HAEMONETICS CORP

Previous wording

In August 2024, in accordance with our previously-announced three-year share repurchase program, we entered into an accelerated share repurchase agreement (“ASR”) with Citibank N.A. (“Citibank”) to repurchase $75.0 million of our common stock. Pursuant to the terms of the ASR, in August 2024, we paid Citibank $75.0 million in cash and received an initial delivery of 0.8 million shares of our common stock based on a closing market price on the New York Stock Exchange on August 28, 2024 of $75.08. This initial delivery of shares represented approximately 80% of the notional amount of the ASR. The ASR was completed in October 2024, subsequent to the end of the second quarter of fiscal 2025, and 0.2 million additional shares were delivered upon settlement. As of September 28, 2024, the total remaining authorization for repurchases of our common stock under the share repurchase program was $150.0 million.

Current wording

In October 2024, we completed a $75.0 million repurchase of our common stock pursuant to an accelerated share repurchase agreement (“ASR”) entered into with Citibank N.A. (“Citibank”) in August 2024. The total number of shares repurchased under the ASR was 1.0 million at an average price per share upon final settlement of $74.36. As of December 28, 2024, the total remaining authorization for repurchases of our common stock under the share repurchase program was $150.0 million.

Previous wording

On May 28, 2024, we issued $700.0 million aggregate principal amount of 2.5% convertible senior notes due 2029 (the “2029 Notes”). The 2029 Notes are governed by the terms of the Indenture between the Company and U.S. Bank National Association, as trustee. The total net proceeds from the sale of the 2029 Notes, after deducting the initial purchasers’ discounts and debt issuance costs, were $682.8 million, of which $230.0 million was used to repay the entirety of the balance on the revolving credit facility under the Company’s current credit agreement, $185.5 million was used to repurchase a portion of our existing 0% convertible senior notes due 2026 and $88.2 million was used to complete capped call transactions, with the remaining proceeds available for future cash requirements. The 2029 Notes will mature on June 1, 2029, unless earlier converted, redeemed or repurchased.

Current wording

On May 28, 2024, we issued $700.0 million aggregate principal amount of 2.5% convertible senior notes due 2029 (the “2029 Notes”). The 2029 Notes are governed by the terms of the Indenture between the Company and U.S. Bank National Association, as trustee. The total net proceeds from the sale of the 2029 Notes, after deducting the initial purchasers’ discounts and debt issuance costs, were $682.8 million, of which $230.0 million was used to repay the entirety of the balance on the revolving credit facility under the Company’s current credit agreement, $185.5 million was used to repurchase a portion of our existing 0% convertible senior notes due 2026 and $88.2 million was used to complete capped call transactions, with the remaining proceeds available for other working capital requirements. The 2029 Notes will mature on June 1, 2029, unless earlier converted, redeemed or repurchased.

Previous wording

On April 1, 2024, we completed our acquisition of Advanced Cooling Therapy, Inc., d/b/a Attune Medical (“Attune Medical”) for total consideration of $187.7 million, which included an upfront cash payment of $162.0 million, or $150.5 million net of cash acquired, the fair value of contingent consideration of $25.3 million, and $0.4 million of working capital adjustments. The contingent consideration is based on sales growth over the next three years, which is uncapped, and the achievement of certain other milestones. We financed the acquisition through a combination of cash on hand and borrowings under its senior unsecured revolving credit facility.

Current wording

On April 1, 2024, we completed our acquisition of Advanced Cooling Therapy, Inc., d/b/a Attune Medical (“Attune Medical”) for total consideration of $187.7 million, which included an upfront cash payment of $162.0 million, or $150.5 million net of cash acquired, the fair value of contingent consideration of $25.3 million, and $0.4 million of working capital adjustments. The contingent consideration is based on sales growth over the next three years, which is uncapped, and the achievement of certain other milestones. We financed the acquisition through a combination of cash on hand and borrowings under our senior unsecured revolving credit facility.

