet and is used for distribution and manufacturing operations supporting ourPlasma business unit.We lease our facility in Fajardo, Puerto Rico, which is approximately 115,000 square feet and is used for production of blood filters.We lease 127,000 square feet of space in Tijuana, Mexico. We also own a facility in Tijuana, Mexico that is approximately 182,000 square feet. Thesefacilities are used for the production of whole blood collection kits, plasma, blood center and hospital 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.We previously owned the facility in Union, South Carolina, which is approximately 86,000 square feet and is used to manufacture sterile solutions thatsupport our Plasma business. On May 21, 2019, we transferred to CSL Plasma Inc. (“CSL”) substantially all of the tangible assets held by Haemoneticsrelating to the manufacture of anti-coagulant and saline at our Union, South Carolina facility.We own two facilities in Covina, California, that occupy approximately 65,000 square feet and are used for 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. Thesefacilities are used for the production of whole blood collection kits.Our facilities are used by the following business segments: Number of FacilitiesJapan7EMEA13North America Plasma3All Other26Total49ITEM 3. LEGAL PROCEEDINGSInformation with respect to this Item may be found in Note 15, Commitments & 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.PART II22Table of ContentsITEM 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.HoldersThere were 146 holders of record of the Company’s common stock as of March 30, 2019.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 SecuritiesIn May 2019, the Company announced that its Board of Directors had authorized the repurchase of up to $500 million of Haemonetics common shares overthe next two years. This new share repurchase program will help to offset the dilutive impact of recent and future employee equity grants. The timing andamounts of activity under the repurchase program will be at management’s discretion with the intent of beginning activity under the program during fiscal2020.Under the share repurchase program, the Company is authorized to repurchase, from time to time, outstanding shares of common stock in accordance withapplicable laws on the open market, including under trading plans established pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, asamended, and in privately negotiated transactions. The actual timing, number and value of shares repurchased will be determined by the Company at itsdiscretion and will depend on a number of factors, including market conditions, applicable legal requirements and compliance with the terms of loancovenants. The share repurchase program may be suspended, modified or discontinued at any time, and the Company has no obligation to repurchase anyamount of its common stock under the program.In February 2018, the Company's Board of Directors authorized the repurchase of up to $260 million of our outstanding common stock through March 30,2019. As of March 30, 2019, the Company had utilized the full $260 million share repurchase authorization, which resulted in approximately 3.0 milliontotal shares repurchased at an average price of $86.58 per share.23Table of ContentsITEM 6. SELECTED FINANCIAL DATAHaemonetics Corporation Five-Year Review(In thousands, except per share and employee data)2019 2018 2017 2016 2015Summary of Operations: Net revenues$967,579 $903,923 $886,116 $908,832 $910,373Cost of goods sold550,043 492,015 507,622 502,918 475,955Gross profit417,536 411,908 378,494 405,914 434,418Operating expenses: Research and development35,714 39,228 37,556 44,965 54,187Selling, general and administrative298,277 316,523 301,726 317,223 337,168Impairment of assets— — 58,593 92,395 5,441Contingent consideration income— — — (4,727) (2,918)Total operating expenses333,991 355,751 397,875 449,856 393,878Operating income (loss)83,545 56,157 (19,381) (43,942) 40,540Gain on divestiture— 8,000 — — —Interest and other expense, net(9,912) (4,525) (8,095) (9,474) (9,375)Income (loss) before provision (benefit) for incometaxes73,633 59,632 (27,476) (53,416) 31,165Provision (benefit) for income taxes18,614 14,060 (1,208) 2,163 14,268Net income (loss)$55,019 $45,572 $(26,268) $(55,579) $16,897Income (loss) per share: Basic$1.07 $0.86 $(0.51) $(1.09) $0.33Diluted$1.04 $0.85 $(0.51) $(1.09) $0.32Weighted average number of shares51,533 52,755 51,524 50,910 51,533Weighted average number of shares and common stockequivalent shares52,942 53,501 51,524 50,910 52,0892019 2018 2017 2016 2015Financial and Statistical Data: Working capital$340,362 $136,474 $298,850 $302,535 $368,985Current ratio2.4 1.4 2.4 2.6 3.0Property, plant and equipment, net$343,979 $332,156 $323,862 $337,634 $321,948Capital expenditures$118,961 $74,799 $76,135 $102,405 $122,220Depreciation and amortization$109,418 $89,247 $89,733 $89,911 $86,053Total assets$1,274,767 $1,237,339 $1,238,709 $1,319,128 $1,485,417Total debt$350,120 $253,682 $314,647 $408,000 $427,891Stockholders’ equity$667,868 $752,429 $739,610 $721,565 $826,122Debt as a % of stockholders’ equity52.4% 33.7% 42.5% 56.5% 51.8%Employees3,216 3,136 3,107 3,225 3,38324Table of ContentsITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSOur BusinessHaemonetics is a global healthcare company dedicated to providing 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 blood and plasma component collection, thesurgical suite, and hospital transfusion services. When used in this report, the terms “we,” “us,” “our” and “the Company” mean Haemonetics.Our products are organized into three categories for purposes of evaluating and developing their growth potential: Plasma, Blood Center and Hospital. Forthat purpose, “Plasma” includes plasma collection devices and disposables, plasma donor management software, and anticoagulant and saline sold to plasmacustomers. “Blood Center” includes blood collection and processing devices and disposables for red cells, platelets and whole blood as well as related donormanagement software. "Hospital", which is comprised of Hemostasis Management and Cell Processing products, includes devices and methodologies formeasuring coagulation characteristics of blood, surgical blood salvage systems, specialized blood cell processing systems, disposables and blood transfusionmanagement software.We believe that Plasma and Hospital have growth potential, while Blood Center competes in challenging markets which require us to manage the businessdifferently, including reducing costs, shrinking the scope of the current product line, and evaluating opportunities to exit unfavorable customer contracts.Recent DevelopmentsDivestitureOn May 21, 2019, we transferred to CSL Plasma Inc. (“CSL”) substantially all of the tangible assets held by Haemonetics relating to the manufacture of anti-coagulant and saline at our Union, South Carolina facility and CSL assumed certain related liabilities pursuant to the terms of a settlement, release and assettransfer agreement between the parties dated May 13, 2019. At the closing, we received approximately $10 million of proceeds and were concurrentlyreleased from our obligations to supply liquid solutions under a 2014 supply agreement with CSL. We will continue to supply liquid solutions to ourcustomers following the asset transfer agreement pursuant to our supplier arrangements with contract manufacturers. We expect that cost savings generatedfrom the asset transfer agreement, including the release from our liquid solutions supply obligations, will be reallocated to general corporate purposes. Werecognized an impairment charge in the first quarter of fiscal 2020 of approximately $49 million as a result of this transaction.Share Repurchase ProgramsIn May 2019, we announced that our Board of Directors had authorized the repurchase of up to $500 million of Haemonetics common shares over the nexttwo years. This new share repurchase program will help to offset the dilutive impact of recent and future employee equity grants. The timing and amounts ofactivity under the repurchase program will be at management’s discretion with the intent of beginning activity under the program during fiscal 2020.In February 2018, our Board of Directors authorized the repurchase of up to $260 million of our outstanding common stock through March 30, 2019. As ofMarch 30, 2019, we had utilized the full $260 million share repurchase authorization, which resulted in approximately 3.0 million total shares repurchased atan average price of $86.58 per share.TEG 6s Trauma IndicationIn May 2019, we received FDA clearance for the use of TEG 6s in adult trauma settings. This clearance builds on the current indication for the TEG 6s systemin cardiovascular surgery and cardiology procedures, making it the first cartridge-based system available in the U.S. to evaluate the hemostasis condition inadult trauma patients.NexSys PCS® and NexLynk DMS™ In fiscal 2018, we received FDA 510(k) clearance for our NexSys PCS plasmapheresis system, including our embedded software that activates YESTMtechnology, a yield-enhancing solution. We expect to pursue further regulatory clearances for additional enhancements to the overall product offering.25Table of ContentsOur planned roll out of this new platform includes the placement of a significant number of new devices. Such placements will require meaningful capitalexpenditures and new customer contracts that reflect pricing and volumes appropriate to these investments. We have entered into several long-termcommercial contracts for NexSys PCS devices and NexLynk DMS donor management software and are seeking additional contracts from our other Plasmacustomers.Relocation of Corporate HeadquartersIn December 2018, we announced that we had entered into a lease for office space in Boston, MA that will serve as our new corporate headquarters andreplace our existing location in Braintree, MA. We believe our move to Boston, which is anticipated to occur in the third quarter of fiscal 2020, will attractand retain key talent and provide a dynamic space to engage our employees.Debt Issuance and RepaymentOn June 15, 2018, we entered into a five year credit agreement with certain lenders which provided for a $350.0 million term loan (the "Term Loan") and a$350.0 million revolving loan (the "Revolving Credit Facility" and together with the Term Loan, the "Credit Facilities"). A portion of the net proceeds of$347.8 million was used to pay down the $253.7 million remaining outstanding balance on our 2012 credit agreement, as amended in fiscal 2014. Theremainder of the proceeds are being used to support the launch of the NexSys PCS device and for general corporate purposes. On August 21, 2018, we enteredinto two interest rate swap agreements to effectively convert $241.9 million of borrowings under our Credit Facilities from a variable rate to a fixed rate ofinterest.Long-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.In May 2018, we entered into a long-term supply agreement with Pall under which Pall will continue to supply media to us for use in leukoreduction filters.As a condition of the supply agreement, we agreed to accept the HDC line and to make a final payment of $9.0 million to Pall for the HDC line.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 $19.8 million.Accordingly, during the first quarter of fiscal 2019 we recorded impairment charges of $19.8 million for the HDC line.Product RecallsIn March 2018, we issued a voluntary recall of specific lots of our AcrodoseTM Plus and PL Systems sold to our Blood Center customers in the U.S. The recallresulted from reports of low pH readings for platelets stored in the CLX HP bag and, in some instances, an accompanying yellow discoloration of the storagebag. For a period of nine weeks, we were unable to provide our customers with our Acrodose Plus and PL Systems. As a result of the recall, our Blood Centercustomers may have discarded collected platelets and incurred other damages. During fiscal 2019 we entered into settlement agreements with certaincustomers responsible for substantially all of the total outstanding claims against us. As of March 30, 2019, we have recorded cumulative charges of $2.2million associated with this recall which consists of $1.3 million of charges associated with customer returns and inventory reserves and $0.9 million ofcharges associated with customer claims. Substantially all of these claims have been paid as of March 30, 2019.In August 2018, we issued a voluntary recall of certain whole blood collection kits sold to our Blood Center customers in the U.S. The recall resulted fromsome collection 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. As of March 30, 2019, we have recorded cumulative charges of $1.9 million associated with this recall which consists of $0.1million of charges associated with customer returns and inventory reserves and $1.8 million of charges associated with customer claims. We may recordincremental charges for customer claims in future periods associated with this recall.26Table of ContentsRestructuring InitiativeIn fiscal 2018, we launched a Complexity Reduction Initiative (the "2018 Program"), a company-wide restructuring program designed to improve operationalperformance and reduce cost, freeing up resources to invest in accelerated growth. This program includes a reduction of headcount and operating costs toenable a more streamlined organizational structure. We expect to incur aggregate charges between $50 million and $60 million associated with 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 other exit costs, primarilyrelated to third party services. These charges, substantially all of which will result in cash outlays, will be incurred as the specific actions required to executeon these initiatives are identified and approved and are expected to continue through fiscal 2020. We expect savings from this program of approximately $80million on an annualized basis once the program is completed. During the fiscal year ended March 30, 2019 and March 31, 2018, we incurred $13.7 millionand $36.6 million, respectively, of restructuring and turnaround costs under this program.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:•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 auto-immune diseases treated with plasma-derived therapies; the growing understanding and diagnosis of thesediseases; longer lifespans and a growing aging patient population increase the demand for plasma.•Geographical expansion of biopharmaceuticals also increases demand for plasma.Demand for our plasma products in fiscal 2019 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 collection centers and fractionation facilities and approval of plasma-derived biopharmaceuticals. With these factors,we do not expect meaningful new entries or diversification. As a result, there are relatively few customers for our Plasma products, especially in the U.S. where80% of source plasma is collected and only a few customers provide the majority of our Plasma 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.27Table of Contents•Competition in multi-unit collection technology for automated blood component collection systems has intensified and has negatively impactedour sales 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.Cell 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, significantly reducing 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.28Table of ContentsFinancial Summary Fiscal Year (In thousands, except per share data)2019 2018 2017 % Increase/(Decrease) 19 vs. 18 % Increase/(Decrease) 18 vs. 17Net revenues$967,579 $903,923 $886,116 7.0 % 2.0 %Gross profit$417,536 $411,908 $378,494 1.4 % 8.8 %% of net revenues43.2% 45.6% 42.7 % Operating expenses$333,991 $355,751 $397,875 (6.1)% (10.6)%Operating income (loss)$83,545 $56,157 $(19,381) 48.8 % n/m% of net revenues8.6% 6.2% (2.2)% Gain on divestiture$— $8,000 $— 100.0 % 100.0 %Interest and other expense, net$(9,912) $(4,525) $(8,095) n/m (44.1)%Income (loss) before taxes$73,633 $59,632 $(27,476) 23.5 % n/mTax expense (benefit)$18,614 $14,060 $(1,208) 32.4 % n/m% of pre-tax income25.3% 23.6% 4.4 % Net income (loss)$55,019 $45,572 $(26,268) 20.7 % n/m% of net revenues5.7% 5.0% (3.0)% Net income (loss) per share - basic$1.07 $0.86 $(0.51) 24.4 % n/mNet income (loss) per share - diluted$1.04 $0.85 $(0.51) 22.4 % n/mOur fiscal year ends on the Saturday closest to the last day of March. Fiscal 2019, 2018 and 2017 include 52 weeks with each quarter having 13 weeks.Net revenues for fiscal 2019 increased 7.0% compared with fiscal 2018 both with and without the effects of foreign exchange, as revenue increases in Plasmaand Hospital were partially offset by declines in our Blood Center business unit.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 and Hospital were partially offset by declines in Blood Center.Operating income increased during fiscal 2019 as compared with fiscal 2018. Operating income increased primarily due to increased revenue volumes,favorable price and product mix, lower restructuring and turnaround costs and annualized savings as a result of the prior year restructuring initiatives. Thisincrease was partially offset by asset impairments associated with the HDC line, accelerated depreciation related to PCS®2 devices, higher freight costs drivenby revenue volume growth and rising fuel costs and carrier fees and increased investments within our Plasma and Hospital business units.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.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.29Table of ContentsRESULTS OF OPERATIONSNet Revenues by Geography Fiscal Year Fiscal 2019 versus 2018 Fiscal 2018 versus 2017(In thousands)2019 2018 2017 ReportedGrowth Currencyimpact Constantcurrencygrowth (1) ReportedGrowth Currencyimpact Constantcurrencygrowth (1)United States$606,845 $548,731 $522,686 10.6% —% 10.6% 5.0 % —% 5.0 %International360,734 355,192 363,430 1.6% —% 1.6% (2.3)% 2.0% (4.3)%Net revenues$967,579 $903,923 $886,116 7.0% —% 7.0% 2.0 % 0.9% 1.1 %(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 Year2019 2018 2017United States62.7% 60.7% 59.0%Japan7.2% 7.5% 9.0%Europe17.0% 18.2% 18.7%Asia12.3% 12.7% 12.4%Other0.8% 0.9% 0.9%Total100.0% 100.0% 100.0%International sales are generally conducted in local currencies, primarily Japanese Yen, Euro, Chinese Yuan and Australian Dollar. Our results of operationsare impacted by changes in foreign exchange rates, particularly in the value of the Yen, Euro and Australian Dollar relative to the U.S. Dollar.We have placed foreign currency hedges based on estimates of future revenues to reduce the impacts of currency fluctuations. As compared with fiscal 2018,foreign exchange did not have an impact on sales growth during fiscal 2019. For fiscal 2018, as compared with fiscal 2017, the effects of foreign exchangeaccounted for a 0.9% increase in sales.Please see section entitled “Foreign Exchange” in this discussion for a more complete explanation of how foreign currency affects our business and ourstrategy for managing this exposure.Net Revenues by Business Unit Fiscal Year Fiscal 2019 versus 2018 Fiscal 2018 versus 2017(In thousands) 2019 2018 2017 ReportedGrowth Currencyimpact Constantcurrencygrowth (1) ReportedGrowth Currencyimpact Constantcurrencygrowth (1)Plasma $501,837 $435,956 $410,727 15.1% 0.3% 14.8% 6.1% 0.6% 5.5%Blood Center 269,203 284,902 303,890 (5.5)% —% (5.5)% (6.2)% 1.3% (7.5)%Hospital (2) 196,539 183,065 171,499 7.4% 0.1% 7.3% 6.7% 1.3% 5.4%Net revenues $967,579 $903,923 $886,116 7.0% —% 7.0% 2.0% 0.9% 1.1%(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."(2) Hospital revenue includes both Cell Processing and Hemostasis Management revenue. Hemostasis Management revenue was $87.6 million, $75.5 million and $66.1 million forfiscal years 2019, 2018 and 2017, respectively. Hemostasis Management revenue increased 16.0% during fiscal 2019 as compared with fiscal 2018. Without the effect of foreignexchange, Hemostasis Management revenue increased 16.1% during fiscal 2019 as compared with fiscal 2018. Hemostasis Management revenue increased 14.2% during fiscal2018 as compared with fiscal 2017. Without the effect of foreign exchange, Hemostasis Management revenue increased 13.6% during fiscal 2018 as compared with fiscal 2017.30Table of ContentsPlasmaPlasma revenue increased 15.1% during fiscal 2019 as compared with fiscal 2018. Without the effect of foreign exchange, Plasma revenue increased 14.8%during fiscal 2019. This revenue growth was primarily driven by an increase in volume of plasma disposables due to continued strong performance in the U.S.and favorable NexSys PCS pricing during fiscal 2019. Increases in sales of liquid solutions also contributed to the growth during fiscal 2019On May 21, 2019, we transferred to CSL substantially all of the tangible assets held by Haemonetics relating to the manufacture of anti-coagulant and salineat our Union, South Carolina facility. We will continue to supply liquid solutions to our customers following the asset transfer agreement pursuant to oursupplier arrangements with contract manufacturers.Plasma revenue increased 6.1% during fiscal 2018 as compared with fiscal 2017. Without the effect of foreign exchange, Plasma revenue increased 5.5%during fiscal 2018. This revenue growth was primarily driven by an increase in sales of plasma disposables and software due to continued strong performancein the U.S. This increase was partially offset by a decline in liquid solutions revenue and a decrease in equipment revenue resulting from the divestiture of ourSEBRA product line, which contributed $6.5 million in Plasma revenue during fiscal 2017.Blood CenterBlood Center revenue decreased 5.5% during fiscal 2019 as compared with fiscal 2018. There was no foreign exchange impact on Blood Center revenueduring fiscal 2019. This decrease was primarily driven by lower whole blood revenue due to continued market declines, the strategic exit of certain contracts,products and markets, including unfavorable order timing associated with these exits, as well as product recalls. Declines in software revenue in the U.S andplatelet revenue driven by the continued shift toward double dose collection techniques in Japan also contributed to the decrease.Blood 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. This decrease was primarily due to declines in whole blood revenue in both Europe and the U.S. resulting from continuedmoderation in the rate of collections and declines in platelet revenue driven by the continued market shift toward double dose collection techniques inJapan, as well as decreased sales in Europe. Decreases in equipment revenue due to a one-time sale of equipment to the American Red Cross in the prior yearperiod and declines in red cell revenue due to the loss of a customer contract in a prior year also contributed to the overall decrease in Blood Center.HospitalHospital revenue increased 7.4% during fiscal 2019 as compared with fiscal 2018. Without the effect of foreign exchange, Hospital revenue increased 7.3%during fiscal 2019. This increase was primarily attributable to the growth of disposables associated with TEG® diagnostic systems, principally in the U.S. andChina. The TEG 6s system and TEG Manager® software are approved for the same set of indications as the TEG 5000 system in Europe, Australia and Japan.We continue to pursue a broader set of indications for TEG 6s in the U.S. In May 2019, we received FDA clearance for the use of TEG 6s in adult traumasettings. This clearance builds on the current indication for the TEG 6s system in cardiovascular surgery and cardiology procedures, making it the firstcartridge-based system available in the U.S. to evaluate the hemostasis condition in adult trauma patients. The increase during fiscal 2019 was partially offsetby the continued decline in OrthoPAT® revenue due to better blood management which has reduced orthopedic blood loss. We discontinued the sale of ourOrthoPAT products effective March 31, 2019. We offer the Cell Saver Elite + as an alternative autotransfusion system for orthopedics or other medium to lowblood loss procedures.Hospital revenue increased 6.7% during fiscal 2018 as compared with fiscal 2017. Without the effect of foreign exchange, Hospital revenue increased 5.4%during fiscal 2018. This increase was primarily attributable to the growth of disposables associated with TEG® diagnostic systems, principally in the U.S. andChina. Growth in BloodTrack revenue in the U.S. and Europe also contributed to the increase. These increases were partially offset by the continued declinein OrthoPAT® revenue due to better blood management which has reduced orthopedic blood loss.Gross Profit Fiscal Year (In thousands)2019 2018 2017 % Increase/(Decrease) 19 vs. 18 % Increase/(Decrease) 18 vs. 17Gross profit$417,536 $411,908 $378,494 1.4% 8.8%% of net revenues43.2% 45.6% 42.7% 31Table of ContentsGross profit increased 1.4% during fiscal 2019 as compared with fiscal 2018. Without the effects of foreign exchange, gross profit increased 0.5% duringfiscal 2019. Gross profit margin percentage decreased by 240 basis points for fiscal 2019 as compared with fiscal 2018. The decrease in the gross profitmargin during fiscal 2019 was primarily due to increased depreciation expense primarily due to Plasma devices and asset impairments associated with theHDC line. This decrease was partially offset by favorable price and volume mix as well as savings as a result of the prior year restructuring initiative.