Haemonetics(HAE) - 2025 Q4 - Annual Report

Financial Performance - Net revenues for fiscal 2025 increased by 4.0% to $1,360,824, compared to $1,309,055 in fiscal 2024 [230]. - Operating income rose by 34.5% to $221,817 in fiscal 2025, driven by operating leverage and a gain from the sale of a manufacturing facility [232]. - Gross profit increased by 8.3% to $748,958, representing 55.0% of net revenues in fiscal 2025, up from 52.8% in fiscal 2024 [242]. - Hospital revenue surged by 23.7% to $564,269, primarily due to growth in Interventional Technologies and Blood Management Technologies [241]. - Plasma revenue decreased by 6.0% to $535,431, primarily due to lower sales volumes in North America [239]. - Blood Center revenue fell by 7.8% to $261,124, driven by declines in the Whole Blood business [240]. - Research and development expenses increased by 15.2% to $62,722, reflecting increased headcount from recent acquisitions [243]. - Interest and other expenses decreased by 25.1% to $(9,746), primarily due to gains on extinguishment of convertible notes [250]. - The reported income tax rate decreased to 20.9% in fiscal 2025 from 22.6% in fiscal 2024 [251]. - For the year ended March 29, 2025, the company recorded a pre-tax income of $212.1 million and an income tax expense of $44.4 million, resulting in a reported tax rate of 20.9% [253]. Cash Flow and Financing Activities - As of March 29, 2025, the company had $306.8 million in cash and cash equivalents, an increase from $178.8 million as of March 30, 2024 [254][255]. - Net cash provided by operating activities was $181.7 million during fiscal 2025, relatively flat compared to fiscal 2024 [265]. - Net cash used in investing activities was $161.9 million during fiscal 2025, an increase of $160.5 million compared to fiscal 2024 [266]. - Net cash provided by financing activities was $108.8 million during fiscal 2025, an increase of $70.7 million compared to fiscal 2024 [267]. - The company authorized a share repurchase program of up to $500 million to offset the dilutive impact of employee equity grants [262]. - The company repurchased $150.0 million of common stock through an ASR with Goldman Sachs, completing the ASR in April 2025, and has fully funded a $300.0 million Share Repurchase Authorization [205]. Acquisitions and Divestitures - The company completed the divestiture of its Whole Blood product line for total cash consideration of up to $65.8 million, including $43.3 million upfront and up to $22.5 million in contingent consideration based on sales growth over the next three years [204]. - The acquisition of Attune Medical was completed for total consideration of $187.7 million, enhancing the Hospital business unit's presence in electrophysiology [210][211]. - The acquisition of OpSens was finalized for approximately $254.5 million, expanding the Hospital business unit portfolio in interventional cardiology [212][213]. - The company completed the acquisition of Attune Medical for a purchase price of $187.7 million, including contingent consideration with an initial fair value of $25.3 million [300]. - The fair value of identified intangible assets from the acquisition totaled $105.8 million, primarily consisting of developed technology [301]. Market and Operational Insights - The company has seen declining transfusion rates in mature markets due to minimally invasive procedures, impacting growth in the Blood Center market [218]. - The Vascular Closure market continues to grow with the launch of VASCADE MVP in Japan and CE mark clearance for VASCADE systems in fiscal 2023 [221]. - Advanced hemostasis testing is increasingly utilized in clinical decision-making, with TEG systems achieving high market penetration in North America and Europe [224][226]. - The company expanded its market presence in the U.K. with SafeTraceTX, addressing operational efficiency and cybersecurity needs [229]. - Approximately 42% of the company's revenue during fiscal 2025 was generated by its ten largest customers, indicating a concentration of credit risk [269]. - 25.7% of the company's sales in fiscal 2025 were generated outside the U.S., primarily in foreign currencies, with significant exposure to Japanese Yen, Euro, and Chinese Yuan [273]. Debt and Financial Instruments - As of March 29, 2025, total outstanding debt under the senior unsecured term loan was $245.3 million with an effective interest rate of 5.7% [293]. - The company has scheduled principal payments of $6.3 million during fiscal 2026 related to its term loan [261]. - The company utilizes interest rate swaps to convert variable rate borrowings to fixed rates, with a notional amount of $204.5 million as of March 29, 2025 [293]. - A 10% strengthening of the U.S. Dollar would result in a $5.6 million increase in the fair value of forward contracts, while a 10% weakening would lead to a $6.8 million decrease [292]. - The company has a program to mitigate foreign currency exchange rate exposure using derivative financial instruments, including forward foreign currency contracts [275]. Accounting and Valuation - The consolidated financial statements present fairly the financial position of the company as of March 29, 2025, in conformity with U.S. generally accepted accounting principles [295]. - The fair value of contingent consideration in business combinations is recorded at fair value and remeasured at each reporting period based on changes in underlying assumptions [289]. - The company reviews intangible assets for impairment at least annually, considering factors such as market size declines and increased competition [282]. - The income tax provision process involves assessing temporary differences and maintaining a valuation allowance for deferred tax assets that are not more-likely-than-not realizable [285]. - Sensitivity analyses were performed to evaluate changes in fair value resulting from changes in significant assumptions [303].