Previous wording

Net revenues increased 8.6% and 8.3% during the three and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024. Without the effects of foreign exchange, net revenues increased 8.7% during both the three and six months ended September 28, 2024, as compared with the same periods of fiscal 2024. Revenue increases in our Hospital businesses, primarily related to recent acquisitions as well as volume and price benefits, drove the overall increases in revenue during the three and six months ended September 28, 2024.

Current wording

Net revenues increased 3.7% and 6.7% during the three and nine months ended December 28, 2024, respectively, as compared with the same periods of fiscal 2024. Without the effects of foreign exchange, net revenues increased 3.6% and 6.9% during the three and nine months ended December 28, 2024, respectively, as compared with the same periods of fiscal 2024. Revenue increases in Hospital, primarily related to recent acquisitions as well as volume and price benefits, drove the overall increase, partially offset by declines in both Plasma and Blood Center during the three and nine months ended December 28, 2024.

Previous wording

Operating income increased 46.4% and 2.8% during thethree and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024. The increase during the three months ended September 28, 2024 was primarily due to operating leverage, partially offset by operating costs related to recent acquisitions and increased amortization of acquired intangible assets. The increase for the six months ended September 28, 2024 was primarily due to operating leverage and the gains realized on the sale of a manufacturing facility in the first quarter of fiscal 2025, partially offset by operating, transaction and integration costs related to recent acquisitions and increased amortization of acquired intangible assets.

Current wording

Operating income increased 28.4% and 11.5% during the three and nine months ended December 28, 2024, respectively, as compared with the same periods of fiscal 2024. The increase during the three months ended December 28, 2024 was primarily due to operating leverage, decreased performance-based compensation, decreased portfolio rationalization costs and lower transaction and integration costs, partially offset by increased amortization of acquired intangible assets, write downs of certain assets and costs associated with the operations of recent acquisitions. The increase for the nine months ended December 28, 2024 was primarily due to operating leverage, decreased performance-based compensation and the gains realized on the sale of a manufacturing facility in the first quarter of fiscal 2025, partially offset by operating, transaction and integration costs related to recent acquisitions, increased amortization of acquired intangible assets and amortization of fair value inventory step-up.

Previous wording

Our principal operations are in the United States, Europe, Japan and other parts of Asia. Our products are marketed in approximately 90 countries around the world through a combination of our direct sales force and independent distributors and agents. During both the three and six months ended September 28, 2024, our revenue generated outside the U.S. was 25.9% of total net revenues, as compared with 25.7% and 24.8%, respectively, during the three and six months ended September 30, 2023. International sales are generally conducted in local currencies, primarily Japanese Yen, Euro and Chinese Yuan. Our results of operations are impacted by changes in foreign exchange rates, particularly in the value of the Yen and Euro relative to the U.S. Dollar. We have placed foreign currency hedges on certain foreign currencies to mitigate our exposure to foreign currency fluctuations.

Current wording

Our principal operations are in the United States, Europe, Japan and other parts of Asia. Our products are marketed in approximately 90 countries around the world through a combination of our direct sales force and independent distributors and agents. During the three and nine months ended December 28, 2024, our revenue generated outside the U.S. was 26.1% and 26.0% of total net revenues, respectively, as compared with 25.4% and 25.0%, respectively, during the three and nine months ended December 30, 2023. International sales are generally conducted in local currencies, primarily Japanese Yen, Euro and Chinese Yuan. Our results of operations are impacted by changes in foreign exchange rates, particularly in the value of the Yen and Euro relative to the U.S. Dollar. We have placed foreign currency hedges on certain foreign currencies to mitigate our exposure to foreign currency fluctuations.

Previous wording

Plasma revenue decreased 3.0% and 2.8% during the three and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024. Without the effects of foreign exchange, Plasma revenue decreased 3.0% and 2.8% during the three and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024. The decreases during the three and six months ended September 28, 2024 were primarily driven by lower sales volumes in North America, primarily relating to the previously announced customer transition of CSL Plasma, whose non-exclusive supply agreement with the Company is scheduled to expire in December 2025. We anticipate sales of approximately $100.0 million to CSL in fiscal 2025. The decrease for the six months ended September 28, 2024 was also due to a temporary plasma center outage at one of our customers.