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.Operating Expenses Fiscal Year (In thousands)2019 2018 2017 % Increase/(Decrease) 19 vs. 18 % Increase/(Decrease) 18 vs. 17Research and development$35,714 $39,228 $37,556 (9.0)% 4.5 %% of net revenues3.7% 4.3% 4.2% Selling, general and administrative$298,277 $316,523 $301,726 (5.8)% 4.9 %% of net revenues30.8% 35.0% 34.1% Impairment of assets$— $— $58,593 — % (100.0)%% of net revenues—% —% 6.6% Total operating expenses$333,991 $355,751 $397,875 (6.1)% (10.6)%% of net revenues34.5% 39.4% 44.9% Research and DevelopmentResearch and development expenses decreased 9.0% during fiscal 2019 as compared with fiscal 2018. Without the effects of foreign exchange, research anddevelopment expenses decreased 8.4% during fiscal 2019. The decrease in fiscal 2019 was primarily driven by lower restructuring and turnaround costspartially offset by our continued investment of resources in clinical programs, primarily in our Hospital business unit, as well as continued investment in ourPlasma business unit.Research 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 Hospital. These increased costs were partiallyoffset by reduced spending on certain software projects and several projects in Blood Center to better align with our long-term product plans.Selling, General and AdministrativeSelling, general and administrative expenses decreased 5.8% during fiscal 2019 as compared with fiscal 2018. Without the effects of foreign exchange,selling, general and administrative expenses decreased 5.6% during fiscal 2019. The decrease in fiscal 2019 was primarily the result of lower restructuringand turnaround costs and annualized savings as a result of the current and prior year restructuring initiatives. This decrease was partially offset by increasedinvestments within our Plasma and Hospital business units, higher freight costs driven by revenue volume growth and rising fuel costs and carrier fees and anincrease in variable compensation and share-based compensation expense.Selling, 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 Hospital and next generation plasma collection and softwaresystems, and an increase in variable compensation and share-based compensation expense. This increase was partially offset by annualized savings as a resultof the prior year restructuring initiative.32Table of ContentsInterest and Other Expense, NetInterest and other expense, net, increased 5.4 million during fiscal 2019 as compared with fiscal 2018 due to an increase in the Term Loan balance as well asan increase in the effective interest rate. The effective interest rate on total debt outstanding for the fiscal year ended March 30, 2019 was approximately3.8%.Interest and other expense, net, decreased 44.1% during fiscal 2018 as compared with fiscal 2017 due to a decrease in interest expense as a result of principalpayments on our term loan and a reduction in borrowings on our revolving credit line.Income Taxes Fiscal Year 2019 2018 2017 % Increase/(Decrease) 19 vs. 18 % Increase/(Decrease) 18 vs. 17Reported income tax rate25.3% 23.6% 4.4% 1.7% 19.2%Table of ContentsReported Tax RateWe conduct business globally and report our results of operations in a number of foreign jurisdictions in addition to the United States. Our reported tax rate isimpacted by the jurisdictional mix of earnings in any given period as the foreign jurisdictions in which we operate have tax rates that differ from the U.S.statutory tax rate.We have assessed, on a jurisdictional basis, the available means of recovering deferred tax assets, including the ability to carry-back net operating losses, theexistence of reversing temporary differences, the availability of tax planning strategies and available sources of future taxable income. As of March 30, 2019,we maintain a valuation allowance against certain U.S. state deferred tax assets that are not more-likely-than-not realizable and maintains a full valuationallowance against the net deferred tax assets of certain foreign subsidiaries.For the year ended March 30, 2019, we recorded an income tax provision of $18.6 million on our worldwide pre-tax income of $73.6 million, resulting in areported tax rate of 25.3%. Our effective tax rate for the year ended March 30, 2019 is higher than our effective tax rates of 23.6% and 4.4% for the yearsended March 31, 2018 and April 1, 2017, respectively. Our increase in tax rate for fiscal 2019, as compared with fiscal 2018, is primarily the result of theimpact of the U.S. tax reform provisions that became effective in fiscal 2019, including global intangible low taxed income and nondeductible executivecompensation, partially offset by excess stock compensation benefits. The fiscal 2018 rate was higher than the fiscal 2017 tax rate due to the impact of 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) changesin the jurisdictional mix of earnings and the impact of goodwill impairments in fiscal 2017.Income Tax ReformDuring the third quarter of fiscal 2018, the Tax Cuts and Jobs Act (the "Act") was enacted in the United States. The Act reduced the U.S. federal corporate taxrate from 35% to 21%, required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred andcreated new taxes on certain foreign sourced earnings. In addition, the Securities and Exchange Commission issued guidance under Staff AccountingBulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act that directed 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 itsaccounting for the change in tax law.During fiscal 2018 we recognized a provisional amount of $2.0 million as a reasonable estimate of the impact of the provisions of the Act, which wasincluded as a component of income tax expense in the consolidated statements of income (loss). During fiscal 2019, we completed our accounting for the taxeffects of the enactment of the Act. We recognized a $0.4 million adjustment to the provisional tax expense recorded in fiscal 2018.We have incorporated the other impacts of the Act that became effective in fiscal 2019 in the calculation of the tax provision and effective tax rate, includingthe provisions related to global intangible low taxed income (“GILTI”), foreign derived intangible income (“FDII”), base erosion anti abuse tax (“BEAT”), aswell as other provisions which limit tax deductibility of expenses. For fiscal 2019, the GILTI provisions have the most significant impact to us. Under thenew law, U.S. taxes are33Table of Contentsimposed on foreign income in excess of a deemed return on tangible assets of its foreign subsidiaries. The ability to benefit a deduction and foreign taxcredits against a portion of the GILTI income may be limited under the GILTI rules as a result of the utilization of net operating losses, foreign sourcedincome, and other potential limitations within the foreign tax credit calculation.Liquidity and Capital ResourcesThe following table contains certain key performance indicators we believe depict our liquidity and cash flow position:(In thousands)March 30, 2019 March 31, 2018Cash and cash equivalents$169,351 $180,169Working capital$340,362 $136,474Current ratio2.4 1.4Net debt position(1)$(180,769) $(73,513)Days sales outstanding (DSO)67 58Inventory turnover2.5 3.5(1)Net debt position is the sum of cash and cash equivalents less total debt.During fiscal 2018, we launched the 2018 Program, a restructuring initiative designed to reposition our organization and improve our cost structure. Duringfiscal 2019 and 2018, we incurred $13.7 million and $36.6 million of restructuring and turnaround costs under this program, respectively.During fiscal 2017, we launched a multi-year restructuring initiative (the "2017 Program") designed to reposition our organization and improve our coststructure. We did not incur any additional charges under this program during fiscal 2019. During fiscal 2018, we incurred $7.2 million of restructuring andturnaround charges under this program. As of March 30, 2019, charges associated with the 2017 Program are complete.Our primary sources of liquidity are cash and cash equivalents, internally generated cash flow from operations, our Revolving Credit Facility and proceedsfrom employee stock option exercises. We believe these sources are sufficient to fund our cash requirements over at least the next twelve months. Ourexpected cash outlays relate primarily to investments, capital expenditures, including production of the NexSys PCS and Plasma plant capacity expansions,share repurchases, cash payments under the loan agreement, restructuring and turnaround initiatives and acquisitions. These are described in more detail inContractual Obligations below.As of March 30, 2019, we had $169.4 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. On June 15, 2018, we entered into a credit agreement which provided for a $350.0 million Term Loan and a $350.0 million RevolvingCredit Facility. The Credit Facilities expire on June 15, 2023. Interest on the Credit Facilities is established using LIBOR plus 1.13% - 1.75%, depending onour leverage ratio. Under the Credit Facilities, we are required to maintain certain leverage and interest coverage ratios specified in the credit agreement aswell as other customary non-financial affirmative and negative covenants. A portion of the net proceeds of $347.8 million was used to pay down the $253.7remaining outstanding balance on our 2012 credit agreement, as amended in fiscal 2014. The remainder of the proceeds are being used to support the launchof our NexSys PCS device and for general corporate purposes. At March 30, 2019, $336.9 million was outstanding under the Term Loan and $15.0 millionwas outstanding on the Revolving Credit Facility, both, with an effective interest rate of 3.8%. We also had $25.1 million of uncommitted operating lines ofcredit to fund our global operations under which there were no outstanding borrowings as of March 30, 2019.During fiscal 2019, we paid $13.1 million in scheduled principal repayments for the Term Loan. We have scheduled principal repayments of $336.9 millionrequired through fiscal 2024. We were in compliance with the leverage and interest coverage ratios specified in the credit agreement as well as all other bankcovenants as of March 30, 2019.34Table of ContentsCash Flow Overview Fiscal Year (In thousands)2019 2018 2017 %Increase/(Decrease) 19 vs. 18 % Increase/(Decrease)18 vs. 17Net cash provided by (used in): Operating activities$159,281 $220,350 $159,738 $(61,069) $60,612Investing activities(116,148) (63,041) (73,313) 53,107 (10,272)Financing activities(50,628) (120,643) (60,413) (70,015) 60,230Effect of exchange rate changes on cash and cashequivalents(1)(3,323) 3,939 (1,571) (7,262) 5,510Net increase (decrease) in cash and cash equivalents$(10,818) $40,605 $24,441 (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 $159.3 million during fiscal 2019, a decrease of $61.1 million as compared with fiscal 2018. The decrease incash provided by operating activities was primarily due to a working capital outflow driven largely by an increase accounts receivable due to higher revenuegrowth and collections timing, an increase in inventory to support the launch of the NexSys PCS device and decreases in accrued payroll due to severancepayments associated with the 2018 Program. Net income, as adjusted for depreciation, amortization and other non-cash charges, partially offset the decreasein operating activities.Net 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.Investing ActivitiesNet cash used in investing activities was $116.1 million during fiscal 2019, an increase of $53.1 million as compared with fiscal 2018. The increase in cashused in investing activities was primarily the result of an increase in capital expenditures in the current year period due to the NexSys PCS launch andmanufacturing capacity expansion projects in our Plasma business and proceeds received related to the divestiture of our SEBRA product line in the priorperiod.Net 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.Financing ActivitiesNet cash used in financing activities was $50.6 million during fiscal 2019, a decrease of $70.0 million as compared with fiscal 2018. Cash used in financingactivities included the repayment of the $253.7 remaining outstanding balance on our 2012 credit agreement, as amended in fiscal 2014, as well as $160.0million of share repurchases during fiscal 2019. This use in cash was partially offset by proceeds resulting from the $350.0 million Term Loan entered into inJune 2018.35Table of ContentsNet 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 2012 credit agreement, as amended infiscal 2014, as compared with the prior year. These increases in net cash used in financing activities were partially offset by a reduction in borrowings on ourprevious revolving credit facility of $50.0 million in fiscal 2017 and an incremental $7.7 million of proceeds from the exercise of stock options in fiscal 2018as compared with fiscal 2017.Contractual ObligationsA summary of our contractual and commercial commitments as of March 30, 2019 is as follows: Payments Due by Period(In thousands)Total Less than 1 year 1-3 years 3-5 years More than 5 yearsDebt$352,135 $28,262 $39,470 $284,403 $—Interest payments (1)44,318 12,387 31,377 554 —Operating leases17,672 4,041 7,007 5,288 1,336Purchase commitments(2)147,836 147,836 — — —Expected retirement plan benefit payments13,443 1,503 2,792 2,701 6,447Total contractual obligations$575,404 $194,029 $80,646 $292,946 $7,783(1) Interest payments reflect the contractual interest payments on our outstanding debt and exclude the impact of interest rate swap agreements. Interest payments are projected usinginterest rates in effect as of March 30, 2019. Certain of these projected interest payments may differ in the future based on changes in market interest rates.(2) Includes amounts we are committed to spend on purchase orders entered in the normal course of business for capital equipment as well as commitments with contractors for themanufacture of certain disposable products and equipment. The majority of our operating expense spending does not require any advance commitment.The above table does not reflect our long-term liabilities associated with unrecognized tax benefits of $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.Concentration of Credit RiskWhile approximately 52% of our revenue during fiscal 2019 was generated by our ten largest customers, concentrations of credit risk with respect to tradeaccounts receivable are generally limited due to our large number of customers and their diversity across many geographic areas. Certain markets andindustries, however, can expose us to concentrations of credit risk. For example, in the Plasma business unit, sales are concentrated with several largecustomers. As a result, accounts receivable extended to any one of these biopharmaceutical customers can be significant at any point in time. In addition, aportion of our trade accounts receivable outside the U.S. include sales to government-owned or supported healthcare systems in several countries, which aresubject to payment delays and local economic conditions. Payment is dependent upon the financial stability and creditworthiness of those countries' nationaleconomies.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 & Contingencies, to ourconsolidated financial statements contained in Item 8 of this Annual Report on Form 10-K36Table of ContentsInflationWe 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 2019, 37.3% 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.Recent Accounting PronouncementsStandards to be ImplementedIn February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Codification ("ASC") Update No. 2016-02, Leases(Topic 842). ASC Update No. 2016-02 is intended to increase the transparency and comparability among organizations by recognizing lease asset and leaseliabilities on the balance sheet, including those previously classified as operating leases under current U.S. GAAP and disclosing key information aboutleasing arrangements. ASC Update No. 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscalyears, and is applicable to us in fiscal 2020. Earlier adoption is permitted. In July 2018, the FASB issued an update to the leasing guidance to allow anadditional transition option which would allow companies to adopt the standard as of the beginning of the year of adoption as opposed to the earliestcomparative period presented. We adopted the new standard on March 31, 2019.Upon transition, we plan to apply the package of practical expedients permitted under ASC Update No. 2016-02 transition guidance to our entire leaseportfolio at March 31, 2019. As a result, we are not required to reassess (i) whether any expired or existing contracts are or contain leases, (ii) the classificationof any expired or existing leases, and (iii) initial direct costs for any existing leases.As a result of adopting ASC Update No. 2016-02, we expect to recognize additional right-of-use assets and corresponding liabilities for our existing leaseportfolio on our consolidated balance sheets of approximately $20 million to $25 million, with no material impact to our consolidated statements ofoperations or consolidated statements of cash flows. Additionally, we are37Table of Contentsin the process of implementing a new lease administration and lease accounting system, and updating our controls and procedures for maintaining andaccounting for our lease portfolio under the new standard.In June 2016, the FASB issued ASC Update No. 2016-13, Financial Instruments – Credit Losses (Topic 326). ASC Update No. 2016-13 is to intended toreplace the current incurred loss impairment methodology for financial assets measured at amortized cost with a methodology that reflects expected creditlosses and requires consideration of a broader range of reasonable and supportable information, including forecasted information, to develop credit lossestimates. ASC Update No. 2016-13 is effective for annual periods beginning after December 15, 2019, and is applicable to us in fiscal 2021. We are in theprocess of determining the effect that the adoption will have on our financial position and results of operations.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 June 2018, the FASB issued ASC Update No. 2018-07, Compensation - Stock Compensation (Topic 718). The new guidance will align the accounting fornon-employee share-based payments with the existing employee share-based transactions guidance. The guidance is effective for annual periods beginningafter December 15, 2018 and is applicable to us in fiscal 2020. Early adoption is permitted for all entities, including interim periods, but no earlier than theentity's adoption of ASC Topic 606. The impact of adopting ASC Update No. 2018-07 on our financial position and results of operations is being assessed bymanagement.In August 2018, the FASB issued ASC Update No. 2018-15, Intangibles, Goodwill and Other - Internal-Use Software (Subtopic 350-40). The new guidancewill align the accounting implementation costs incurred in a cloud computing arrangement that is a service contract with the accounting for internal-usesoftware licenses. The guidance is effective for annual periods beginning after December 15, 2019 and is applicable to us in fiscal 2021. Early adoption ispermitted for all entities, including interim periods. The impact of adopting ASC Update No. 2018-15 is not expected to have a material effect on ourconsolidated financial statements.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 RecognitionRevenues from product sales are recorded at the net sales price, which includes estimates of variable consideration related to rebates, product returns andvolume discounts. These reserves, which are based on estimates of the amounts earned or to be claimed on the related sales, are recorded as a reduction ofrevenue and a current liability. Our estimates take into consideration historical experience, current contractual and statutory requirements, specific knownmarket events and trends, industry data, and forecasted customer buying and payment patterns. Overall, these reserves reflect our best estimates of the amountof consideration to which we are entitled based on the terms of the contract. The amount of variable consideration included in the net sales price is limited tothe amount that is probable not to result in a significant reversal in the amount of the cumulative revenue recognized in a future period. Revenue recognizedin the current period related to performance obligations satisfied in prior periods was not material. If we are unable to estimate the expected rebatesreasonably, we record a liability for the maximum potential rebate or discount that could be earned. In circumstances where we provide upfront rebatepayments to customers, we capitalize the rebate payments and amortize the resulting asset as a reduction of revenue using a systematic method over the life ofthe contract. See Note 2, Summary of Significant Accounting Policies and Note 6, Revenue, to our consolidated financial statements contained in Item 8 ofthis Annual Report on Form 10-K for further information.38Table of ContentsGoodwill and Intangible AssetsAlthough we use consistent methodologies in developing the assumptions and estimates underlying the fair value calculations used in our impairment tests,these estimates are uncertain by nature and can vary from actual results. The use of alternative valuation assumptions, including estimated revenueprojections, growth rates, cash flows and discount rates could result in different fair value estimates.Future events that could have a negative impact on the levels of excess fair value over carrying value of our reporting units include, but are not limited to, thefollowing:•Decreases in estimated market sizes or market growth rates due to greater-than-expected declines in procedural volumes, pricing pressures, productactions and/or competitive technology developments,•Declines in our market share and penetration assumptions due to increased competition, an inability to develop or launch new and next-generationproducts and technology features in line with our commercialization strategies and market and/or regulatory conditions that may cause significantlaunch delays or product recalls,•Decreases in our forecasted profitability due to an inability to implement successfully and achieve timely and sustainable cost improvementmeasures consistent with our expectations,•Changes in our reporting units or in the structure of our business as a result of future reorganizations, acquisitions or divestitures of assets orbusinesses and•Increases in our market-participant risk-adjusted weighted average cost of capital and increases in our market-participant tax rate and/or changes intax laws or macroeconomic conditions.Negative changes in one or more of these factors, among others, could result in future impairment charges.