8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 Date of Report (Date of earliest event reported)  August 1, 2016

HAEMONETICS CORPORATION

(Exact name of registrant as specified in its charter)

Massachusetts	001-14041	04-2882273
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

400 Wood Road	02184
(Address of principal executive offices)	Zip code

Registrant's telephone number, including area code  781-848-7100

(Former name or former address, if changed since last report.)

	Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02               RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On August 1, 2016, Haemonetics Corporation (the “Company”) issued a press release announcing financial results for the first quarter ended July 2, 2016. The Company has also provided further comments on its website regarding its first quarter performance. Copies of the release and comments are furnished with this report as exhibits 99.1 and 99.2, respectively.

The information in this current report on Form 8-K and the exhibit attached hereto shall not be deemed “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.

Item 5.02DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS

(c) Appointment of William P. Burke as Chief Financial Officer

On August 1, 2016, Haemonetics Corporation (the “Company”) announced the appointment of William P. Burke as its Chief Financial Officer, effective August 8, 2016. Mr. Burke will serve as the Company’s principal financial officer and oversee the treasury, controllership and accounting, investor relations, tax, and financial planning and analysis functions.

Mr. Burke, 48, joins the Company directly from Medtronic, Inc. where he has served as Chief Integration Officer for the integration of Covidien Plc into Medtronic since June 2015, filling the key role of principal operating officer for the integration management office. Previously, he held various Finance positions of over a 20-year career with Covidien and predecessor companies, including most recently CFO - Europe, Vice President of Corporate Strategy and Portfolio Management, and Vice President of Financial Planning and Analysis.

Mr. Burke will receive an annual base salary of $475,000 and participate in the Company’s annual bonus plan with a target amount in fiscal 2017 equal to 65% of his base salary, such payment determined by the achievement of Company financial metrics and his performance. Mr. Burke will also receive a $500,000 sign-on bonus after 90 days of employment. This bonus is repayable should he be terminated for cause or voluntarily terminate his employment within twelve months.

Subject to Compensation Committee approval, Mr. Burke will receive an equity grant valued at $1,425,000 consisting of 50% performance share units, 25% restricted stock units and 25% non-qualified stock options. The performance share units vest, if at all, on the last day of a three year performance period conditioned on Mr. Burke’s continued employment with the Company and on the relative total return for Company shareholders versus a combination of the S&P MidCap 400 and S&P SmallCap 600 indices. Assuming Mr. Burke’s continued employment with the Company, the restricted stock units and stock options will vest over a four year period at a rate of 25% upon each of the first four anniversaries of the grant date. The restricted stock units and the exercise price of the stock options will be determined by the fair market value of the Company’s common stock at the time of grant. All other terms and conditions of these equity awards are consistent with the Company’s equity award agreements filed by the Company as exhibits to the 10-K filed with the Securities and Exchange Commission for the fiscal year ended March 28, 2015 and are also subject to the Company’s clawback policies as described in the 2016 Proxy Statement under “Recapture Policy”. Any additional equity grants are at the discretion of the Company’s Compensation Committee.

Mr. Burke will also enter into a Change in Control Agreement with the Company, the terms of which are substantively identical to the Change of Control Agreements in place between the Company and its other executive officers, and summarized under the headings “Double Trigger Change of Control Agreements” and “Potential Payments Upon Termination or Change of Control” in the Company’s definitive proxy statement on Schedule 14A filed with the Securities and Exchange Commission on June 10, 2016 (the “2016 Proxy Statement”) and filed as exhibit 10AB to the 10-K filed with the Securities and Exchange Commission for the fiscal year ended April 2, 2016. Mr. Burke’s Change of Control Agreement provides that he will be entitled to receive the equivalent of 2 years base salary and target incentive compensation, and two years of benefits in the event his employment is terminated without cause or by Mr. Burke for good reason in the two year period following a defined change of control.

Finally, Mr. Burke will enter into an Executive Security Agreement that provides him with severance pay in an amount equal to his annual base salary and the equivalent of a year of the Company’s contribution to his medical and welfare benefits if his employment is terminated by the Company without “cause”, as defined therein.  All other terms and conditions will be consistent with the Executive Security Agreement filed by the Company as an exhibit to the 8-K filed with the Securities and Exchange Commission on January 19, 2016.

Mr. Burke also will participate in all other elements of the Company’s employee benefit plans for the Company’s senior executives, which are outlined in the 2016 Proxy Statement.

The selection of Mr. Burke was not pursuant to any arrangement or understanding with respect to any other person. In addition, there are no family relationships between Mr. Burke and any director or other executive officer of the Company.

Item 9.01               FINANCIAL STATEMENTS AND EXHIBITS

99.1: Press Release of Haemonetics Corporation dated August 1, 2016 announcing financial results for the first quarter ended July 2, 2016.