Current wording

Plasma revenue decreased 9.1% and 5.0% during the three and nine months ended December 28, 2024, respectively, as compared with the same periods of fiscal 2024. Without the effects of foreign exchange, Plasma revenue decreased 9.1% and 5.0% during the three and nine months ended December 28, 2024, respectively, as compared with the same periods of fiscal 2024. The decreases during the three and nine months ended December 28, 2024 were primarily driven by lower sales volumes in North America, primarily relating to the previously announced customer transition of CSL Plasma, whose non-exclusive supply agreement with the Company is scheduled to expire in December 2025. We anticipate sales of approximately $100.0 million to CSL in fiscal 2025.

Previous wording

Blood Center revenue decreased 1.6% and 2.9%during the three and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024. Without the effects of foreign exchange, Blood Center revenue decreased 0.9% and 1.5%during the three and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024. The decreases during the three and six months ended September 28, 2024 were primarily driven by declines in our Whole Blood business.

Current wording

Blood Center revenue decreased 2.8% and 2.9%during the three and nine months ended December 28, 2024, respectively, as compared with the same periods of fiscal 2024. Without the effects of foreign exchange, Blood Center revenue decreased 2.8% and 1.9% during the three and nine months ended December 28, 2024, respectively, as compared with the same periods of fiscal 2024. The decreases during the three and nine months ended December 28, 2024 were primarily driven by declines in our Whole Blood business, which was divested in January 2025, subsequent to the end of the third fiscal quarter of 2025.

Previous wording

Hospital revenue increased 30.9% and 30.8%during the three and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024. Without the effects of foreign exchange, Hospital revenue increased 30.8% and 31.1%during the three and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024. The increases during the three and six months ended September 28, 2024 were primarily attributable to the product lines within the Interventional Technologies franchise with benefits from Sensor Guided Technologies and Esophageal Protection that were recently acquired, as well as growth in Vascular Closure as well as Blood Management Technologies.

Current wording

Hospital revenue increased 23.9% and 28.3% during the three and nine months ended December 28, 2024, respectively, as compared with the same periods of fiscal 2024. Without the effects of foreign exchange, Hospital revenue increased 23.8% and 28.5% during the three and nine months ended December 28, 2024, respectively, as compared with the same periods of fiscal 2024. The increases during the three and nine months ended December 28, 2024 were primarily attributable to the product lines within the Interventional Technologies franchise, including benefits from the recently acquired Sensor Guided Technologies and Esophageal Protection product lines and growth in Vascular Closure, as well as contributions from the product lines within the Blood Management Technologies franchise.

Previous wording

Gross profit increased 9.9% and 7.3% for the three and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024. Without the effects of foreign exchange, gross profit increased 13.2% and 9.5% during the three and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024. The increases during the three and six months ended September 28, 2024 were driven by increased revenues in the Hospital business and volume, mix and price, partially offset by restructuring costs related to portfolio rationalization initiatives, foreign exchange, amortization of fair value inventory step-up related to the Attune Medical acquisition.

Current wording

Gross profit increased 8.8% and 7.8% for the three and nine months ended December 28, 2024, respectively, as compared with the same periods of fiscal 2024. Without the effects of foreign exchange, gross profit increased 9.3% and 9.4% during the three and nine months ended December 28, 2024, respectively, as compared with the same periods of fiscal 2024. The increase during the three months ended December 28, 2024 was driven by increased revenues in the Hospital business, primarily volume as well as price, partially offset by the amortization of fair value inventory step-up related to the Attune Medical acquisition. The increase during the nine months ended December 28, 2024 was driven by increased revenues in the Hospital business and volume, mix and price, partially offset by amortization of fair value inventory step-up related to the Attune Medical acquisition, restructuring costs related to portfolio rationalization initiatives and foreign exchange.

Previous wording

Research and development expenses increased 30.5% and 22.4% during the three and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024. Without the effects of foreign exchange, research and development expenses increased 30.7% and 22.5% during the three and six months ended September 28, 2024, respectively, as compared with the same periods of fiscal 2024. The increases during the three and six months ended September 28, 2024 were primarily due to increased headcount as a result of recent acquisitions.