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. See Note 2, Summary of Significant Accounting Policies and Note 9, Goodwill & Intangible Assets, to our consolidatedfinancial 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. Refer to Note 4, Income Taxes, to our consolidated financialstatements contained in Item 8 of this Annual Report on Form 10-K for further information and discussion of our income tax provision and balancesincluding 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 positions39Table of Contentspresuming the taxing authorities' full knowledge of the position and all relevant facts. We record a liability for the portion of unrecognized tax benefitsclaimed that we have determined are not more-likely-than-not realizable. These tax reserves have been established based on management's assessment as tothe potential exposure attributable to our uncertain tax positions as well as interest and penalties attributable to these uncertain tax positions. All tax reservesare analyzed quarterly and adjustments are made as events occur that result in changes in judgment.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. 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.40Table of ContentsITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKThe Company’s exposures relative to market risk are due to foreign exchange risk and interest rate risk.Foreign Exchange RiskSee the section above entitled Foreign Exchange for a discussion of how foreign currency affects our business. It is our policy to minimize, for a period oftime, the unforeseen impact on our financial results of fluctuations in foreign exchange rates by using derivative financial instruments known as forwardcontracts to hedge anticipated cash flows from forecasted foreign currency denominated sales and costs. We do not use the financial instruments forspeculative or trading activities.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 $6.8 millionincrease in the fair value of the forward contracts, whereas a 10% weakening of the U.S. dollar would result in a $7.0 million decrease in the fair value of theforward contracts.Interest Rate RiskOur exposure to changes in interest rates is associated with borrowings under our Credit Facilities, all of which is variable rate debt. Total outstanding debtunder our Credit Facilities for the fiscal year ended March 30, 2019 was $351.9 million with an interest rate of 3.8% based on prevailing Adjusted LIBORrates. An increase of 100 basis points in Adjusted LIBOR rates would result in additional annual interest expense of $3.5 million. On August 21, 2018, weentered into two interest rate swap agreements to effectively convert $241.9 million of borrowings under our Credit Facilities from a variable rate to a fixedrate. These interest rate swaps are intended to mitigate the exposure to fluctuations in interest rates and qualify for hedge accounting treatment as cash flowhedges.41Table 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 30, 2019 andMarch 31, 2018, the related consolidated statements of income (loss), comprehensive income (loss), stockholders' equity and cash flows for each of the threeyears in the period ended March 30, 2019, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to asthe “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position ofthe Company at March 30, 2019 and March 31, 2018, and the results of its operations and its cash flows for each of the three years in the period endedMarch 30, 2019, 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 30, 2019, 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 22, 2019 expressed an unqualifiedopinion thereon.Adoption of New Accounting StandardAs discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for revenue effective April 1, 2018 due tothe adoption of Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), and the related amendments.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 22, 201942Table of ContentsITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHAEMONETICS CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME (LOSS)(In thousands, except per share data) Year Ended March 30, 2019 March 31, 2018 April 1, 2017 Net revenues$967,579 $903,923 $886,116Cost of goods sold550,043 492,015 507,622Gross profit417,536 411,908 378,494Operating expenses: Research and development35,714 39,228 37,556Selling, general and administrative298,277 316,523 301,726Impairment of assets— — 58,593Total operating expenses333,991 355,751 397,875Operating income (loss)83,545 56,157 (19,381)Gain on divestiture— 8,000 —Interest and other expense, net(9,912) (4,525) (8,095)Income (loss) before provision (benefit) for income taxes73,633 59,632 (27,476)Provision (benefit) for income taxes18,614 14,060 (1,208)Net income (loss)$55,019 $45,572 $(26,268) Net income (loss) per share - basic$1.07 $0.86 $(0.51)Net income (loss) per share - diluted$1.04 $0.85 $(0.51) Weighted average shares outstanding Basic51,533 52,755 51,524Diluted52,942 53,501 51,524The accompanying notes are an integral part of these consolidated financial statements.43Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)(In thousands) Year Ended March 30, 2019 March 31, 2018 April 1, 2017 Net income (loss)$55,019 $45,572 $(26,268) Other comprehensive (loss) income: Impact of defined benefit plans, net of tax(204) 1,949 5,220Foreign currency translation adjustment, net of tax(9,108) 13,430 (7,336)Unrealized loss on cash flow hedges, net of tax(1,877) (2,796) (364)Reclassifications into earnings of cash flow hedge (gains) losses, net of tax(200) 1,299 4,647Other comprehensive (loss) income(11,389) 13,882 2,167Comprehensive income (loss)$43,630 $59,454 $(24,101)The accompanying notes are an integral part of these consolidated financial statements.44Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In thousands, except share data) March 30, 2019 March 31, 2018 ASSETS Current assets: Cash and cash equivalents$169,351 $180,169Accounts receivable, less allowance of $3,937 at March 30, 2019 and $2,111 at March 31, 2018185,027 151,226Inventories, net194,337 160,799Prepaid expenses and other current assets27,406 28,983Total current assets576,121 521,177Property, plant and equipment, net343,979 332,156Intangible assets, less accumulated amortization of $263,479 at March 30, 2019 and $249,278 at March 31, 2018127,693 156,589Goodwill210,819 211,395Deferred tax asset4,359 3,961Other long-term assets11,796 12,061Total assets$1,274,767 $1,237,339LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Notes payable and current maturities of long-term debt$27,666 $194,259Accounts payable63,361 55,265Accrued payroll and related costs53,200 69,519Other current liabilities91,532 65,660Total current liabilities235,759 384,703Long-term debt, net of current maturities322,454 59,423Deferred tax liability19,906 6,526Other long-term liabilities28,780 34,258Stockholders’ equity: Common stock, $0.01 par value; Authorized — 150,000,000 shares; Issued and outstanding — 51,019,918 shares at March30, 2019 and 52,342,965 shares at March 31, 2018510 523Additional paid-in capital536,320 503,955Retained earnings161,418 266,942Accumulated other comprehensive loss(30,380) (18,991)Total stockholders’ equity667,868 752,429Total liabilities and stockholders’ equity$1,274,767 $1,237,339The accompanying notes are an integral part of these consolidated financial statements.45Table 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, 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 — — — — —Share-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 — — — — —Share-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) $752,429Employee stock purchase plan67 1 3,253 — — 3,254Exercise of stock options287 3 10,188 — — 10,191Shares repurchased(1,841) (18) 1,737 (161,719) — (160,000)Issuance of restricted stock, net of cancellations164 1 (1) — — —Share-based compensation expense— — 17,188 — — 17,188Cumulative effect of change in accounting standards— — — 1,176 — 1,176Net income— — — 55,019 — 55,019Other comprehensive loss— — — — (11,389) (11,389)Balance, March 30, 201951,020 $510 $536,320 $161,418 $(30,380) $667,868The accompanying notes are an integral part of these consolidated financial statements.46Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands) Year Ended March 30, 2019 March 31, 2018 April 1, 2017Cash Flows from Operating Activities: Net income (loss)$55,019 $45,572 $(26,268)Adjustments to reconcile net income (loss) to net cash provided by operating activities: Non-cash items: Depreciation and amortization109,418 89,247 89,733Impairment of assets21,170 2,673 75,348Share-based compensation expense17,188 13,025 9,150Gain on divestiture— (8,000) —Deferred tax provision (benefit)13,351 (5,828) (6,800)Unrealized (gain) loss from hedging activities(24) (649) 517Provision for losses on accounts receivable and inventory6,325 2,639 11,381Other non-cash operating activities(416) 1,692 860Change in operating assets and liabilities: Change in accounts receivable(38,064) 5,087 3,155Change in inventories(39,322) 14,385 (1,552)Change in prepaid income taxes(3,594) 1,436 1,395Change in other assets and other liabilities494 17,670 (18,253)Change in accounts payable and accrued expenses17,736 41,401 21,072Net cash provided by operating activities159,281 220,350 159,738Cash Flows from Investing Activities: Capital expenditures(118,961) (74,799) (76,135)Proceeds from divestiture— 9,000 —Proceeds from sale of property, plant and equipment2,813 2,758 2,822Net cash used in investing activities(116,148) (63,041) (73,313)Cash Flows from Financing Activities: Term loan borrowings347,780 — —Repayment of term loan borrowings(266,853) (61,654) (42,683)Net increase (decrease) in short-term loans15,000 671 (50,727)Proceeds from employee stock purchase plan3,254 3,246 3,560Proceeds from exercise of stock options10,191 37,094 29,437Share repurchases(160,000) (100,000) —Net cash used in financing activities(50,628) (120,643) (60,413)Effect of exchange rates on cash and cash equivalents(3,323) 3,939 (1,571)Net Change in Cash and Cash Equivalents(10,818) 40,605 24,441Cash and Cash Equivalents at Beginning of Year180,169 139,564 115,123Cash and Cash Equivalents at End of Year$169,351 $180,169 $139,564Supplemental Disclosures of Cash Flow Information: Interest paid$13,116 $7,663 $7,850Income taxes paid$8,205 $9,083 $6,957Transfers from inventory to fixed assets for placement of Haemonetics equipment$16,345 $8,963 $6,255The accompanying notes are an integral part of these consolidated financial statements.47Table 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. Its technology addresses important medical marketsincluding blood and plasma component collection, the surgical suite, and hospital transfusion services.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 its customers. The Company provides plasma collection systems andsoftware that enable the collection of plasma used by biopharmaceutical companies to make life saving pharmaceuticals and also provides analytical devicesfor measuring hemostasis that enable healthcare providers to better manage their patients’ bleeding risk. In addition, the Company makes blood processingsystems and software that make blood donation more efficient and track life giving blood components. Finally, Haemonetics supplies systems and softwarethat facilitate blood transfusions and cell processing.The accompanying consolidated financial statements present separately the Company's consolidated financial position, results of operations, cash flows andchanges in shareholders’ 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. The Company hasassessed its ability to continue as a going concern. As of March 30, 2019, Haemonetics has concluded that substantial doubt about its ability to continue as agoing concern does not exist.The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provideadditional evidence relative to certain estimates or to identify matters that require additional disclosure. Refer to Note 20, Subsequent Events, for informationpertaining to the divestiture of a manufacturing facility.2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESFiscal YearHaemonetics' fiscal year ends on the Saturday closest to the last day of March. Fiscal 2019, 2018 and 2017 include 52 weeks with each quarter having 13weeks.Principles of ConsolidationThe accompanying consolidated financial statements include all accounts including those of its 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 the Company to make estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenuesand expenses during the reporting period. Actual results could vary from the amounts derived from its estimates and assumptions. The Company considersestimates to be critical if they are required to make assumptions about material matters that are uncertain at the time of estimation or if materially differentestimates could have been made or it is reasonably likely that the accounting estimate will change from period to period. The following are areas consideredto be critical and require management’s judgment: revenue recognition, inventory provisions, intangible asset and goodwill valuation, legal and otherjudgmental accruals and income taxes.48Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)ReclassificationsCertain immaterial reclassifications have been made to prior years' amounts to conform to the current year's presentation.ContingenciesThe Company may become involved in various legal proceedings that arise in the ordinary course of business, including, without limitation, patentinfringement, product liability and environmental matters. Accruals recorded for various contingencies including legal proceedings, employee relatedlitigation, self-insurance and other claims are based on judgment, the probability of losses and, where applicable, the consideration of opinions of internaland/or external legal counsel and actuarially determined estimates. When a loss is probable and a range of loss is established but a best estimate cannot bemade, the Company records the minimum loss contingency amount, which could be zero. These estimates are often initially developed substantially earlierthan the ultimate loss is known and the estimates are reevaluated each accounting period, as additional information is available. As information becomesknown, an additional loss provision is recorded when either a best estimate can be made or the minimum loss amount is increased. When events result in anexpectation of a more favorable outcome than previously expected, the best estimate is changed to a lower amount.Revenue RecognitionThe Company's revenue recognition policy is to recognize revenues from product sales, software and services in accordance with the Financial AccountingStandards Board ("FASB") issued Accounting Standards Codification ("ASC") Update No. 2014-19, Revenue from Contracts with Customers (Topic 606).Revenue is recognized when obligations under the terms of a contract with a customer are satisfied; this occurs with the transfer of control of the Company’sgoods or services. The Company considers revenue to be earned when all of the following criteria are met: it has a contract with a customer that createsenforceable rights and obligations; promised products or services are identified; the transaction price, or the consideration the Company expects to receivefor transferring goods or providing services, is determinable and it has transferred control of the promised items to the customer. A promise in a contract totransfer a distinct good or service to the customer is identified as a performance obligation. A contract’s transaction price is allocated to each performanceobligation and recognized as revenue when, or as, the performance obligation is satisfied. Some of the Company’s contracts have multiple performanceobligations. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligationbased on the estimated standalone selling prices of the good or service in the contract. For goods or services for which observable standalone selling pricesare not available, the Company uses an expected cost plus a margin approach to estimate the standalone selling price of each performance obligation.Product RevenuesThe majority of the Company’s performance obligations related to product sales are satisfied at a point in time. Product revenue consists of the sale of itsdisposable blood component collection and processing sets and the related equipment. The Company’s performance obligation related to product sales issatisfied upon shipment or delivery to the customer based on the specified terms set forth in the customer contract. Shipping and handling activitiesperformed after a customer obtains control of the good are treated as fulfillment activities and are not considered to be a separate performance obligation.Revenue is recognized over time for maintenance plans provided to customers that provide services beyond the Company’s standard warranty period.Payment terms between customers related to product sales vary by the type of customer, country of sale, and the products or services offered and could resultin an unbilled receivable or deferred revenue balance depending on whether the performance obligation has been satisfied (or partially satisfied).For product sales to distributors, the Company recognizes revenue for both equipment and disposables upon shipment to distributors, which is when itsperformance obligations are complete. The Company's standard contracts with its distributors state that title to the equipment passes to the distributors atpoint of shipment to a distributor’s location. The distributors are responsible for shipment to the end customer along with any installation, training andacceptance of the equipment by the end customer. Payments from distributors are not contingent upon resale of the product.The Company also places equipment at customer sites. While the Company retains ownership of this equipment, the customer has the right to use it for aperiod of time provided they meet certain agreed to conditions. The Company recovers the cost of providing the equipment from the sale of its disposables.49Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Software and Other RevenuesTo a lesser extent, the Company enters into other types of contracts including certain software licensing arrangements to provide software solutions tosupport its plasma, blood collection and hospital customers. A portion of its software sales are perpetual licenses typically accompanied by significantimplementation services related to software customization as well as other professional and technical services. The Company generally recognizes revenuefrom the sale of perpetual licenses and related customization services over time (the Company is creating or enhancing an asset that the customer controls)using an input method which requires it to make estimates of the extent of progress toward completion of the contract. When the Company provides otherservices, including in some instances hosting, technical support and maintenance, it recognizes these fees and charges over time (the customersimultaneously receives and consumes benefits), as performance obligations for these services are satisfied during the contract period. Certain of theCompany's software licensing arrangements are term-based licenses that include a per-collection or a usage-based fee related to the use of the license and therelated technical support and hosting services. For these usage-based arrangements, the Company applies the revenue recognition exception resulting inrevenue recognition occurring upon the later of actual usage or satisfaction of the related performance obligations. The payment terms for software licensingarrangements vary by customer pursuant to the terms set forth in the customer contract and result in an unbilled receivable or deferred revenue balancedepending on whether the performance obligation has been satisfied (or partially satisfied).Significant JudgmentsRevenues from product sales are recorded at the net sales price, which includes estimates of variable consideration related to rebates, product returns andvolume discounts. These reserves, which are based on estimates of the amounts earned or to be claimed on the related sales, are recorded as a reduction ofrevenue and a current liability. The Company's estimates take into consideration historical experience, current contractual and statutory requirements,specific known market events and trends, industry data, and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’sbest estimates of the amount of consideration to which it is entitled based on the terms of the contract. The amount of variable consideration included in thenet sales price is limited to the amount that is probable not to result in a significant reversal in the amount of the cumulative revenue recognized in a futureperiod. Revenue recognized in the current period related to performance obligations satisfied in prior periods was not material. If the Company is unable toestimate the expected rebates reasonably, it records a liability for the maximum potential rebate or discount that could be earned. In circumstances where theCompany provides upfront rebate payments to customers, it capitalizes the rebate payments and amortizes the resulting asset as a reduction of revenue usinga systematic method over the life of the contract.Contract BalancesThe timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customeradvances and deposits (contract liabilities) on the consolidated balance sheets. The difference in timing between billing and revenue recognition primarilyoccurs in software licensing arrangements, resulting in contract assets and contract liabilities.Practical ExpedientsThe Company elected not to disclose the value of transaction price allocated to unsatisfied performance obligations for contracts with an original expectedlength of one year or less. When applicable, the Company has also elected to use the practical expedient to not adjust the promised amount of considerationfor the effects of a significant financing component if it is expected, at contract inception, that the period between when the Company transfers a promisedgood or service to a customer and when the customer pays for that good or service, will be one year or less.Non-Income TaxesThe Company is required to collect sales or valued added taxes in connection with the sale of certain of its products. The Company reports revenues net ofthese amounts as they are promptly remitted to the relevant taxing authority.The Company is 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, which went intoeffect January 1, 2013, was established as part of the March 2010 U.S. healthcare reform legislation and was included in selling, general and administrativeexpenses. In December 2015, this tax was suspended for