99.2: Comments on 1st Quarter Fiscal 2017 Results

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	HAEMONETICS CORPORATION
	(Registrant)
Date: August 1, 2016	By:	/s/ Christopher Simon
		Christopher Simon, President and
		Chief Executive Officer

EX-99.1

		Exhibit 99.1
		News Release
FOR RELEASE:		CONTACT:
Date	August 1, 2016	Gerry Gould, VP-Investor Relations
Time	8:00 am Eastern	Tel. (781) 356-9402
		gerry.gould@haemonetics.com
		Alt. (781) 356-9613

Haemonetics Reports 1st Quarter Fiscal 2017 Results and Affirms Full Year Fiscal 2017 Guidance

Braintree, MA, August 1, 2016 - Haemonetics Corporation (NYSE: HAE) reported first quarter fiscal 2017 revenue of $210.0 million, down 2% versus the first quarter of fiscal 2016 and flat in constant currency.

The Company reported a GAAP net loss of $10.3 million or $0.20 per share in the first quarter of fiscal 2017. Excluding restructuring and transformation expenses, deal amortization and other expenses detailed below, adjusted net income was $12.9 million, down 28%, and adjusted earnings per share were $0.25, down 29% compared with the first quarter of the prior fiscal year.¹

Included in first quarter fiscal 2017 GAAP net loss and adjusted net income was $3.4 million or $0.06 per share of expenses related to a leukoreduction filter recall.

Christopher Simon, Haemonetics’ CEO, stated: “Our first quarter revenue represents a reasonable start to fiscal 2017. However, our profitability was negatively impacted by the leukoreduction filter recall, which added $3.4 million of expense in the quarter. The implementation of our strategic plan began in the quarter, with tough measures designed to reposition our organization and cost structure.”

Mr. Simon continued: “We have opportunities to increase the value of our Company by advancing product innovation, focusing on our growth franchises and driving productivity. We implemented the first phase of cost reductions and realized $7 million of savings in the first quarter, and we are on track to achieve our targeted $40 million of savings in fiscal 2017. We are restructuring our operating model, streamlining our organization and reallocating resources to invest in profitable growth.”

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FIRST QUARTER REVENUE

Plasma

Plasma franchise revenue was $97.6 million, up $9.1 million or 10% over the prior year first quarter on a reported basis and up 12% in constant currency. North America Plasma disposables revenue was up 15%, with roughly equal contributions from volume increases in plasma collection sets and increased saline and sodium citrate solutions shipments. Plasma collection volume strength continued, reflecting robust end user markets for plasma-derived biopharmaceuticals.

Hemostasis Management

Hemostasis Management franchise revenue was $15.3 million, up $1.3 million or 9% over the prior year first quarter on a reported basis and up 12% in constant currency. TEG disposables revenue was up 14% on a reported basis and up 17% in constant currency over the prior year’s first quarter, with continued growth in the U.S. and China.

The TEGinstalled base continued to increase, benefiting from expanded adoption in new and existing accounts. The TEG family of products - TEG 5000, TEG 6s and TEG Manager™ software - remains well positioned for continued revenue growth, consistent with the Company’s outlook.

Cell Processing

Cell Processing (“surgical”) franchise revenue was $26.1 million, down $1.7 million or 6% versus the prior year first quarter on a reported basis and down 3% in constant currency. The revenue decline resulted from continued OrthoPAT disposables volume decline.

Blood Center

Blood Center franchise revenue was $70.9 million, down $12.1 million or 15% versus the prior year first quarter on a reported basis and down 13% in constant currency.

Platelet disposables revenue was down 13% versus the prior year first quarter on a reported basis and down 11% on a constant currency basis. Order timing, including strong year-end fiscal 2016 order fulfillment of single dose collection disposables in Japan, combined with a continued market shift toward double dose collection techniques, drove the decline.

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Red cell disposables revenue was down 26% as reported and 25% on a constant currency basis. Lower volume, as well as pricing and volume changes associated with previously announced U.S. customer contracts, accounted for the declines.

Whole blood disposables revenue was down 18% as reported and down 16% on a constant currency basis. These declines reflected continued softness in the U.S. whole blood collection market and ongoing global price erosion.

Geographic

First quarter fiscal 2017 revenue growth was 4% in North America and less than 1% in Asia Pacific, with declines of 12% in EMEA and 16% in Japan. On a constant currency basis, the Company had revenue growth of 4% in North America and 5% in Asia Pacific, with declines of 5% in EMEA and 17% in Japan.