Current wording

Research and development expenses increased 19.3% and 21.3% during the three and nine months ended December 28, 2024, respectively, as compared with the same periods of fiscal 2024. Without the effects of foreign exchange, research and development expenses increased 19.4% and 21.4% during the three and nine months ended December 28, 2024, respectively, as compared with the same periods of fiscal 2024. The increases during the three and nine months ended December 28, 2024 were primarily due to increased headcount as a result of recent acquisitions.

Previous wording

Selling, general and administrative expenses decreased 7.3% during the three months ended September 28, 2024 and increased 3.1%during thesix months ended September 28, 2024, as compared with the same periods of fiscal 2024. Without the effects of foreign exchange, selling, general, and administrative expenses decreased 6.6% during the three months ended September 28, 2024 and increased 3.2% during thesix months ended September 28, 2024, as compared with the same periods of fiscal 2024. The decrease during the three months ended September 28, 2024 was driven by decreased performance-based compensation as well as decreases in impairment of intangible assets and litigation-related charges compared to the prior year period, partially offset by operating costs related to recent acquisitions and increased headcount. The increase during the six months ended September 28, 2024 was primarily driven by transaction, integration and operating costs related to recent acquisitions, increased headcount and restructuring costs related to portfolio rationalization initiatives, partially offset by gains realized on the sale of a manufacturing facility in the first quarter of fiscal 2025 and the decreases in impairment of intangible assets compared to the prior year period.

Current wording

Selling, general and administrative expenses decreased 4.7% during the three months ended December 28, 2024 and increased 0.4%during thenine months ended December 28, 2024, as compared with the same periods of fiscal 2024. Without the effects of foreign exchange, selling, general, and administrative expenses decreased 5.0% during the three months ended December 28, 2024 and increased 0.4% during the nine months ended December 28, 2024, as compared with the same periods of fiscal 2024. The decrease during the three months ended December 28, 2024 was driven by decreased performance-based compensation, operating leverage and lower integration and transaction costs, partially offset by write downs of certain assets and costs associated with the operations of recent acquisitions. The increase during the nine months ended December 28, 2024 was primarily driven by digital transformation costs incurred as part of the upgrade of our enterprise resource planning system, transaction, integration and operating costs related to recent acquisitions and increased headcount, partially offset by gains realized on the sale of a manufacturing facility in the first quarter of fiscal 2025, decreases in impairment of intangible assets and decreases in litigation costs compared to the prior year period.

Previous wording

We recognized amortization expense related to our acquired intangible assets of $12.3 million and $24.7 million during the three and six months ended September 28, 2024, respectively, and $7.2 million and $14.7 million during thethree and six months ended September 30, 2023, respectively. The increases were primarily related to the amortization of the intangible assets acquired in conjunction with the recent acquisitions of OpSens and Attune Medical.

Current wording

We recognized amortization expense related to our acquired intangible assets of $12.2 million and $37.0 million during the three and nine months ended December 28, 2024, respectively, and $6.9 million and $21.6 million during thethree and nine months ended December 30, 2023, respectively. The increases were primarily related to the amortization of the intangible assets acquired in conjunction with the recent acquisitions of OpSens and Attune Medical.

Previous wording

Interest and other expense increased by $4.5 million during thethree months ended September 28, 2024 and decreased $4.5 million during thesix months ended September 28, 2024, as compared with the same periods of fiscal 2024. The increase during thethree months ended September 28, 2024, as compared with the prior year period, was primarily driven by interest expense and amortization of deferred financing costs on the 2029 Notes issued in fiscal 2025, partially offset by foreign exchange. The decrease during the six months ended September 28, 2024 was primarily driven by the net gain on the repurchase of convertible notes during the first quarter of fiscal 2025, partially offset by interest expense on the 2029 Notes issued in fiscal 2025 as well ashigher interest incurred on our revolving credit facilities, as compared with the same period of fiscal 2024.