two50Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)years, beginning on January 1, 2016. In January 2018, another temporary two year suspension of the excise tax was passed, extending the suspension untilDecember 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, including those resulting from intercompany transactions, are charged directly to earnings andincluded in other expense, net on the consolidated statements of income (loss). The impact of foreign exchange on long-term intercompany loans, for whichrepayment has not been scheduled or planned, are recorded in accumulated 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 30, 2019, cash andcash equivalents consisted of investments in United States Government Agency and institutional money market funds.Allowance for Doubtful AccountsThe Company establishes a specific allowance for customers when it is probable that they will not be able to meet their financial obligations. Customeraccounts are reviewed individually on a regular basis and reserves are established as deemed appropriate. The Company also maintains a general reserveusing a percentage that is established based upon the age of its receivables and its collection history. The Company establishes allowances for balances notyet due and past due accounts 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. The Company has based its provisions for excess, expired and obsolete inventory primarily on its estimates of forecasted net sales.Significant changes in the timing or level of demand for the Company's products result in recording additional provisions for excess, expired and obsoleteinventory. Additionally, uncertain timing of next-generation product approvals, variability in product launch strategies, non-cancelable purchasecommitments, product recalls and variation in product utilization all affect the Company's estimates related to excess, expired and obsolete inventory.Property, Plant and EquipmentProperty, plant and equipment is recorded at historical cost. The Company provides for depreciation and amortization by charges to operations using thestraight-line method in amounts estimated to recover the cost of the building and improvements, equipment and furniture and fixtures over their estimateduseful lives as follows: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 YearsThe Company evaluates the depreciation periods of property, plant and equipment to determine whether events or circumstances warrant revised estimates ofuseful lives. All property, plant and equipment are also tested for impairment whenever events or changes in circumstances indicate that their carryingamount may not be recoverable.51Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The Company's installed base of devices includes devices owned by the Company and devices sold to the customer. The asset on its balance sheet classifiedas Haemonetics equipment consists of medical devices installed at customer sites but owned by Haemonetics. Generally the customer has the right to use itfor a period of time as long as they meet the conditions the Company has established, which among other things, generally include one or more of thefollowing:•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, the Company reviews Haemonetics equipment and theirrelated useful lives at least once a year, or more frequently if certain conditions arise, to determine if any adverse conditions exist that would indicate thecarrying value of these assets may not be recoverable. To conduct these reviews, the Company estimates the future amount and timing of demand fordisposables used with these devices, from which it generate revenues. The Company also considers product life cycle in its evaluation of useful life andrecoverability. Changes in expected demand can result in additional depreciation expense, which is classified as cost of goods sold. Any significantunanticipated changes in demand could impact the value of the Company's devices and its 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. The Company performs its annual impairment test on thefirst day of the fiscal fourth quarter for each of its reporting units.Under ASC Update No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment entities perform their goodwillimpairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which thecarrying value exceeds the reporting unit's fair value. A reporting unit is defined as an operating segment or one level below an operating segment, referred toas a component. The Company determines its reporting units by first identifying its operating segments and then by assessing whether any components ofthese segments constitute a business for which discrete financial information is available and where segment management regularly reviews the operatingresults of that component. The Company aggregates components within an operating segment that have similar economic characteristics. Its reporting unitsfor purposes of assessing goodwill impairment are organized primarily based on operating segments and geography 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.When allocating goodwill from business combinations to its reporting units, the Company assigns goodwill to the reporting units that it expects to benefitfrom the respective business combination at the time of acquisition. In addition, for purposes of performing its goodwill impairment tests, assets andliabilities, including corporate assets, which relate to a reporting unit’s operations and would be considered in determining its fair value, are allocated to theindividual reporting units. The Company allocates assets and liabilities not directly related to a specific reporting unit, but from which the reporting unitbenefits, based primarily on the respective revenue contribution of each reporting unit.The Company uses the income approach, specifically the discounted cash flow method, to derive the fair value of each of its reporting units in preparing itsgoodwill impairment assessments. This approach calculates fair value by estimating the after-tax cash flows attributable to a reporting unit and thendiscounting these after-tax cash flows to a present value using a risk-adjusted discount rate. The Company selected this method as being the most meaningfulin preparing its goodwill assessments because the use of the income approach typically generates a more precise measurement of fair value than the marketapproach. In applying the income approach to its accounting for goodwill, the Company makes assumptions about the amount52Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)and timing of future expected cash flows, terminal value growth rates and appropriate discount rates. The amount and timing of future cash flows within theCompany's discounted cash flow analysis is based on its most recent operational budgets, long range strategic plans and other estimates. The terminal valuegrowth rate is used to calculate the value of cash flows beyond the last projected period in the Company's discounted cash flow analysis and reflects theCompany's best estimates for stable, perpetual growth of its reporting units. The Company uses estimates of market-participant risk adjusted weightedaverage cost of capital as a basis for determining the discount rates to apply to its reporting units’ future expected cash flows. The Company corroborated thevaluations that arose from the discounted cash flow approach by performing both a market multiple valuation and by reconciling the aggregate fair value ofits reporting units to its market capitalization at the time of the test.During the fourth quarter of fiscal 2019 and 2018, the Company performed its annual goodwill impairment test under the guidelines of ASC Update No.2017-04. The results of the goodwill impairment test performed indicated that the estimated fair value of all of its reporting units exceeded their respectivecarrying values. There were no reporting units at risk of impairment as of the fiscal 2019 and 2018 annual test date. During fiscal 2017, the Companyrecorded goodwill impairment charges of $57.0 million.The Company reviews intangible assets subject to amortization for impairment at least annually or more frequently if certain conditions arise to determine ifany adverse conditions exist that would indicate that the carrying value of an asset or asset group may not be recoverable, or that a change in the remaininguseful life is required. Conditions indicating that an impairment exists include, but are not limited to, a change in the competitive landscape, internaldecisions to pursue new or different technology strategies, a loss of a significant customer or a significant change in the marketplace including prices paid forits products or the size of the market for its products.When an impairment indicator exists, the Company tests the intangible asset for recoverability. For purposes of the recoverability test, the Company groupsits amortizable intangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cashflows independent of other assets and liabilities. If the carrying value of the intangible asset (asset group) exceeds the undiscounted cash flows expected toresult from the use and eventual disposition of the intangible asset (asset group), the Company will write the carrying value down to the fair value in theperiod identified.The Company generally calculates the fair value of its intangible assets as the present value of estimated future cash flows it expects to generate from theasset using a risk-adjusted discount rate. In determining its estimated future cash flows associated with its intangible assets, the Company uses estimates andassumptions about future revenue contributions, cost structures and remaining useful lives of the asset (asset group).If the Company determines the estimate of an intangible asset's remaining useful life should be reduced based on its expected use of the asset, the remainingcarrying amount of the asset is amortized prospectively over the revised estimated useful life. During fiscal 2019 and 2018 the Company did not incur anyintangible asset impairments. During fiscal 2017, the Company impaired $4.8 million of intangible assets. See Note 9, Goodwill & Intangible Assets.Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise MarketedASC Topic 985-20, Software - Costs of Software to be Sold, Leased or Marketed, specifies that costs incurred internally in researching and developing acomputer software product should be charged to expense until technological feasibility has been established for the product. Once technological feasibilityis established, all software costs should be capitalized until the product is available for general release to customers, at which point capitalized costs areamortized over their estimated useful life of 5 to 10 years. Technological feasibility is established when it has a detailed design of the software and whenresearch and development activities on the underlying device, if applicable, are completed. The Company capitalizes costs associated with both software thatit sells as a separate product and software that is embedded in a device.The Company reviews the net realizable value of capitalized assets periodically to assess the recoverability of amounts capitalized. There were noimpairment charges recorded during fiscal 2019 and 2018. During fiscal 2017, the Company recorded $4.0 million of impairment charges. In the future, thenet realizable value may be adversely affected by the loss of a significant customer or a significant change in the market place, which could result in animpairment being recorded.53Table 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 30, 2019 March 31, 2018VAT liabilities$3,995 $2,932Forward contracts5,348 1,583Deferred revenue27,279 25,814Accrued taxes8,451 5,340All other46,459 29,991Total$91,532 $65,660Other 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 30, 2019 March 31, 2018Unfunded pension liability13,766 14,045Unrecognized tax benefit2,895 2,850Transition tax liability6,305 7,837All other5,814 9,526Total$28,780 $34,258Research 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 $4.5 million, $3.1 million and $2.5 million in fiscal 2019, 2018 and 2017, respectively.Shipping and Handling CostsShipping and handling costs are included in selling, general and administrative expenses.Income TaxesThe income tax provision is calculated for all jurisdictions in which the Company operates. The income tax provision process involves calculating currenttaxes due and assessing temporary differences arising from items that are taxable or deductible in different periods for tax and accounting purposes and arerecorded as deferred tax assets and liabilities. Deferred tax assets are evaluated for realizability and a valuation allowance is maintained for the portion of theCompany's deferred tax assets that are not more-likely-than-not realizable. All available evidence, both positive and negative, has been considered todetermine whether, based on the weight of that evidence, a valuation allowance is needed against the deferred tax assets. Refer to Note 4, Income Taxes, forfurther information and discussion of the Company's income tax provision and balances including a discussion of the impact of the Tax Cuts and Jobs Act(the "Act") enacted in December 2017.The Company files income tax returns in all jurisdictions in which it operates. The Company records a liability for uncertain tax positions taken or expectedto be taken in income tax returns. The Company's financial statements reflect expected future54Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)tax consequences of such positions presuming the taxing authorities' full knowledge of the position and all relevant facts. The Company records a liabilityfor the portion of unrecognized tax benefits claimed that it has determined are not more-likely-than-not realizable. These tax reserves have been establishedbased on management's assessment as to the potential exposure attributable to the Company's 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.The Company evaluates at the end of each reporting period whether some or all of the undistributed earnings of its foreign subsidiaries are permanentlyreinvested. The Company recognizes deferred income tax liabilities to the extent that management asserts that undistributed earnings of its foreignsubsidiaries are not permanently reinvested or will not be permanently reinvested in the future. The Company's position is based upon several factorsincluding management’s evaluation of the Haemonetics and its subsidiaries’ financial requirements, the short-term and long-term operational and fiscalobjectives of the Company and the tax consequences associated with the repatriation of earnings.Derivative InstrumentsThe Company accounts for its derivative financial instruments in accordance with ASC Topic 815, Derivatives and Hedging ("ASC 815") and ASC Topic820, Fair Value Measurements and Disclosures ("ASC 820"). In accordance with ASC 815, the Company records all derivatives on the balance sheet at fairvalue. The accounting for the change in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected todesignate a derivative as a hedging instrument for accounting purposes and whether the hedging relationship has satisfied the criteria necessary to applyhedge accounting. In addition, ASC 815 provides 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 the hedged assets, liabilities, or firm commitments through earnings or (b) recognized in equity until the hedgeditem is recognized in earnings, depending on whether the derivative is being used to hedge changes in fair value or cash flows. The ineffective portion of aderivative’s change in fair value is immediately recognized in earnings. The Company does not use derivative financial instruments for trading orspeculation 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 the Company's consolidated statements of income (loss),depending on the nature of the underlying hedged transactions. The cash flows related to the gains and losses are classified in the consolidated statements ofcash flows as part of cash flows from operating activities. For those derivative instruments that are not designated as part of a hedging relationship theCompany records the gains or losses in earnings currently. These gains and losses are intended to offset the gains and losses recorded on net monetary assetsor liabilities that are denominated in foreign currencies. The Company recorded foreign currency losses of $2.3 million, $0.2 million and $1.8 million infiscal 2019, 2018 and 2017, respectively.On a quarterly basis, the Company assesses whether the cash flow hedges are highly effective in offsetting changes in the cash flow of the hedged item. TheCompany manages the credit risk of its counterparties by dealing only with institutions that it considers financially sound and consider the risk of non-performance to be remote. Additionally, the Company's interest rate risk management strategy includes the use of interest rate swaps to mitigate its exposureto changes in variable interest rates. The Company's objective in using interest rate swaps is to add stability to interest expense and to manage and reduce therisk inherent in interest rate fluctuations.The Company's derivative instruments do not subject its earnings or cash flows to material risk, as gains and losses on these derivatives are intended to offsetlosses and gains on the item being hedged. The Company does not enter into derivative transactions for speculative purposes and it does not have any non-derivative instruments that are designated as hedging instruments pursuant to ASC 815.Share-Based CompensationThe Company expenses the fair value of share-based awards granted to employees, board members and others, net of estimated forfeitures. To calculate thegrant-date fair value of its stock options the Company uses the Black-Scholes option-pricing model and for performance share units it uses Monte Carlosimulation models.55Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Costs Associated with Exit ActivitiesThe Company records employee termination costs in accordance with ASC Topic 712, Compensation - Nonretirement and Postemployment Benefits, if itpays the benefits as part of an on-going benefit arrangement, which includes benefits provided as part of its established severance policies or that it providesin accordance with international statutory requirements. The Company accrues employee termination costs associated with an on-going benefit arrangementif the obligation is attributable to prior services rendered, the rights to the benefits have vested, the payment is probable and the liability can be reasonablyestimated. The Company accounts for employee termination benefits that represent a one-time benefit in accordance with ASC Topic 420, Exit or DisposalCost Obligations. It records 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 with ASC Topic 420 and ASC Topic 360, Property, Plant andEquipment and are included primarily in selling, general and administrative costs in its consolidated statement of income (loss). Additionally, costs directlyrelated to the Company's active restructuring initiatives, including program management costs, accelerated depreciation and costs to transfer product linesamong facilities are included within costs of goods sold and selling, general and administrative costs in its consolidated statement of income (loss). See Note3, Restructuring, for further information and discussion of its restructuring plans.Valuation of AcquisitionsThe Company allocates the amounts it pays for each acquisition to the assets acquired and liabilities assumed based on their estimated fair values at the datesof acquisition, including acquired identifiable intangible assets. The Company bases the estimated fair value of identifiable intangible assets on detailedvaluations that use historical information and market assumptions based upon the assumptions of a market participant. The Company allocates any excesspurchase price over the fair value 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 2019, 2018 and 2017, the Company's ten largest customers accounted for approximately 52%, 45% and 42% of net revenues, respectively. In fiscal2019, 2018 and 2017 two Plasma customers, CSL Plasma Inc. ("CSL") and Grifols S.A. ("Grifols"), each were greater than 10% of total net revenue and in totalaccounted for approximately 27%, 26% and 24% of net revenues, respectively. Additionally, one Blood Center customer accounted for greater than 10% ofthe Japan segment’s net revenues in fiscal 2019, 2018 and 2017.Certain other markets and industries can expose the Company to concentrations of credit risk. For example, in the Plasma business unit, sales areconcentrated with several large customers. As a result, accounts receivable extended to any one of these biopharmaceutical customers can be significant atany point in time. Also, a portion of the Company's trade accounts receivable outside the U.S. include sales to government-owned or supported healthcaresystems in several countries, which are subject to payment delays. Payment is dependent upon the financial stability and creditworthiness of those countries’national economies. The Company has not incurred significant losses on government receivables. The Company continually evaluates all governmentreceivables for potential collection risks associated with the availability of government funding and reimbursement practices. If the financial condition ofcustomers or the countries’ healthcare systems deteriorate such that their ability to make payments is uncertain, allowances may be required in future periods.Recent Accounting PronouncementsLeases (Topic 842)In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Codification ("ASC") Update No. 2016-02, Leases(Topic 842). ASC Update No. 2016-02 is intended to increase the transparency and comparability among organizations by recognizing lease asset and leaseliabilities on the balance sheet, including those previously classified as operating leases under current U.S. GAAP and disclosing key information aboutleasing arrangements. ASC Update No. 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscalyears, and is applicable to us in fiscal 2020. Earlier adoption is permitted. In July 2018, the FASB issued an update to the leasing guidance56Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)to allow an additional transition option which would allow companies to adopt the standard as of the beginning of the year of adoption as opposed to theearliest comparative period presented. We adopted the new standard on March 31, 2019.Upon transition, the Company plans to apply the package of practical expedients permitted under ASC Update No. 2016-02 transition guidance to its entirelease portfolio at March 31, 2019. As a result, the Company is not required to reassess (i) whether any expired or existing contracts are or contain leases, (ii)the classification of any expired or existing leases, and (iii) initial direct costs for any existing leases.As a result of adopting ASC Update No. 2016-02, the Company expects to recognize additional right-of-use assets and corresponding liabilities for theCompany's existing lease portfolio on the consolidated balance sheets of approximately $20 million to $25 million, with no material impact to theconsolidated statements of operations or consolidated statements of cash flows. Additionally, the Company is in the process of implementing a new leaseadministration and lease accounting system, and updating its controls and procedures for maintaining and accounting for its lease portfolio under the newstandard.Standards ImplementedRevenue from Contracts with Customers (Topic 606)In May 2014, the FASB issued ASC Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASC Update No. 2014-09 stipulates that anentity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which theentity expects to be entitled in exchange for those goods or services. To achieve this core principle, an entity should apply the following steps: (1) identifythe contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction priceto the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation.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 itsconsolidated statement of operations.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 Company adopted ASC Update No. 2014-09 on April 1, 2018 using the modified retrospective method. Under this method, entities recognize thecumulative effect of applying the new standard at the date of initial application with no restatement of comparative periods presented. The cumulative effectof applying the new standard resulted in an increase to opening retained earnings of $1.5 million upon adoption of Topic 606 in April 2018, primarily relatedto deferred revenue associated with software contracts. Software revenue accounted for approximately 8.2% and 8.6% of total revenue for fiscal year endedMarch 30, 2019 and March 31, 2018, respectively. The new standard has been applied only to those contracts that were not completed as of March 31, 2018.The impact of adopting ASC Update No. 2014-09 was not significant to individual financial statement line items in the consolidated balance sheet andconsolidated statement of income (loss) and comprehensive income (loss).Other Recent Accounting PronouncementsIn 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 Company adopted ASC Update No. 2016-16 during the first quarter of fiscal 2019. The adoption of ASC Update No. 2016-16 did nothave a material impact on the Company's consolidated financial statements.57Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)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 Company adopted ASC Update No. 2016-15 during the firstquarter of fiscal 2019. The adoption of ASC Update No. 2016-15 did not have a material impact on the Company's 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 Company adopted ASCUpdate No. 2017-09 during the first quarter of fiscal 2019. The adoption of ASC Update No. 2017-09 did not have a material impact on the Company'sconsolidated 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 makes more financial and non-financial hedging strategies eligible for hedge accounting, amends the presentation and disclosurerequirements for hedging activities and changes how companies assess hedge effectiveness. The Company early adopted ASC Update No. 2017-12 during thesecond quarter of fiscal 2019. The adoption of ASC Update No. 2017-12 did not have an impact on the Company's consolidated financial statements or theclassification of its designated and non-designated hedge contracts.In August 2018, the Securities and Exchange Commission adopted amendments to certain disclosure requirements in Securities Act Release No. 33-10532,Disclosure Update and Simplification. This amendment require companies to disclose a reconciliation of changes in stockholders’ equity to prior periods. Apresentation showing the activity for the year to date period and comparable prior year detail are shown in the disclosure.3. RESTRUCTURINGOn an ongoing basis, the Company reviews the global economy, the healthcare industry, and the markets in which it competes to identify opportunities forefficiencies, enhance commercial capabilities, align its resources and offer its customers better solutions. In order to realize these opportunities, the Companyundertakes restructuring-type activities to transform its business.During fiscal 2018, the Company launched a Complexity Reduction Initiative (the "2018 Program"), a company-wide restructuring program designed toimprove operational performance and reduce cost, freeing up resources to invest in accelerated growth. This program includes a reduction of headcount andoperating costs to enable a more streamlined organizational structure. The Company expects to incur aggregate charges between $50 million and $60 millionassociated with these actions, of which it expects $35 million to $40 million will consist of severance and other employee costs and the remainder willconsist 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 thespecific actions required to execute on these initiatives are identified and approved and are expected to continue through fiscal 2020. During fiscal 2019 and2018, the Company incurred $13.7 million and $36.6 million of restructuring and turnaround costs under this program, respectively. Total cumulativecharges under this program are $50.3 million as of March 30, 2019.During fiscal 2017, the Company launched a restructuring program (the "2017 Program") designed to reposition its organization and improve its coststructure. The Company did not incur any charges under this program during fiscal 2019. During fiscal 2018 and 2017, the Company incurred $7.2 millionand $28.7 million of restructuring and turnaround charges under this program, respectively. The 2017 Program is substantially complete.58Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The following table summarizes the activity for restructuring reserves related to the 2018 Program and the 2017 and Prior Programs for the fiscal years endedMarch 30, 2019, March 31, 2018 and April 1, 2017, substantially all of which relates to employee severance and other employee costs:(In thousands)2018 Program 2017 and PriorPrograms TotalBalance at April 2, 2016$— $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 $28,535Costs incurred, net of reversals431 (36) 395Payments(20,742) (650) (21,392)Non-cash adjustments(96) 37 (59)Balance at March 30, 2019$6,722 $757 $7,479The substantial majority of restructuring costs during fiscal 2019, 2018 and 2017 have been included as a component of selling, general and administrativeexpenses in the accompanying consolidated statements of income (loss). As of March 30, 2019, the Company had a restructuring liability of $7.5 million, ofwhich, approximately $6.7 million is payable within the next twelve months.In addition to the restructuring expenses included in the table above, the Company also incurred costs of $13.2 million, $13.6 million and $12.5 million infiscal 2019, 2018 and 2017, respectively, that do not constitute as restructuring under ASC 420, Exit and Disposal Cost Obligations, which the Companyrefers to as turnaround costs. These costs, substantially all of which have been included as a component of selling, general and administrative expenses in theaccompanying consolidated statements of income (loss), consist primarily of expenditures directly related to the restructuring actions and include programmanagement costs associated with the implementation of outsourcing initiatives and recent accounting standards.59Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The tables below present restructuring and turnaround costs by reportable segment:Restructuring costs (In thousands)2019 2018 2017Japan$102 $514 $819EMEA730 1,496 4,272North America Plasma(20) 565 366All Other(417) 27,954 16,376Total$395 $30,529 $21,833 Turnaround costs (In thousands)2019 2018 2017Japan$— $— $2EMEA108 (107) 94North America Plasma136 976 972All Other12,984 12,727 11,415Total$13,228 $13,596 $12,483 Total restructuring and turnaround$13,623 $44,125 $34,3164. INCOME TAXESDomestic and foreign income before provision for income tax is as follows:(In thousands)2019 2018 2017Domestic$26,665 $3,534 $(44,724)Foreign46,968 56,098 17,248Total$73,633 $59,632 $(27,476)The income tax provision from continuing operations contains the following components:(In thousands)2019 2018 2017Current Federal$(4,165) $9,927 $(1,424)State844 1,024 436Foreign8,584 8,937 6,580Total current$5,263 $19,888 $5,592Deferred Federal12,220 (5,350) (8,711)State463 344 (953)Foreign668 (822) 2,864Total deferred$13,351 $(5,828) $(6,800)Total$18,614 $14,060 $(1,208)The Company conducts business globally and reports its results of operations in a number of foreign jurisdictions in addition to the United States. TheCompany's reported tax rate is impacted by the jurisdictional mix of earnings in any given period as the foreign jurisdictions in which it operates have taxrates that differ from the U.S. statutory tax rate.60Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)During the third quarter of fiscal 2018, the Tax Cuts and Jobs Act (the "Act") was enacted in the United States. The Act reduced the U.S. federal corporate taxrate from 35% to 21%, required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred andcreated new taxes on certain foreign sourced earnings. In addition, the Securities and Exchange Commission issued guidance under Staff AccountingBulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act that directed taxpayers to consider the impact of the U.S. legislation as“provisional” when they do not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to completetheir accounting for the change in tax law.During fiscal 2018, the Company recognized a provisional amount of $2.0 million as a reasonable estimate of the impact of the provisions of the Act, whichwas included as a component of income tax expense in the consolidated statements of income (loss). During fiscal 2019, the Company completed itsaccounting for the tax effects of the enactment of the Act. The Company recognized a $0.4 million adjustment to the provisional tax expense recorded infiscal 2018.The Company has incorporated the other impacts of the Act that became effective in fiscal 2019 in the calculation of the tax provision and effective tax rate,including the provisions related to global intangible low taxed income (“GILTI”), foreign derived intangible income (“FDII”), base erosion anti abuse Tax(“BEAT”), as well as other provisions which limit tax deductibility of expenses. For fiscal 2019, the GILTI provisions have the most significant impact to theCompany. Under the new law, U.S. taxes are imposed on foreign income in excess of a deemed return on tangible assets of its foreign subsidiaries. The abilityto benefit a deduction and foreign tax credits against a portion of the GILTI income may be limited under the GILTI rules as a result of the utilization of netoperating losses, foreign sourced income, and other potential limitations within the foreign tax credit calculation. Interpretive guidance on the accounting for GILTI states that an entity can make an accounting policy election to either recognize deferred taxes fortemporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred as aperiod expense only. For the year ended March 30, 2019, the Company made the accounting policy election to recognize GILTI as a period expense.The Company's subsidiary in Puerto Rico has been granted a fifteen-year tax grant that expires in calendar 2027. Its qualification for the tax grant isdependent on the continuation of its manufacturing activities in Puerto Rico. The Company benefits from a reduced tax rate on its earnings in Puerto Ricounder the tax grant.The Company's subsidiary in Malaysia has been granted a full income tax exemption to manufacture whole blood and apheresis devices that could be ineffect for up to ten years, provided certain conditions are satisfied. The income tax exemption was in effect beginning June 1, 2016.61Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Tax affected, significant temporary differences comprising the net deferred tax liability are as follows:(In thousands)March 30, 2019 March 31, 2018Deferred tax assets: Depreciation$2,277 $1,345Amortization of intangibles1,091 964Inventory3,541 3,183Accruals, reserves and other deferred tax assets15,802 16,939Net operating loss carry-forward4,931 10,810Stock based compensation3,728 3,292Tax credit carry-forward, net4,176 3,479Gross deferred tax assets35,546 40,012Less valuation allowance(11,322) (11,090)Total deferred tax assets (after valuation allowance)24,224 28,922Deferred tax liabilities: Depreciation(23,102) (17,732)Amortization of goodwill and intangibles(13,959) (11,942)Unremitted earnings(801) (274)Other deferred tax liabilities(1,909) (1,539)Total deferred tax liabilities(39,771) (31,487)Net deferred tax liabilities$(15,547) $(2,565)The valuation allowance increased by $0.2 million during fiscal 2019, primarily as a result of net operating losses and tax credits generated in jurisdictions inwhich the Company has concluded that its deferred tax assets are not more-likely-than-not realizable, offset by the release of the valuation allowance againstdeferred tax assets in certain foreign subsidiaries. The Company has assessed, on a jurisdictional basis, the available means of recovering deferred tax assets,including the ability to carry-back net operating losses, the existence of reversing temporary differences, the availability of tax planning strategies andavailable sources of future taxable income. It has also considered the ability to implement certain strategies that would, if necessary, be implemented toaccelerate taxable income and use expiring deferred tax assets. The Company believes it is able to support the deferred tax assets recognized as of the end ofthe year based on all of the available evidence. The worldwide net deferred tax liability as of March 30, 2019 includes deferred tax liabilities related toamortizable tax basis in goodwill, which are indefinite lived and can only be used as a source of income to benefit other indefinite lived assets.As of March 30, 2019, the Company maintains a valuation allowance against certain U.S. state deferred tax assets that are not more-likely-than-not realizableand maintains a full valuation allowance against the net deferred tax assets of certain foreign subsidiaries.As of March 30, 2019, the Company has U.S. federal net operating losses of approximately $5.8 million that will begin to expire in fiscal 2036. TheCompany has U.S. state net operating losses of $21.7 million of which $21.3 million will begin to expire in fiscal 2020 and $0.4 million can be carriedforward indefinitely. The Company has federal and state tax credits of $0.5 million and $4.7 million, respectively, which will begin to expire in fiscal 2039and fiscal 2025, respectively.The Company's net operating loss and tax credit carry-forwards may become subject to an annual limitation in the event of certain cumulative changes in theownership interest of significant shareholders over a three-year period in excess of 50 percent as defined under Section 382 and 383 of the U.S. InternalRevenue Code of 1986, respectively, as well as similar state provisions. The amount of the annual limitation is determined based on the value of theCompany immediately prior to the ownership change. The Company conducted a Section 382 study covering the period April 2, 2011 through December 31,2017. The study concluded that there were no limitations on the Company’s net operating losses and tax credit carryforwards as of December 31, 2017. TheCompany does not believe it has had an ownership change through March 30, 2019. Subsequent ownership changes may further affect the limitation infuture years.62Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)As of March 30, 2019, the Company has foreign net operating losses of approximately $12.6 million that are available to reduce future income of which $3.7million will begin to expire in fiscal 2034 and $8.9 million can be carried forward indefinitely.As of March 30, 2019, substantially all of the unremitted earnings of the Company have been taxed in the U.S. as a result of tax reform. The Company hasprovided $0.8 million of net foreign withholding taxes on approximately $154.0 million of unremitted earnings that are not indefinitely reinvested. TheCompany has not provided U.S. deferred income taxes or foreign withholding taxes on unremitted earnings of foreign subsidiaries of approximately $287.9million as such amounts are considered to be indefinitely reinvested in the business or could be remitted without a future tax cost. The accumulated earningsin the foreign subsidiaries are primarily utilized to fund working capital requirements as its subsidiaries continue to expand their operations, to serviceexisting debt obligations and to fund future foreign acquisitions. The Company does not believe it is practicable to estimate the amount of income taxespayable on the earnings that are indefinitely reinvested in foreign operations.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)2019 2018 2017Tax at federal statutory rate$15,463 21.0 % $18,807 31.5 % $(9,616) 35.0 %Difference between U.S. and foreign tax(1,423) (1.9)% (9,264) (15.5)% 137 (0.5)%State income taxes net of federal benefit902 1.2 % 29 — % (495) 1.8 %Change in uncertain tax positions267 0.4 % 1,095 1.8 % 862 (3.1)%Global intangible low taxed income5,954 8.1 % — — % — — %Unremitted earnings527 0.7 % (791) (1.3)% 330 (1.2)%Deferred statutory rate changes1,183 1.6 % (3,193) (5.4)% (383) 1.4 %Non-deductible goodwill impairment— — % — — % 3,703 (13.5)%Non-deductible executive compensation1,588 2.2 % 221 0.4 % 40 (0.1)%Non-deductible other462 0.6 % 22 — % 856 (3.1)%Stock compensation benefits(5,382) (7.3)% (2,544) (4.3)% — — %Research credits(768) (1.0)% (763) (1.3)% (561) 2.0 %One-time transition tax from tax reform26 — % 25,798 43.3 % — — %Tax amortization of goodwill— — % — — % (10,564) 38.4 %Valuation allowance(184) (0.3)% (15,541) (25.9)% 13,505 (49.2)%Other, net(1) — % 184 0.3 % 978 (3.5)%Income tax provision (benefit)$18,614 25.3 % $14,060 23.6 % $(1,208) 4.4 %The Company recorded an income tax provision of $18.6 million, representing an effective tax rate of 25.3%. The effective tax rate is higher than the U.S.statutory rate of 21.0% primarily as a result of the impact of GILTI, non-deductible executive compensation, and foreign losses not benefited, including anasset impairment expense of $21.2 million recorded in pretax income for which no tax benefit was recognized due to a valuation allowance maintainedagainst its deferred tax assets in the impacted jurisdiction. Refer to Note 8, Property, Plant & Equipment, for additional details. The effective tax rate hasbeen favorably impacted by excess stock compensation benefits, research tax credits generated, jurisdictional mix of earnings, and the release of valuationallowance against its net deferred tax assets in certain foreign jurisdictions. The Company has recorded $0.5 million tax expense related to unremitted foreignearnings that are not considered permanently reinvested.Unrecognized Tax BenefitsUnrecognized tax benefits represent uncertain tax positions for which reserves have been established. As of March 30, 2019, the Company had $4.7 millionof unrecognized tax benefits, of which $3.9 million would impact the effective tax rate, if recognized. As of March 31, 2018, the Company had $4.5 millionof unrecognized tax benefits, of which $3.8 million would impact the effective tax rate, if recognized. At April 1, 2017, the Company had $3.4 million ofunrecognized tax benefits, of which $1.5 million would impact the effective tax rate, if recognized.63Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)During the fiscal year ended March 30, 2019 the Company's unrecognized tax benefits were increased by $0.2 million, primarily relating to uncertain taxpositions established against various federal and state tax credits.The following table summarizes the activity related to its gross unrecognized tax benefits for the fiscal years ended March 30, 2019, March 31, 2018 andApril 1, 2017:(In thousands)March 30, 2019 March 31, 2018 April 1, 2017Beginning Balance$4,450 $3,370 $2,523Additions for tax positions of current year282 289 —Additions for tax positions of prior years— 1,203 1,279Reductions of tax positions(52) (252) (29)Closure of statute of limitations(23) (160) (403)Ending Balance$4,657 $4,450 $3,370As of March 30, 2019, the Company anticipates that the liability for unrecognized tax benefits for uncertain tax positions could change by up to $1.3 millionin the next twelve months, as a result of closure of various statutes of limitations and potential settlements with tax authorities.The Company's historical practice has been and continues to be to recognize interest and penalties related to federal, state and foreign income tax matters inincome tax expense. Approximately $0.2 million of gross interest and penalties were accrued at both March 30, 2019 and March 31, 2018 and are notincluded in the amounts above. There was a nominal benefit included in tax expense for accrued interest and penalties during fiscal 2019, 2018 and 2017.The Company conducts business globally and, as a result, files federal, state and foreign income tax returns in multiple jurisdictions. In the normal course ofbusiness, it is subject to examination by taxing authorities throughout the world. With a few exceptions, the Company is no longer subject to U.S. federal,state, or local income tax examinations for years before fiscal 2016 and foreign income tax examinations for years before fiscal 2014. To the extent that theCompany has 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.5. 