Current wording

Interest and other expense increased by $7.2 million and $2.7 million during thethree and nine months ended December 28, 2024, respectively, as compared with the same periods of fiscal 2024. The increase during the three months ended December 28, 2024, as compared with the prior year period, was primarily driven by interest expense and amortization of deferred financing costs on the 2029 Notes issued in fiscal 2025 and foreign exchange. The increase during the nine months ended December 28, 2024 was primarily driven by interest expense and amortization of deferred financing costs on the 2029 Notes issued in fiscal 2025 as well as higher interest incurred on our revolving credit facilities, as compared with the same period of fiscal 2024, partially offset by the net gain on the repurchase of convertible notes during the first quarter of fiscal 2025.

Previous wording

For the three and six months ended September 28, 2024, the Company reported income tax expense of $10.9 million and $19.2 million, representing effective tax rates of 24.3% and 21.0%. The effective tax rate for the three months ended September 28, 2024, which includes an immaterial discrete tax benefit. The effective tax rate for the six months ended September 28, 2024 includes $3.6 million of discrete tax benefit, primarily related to stock compensation windfalls. The discrete benefit also includes other items such as provision to return differences.

Current wording

For the three and nine months ended December 28, 2024, the Company reported income tax expense of $12.4 million and $31.6 million, respectively, representing effective tax rates of 24.9% and 22.4%. The effective tax rate for the nine months ended December 28, 2024 includes $3.3 million of discrete tax benefit, primarily related to stock compensation windfalls. The discrete benefit also includes other items such as provision to return differences.

Previous wording

For the three and six months ended September 30, 2023, the Company reported income tax expense of $7.9 million and $18.5 million, respectively, representing effective tax rates of 24.1% and 21.9%, respectively. The effective tax rate for the three months ended September 30, 2023 includes $0.1 million of discrete tax benefit primarily related to stock compensation windfalls. The effective tax rate for the six months ended September 30, 2023 includes $1.3 million of discrete tax benefit primarily related to stock compensation windfalls.

Current wording

For the three and nine months ended December 30, 2023, the Company reported income tax expense of $12.8 million and $31.3 million, respectively, representing effective tax rates of 29.0% and 24.3%, respectively. The effective tax rate for the nine months ended December 30, 2023 includes $1.1 million of discrete tax benefit, of which $2.6 million relates to stock compensation windfalls, partially offset by other discrete items.

Previous wording

The increase in the reported tax rate for the three months ended September 28, 2024, compared to the same period in fiscal 2024, relates primarily to the unfavorable impact of the jurisdictional mix of earnings and non-deductible acquisition-related expenses. The decrease in the reported tax rate for the six months ended September 28, 2024, compared to the same period in fiscal 2024, relates primarily to increased discrete tax benefits year-over-year, partially offset by the unfavorable impact of jurisdictional mix of earnings and non-deductible acquisition-related expenses.

Current wording

The decrease in the reported tax rate for the three months ended December 28, 2024, compared to the same period in fiscal 2024, relates primarily to the decrease in non-deductible acquisition-related expenses. The decrease in the reported tax rate for the nine months ended December 28, 2024, compared to the same period in fiscal 2024, relates primarily to increased discrete tax benefits year-over-year and decreased non-deductible acquisition-related expenses.

Previous wording

Our primary sources of liquidity are cash and cash equivalents, internally generated cash flow from operations and our senior unsecured revolving credit facility. We believe these sources are sufficient to fund our cash requirements over at least the next twelve months and to meet our known long-term cash requirements, including our convertible senior notes due March 1, 2026. Our expected cash outlays relate primarily to acquisitions, investments, capital expenditures, including enhancements to our North American manufacturing facilities, share repurchases, portfolio rationalization initiatives and cash principal and interest payments under our revised credit agreements. As of September 28, 2024, we had $299.3 million in cash and cash equivalents, the majority of which is held in the U.S. or in countries from which it can be repatriated to the U.S.

Current wording

Our primary sources of liquidity are cash and cash equivalents, internally generated cash flow from operations and our senior unsecured revolving credit facility. We believe these sources are sufficient to fund our cash requirements over at least the next twelve months and to meet our known long-term cash requirements, including our convertible senior notes due March 1, 2026. Our expected cash outlays relate primarily to acquisitions, investments, capital expenditures, including enhancements to our North American manufacturing facilities, share repurchases, portfolio rationalization initiatives and cash principal and interest payments under our revised credit agreements. As of December 28, 2024, we had $320.8 million in cash and cash equivalents, the majority of which is held in the U.S. or in countries from which it can be repatriated to the U.S.

Previous wording

In the first quarter of fiscal 2025, the Company used a portion of its proceeds from the 2029 Notes to repurchase, for $185.5 million, $200.0 million of the $500.0 million aggregate principal amount of its 0% convertible senior notes due 2026 (the “2026 Notes”), resulting in a gain of $14.5 million related to the discount on repurchase. As the repurchase of the 2026 Notes met the criteria for extinguishment accounting, $1.9 million of unamortized debt issuance costs were allocated to the repurchase, resulting in a net gain of $12.6 million. As of September 28, 2024, the $300.0 million remaining principal balance on the 2026 Notes was netted down by $2.3 million of remaining debt issuance costs, resulting in a net convertible note payable of $297.7 million. Interest expense related to the 2026 Notes was $0.4 million and $1.0 million for the three and six months ended September 28, 2024, respectively, which is entirely attributable to the amortization of the debt issuance costs. The remaining debt issuance costs are amortized at an effective interest rate of 0.5%.

Current wording

In the first quarter of fiscal 2025, the Company used a portion of its proceeds from the 2029 Notes to repurchase, for $185.5 million, $200.0 million of the $500.0 million aggregate principal amount of its 0% convertible senior notes due 2026 (the “2026 Notes”), resulting in a gain of $14.5 million related to the discount on repurchase. As the repurchase of the 2026 Notes met the criteria for extinguishment accounting, $1.9 million of unamortized debt issuance costs were allocated to the repurchase, resulting in a net gain of $12.6 million. As of December 28, 2024, the $300.0 million remaining principal balance on the 2026 Notes was netted down by $1.9 million of remaining debt issuance costs, resulting in a net convertible note payable of $298.1 million. Interest expense related to the 2026 Notes was $0.4 million and $1.4 million for the three and nine months ended December 28, 2024, respectively, which is entirely attributable to the amortization of the debt issuance costs. The remaining debt issuance costs are amortized at an effective interest rate of 0.5%.

Previous wording

As of September 28, 2024, the $700.0 million principal balance of the 2029 Notes was netted down by $16.2 million of remaining debt issuance costs, resulting in a net convertible note payable of $683.8 million. Interest expense related to the 2029 Notes was $5.2 million and $6.9 million for the three and six months ended September 28, 2024, respectively, which includes nominal interest expense and the amortization of the debt issuance costs.

Current wording

As of December 28, 2024, the $700.0 million principal balance of the 2029 Notes was netted down by $15.4 million of remaining debt issuance costs, resulting in a net convertible note payable of $684.6 million. Interest expense related to the 2029 Notes was $5.2 million and $12.1 million for the three and nine months ended December 28, 2024, respectively, which includes nominal interest expense and the amortization of the debt issuance costs.

Previous wording

On April 30, 2024, the Company entered into a second amended and restated credit agreement with certain lenders to refinance the 2022 Revised Credit Facilities and extend their maturity date through April 2029. The second amended and restated credit agreement provides for a $250.0 million senior unsecured term loan, the proceeds of which, along with $12.5 million of cash on hand, were used to retire the balance of the term loan under the 2022 Revised Credit Facilities, and a $750.0 million senior unsecured revolving credit facility (together, the “2024 Revised Credit Facilities”). Loans under the 2024 Revised Credit Facilities will initially bear interest at an annual rate equal to the Adjusted Term SOFR Rate (as specified in the second amended and restated credit agreement), which is subject to a floor of 0.0%, plus an applicable rate ranging from 1.125% to 1.750% based on the Company’s consolidated net leverage ratio (as specified in the second amended and restated credit agreement) at the applicable measurement date. The revolving credit facility carries an unused fee that ranges from 0.125% to 0.250% annually based on the Company’s consolidated net leverage ratio at the applicable measurement date. The 2024 Revised Credit Facilities mature on April 30, 2029. The principal amount of the term loan under the 2024 Revised Credit Facilities amortizes quarterly through the maturity date at a rate of 2.5% for the first three years following the closing date, 5.0% for the fourth year following the closing date and 7.5% for the fifth year following the closing date, with the unpaid balance due at maturity.