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)2019 2018 2017Basic EPS Net income (loss)$55,019 $45,572 $(26,268)Weighted average shares51,533 52,755 51,524Basic income (loss) per share$1.07 $0.86 $(0.51)Diluted EPS Net income (loss)$55,019 $45,572 $(26,268)Basic weighted average shares51,533 52,755 51,524Net effect of common stock equivalents1,409 746 —Diluted weighted average shares52,942 53,501 51,524Diluted income (loss) per share$1.04 $0.85 $(0.51)Basic earnings per share is calculated using the Company's weighted-average outstanding common shares. Diluted earnings per share is calculated using itsweighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method. For fiscal 2019and 2018, weighted average shares outstanding, assuming dilution, excludes the impact of 0.2 million and 0.4 million anti-dilutive shares, respectively. Forfiscal 2017, the Company recognized a64Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)net loss; therefore it 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 PlanIn May 2019, the Company announced that its Board of Directors had authorized the repurchase of up to $500 million of Haemonetics common shares overthe next two years. This new share repurchase program will help to offset the dilutive impact of recent and future employee equity grants. The timing andamounts of activity under the repurchase program will be at management’s discretion with the intent of beginning activity under the program during fiscal2020.Under the share repurchase program, the Company is authorized to repurchase, from time to time, outstanding shares of common stock in accordance withapplicable laws on the open market, including under trading plans established pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, asamended, and in privately negotiated transactions. The actual timing, number and value of shares repurchased will be determined by the Company at itsdiscretion and will depend on a number of factors, including market conditions, applicable legal requirements and compliance with the terms of loancovenants. The share repurchase program may be suspended, modified or discontinued at any time, and the Company has no obligation to repurchase anyamount of its common stock under the program.On February 6, 2018, the Company announced that its Board of Directors authorized the repurchase of up to $260 million of its outstanding common stockfrom time to time, based on market conditions, through March 30, 2019. In May 2018, the Company completed a $100.0 million repurchase of its commonstock pursuant to an accelerated share repurchase agreement ("ASR") entered into with Citibank N.A (“Citibank”) in February 2018. The total number ofshares repurchased under the ASR was approximately 1.4 million at an average price per share upon final settlement of $72.51. In August 2018, the Companycompleted an additional $80.0 million repurchase of its common stock pursuant to an ASR entered into with Citibank in June 2018. The total number ofshares repurchased under the ASR was approximately 0.9 million at an average price per share upon final settlement of $93.83. In December 2018, theCompany repurchased the remaining $80.0 million of its common stock under the Company's share repurchase authorization pursuant to an ASR entered intowith Citibank in November 2018. The total number of shares repurchased under the ASR was approximately 0.8 million at an average price per share uponfinal settlement of $103.74. As of March 30, 2019, the Company had utilized the full $260 million share repurchase authorization, which resulted inapproximately 3.0 million total shares repurchased at an average price of $86.58 per share.6. REVENUEThe Company's revenue recognition policy is to recognize revenues from product sales, software and services in accordance with ASC Topic 606, Revenuefrom Contracts with Customers. The Company adopted Topic 606 as of April 1, 2018 using the modified retrospective method. Under this method, entitiesrecognize the cumulative effect of applying the new standard at the date of initial application with no restatement of comparative periods presented. Thecumulative effect of applying the new standard resulted in an increase to opening retained earnings of $1.5 million upon adoption of Topic 606 on April 1,2018, primarily related to deferred revenue associated with software revenue. The new standard has been applied only to those contracts that were notcompleted as of March 31, 2018.The impact of adopting Topic 606 was not significant to individual financial statement line items in the consolidated balance sheet as of March 30, 2019 orin the consolidated statements of income (loss) and comprehensive income (loss) for fiscal 2019.As of March 30, 2019, the Company had $23.9 million of transaction price allocated to remaining performance obligations related to executed contracts withan original duration of one year or more. The Company expects to recognize approximately 56% of this amount as revenue within the next twelve monthsand the remaining balance thereafter.As of March 30, 2019 and April 1, 2018, the Company had contract assets of $5.6 million and $2.7 million, respectively. The change is primarily due to thedelay in billings compared to the revenue recognized. Contract assets are classified as other current assets and other long-term assets on the consolidatedbalance sheet.As of March 30, 2019 and April 1, 2018, the Company had contract liabilities of $20.3 million and $16.6 million, respectively. During fiscal 2019, theCompany recognized $15.0 million of revenue that was included in the above April 1, 2018 contract liability balance. Contract liabilities are classified asother current liabilities and other long-term liabilities on the consolidated balance sheet.65Table 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 30, 2019 March 31,2018(1)Raw materials$69,420 $52,997Work-in-process12,610 10,774Finished goods112,307 97,028Total Inventories$194,337 $160,799(1) The Company corrected the classification of inventory as of March 31, 2018. This correction did not change total inventories and did not have a financial statement impact.8. PROPERTY, PLANT AND EQUIPMENTProperty and equipment consisted of the following:(In thousands) March 30, 2019 March 31, 2018Land $7,337 $7,450Building and building improvements 118,821 114,646Plant equipment and machinery 301,297 291,537Office equipment and information technology 132,783 134,412Haemonetics equipment 372,984 325,401 Total 933,222 873,446Less: accumulated depreciation and amortization (589,243) (541,290)Property, plant and equipment, net $343,979 $332,156Depreciation expense was $76.8 million, $57.7 million and $66.5 million in fiscal 2019, 2018 and 2017, respectively. There were no asset impairmentsincluded in depreciation expense during fiscal 2019. Fiscal 2018 and 2017 include $0.3 million and $10.0 million, respectively, of additional depreciationexpense due to asset impairments.As part of the acquisition of the whole blood business from Pall Corporation (“Pall”) in fiscal 2012, Pall agreed to manufacture and install in one of theCompany's facilities a filter media manufacturing line (the “HDC line”) for which the Company agreed to pay Pall approximately $15.0 million (plus pre-approved overages). Pall also agreed to supply media to the Company for use in leukoreduction filters until such time as the Company accepted the HDCline.In May 2018, the Company entered into a long-term supply agreement with Pall under which Pall will continue to supply media to the Company for usein leukoreduction filters. As a condition of the supply agreement, the Company agreed to accept the HDC line and to make a final payment of $9.0 million toPall for the HDC line.As a result of the decision to continue to source media for leukoreduction filters from Pall rather than producing them internally, the Company does notexpect to utilize the HDC line for future production and expects that the asset’s future cash flows will not be sufficient to recover its carrying value of $19.8million. Accordingly, during the first quarter of fiscal 2019 the Company recorded impairment charges of $19.8 million for the HDC line.During fiscal 2019, the Company impaired an additional $1.4 million of property, plant and equipment as a result of the Company's review of non-core andunderperforming assets, resulting in total impairment charges of $21.2 million during fiscal 2019. These impairments were included within cost of goods soldon the consolidated statements of income (loss) and impacted the All Other reporting segment. During fiscal 2018 and 2017, the Company impaired $2.2million and $13.3 million of property, plant and equipment, respectively.Additionally, the Company has changed the estimated useful lives of PCS®2 devices, included within Haemonetics Equipment, as these will be replaced bythe NexSys PCS® which the Company began placing during the second quarter of fiscal 2019. During fiscal 2019, the Company incurred $18.0 million ofaccelerated depreciation expense related to this change in estimate.66Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)9. GOODWILL AND INTANGIBLE ASSETSThe changes in the carrying amount of goodwill by operating segment for fiscal 2019 and 2018 are as follows:(In thousands)Japan EMEA North AmericaPlasma All Other TotalCarrying 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 $211,395Transfer of goodwill between segments— (1,084) — 1,084 —Currency translation(168) (139) — (269) (576)Carrying amount as of March 30, 2019$24,874 $19,454 $26,415 $140,076 $210,819The results of the Company's goodwill impairment test performed in the fourth quarter of fiscal 2019 and 2018 indicated that the estimated fair value of allreporting units exceeded their respective carrying values. There were no reporting units at risk of impairment as of the fiscal 2019 and 2018 annual test dates.During fiscal 2017, the Company recorded goodwill impairment charges of $57.0 million. During fiscal 2019, management reorganized its operatingsegments such that certain immaterial components of the EMEA operating segment became components of the All Other operating segment. As a result, theCompany transferred $1.1 million of goodwill to the All Other operating segment, which represented the portion of goodwill associated with thesecomponents.The gross carrying amount of intangible assets and the related accumulated amortization as of March 30, 2019 and March 31, 2018 is as follows:(In thousands)Gross CarryingAmount AccumulatedAmortization NetAs of March 30, 2019 Amortizable: Patents$9,635 $8,444 $1,191Capitalized software66,631 34,737 31,894Other developed technology103,321 73,271 30,050Customer contracts and related relationships194,793 142,747 52,046Trade names5,169 4,280 889Total$379,549 $263,479 $116,070Non-amortizable: In-process software development$8,740 In-process patents2,883 Total$11,623 67Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(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 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 the Company's intangible assets fromMarch 31, 2018 to March 30, 2019 reflect the impact of amortization expense, partially offset by the investment in capitalized software.Aggregate amortization expense for amortized intangible assets for fiscal 2019, 2018, and 2017 was $32.6 million, $31.9 million and $37.2 million,respectively. During fiscal 2017, the Company impaired $4.8 million of intangible assets. Amortization expense for fiscal 2017 included $4.0 million ofamortization expense resulting from these intangible asset impairments. There were no intangible asset impairments during fiscal 2019 and 2018. Future annual amortization expense on intangible assets is estimated to be as follows:(In thousands) Fiscal 2020 $28,226Fiscal 2021 $26,593Fiscal 2022 $12,013Fiscal 2023 $9,375Fiscal 2024 $4,99110. CAPITALIZATION OF SOFTWARE DEVELOPMENT COSTSThe cost of software that is developed or obtained for internal use is accounted for pursuant to ASC Topic 350, Intangibles — Goodwill and Other. Pursuantto ASC Topic 350, the Company capitalizes costs incurred during the application development stage of software developed for internal use and expensecosts incurred during the preliminary project and the post-implementation operation stages of development. The costs capitalized for each project areincluded in intangible assets in the consolidated financial statements.For costs incurred related to the development of software to be sold, leased, or otherwise marketed, the Company applies the provisions of ASC Topic 985-20,Software - Costs of Software to be Sold, Leased or Marketed, which specifies that costs incurred internally in researching and developing a computersoftware product should be charged to expense until technological feasibility has been established for the product. Once technological feasibility isestablished, all software costs should be capitalized until the product is available for general release to customers.The Company capitalized $3.5 million and $9.3 million in software development costs for ongoing initiatives during fiscal 2019 and 2018, respectively. AtMarch 30, 2019 and March 31, 2018, the Company had a total of $75.4 million and $71.8 million of software costs capitalized, of which $8.7 million and$17.7 million are related to in process software development initiatives, respectively, and the remaining balance represents in-service assets that are beingamortized over their useful lives. In68Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)connection with these development activities, the Company capitalized interest of $0.3 million in both fiscal 2019 and 2018. The Company amortizescapitalized costs when the products are released for sale. During fiscal 2019 and 2018, $12.5 million and $4.4 million of capitalized costs were placed intoservice, respectively. Amortization of capitalized software development cost expense was $7.6 million, $6.8 million and $9.7 million for fiscal 2019, 2018and 2017, respectively and has been included as a component of cost of goods sold within the accompanying consolidated statements of income (loss). Therewere no impairment charges recorded during fiscal 2019 and 2018. Amortization expense in fiscal 2017 includes $4.0 million of impairment charges. Thecosts capitalized for each project are included in intangible assets in the consolidated financial statements.11. NOTES PAYABLE AND LONG-TERM DEBTNotes payable and long-term debt consisted of the following:(In thousands)March 30, 2019 March 31, 2018Term loan, net of financing fees$334,859 $253,305Other borrowings15,261 377Less current portion(27,666) (194,259)Long-term debt$322,454 $59,423On June 15, 2018, the Company entered into a credit agreement with certain lenders which provided for a $350.0 million term loan (the "Term Loan") and a$350.0 million revolving loan (the "Revolving Credit Facility" and together with the Term Loan, the "Credit Facilities"). The Credit Facilities expire on June15, 2023. Interest on the Credit Facilities is established using LIBOR plus 1.13% - 1.75%, depending on the Company's leverage ratio. A portion of the netproceeds of $347.8 million was used to pay down the $253.7 million remaining outstanding balance on the 2012 credit agreement, as amended in fiscal2014. The remainder of the proceeds were used to support the launch of the NexSys PCS device and for general corporate purposes. At March 30, 2019,$336.9 million was outstanding under the Term Loan and $15.0 million was outstanding on the Revolving Credit Facility, both with an effective interest rateof 3.8%. The Company also had $25.1 million of uncommitted operating lines of credit to fund its global operations under which there were no outstandingborrowings as of March 30, 2019.Under the Credit Facilities, the Company is required to maintain a Consolidated Leverage Ratio not to exceed 3.5:1.0 and a Consolidated Interest CoverageRatio not to be less than 4.0:1.0 during periods when the Credit Facilities are outstanding. In addition, the Company is required to satisfy these covenants, ona pro forma 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 Leverage Ratio is calculated as Consolidated Total Debt divided by Consolidated EBITDA. Consolidated EBITDA includes EBITDA adjustedby 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 its business, capital expenditures, share repurchase and other restricted payments. These covenants aresubject to 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 the Company from being able to borrow additionalfunds and would constitute a default, which could result in, among other things, the amounts outstanding including all accrued interest and unpaid fees,becoming immediately due and payable. In addition, the Credit Facilities include customary events of default, in certain cases subject to customary cureperiods. As of March 30, 2019, the Company was in compliance with the covenants.Commitment FeePursuant to the Credit Facilities, the Company is required to pay, on the last day of each calendar quarter, a commitment fee on the unused portion of theRevolving Credit Facility. The commitment fee is subject to a pricing grid based on the Company's Consolidated Leverage Ratio. The commitment feeranges from 0.150% to 0.275%. The current commitment fee on the undrawn portion of the Revolving Credit Facility is 0.175%.69Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Debt Issuance Costs and InterestExpenses associated with the issuance of the Term Loan were capitalized and are amortized to interest expense over the life of the term loan using theeffective interest method. As of March 30, 2019, the $336.9 million term loan balance was netted down by the $2.0 million of remaining debt discount,resulting in a net note payable of $334.9 million.Interest expense was $13.1 million, $7.7 million and $7.9 million for fiscal 2019, 2018 and 2017, respectively. Accrued interest associated with theoutstanding debt is included as a component of other current liabilities in the accompanying consolidated balance sheets. As of both March 30, 2019 andMarch 31, 2018, the Company had an insignificant amount of accrued interest associated with the outstanding debt.The aggregate amount of debt maturing during the next five fiscal years and thereafter are as follows:Fiscal year (In thousands) 2020$28,262202121,942202217,5282023214,394202470,009Thereafter—12. DERIVATIVES AND FAIR VALUE MEASUREMENTSThe Company manufactures, markets and sells its products globally. For the fiscal year ended March 30, 2019, 37.3% of the Company's sales were generatedoutside the U.S. in local currencies. The Company also incurs certain manufacturing, marketing and selling costs in international markets in local currency.Accordingly, earnings and cash flows are exposed to market risk from changes in foreign currency exchange rates relative to the U.S. Dollar, the Company'sreporting currency. The Company has a program in place that is designed to mitigate the exposure to changes in foreign currency exchange rates. Thatprogram includes the use of derivative financial instruments to minimize, for a period of time, the impact on its financial results from changes in foreignexchange rates. The Company utilizes foreign currency forward contracts to hedge the anticipated cash flows from transactions denominated in foreigncurrencies, primarily the Japanese Yen and the Euro, and to a lesser extent the Swiss Franc, Australian Dollar, Canadian Dollar and the Mexican Peso. Thisdoes not eliminate the impact of the volatility of foreign exchange rates. However, because the Company generally enters into forward contracts one year out,rates are fixed for a one-year period, thereby facilitating financial planning and resource allocation.Designated Foreign Currency Hedge ContractsAll of the Company's designated foreign currency hedge contracts as of March 30, 2019 and March 31, 2018 were cash flow hedges under ASC 815,Derivatives and Hedging ("ASC 815"). The Company records the effective portion of any change in the fair value of designated foreign currency hedgecontracts in other comprehensive income until the related third-party transaction occurs. Once the related third-party transaction occurs, the Companyreclassifies the effective portion of any related gain or loss on the designated foreign currency hedge contracts to earnings. In the event the hedged forecastedtransaction does not occur, or it becomes probable that it will not occur, the Company will reclassify the amount of any gain or loss on the related cash flowhedge to earnings at that time. The Company had designated foreign currency hedge contracts outstanding in the contract amount of $81.5 million as ofMarch 30, 2019 and $86.0 million as of March 31, 2018. At March 30, 2019, gains of $2.6 million, net of tax, will be reclassified to earnings within the nexttwelve months. Substantially all currency cash flow hedges outstanding as of March 30, 2019 mature within twelve months.70Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Non-Designated Foreign Currency ContractsThe Company manages its exposure to changes in foreign currency on a consolidated basis to take advantage of offsetting transactions and balances. It usesforeign currency forward contracts as a part of its strategy to manage exposure related to foreign currency denominated monetary assets and liabilities. Theseforeign currency forward contracts are entered into for periods consistent with currency transaction exposures, generally one month. They are not designatedas cash flow or fair value hedges under ASC 815. These forward contracts are marked-to-market with changes in fair value recorded to earnings. The Companyhad non-designated foreign currency hedge contracts under ASC 815 outstanding in the contract amount of $37.4 million as of March 30, 2019 and $36.3million as of March 31, 2018.Interest Rate SwapsOn June 15, 2018, the Company entered into Credit Facilities which provided for a $350 million Term Loan and a $350 million Revolving Credit Facility.Under the terms of the Credit Facilities, interest is established using LIBOR plus 1.13% - 1.75%. As a result, the Company's earnings and cash flows areexposed to interest rate risk from changes to LIBOR. Part of the Company's interest rate risk management strategy includes the use of interest rate swaps tomitigate its exposure to changes in variable interest rates. The Company's objective in using interest rate swaps is to add stability to interest expense and tomanage and reduce the risk inherent in interest rate fluctuations.In August 2018, the Company entered into two interest rate swap agreements (the "Swaps") to pay an average fixed rate of 2.80% on a total notional value of$241.9 million of debt. As a result of the interest rate swaps, 70% of the Term Loan exposed to interest rate risk from changes in LIBOR are fixed at a rate of4.05%. The Swaps mature on June 15, 2023. The Company designated the Swaps as cash flow hedges of variable interest rate risk associated with $345.6million of indebtedness. For fiscal 2019, the Company recorded a loss of $5.2 million in accumulated other comprehensive loss to recognize the effectiveportion of the fair value of the Swaps that qualify as cash flow hedges.Fair Value of Derivative InstrumentsThe following table presents the effect of the Company's derivative instruments designated as cash flow hedges and those not designated as hedginginstruments under ASC 815 in its consolidated statements of income (loss) and comprehensive income (loss) for the fiscal year ended March 30, 2019.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 $2,610 $577 Net revenues, COGSand SG&A $1,601 Interest and otherexpense, netNon-designated foreign currency hedgecontracts — — $1,355 Interest and otherexpense, netDesignated interest rate swaps, net of tax $(4,487) $(377) Interest and otherexpense, net $— The Company did not have fair value hedges or net investment hedges outstanding as of March 30, 2019 or March 31, 2018. As of March 30, 2019, nodeferred tax assets were recognized for designated foreign currency hedges.ASC 815 requires all derivative instruments to be recognized at their fair values as either assets or liabilities on the balance sheet. The Company determinesthe fair value of its derivative instruments using the framework prescribed by ASC 820, Fair Value Measurements and Disclosures, by considering theestimated amount it would receive or pay to sell or transfer these instruments at the reporting date and by taking into account current interest rates, currencyexchange rates, current interest rate curves, interest rate volatilities, the creditworthiness of the counterparty for assets, and its creditworthiness for liabilities.In71Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)certain instances, the Company may utilize financial models to measure fair value. Generally, the Company uses inputs that include quoted prices for similarassets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; other observable inputs for theasset or liability; and inputs derived principally from, or corroborated by, observable market data by correlation or other means. As of March 30, 2019, theCompany has classified its derivative assets and liabilities within Level 2 of the fair value hierarchy prescribed by ASC 815, as discussed below, becausethese observable inputs are available for substantially the full term of its derivative instruments.The following tables present the fair value of the Company's derivative instruments as they appear in its consolidated balance sheets as of March 30, 2019and March 31, 2018:(In thousands)Location inBalance Sheet As of March 30, 2019 As of March 31, 2018Derivative Assets: Designated foreign currency hedge contractsOther current assets $1,208 $780Non-designated foreign currency hedge contractsOther current assets 69 324 $1,277 $1,104Derivative Liabilities: Designated foreign currency hedge contractsOther current liabilities $145 $1,445Non-designated foreign currency hedge contractsOther current liabilities — 138Designated interest rate swapsOther current liabilities 5,203 — $5,348 $1,583Other 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.The Company's money market funds carried at fair value are classified within Level 1 of the fair value hierarchy because they are valued using quotedmarket prices.72Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)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 30, 2019 and March 31, 2018. As of March 30, 2019(In thousands) Level 1 Level 2 TotalAssets Money market funds $36,980 $— $36,980Designated foreign currency hedge contracts — 1,208 $1,208Non-designated foreign currency hedge contracts — 69 $69 $36,980 $1,277 $38,257Liabilities Designated foreign currency hedge contracts $— $145 $145Designated interest rate swaps — 5,203 $5,203 $— $5,348 $5,348 As of March 31, 2018 Level 1 Level 2 TotalAssets 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 $1,583Other 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 11, Notes Payable and Long-Term Debt.13. PRODUCT WARRANTIESThe Company generally provides warranty on parts and labor for one year after the sale and installation of each device. The Company also warrantsdisposables products through their use or expiration. The Company estimates potential warranty expense based on historical warranty experience andperiodically assesses the adequacy of the warranty accrual, making adjustments as necessary.