Current wording

On April 30, 2024, the Company entered into a second amended and restated credit agreement with certain lenders to refinance the 2022 Revised Credit Facilities and extend their maturity date through April 2029. The second amended and restated credit agreement provides for a $250.0 million senior unsecured term loan, the proceeds of which, along with $12.5 million of cash on hand, were used to retire the balance of the term loan under the 2022 Revised Credit Facilities, and a $750.0 million senior unsecured revolving credit facility (together, the “2024 Revised Credit Facilities”). Loans under the 2024 Revised Credit Facilities bear interest at an annual rate equal to the Adjusted Term SOFR Rate (as specified in the second amended and restated credit agreement), which is subject to a floor of 0.0%, plus an applicable rate ranging from 1.125% to 1.750% based on the Company’s consolidated net leverage ratio (as specified in the second amended and restated credit agreement) at the applicable measurement date. The revolving credit facility carries an unused fee that ranges from 0.125% to 0.250% annually based on the Company’s consolidated net leverage ratio at the applicable measurement date. The 2024 Revised Credit Facilities mature on April 30, 2029. The principal amount of the term loan under the 2024 Revised Credit Facilities amortizes quarterly through the maturity date at a rate of 2.5% for the first three years following the closing date, 5.0% for the fourth year following the closing date and 7.5% for the fifth year following the closing date, with the unpaid balance due at maturity.

Previous wording

At September 28, 2024, $248.4 million was outstanding under the term loan with an effective interest rate of 6.7%. There were no outstanding borrowings under the revolving credit facilities at September 28, 2024. The Company also had $19.8 million of uncommitted operating lines of credit to fund its global operations under which there were no outstanding borrowings as of September 28, 2024.

Current wording

At December 28, 2024, $246.9 million was outstanding under the term loan with an effective interest rate of 6.1%. There were no outstanding borrowings under the revolving credit facilities at December 28, 2024. The Company also had $18.0 million of uncommitted operating lines of credit to fund its global operations under which there were no outstanding borrowings as of December 28, 2024.

Previous wording

The Company has scheduled principal payments of $3.1 million required during the remainder of fiscal 2025 related to its term loan.

Current wording

The Company has scheduled principal payments of $1.6 million required during the remainder of fiscal 2025 related to its term loan.

Previous wording

During fiscal 2022, our Board of Directors approved a revised Operational Excellence Program. We estimate that we will incur aggregate charges between $85.0 million and $90.0 million by the end of fiscal 2025 under the program in connection with the Operational Excellence Program. These charges, the majority of which will result in cash outlays, including severance and other employee costs, will be incurred as the specific actions required to execute these initiatives are identified and approved and are expected to be substantially completed by the end of fiscal 2025. During the three and six months ended September 28, 2024, the Company incurred $1.7 million and $4.1 million, respectively, of restructuring and restructuring related costs under this program.

Current wording

During fiscal 2022, our Board of Directors approved a revised Operational Excellence Program. We estimate that we will incur aggregate charges of approximately $85.0 million by the end of fiscal 2025 under the program in connection with the Operational Excellence Program. These charges, the majority of which will result in cash outlays, including severance and other employee costs, will be incurred as the specific actions required to execute these initiatives are identified and approved and are expected to be substantially completed by the end of fiscal 2025. During the three and nine months ended December 28, 2024, the Company incurred $1.9 million and $6.0 million, respectively, of restructuring and restructuring related costs under this program.