(In thousands)March 30, 2019 March 31, 2018Warranty accrual as of the beginning of the year$316 $176Warranty provision660 1,082Warranty spending(742) (942)Warranty accrual as of the end of the year$234 $31673Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)14. RETIREMENT PLANSDefined Contribution PlansThe Company has a Savings Plus Plan (the "401k Plan") that is a 401(k) plan that allows its U.S. employees to accumulate savings on a pre-tax basis. Inaddition, matching contributions are made to the 401k Plan based upon pre-established rates. The Company's matching contributions amounted toapproximately $5.0 million, $5.5 million and $5.1 million in fiscal 2019, 2018 and 2017, respectively. Upon Board approval, additional discretionarycontributions can also be made. No discretionary contributions were made for the 401k Plan in fiscal 2019, 2018, or 2017.Some of the Company's subsidiaries also have defined contribution plans, to which both the employee and the employer make contributions. The employercontributions to these plans totaled $0.6 million, $0.7 million and 0.8 million in fiscal 2019, 2018 and 2017, respectively.Defined Benefit PlansASC Topic 715, Compensation — Retirement Benefits, requires an employer to: (a) recognize in its statement of financial position an asset for a plan’s over-funded status or a liability for a plan’s under-funded status; (b) measure a plan’s assets and its obligations that determine its funded status as of the end of theemployer’s fiscal year (with limited exceptions); and (c) recognize changes in the funded status of a defined benefit post retirement plan in the year in whichthe changes occur. Accordingly, the Company is required to report changes in its funded status in comprehensive 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.Some of the Company's foreign subsidiaries have defined benefit pension plans covering substantially all full time employees at those subsidiaries. Netperiodic benefit costs for the plans in the aggregate include the following components:(In thousands)2019 2018 2017Service cost$1,893 $2,651 $3,404Interest cost on benefit obligation340 293 287Expected return on plan assets(208) (215) (308)Actuarial loss132 186 532Amortization of unrecognized prior service cost(86) (121) (119)Amortization of unrecognized transition obligation— — 37Plan settlements and curtailments(82) (445) 289Totals$1,989 $2,349 $4,12274Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The activity under those defined benefit plans are as follows:(In thousands)March 30, 2019 March 31, 2018Change in Benefit Obligation: Benefit Obligation, beginning of year$(30,476) $(31,345)Service cost(1,893) (2,651)Interest cost(340) (293)Benefits paid902 518Actuarial gain(367) 2,381Employee and plan participants contribution(1,815) (3,441)Plan settlements and curtailments3,069 5,064Foreign currency changes283 (709)Benefit obligation, end of year$(30,637) $(30,476)Change in Plan Assets: Fair value of plan assets, beginning of year$16,322 $17,285Company contributions1,329 1,542Benefits paid(795) (434)(Loss) gain on plan assets265 (200)Employee and plan participants contribution1,801 3,490Plan settlements(2,916) (4,531)Foreign currency changes281 (830)Fair value of plan assets, end of year$16,287 $16,322Funded Status*$(14,350) $(14,154)Unrecognized net actuarial loss2,245 2,187Unrecognized prior service cost(714) (698)Net amount recognized$(12,819) $(12,665)* 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 asset value associated with the reinsurancecontracts was $6.1 million and $6.5 million at March 30, 2019 and March 31, 2018, respectively. The total liability for this plan, which is included in thetable above, was $9.4 million and $9.9 million as of March 30, 2019 and March 31, 2018, respectively.The accumulated benefit obligation for all plans was $28.6 million and $29.6 million for fiscal 2019 and 2018, respectively. There were no plans where theplan assets were greater than the accumulated benefit obligation as of March 30, 2019 and March 31, 2018.75Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The components of the change recorded in the Company's accumulated other comprehensive loss related to its defined benefit plans, net of tax, are as follows(in thousands):Balance, April 2, 2016$(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)Actuarial loss(51)Prior service cost(80)Plan settlements and curtailments(73)Balance as of March 30, 2019$(527)The Company expects to amortize $0.3 million from accumulated other comprehensive loss to net periodic benefit cost during fiscal 2020.The weighted average rates used to determine the net periodic benefit costs and projected benefit obligations were as follows: 2019 2018 2017Discount rate0.97% 1.07% 0.76%Rate of increased salary levels1.78% 1.73% 1.43%Expected long-term rate of return on assets0.75% 0.90% 1.10%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.The Company has no other material obligation for post-retirement or post-employment benefits.The Company's investment policy for pension plans is to balance risk and return through a diversified portfolio to reduce interest rate and market risk.Maturities are managed 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 the Company's defined benefitpension plan at fair value as of March 30, 2019. Using the same three-level valuation hierarchy for disclosure of fair value measurements as described inNote 12, Derivatives and Fair Value Measurements, all of the assets of the Company’s plan are classified within Level 2 of the fair value hierarchy becausethe plan assets are primarily insurance contracts.Expected benefit payments for both plans are estimated using the same assumptions used in determining the Company’s benefit obligation at March 30,2019. 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.76Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Estimated future benefit payments are as follows:(In thousands) Fiscal 2020$1,503Fiscal 20211,252Fiscal 20221,540Fiscal 20231,331Fiscal 20241,370Fiscal 2025-20296,447 $13,443The Company's contributions for fiscal 2020 are expected to be consistent with the current year.15. COMMITMENTS AND CONTINGENCIESThe Company leases facilities and certain equipment under operating leases expiring at various dates through fiscal 2026. Facility leases require theCompany to pay certain insurance expenses, maintenance costs and real estate taxes.Approximate future basic rental commitments under operating leases as of March 30, 2019 are as follows:Fiscal Year (In thousands) 2020$4,04120213,72620223,28120233,14620242,142Thereafter1,336 $17,672Rent expense in fiscal 2019, 2018 and 2017 was $6.4 million, $6.4 million and $6.2 million, respectively. Some of the Company's operating leases includerenewal provisions and escalation clauses that the Company leases.The Company is a party to various legal proceedings and claims arising out of the ordinary course of its business. The Company believes that except forthose matters described below, there are no other proceedings or claims pending against it the ultimate resolution of which could have a material adverseeffect on its financial condition or results of operations. At each reporting period, management evaluates whether or not a potential loss amount or a potentialrange of loss is probable and reasonably estimable under ASC 450, Contingencies, for all matters. Legal costs are expensed as incurred.Product RecallsIn March 2018, the Company issued a voluntary recall of specific lots of its AcrodoseTM Plus and PL Systems sold to its Blood Center customers in the U.S.The recall resulted from reports of low pH readings for platelets stored in the CLX HP bag and, in some instances, an accompanying yellow discoloration ofthe storage bag. For a period of nine weeks, the Company was unable to provide its customers with its Acrodose Plus and PL Systems. As a result of the recall,Blood Center customers may have discarded collected platelets and incurred other damages. During fiscal 2019 the Company entered into settlementagreements with certain customers responsible for substantially all of the total outstanding claims against it. As of March 30, 2019, the Company hasrecorded cumulative charges of $2.2 million associated with this recall which consists of $1.3 million of charges associated with customer returns andinventory reserves and $0.9 million of charges associated with customer claims. Substantially all of these claims have been paid as of March 30, 2019.In August 2018, the Company issued a voluntary recall of certain whole blood collection kits sold to its Blood Center customers in the U.S. The recallresulted from some collection sets' filters failing to adequately remove leukocytes from collected blood. As a result of the recall, the Company's Blood Centercustomers may have conducted tests to confirm that the collected blood was adequately leukoreduced, sold the collected blood labeled as non-leukoreduced at a lower price or77Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)discarded the collected blood. As of March 30, 2019, the Company has recorded cumulative charges of $1.9 million associated with this recall which consistsof $0.1 million of charges associated with customer returns and inventory reserves and $1.8 million of charges associated with customer claims. TheCompany may record incremental charges for customer claims in future periods associated with this recall.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 four independent members of the Company's 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 30, 2019 were 3,897,238.Share-Based CompensationCompensation cost related to share-based transactions is recognized in the consolidated financial statements based on fair value. The total amount of share-based compensation expense, which is recorded on a straight line basis, was as follows:(In thousands)2019 2018 2017Selling, general and administrative expenses$12,878 $9,960 $6,894Research and development2,972 2,114 1,549Cost of goods sold1,338 951 707 $17,188 $13,025 $9,150Stock OptionsOptions are granted to purchase common stock at prices as determined by the Committee, but in no event shall such exercise price be less than the fair marketvalue 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 year from grantfor non-employee directors. Options expire not more than 7 years from the date of the grant. The grant-date fair value of options, adjusted for estimatedforfeitures, is recognized as expense on a straight line basis over the requisite service period, which is generally the vesting period. Forfeitures are estimatedbased on historical experience.78Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)A summary of stock option activity for the fiscal year ended March 30, 2019 is as follows: OptionsOutstanding WeightedAverageExercise Priceper Share WeightedAverageRemainingLife (years) AggregateIntrinsicValue($000’s)Outstanding at March 31, 20181,197,438 $36.68 4.71 $43,685Granted209,675 94.67 Exercised(290,824) 35.87 Forfeited/Canceled(102,886) 40.01 Outstanding at March 30, 20191,013,403 $48.55 4.48 $40,902 Exercisable at March 30, 2019366,857 $36.63 3.06 $18,655 Vested or expected to vest at March 30, 2019936,291 $47.16 4.20 $38,931The total intrinsic value of options exercised was $19.4 million, $15.4 million and $8.3 million during fiscal 2019, 2018 and 2017, respectively.As of March 30, 2019, there was $7.3 million of total unrecognized compensation cost related to non-vested stock options. This cost is expected to berecognized over a weighted average period of 2.8 years.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 the Company'scommon stock over 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 theexpected life of the option being valued. The expected life of the option was estimated with reference to historical exercise patterns, the contractual term ofthe option and the vesting period.The assumptions utilized for option grants during the periods presented are as follows: 2019 2018 2017Volatility26.1% 24.2% 24.0%Expected life (years)4.9 4.8 4.9Risk-free interest rate2.8% 1.7% 1.2%Dividend yield0.0% 0.0% 0.0%Grant-date fair value per Option$26.67 $10.25 $7.61Restricted 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.79Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)A summary of RSU activity for the fiscal year ended March 30, 2019 is as follows: Shares WeightedAverageGrant Date Fair ValueUnvested at March 31, 2018417,714 $38.95Granted108,611 94.55Vested(150,583) 40.04Forfeited(66,520) 44.15Unvested at March 30, 2019309,222 $57.07The weighted-average grant-date fair value of RSUs granted and total fair value of RSUs vested are as follows: 2019 2018 2017Grant-date fair value per RSU$94.55 $41.87 $32.61Fair value of RSUs vested$40.04 $33.03 $34.98As of March 30, 2019, there was $13.1 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 2.6 years.Performance Share UnitsThe grant date fair value of Performance Share 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 total 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. ThePSU comparison group consists of the S&P Mid Cap 400 and the S&P Small Cap 600 indices. Depending on the Company's relative performance during theperformance period, a recipient of the award is entitled to receive a number of ordinary shares equal to a percentage, ranging from 0% to 200%, of the awardgranted. If the Company’s total shareholder return for the performance period is negative, then any share payout will be capped at 100% of the target award,regardless of the Company's performance relative to the its comparison group. In addition to these relative total shareholder return PSUs, the Company's ChiefExecutive Officer received PSU grants during both fiscal 2018 and 2017 with performance conditions based on the financial results of the Company andother internal metrics. As a result, the Company may issue up to 872,887 shares related to outstanding performance based awards.A summary of PSU activity for the fiscal year ended March 30, 2019 is as follows: Shares WeightedAverageGrant Date Fair ValueUnvested at March 31, 2018388,107 $39.63Granted94,460 115.64Vested(1)(12,352) 29.20Forfeited(21,559) 49.50Unvested at March 30, 2019(2)(3)448,656 $54.22(1) Includes the vesting of 6,176 shares that were earned in connection with awards granted in fiscal 2016 for the three-year performance cycle award periodended September 30, 2018, based on actual relative total shareholder return of 200%.(2) Includes 48,851 shares that were earned in connection with the fiscal 2018 and 2017 internal metrics awards granted to the Company's Chief ExecutiveOfficer for the performance period ended March 30, 2019, disclosed in this table at the target number of 100%. The fiscal 2018 and 2017 awards werecertified by the Committee in May 2019 at 144.31% and 80.05%, respectively.(3) Includes 65,525 shares that were earned for awards granted in fiscal 2017 for the performance period ended March 30, 2019, disclosed in this table at thetarget number of 100%. Shares earned under this award were certified by the Committee in April 2019 based on the actual relative total shareholder return of200%.80Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The 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 fiscal year were as follows: 2019 2018 2017Expected stock price volatility27.07% 26.11% 26.39%Peer group stock price volatility34.98% 34.13% 33.86%Correlation of returns47.57% 49.51% 51.17%The weighted-average grant-date fair value of PSUs granted and total fair value of PSUs vested are as follows: 2019 2018 2017Grant-date fair value per PSU$115.64 $46.49 $34.07Fair value of PSUs vested$29.20 $— $—As of March 30, 2019, there was $11.7 million of total unrecognized compensation cost related to non-vested performance share units. This cost is expectedto be 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 its full-time employees are eligible to participatein the Purchase Plan.The Purchase Plan provides for two “purchase periods” within each of its 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: 2019 2018 2017Volatility30.0% 22.6% 31.3%Expected life (months)6 6 6Risk-free interest rate2.3% 1.2% 0.5%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 $21.51, $9.66 and $7.79 during fiscal2019, 2018 and 2017, respectively.17. SEGMENT AND ENTERPRISE-WIDE INFORMATIONThe Company determines its reportable segments by first identifying its operating segments and then by assessing whether any components of thesesegments constitute a business for which discrete financial information is available and where segment management regularly reviews the operating results ofthat component. The Company's operating segments are based primarily on geography. North America Plasma is a separate operating segment with dedicatedsegment management due to the size and scale of the Plasma business unit. It aggregates components within an operating segment that have similar economiccharacteristics.81Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)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.The Company measures and evaluates the operating segments based on operating income. It excludes certain corporate expenses from segment operatingincome. In addition, certain amounts that the Company considers to be non-recurring or non-operational are excluded from segment operating incomebecause it evaluates the operating results of the segments excluding such items. These items include restructuring and turnaround costs, deal amortization,asset impairments, PCS2 accelerated depreciation and related costs and certain legal charges. Although these amounts are excluded from segment operatingincome, as applicable, they are included in the reconciliations that follow. The Company measures and evaluates its net revenues and operating income usinginternally derived standard currency exchange rates that remain constant from year to year; therefore, segment information is presented on this basis.During fiscal 2019, the Company reorganized its operating segments such that certain immaterial components of EMEA are now reported as components ofAll Other. Accordingly, the prior year numbers have been updated to reflect this reclassification as well as other changes within the cost reporting structurethat occurred in the first quarter of fiscal 2019. These changes did not have an impact on the Company's ability to aggregate Americas Blood Center andHospital with Asia - Pacific.Selected information by business segment is presented below:(In thousands)2019 2018 2017Net revenues Japan$70,227 $68,172 $74,695EMEA169,862 173,551 188,907North America Plasma395,922 333,831 309,718All Other337,054 333,763 326,260Net revenues before foreign exchange impact973,065 909,317 899,580Effect of exchange rates(5,486) (5,394) (13,464)Net revenues$967,579 $903,923 $886,116(In thousands)2019 2018 2017Segment operating income Japan$36,226 $40,193 $43,042EMEA49,730 68,897 74,878North America Plasma167,205 129,697 109,889All Other141,070 140,623 141,427Segment operating income394,231 379,410 369,236 Corporate operating expenses(237,568) (252,222) (249,048) Effect of exchange rates8,367 4,059 (4,772)Restructuring and turnaround costs(13,660) (44,125) (34,337)Deal amortization(24,803) (26,013) (27,107)Impairment of assets(21,170) (1,941) (73,353)Legal charges(2,726) (3,011) —PCS2 accelerated depreciation and related costs(19,126) — —Operating income (loss)$83,545 $56,157 $(19,381)82Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(In thousands)2019 2018 2017Depreciation and amortization Japan$520 $486 $827EMEA4,153 4,464 4,255North America Plasma39,497 16,060 13,022All Other65,248 68,237 71,629Total depreciation and amortization (excluding impairment charges)$109,418 $89,247 $89,733(In thousands)March 30, 2019 March 31, 2018 April 1, 2017Long-lived assets(1) Japan$26,660 $26,640 $21,412EMEA71,048 74,783 63,854North America Plasma113,921 91,815 142,164All Other132,350 138,918 96,432Total long-lived assets$343,979 $332,156 $323,862(1) Long-lived assets are comprised of property, plant and equipment.Selected information by principle operating regions is presented below:(In thousands)2019 2018 2017Net Revenues United States$606,845 $548,731 $522,686Japan69,908 67,319 79,266Europe164,504 164,226 166,007Asia118,700 115,127 109,858Other7,622 8,520 8,299Net revenues$967,579 $903,923 $886,116(In thousands)March 30, 2019 March 31, 2018 April 1, 2017Long-lived assets(1) United States$269,849 $236,603 $241,610Japan1,726 1,511 1,691Europe11,200 13,696 12,952Asia30,930 36,431 34,174Other30,274 43,915 33,435Total long-lived assets$343,979 $332,156 $323,862(1) Long-lived assets are comprised of property, plant and equipment.The Company's products are organized into three categories for purposes of evaluating their growth potential: Plasma, Blood Center and Hospital.Management reviews revenue trends based on these business units.83Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Net revenues by business unit are as follows:(In thousands)2019 2018 2017Plasma501,837 435,956 410,727Blood Center269,203 284,902 303,890Hospital196,539 183,065 171,499Net revenues$967,579 $903,923 $886,11618. 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 30, 2019 and March 31,2018:(In thousands) Foreign currency Defined benefitplans Net UnrealizedGain/loss onDerivatives TotalBalance, April 1, 2017 $(29,835) $(2,272) $(766) $(32,873)Other comprehensive (loss) income 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 (loss) income 13,430 1,949 (1,497) 13,882Balance, March 31, 2018 $(16,405) $(323) $(2,263) $(18,991)Other comprehensive income (loss) before reclassifications (9,108) (139) (1,877) (11,124)Amounts reclassified from accumulated other comprehensive loss(1) — (65) (200) (265)Net current period other comprehensive income (loss) (9,108) (204) (2,077) (11,389)Balance, March 30, 2019 $(25,513) $(527) $(4,340) $(30,380)(1) Presented net of income taxes, the amounts of which are insignificant.84Table 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 2019 June 30, 2018 September 29, 2018 December 29, 2018 March 30, 2019Net revenues $229,347 $241,581 $247,356 $249,295Gross profit $83,244 $111,907 $111,175 $111,210Operating income $5,293 $26,076 $28,320 $23,856Net income (loss) $(2,819) $18,726 $18,277 $20,835Per share data: Net income (loss): Basic $(0.05) $0.36 $0.36 $0.41Diluted $(0.05) $0.35 $0.35 $0.40 (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 (loss) income $20,137 $20,102 $(6,547) $11,880Per share data: Net (loss) income: Basic $0.38 $0.38 $(0.12) $0.22Diluted $0.38 $0.38 $(0.12) $0.22The operating results for the fourth quarter of fiscal 2018 include certain misstatements that were determined to be immaterial both individually and in theaggregate. The misstatement in the fourth quarter of fiscal 2018 was primarily driven by an over accrual of certain professional fees in the third quarter offiscal 2018.Below is a summary of the net overstatement/(understatement) of the Company’s reported operating income and net income for the fourth quarter of fiscal2018.(In thousands) Overstatement/(Understatement)Three Months Ended Operating (Loss)Income Net (Loss) IncomeMarch 31, 2018 2,835 2,42620. SUBSEQUENT EVENTOn May 21, 2019, we transferred to CSL Plasma Inc. (“CSL”) substantially all of the tangible assets held by Haemonetics relating to the manufacture of anti-coagulant and saline (together, “Liquids”) at our Union, South Carolina facility (“Union”), which consist primarily of property, plant and equipment andinventory, and CSL assumed certain related liabilities pursuant to the terms of a settlement, release and asset transfer agreement (the “Asset Transfer”)between the parties dated May 13, 2019. The Asset Transfer excludes all other assets related to Union, including accounts receivable, customer contracts andour U.S. Food and Drug Administration (“FDA”) product approvals for manufacturing Liquids.At closing, Haemonetics received approximately $10 million of proceeds for the Asset Transfer and were concurrently released from our obligations to supplyLiquids under a 2014 supply agreement with CSL. In connection with the Asset Transfer, CSL and Haemonetics also entered into related transition services,supply and manufacturing services and quality agreements (the “Transition Agreements”) that, among other things, permit CSL to manufacture Liquids underour FDA product approvals,85Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)exclusively for Haemonetics and CSL, until CSL obtains separate product approvals to manufacture the Liquids from the FDA. CSL also agreed to extendoffers of employment to substantially all employees of Haemonetics located at the Union facility.We will continue to supply Liquids to our customers following the Asset Transfer pursuant to our supplier arrangements with contract manufacturers. Weexpect that cost savings generated from the Asset Transfer, including the release from our Liquids supply obligations under the 2014 supply agreement withCSL, will be reallocated to general corporate purposes.In connection with our entry into the Agreement, we classified the Union assets and liabilities related to the Asset Transfer under the Agreement as held-for-sale in our consolidated financial statements for the first quarter of fiscal 2020 prior to the closing of the Asset Transfer. Accordingly, we recorded these assetsand liabilities at fair value, less estimated sales costs. Such assets and liabilities were previously classified as held-and-used as of March 30, 2019 anddetermined to be recoverable when evaluated within the broader North America Plasma asset group that is profitable. As a result of the classification as held-for-sale, we recognized a pre-tax impairment charge of approximately $49 million in the first quarter of fiscal 2020, primarily related to the carrying balancesof the property, plant and equipment exceeding the consideration received under the terms of the Agreement. The charge will not result in any future cashexpenditures.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-15(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 30, 2019. 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 30, 2019.Ernst & Young, LLP, an independent registered public accounting firm, has issued an attestation report on the effectiveness of our internal control overfinancial reporting. This report, in which they expressed an unqualified opinion, is included below.Changes in Internal ControlsThere have been no changes in our internal control over financial reporting during the quarter ended March 30, 2019 that have materially affected, or arelikely to materially affect, our internal control over financial reporting.86Table 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 30, 2019, 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 30, 2019, 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 2019 consolidatedfinancial statements of the Company and our report dated May 22, 2019 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 22, 201987Table of ContentsITEM 9B. OTHER INFORMATIONNone.PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS 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 of 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 shareholders 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 shareholders 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 shareholders 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 shareholders to be filed withthe Securities and Exchange Commission within 120 days after the close of our fiscal year.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item is incorporated by reference to our Definitive Proxy Statement for our annual meeting of shareholders to be filed withthe Securities and Exchange Commission within 120 days after the close of our fiscal year.88Table of ContentsPART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULESThe following documents are filed as a part of this report:A)Financial Statements are included in Part II of this reportFinancial Statements required by Item 8 of this Form Report of Independent Registered Public Accounting Firm42Consolidated Statements of Income (Loss)43Consolidated Statements of Comprehensive Income (Loss)44Consolidated Balance Sheets45Consolidated Statements of Stockholders’ Equity46Consolidated Statements of Cash Flows47Notes to Consolidated Financial Statements48Schedules required by Article 12 of Regulation S-X II Valuation and Qualifying Accounts95All other schedules have been omitted because they are not applicable or not required.B)Exhibits required by Item 601 of Regulation S-K are listed in the Exhibit Index beginning at page 91, which is incorporated herein byreference.89Table of ContentsEXHIBITS FILED WITH SECURITIES AND EXCHANGE COMMISSIONNumber and Description of Exhibit1. Articles of Organization3A* Restated Articles of Organization of Haemonetics Corporation, reflecting Articles of Amendment dated August 23, 1993, August 21, 2006and July 26, 2018 (filed as Exhibit 3.1 to the Company's Form 8-K dated July 31, 2018 and incorporated herein by reference).3B* By-Laws of the Company, as amended through July 26, 2018 (filed as Exhibit 3.3 to the Company's Form 8-K dated July 31, 2018 andincorporated 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 as Exhibit 10J to the Company's Form 10-K for the year ended March 31, 2018 and incorporated herein byreference).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 as Exhibit 10K to the Company's Form 10-K for the year ended March 31, 2018 and incorporated herein byreference).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 (filed as Exhibit 10L to the Company's Form 10-K for the year ended March 31, 2018 and incorporated hereinby reference).10M* 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).90Table of Contents10N* 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 (filed as Exhibit 10R to the Company'sForm 10-K for the year ended March 31, 2018 and incorporated herein by reference).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 (filed asExhibit 10U to the Company's Form 10-K for the year ended March 31, 2018 and incorporated herein by reference).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*‡ Office Lease Agreement, dated as of December 18, 2018, by and between OPG 125 Summer Owner (DE) LLC and the Company (filed asExhibit 10.1 to the Company's Form 10-Q for the quarter ended December 29, 2018 and incorporated herein by reference).10Z*† 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).10AA*† 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).10AB*† 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).91Table of Contents10AC*† Form of Option Agreement for Non-Qualified stock options for the 2005 Long-Term Incentive Compensation Plan for Employees (adoptedfiscal 2019) (filed as Exhibit 10.2 to the Company's Form 10-Q for the quarter ended June 30, 2018 and incorporated herein by reference).10AD*† Form of Restricted Stock Unit Agreement with Non-Employee Directors under 2005 Long-Term Incentive Compensation Plan (fiscal 2019)(filed as Exhibit 10.5 to the Company's Form 10-Q for the quarter ended June 30, 2018 and incorporated herein by reference).10AE*† Form of Restricted Stock Unit 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).10AF*† Form of Restricted Stock Unit Agreement with Employees under 2005 Long-Term Incentive Compensation Plan (adopted fiscal 2019) (filedas Exhibit 10.4 to the Company's Form 10-Q for the quarter ended June 30, 2018 and incorporated herein by reference).10AG*† 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).10AH*† 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).10AI*† 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).10AJ*† 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).10AK*† 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).10AL*† 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).10AM*† 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).10AN*† 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).10AO*† Haemonetics Corporation Worldwide Employee Bonus Plan (as amended and restated effective April 23, 2019) (filed as Exhibit 10.1 to theCompany's Form 8-K dated April 29, 2019 and incorporated herein by reference).10AP*† 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).10AQ*† Form of Performance Share Unit Agreement Under 2005 Long-Term Incentive Compensation Plan (Internal Financial Metrics, adopted fiscal2018) (filed as Exhibit 10.3 to the Company’s Form 10-Q for the quarter ended July 1, 2017 and incorporated herein by reference).10AR*† Form of Performance Share Unit Agreement Under 2005 Long-Term Incentive Compensation Plan (rTSR Metrics, adopted fiscal 2015) (filedas Exhibit 10AP to the Company’s Form 10-K for the fiscal year ended March 28, 2015 and incorporated herein by reference).10AS*† Form of Performance Share Unit Agreement Under 2005 Long-Term Incentive Compensation Plan (rTSR Metrics, adopted fiscal 2017) (filedas Exhibit 10AN to the Company's Form 10-K for the year ended March 31, 2018 and incorporated herein by reference).10AT*† Form of Performance Share Unit Agreement Under 2005 Long-Term Incentive Compensation Plan (rTSR Metrics, adopted fiscal 2018) (filedas Exhibit 10AO to the Company's Form 10-K, for the year ended March 31, 2018 and incorporated herein by reference).10AU*† Form of Performance Share Unit Agreement Under 2005 Long-Term Incentive Compensation Plan (rTSR Metrics, adopted fiscal 2019) (filedas Exhibit 10.3 to the Company's Form 10-Q for the quarter ended June 30, 2018 and incorporated herein by reference).10AV*† Form of Performance Share Unit Agreement Under 2005 Long-Term Incentive Compensation Plan (rTSR Metrics, adopted fiscal 2020) (filedherewith as Exhibit 10AV to the Company's Form 10-K, for the year ended March 30, 2019).92Table of Contents10AW*† 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).10AX* Form of Indemnification Agreement (as executed with each director and executive officer of the Company) (filed as Exhibit 10.1 to theCompany's Form 10-Q for the quarter ended September 29, 2018 and incorporated herein by reference).10AY* 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).10AZ*‡ 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).10BA* Credit Agreement, dated as of June 15, 2018, by and among Haemonetics Corporation, the Lenders from time to time party thereto andJPMorgan Chase Bank, N.A., as Administrative Agent (filed as Exhibit 10.1 to the Company’s Form 8-K dated July 18, 2018 andincorporated herein by reference). 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 30, 2019, 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‡Confidential treatment has been requested as to portions of the exhibit. Confidential materials omitted and filed separately with the Securities andExchange Commission.ˆIn 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.93Table of ContentsSIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized. HAEMONETICS CORPORATION By: /s/ Christopher Simon Christopher Simon President and Chief Executive OfficerDate : May 22, 2019Pursuant 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 and Chief Executive Officer May 22, 2019Christopher Simon (Principal Executive Officer) /s/ William Burke Executive Vice President, Chief Financial Officer May 22, 2019William Burke (Principal Financial Officer) /s/ Dan Goldstein Vice President, Corporate Controller May 22, 2019Dan Goldstein (Principal Accounting Officer) /s/ Robert Abernathy Director May 22, 2019Robert Abernathy /s/ Catherine Burzik Director May 22, 2019Catherine Burzik /s/ Charles Dockendorff Director May 22, 2019Charles Dockendorff /s/ Ronald Gelbman Director May 22, 2019Ronald Gelbman /s/ Pedro Granadillo Director May 22, 2019Pedro Granadillo /s/ Mark Kroll Director May 22, 2019Mark Kroll /s/ Claire Pomeroy Director May 22, 2019Claire Pomeroy /s/ Richard Meelia Director May 22, 2019Richard Meelia /s/ Ellen Zane Director May 22, 2019Ellen Zane 94Table of ContentsSCHEDULE IIHAEMONETICS CORPORATIONVALUATION AND QUALIFYING ACCOUNTS(In thousands)Balance atBeginning ofFiscal Year Charged toCosts andExpenses Write-Offs(Net of Recoveries) Balance at Endof Fiscal YearFor Year Ended March 30, 2019 Allowance for Doubtful Accounts$2,111 $2,111 $285 $3,937For 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 $2,18495Exhibit 10AVHAEMONETICS CORPORATION2005 LONG-TERM INCENTIVE COMPENSATION PLANPERFORMANCE SHARE UNIT AGREEMENTWITH«Name»HAEMONETICS 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 Company desires that the Employee be granted a Performance Share Unit award pursuant to Article 10(Other Stock Unit Awards) of the Plan settled in Shares (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 S&P MidCap 400 (the “Index”), as adjusted as 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, onthe 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 upon the Employee’s continued employment with the Company through the MaturityDate:Company Relative TSR Percentile Rankat Maturity DateShare Payout as a Percentage of Target AwardBelow 30th Percentile0%30th to 50th Percentile50% to 99%51st to 80th Percentile100% to 200%80th Percentile or higher200%1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.The companies constituting the Index for purposes of calculating TSR for the Performance Period will be the population of companiesin the S&P MidCap 400 as of the first day of the Performance Period (the “Index Population”), adjusted as follows: (i) companies thatare removed from the Index during the Performance Period but whose stock continued to be publicly traded on a major U.S. stockexchange during the entire Performance Period shall be included in the Index Population, (ii) companies that are added to the Indexduring the Performance Period that were not part of the Index Population on the first day of the Performance Period shall be excludedfrom the Index Population, (iii) companies that have been acquired or gone private during the Performance Period such that their stockis no longer included in the Index and failed to be publicly traded on a major U.S. stock exchange during the entire PerformancePeriod shall be excluded from the Index Population; and (iv) companies that are no longer in existence or declare bankruptcy or whosestock ceases to be publicly traded on a major U.S. stock exchange as a result of a business failure shall be included in the IndexPopulation 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:(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),2“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 Compensation Committee of the Company’s Board of Directors (the “Committee”) asprovided 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).In 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 Share3Payout as a Percentage of Target Award for the PSUs shall be determined as of the Maturity Date and paid in accordance with Section2(a) above; provided, however, that number of Shares paid to the Employee shall be multiplied by a fraction, the numerator of which isthe number of days elapsed 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 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.(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.”4(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.(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.5(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 fifty percent (50%) of the Company’s then outstanding Shares, shall acquire suchadditional Shares in one or more transactions, or series of transactions, such that following such transaction ortransactions such person or group and affiliates beneficially own fifty percent (50%) or more of the Shares 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,(C) individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of theCompany’s Board of Directors (for this purpose, “Incumbent Board” means at any time those persons who are thenmembers of the Company’s Board of Directors and who are either (i) members of the Company’s Board of Directorson the date of this Agreement, or (ii) have been elected, or have been nominated for election by the Company’sshareholders, by the affirmative vote of at least two-thirds of the directors comprising the Incumbent Board at the timeof such election or nomination (either by a specific vote or by approval of the proxy statement of the Company in whichsuch person is named as a nominee for director without objection to such nomination), and(D) the consummation of any merger, reorganization, consolidation or share exchange unless the persons whowere the beneficial owners of the Company’s outstanding Shares immediately before the consummation of suchtransaction beneficially own more than 50% of the outstanding shares of the common stock of the successor or survivorentity 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 entity described above shall be determinedexclusively by reference to the shares of the successor or survivor entity which result from the beneficial ownership ofShares by the persons described above immediately before the consummation 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).(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).6(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 by theCompany, either with or without Cause, shall not be treated as a Qualifying Retirement.7(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. The foregoing provisions ofthis Section 3(c) shall cease to apply following a Change in Control, except as otherwise required by applicable law, including anynational exchange listing standards.8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 Shares 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 shareholder ofHaemonetics with respect to the PSUs unless and until Shares have 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 Shares 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 Shares 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 local income taxes that may be owed on account of payment of the PSUs, shall be theEmployee’s responsibility. By accepting this Grant, the Employee agrees and acknowledges that the Company promptly may withholdfrom the Employee’s compensation, including but not limited9to Shares delivered pursuant to Section 4, the amount of taxes the Company is required to withhold pursuant to this Agreement, unlessthe Employee shall satisfy such withholding obligation to the Company as provided in Article 17 of the Plan. The Employeeacknowledges that the tax laws and regulations applicable to the PSUs and the disposition of the Shares provided upon settlement ofthe vested PSUs are complex and subject to change, and it is the Employee’s sole responsibility to obtain his or her own advice as tothe tax treatment of the terms of this Agreement.9. 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 acquired pursuant to the Plan as may be required for the administration of thePlan and/or the subsequent holding of Shares on the Employee’s behalf. The Employee understands that Data will be held only as longas is necessary to implement, administer and manage the Employee’s participation in the Plan. The Employee understands that theEmployee may, at any time, view Data, request additional information about the storage and processing of Data, require any necessaryamendments to it or refuse or withdraw the consents herein, in any10case without cost, by contacting in writing the Employee’s local Human Resources representative. Refusal or withdrawal of consentmay, however, affect the Employee’s ability to exercise or realize benefits from this award or the Plan. For more information on theconsequences of the Employee’s refusal to consent or withdrawal of consent, the Employee understands that the Employee maycontact the Employee’s local Human Resources representative.11. 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 that11could cause the application of the laws of any jurisdiction other than the Commonwealth of Massachusetts. The parties agree that alldisputes with respect to this agreement shall be resolved through courts of competent jurisdiction located in the Commonwealth ofMassachusetts.[Remainder of this page intentionally left blank]12IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.HAEMONETICS CORPORATION____________________________________By:Its:By signing this Agreement, Employee 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.EMPLOYEE____________________________________ [Employee Name]13Exhibit 21.1Exhibit 21.1 - Subsidiaries of the CompanyEntity NameJurisdiction of Incorporation5D Information Management, Inc.DelawareArryx, Inc.NevadaGlobal Med Technologies, Inc.ColoradoHaemonetics (Hong Kong) LimitedHong KongHaemonetics (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 EIRELIBrazilHaemonetics 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 SASFranceExhibit 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), pertaining to the 2007 Employee Stock Purchase Plan of Haemonetics Corporation;(2) Registration Statement (Form S-8 No. 333-200226), pertaining to the 2005 Long-Term Incentive Compensation Plan of HaemoneticsCorporation;(3) Registration Statement (Form S-8 No. 333-181847), pertaining to the 2005 Long-Term Incentive Compensation Plan of HaemoneticsCorporation;(4) Registration Statement (Form S-8 No. 333-159434), pertaining to the 2005 Long-Term Incentive Compensation Plan of HaemoneticsCorporation;(5) Registration Statement (Form S-8 No. 333-149205), pertaining to the 2007 Employee Stock Purchase Plan of Haemonetics Corporation, and(6) Registration Statement (Form S-8 No. 333-136839), pertaining to the 2005 Long-Term Incentive Compensation Plan of HaemoneticsCorporation;of our reports dated May 22, 2019, 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 30, 2019. /s/ Ernst & Young LLPBoston, MassachusettsMay 22, 2019EXHIBIT 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 22, 2019 /s/ Christopher Simon Christopher Simon, President 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 22, 2019 /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 30, 2019 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 22, 2019 /s/ Christopher Simon Christopher Simon, President 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 30, 2019 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 22, 2019 /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.

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