Previous wording

Net cash provided by operating activities decreased by $96.8 million during the six months ended September 28, 2024, as compared with the six months ended September 30, 2023. The decrease in cash provided by operating activities was primarily due to the timing of accounts payable payments, increased inventory balances and a payment in connection with a previously disclosed legal settlement.

Current wording

Net cash provided by operating activities decreased by $52.5 million during the nine months ended December 28, 2024, as compared with the nine months ended December 30, 2023. The decrease in cash provided by operating activities was primarily due to decreased accrued performance-based compensation, increased inventory balances and spend related to digital transformation costs incurred as part of the upgrade of our enterprise resource planning system, partially offset by collections of accounts receivable and increased net income.

Previous wording

Net cash used in investing activities increased by $122.2 million during the six months ended September 28, 2024, as compared with the six months ended September 30, 2023. The increase in cash used in investing activities was primarily the result of the acquisition of Attune Medical, partially offset by the proceeds from the sales of property, plant and equipment.

Current wording

Net cash used in investing activities decreased by $129.4 million during the nine months ended December 28, 2024, as compared with the nine months ended December 30, 2023. The decrease in cash used in investing activities was primarily the result of the acquisition of OpSens Inc. completed during fiscal 2024 and the proceeds from the sales of property, plant and equipment in fiscal 2025, partially offset by the acquisition of Attune Medical in fiscal 2025.

Previous wording

Net cash provided by financing activities increased by $266.7 million during the six months ended September 28, 2024, as compared with the six months ended September 30, 2023, primarily due to the issuance the 2029 Notes, partially offset by the repurchase of a portion of the 2026 Notes, capped call transactions, share repurchases, payments on the revolving credit facility and debt issuance costs.

Current wording

Net cash provided by financing activities increased by $158.6 million during the nine months ended December 28, 2024, as compared with the nine months ended December 30, 2023, primarily due to the issuance of the 2029 Notes, partially offset by the repurchase of a portion of the 2026 Notes, proceeds on the revolving credit facility in the previous year, capped call transactions, share repurchases, payments on the revolving credit facility in the current year and debt issuance costs.

Previous wording

During both the three and six months ended September 28, 2024, 25.9% of our sales were generated outside the U.S., generally in foreign currencies, yet our reporting currency is the U.S. Dollar. We also incur certain manufacturing, marketing and selling costs in international markets in local currency. Our primary foreign currency exposures relate to sales denominated in Japanese Yen, Euro and Chinese Yuan. We also have foreign currency exposure related to manufacturing and other operational costs denominated in Swiss Francs, Canadian Dollars, Mexican Pesos and Malaysian Ringgit. The Yen, Euro and Yuan sales exposure is partially mitigated by costs and expenses for foreign operations and sourcing products denominated in foreign currencies.

Current wording

During the three and nine months ended December 28, 2024, 26.1% and 26.0%, respectively, of our sales were generated outside the U.S., generally in foreign currencies, yet our reporting currency is the U.S. Dollar. We also incur certain manufacturing, marketing and selling costs in international markets in local currency. Our primary foreign currency exposures relate to sales denominated in Japanese Yen, Euro and Chinese Yuan. We also have foreign currency exposure related to manufacturing and other operational costs denominated in Swiss Francs, Canadian Dollars, Mexican Pesos and Malaysian Ringgit. The Yen, Euro and Yuan sales exposure is partially mitigated by costs and expenses for foreign operations and sourcing products denominated in foreign currencies.

Previous wording

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

Current wording

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

Previous wording

•Our ability to comply with established and developing U.S. and foreign legal and regulatory requirements, including the U.S. Foreign Corrupt Practices Act, European Union Medical Device Regulation and In Vitro Diagnostic Regulation and similar laws in other jurisdictions, as well as U.S. and foreign export and import restrictions and tariffs;

Current wording

•Our ability to comply with established and developing U.S. and foreign legal and regulatory requirements, including the U.S. Foreign Corrupt Practices Act, European Union Medical Device Regulation and In Vitro Diagnostic Regulation and similar laws in other jurisdictions, as well as the impact of U.S. and foreign export and import restrictions and tariffs;