OPERATING RESULTS

Gross profit on a GAAP basis was $91.1 million, down $11.5 million from the prior year first quarter. Adjusted gross profit was $92.2 million, down $11.4 million or 11% from the prior year and included $3.7 million of unfavorable currency impact, partially offset by $2.0 million of benefit from cost reduction initiatives implemented midway through the first quarter of fiscal 2017. First quarter fiscal 2017 GAAP and adjusted gross profit were reduced by $3.4 million due to the leukoreduction filter recall. Gross margin on a GAAP basis was 43.4% and adjusted gross margin was 43.9%, both down 460 basis points versus the first quarter of the prior fiscal year.

Operating expenses were $98.9 million in the first quarters of both fiscal years 2017 and 2016, and included restructuring and related charges and deal amortization of $27.2 million and $22.2 million, respectively. Offsetting these increased charges were $5.0 million of benefit from cost reduction initiatives implemented in the first quarter of fiscal 2017.

First quarter GAAP operating loss was $7.9 million versus operating income of $3.6 million in the first quarter of the prior year. Adjusted operating income was $19.3 million, down $6.5 million including $3.4 million of currency headwinds and $3.4 million of recall expenses.

The GAAP income tax provisions were 2.9% of the first quarter fiscal 2017 pre-tax loss and 117% of the first quarter fiscal 2016 pre-tax income, while the income tax rates were 24.7% and 24.5% of adjusted pre-tax income in the first quarters of fiscal 2017 and 2016, respectively.

Balance Sheet and Cash Flow

3

Cash on hand was $118 million, an increase of $3 million during the first quarter of fiscal 2017, as the Company utilized $11 million of cash, less $3 million of cash tax benefits, for restructuring and related initiatives. The Company reported free cash flow of $8 million, inclusive of the aforementioned net restructuring funding requirements, and $16 million before such funding.

RESTRUCTURING AND RESTRUCTURING-RELATED EXPENSES AND DEAL AMORTIZATION

The Company recently announced and began implementing a plan to optimize growth and profitability. For fiscal 2017, that plan includes a repositioning of the Company’s organization and cost structure. Further, the Company indicated that enactment of that plan will include, in fiscal 2017, pre-tax restructuring charges, primarily termination benefits, approximating $17 million; and restructuring-related expenses including exit costs of $9 million.

Anticipated charges and expenses are expected to total $26 million pre-tax or $18 million net of tax benefit, representing approximately $0.35 per share impact on fiscal 2017 GAAP earnings. In the first quarter of fiscal 2017, the Company incurred $19 million of such expenses pre-tax, or $13 million net of tax benefit of such charges, approximately $0.25 per share.

The Company excludes acquisition related amortization expenses from its adjusted operating income and adjusted earnings per share. Excluded from first quarter adjusted earnings were $7.1 million pre-tax in fiscal 2017 and $7.4 million pre-tax in fiscal 2016, or $0.10 per share in each first quarter.

Fiscal 2017 Guidance

The Company affirmed its fiscal 2017 guidance, summarized as follows.

Revenue, including 1.7% impact of having one less week in the Company’s fiscal 2017 calendar than in the prior fiscal year:

• Total revenue: $850-$875 million, down 4-7% vs. prior year on a reported basis and down 2-4% in constant currency.

• Plasma: 7-9% revenue growth as reported or 8-10% in constant currency.

• Hemostasis Management: 17-20% revenue growth as reported or 20-23% in constant currency.

• Cell Processing: approximately 10% revenue decline as reported, 6% in constant currency, with flat revenue in Cell Saver, growth in BloodTrack and a continuing decline in OrthoPAT.

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• Blood Center (whole blood, red cell and platelet): 19-23% revenue decline as reported or 16-20% decline in constant currency.

Operating margin: 6-7% of revenue on a GAAP basis and, exclusive of restructuring and related expenses, 13% adjusted operating margin.

Income taxes: 17-18% of GAAP pre-tax income and 25-26% of adjusted pre-tax income.

Acquisition related amortization: $27 million pre-tax or $0.39 per share.

Earnings per share: $0.70-$0.80 on a GAAP basis and, exclusive of restructuring charges, restructuring-related expenses and acquisition related amortization, $1.40-$1.50 adjusted.

Free cash flow: $47-$52 million, including the funding of $18 million of after-tax restructuring charges and restructuring related expenses; $65-$70 million before funding such charges and expenses.

CONFERENCE CALL AND ADDITIONAL COMMENTARY

Haemonetics will host a webcast to discuss first quarter results on Monday, August 1, 2016 at 8:00am Eastern Time. Interested parties may participate at: http://edge.media-server.com/m/p/vnuvfpge.

The Company is posting this press release and additional commentary to be discussed on the webcast entitled Comments on 1^st Quarter Fiscal 2017Results to its Investor Relations website.

These comments can be accessed by the following direct link: http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MzQ1NDM1fENoaWxkSUQ9LTF8VHlwZT0z&t=1&cb=636051357898808766.

About Haemonetics

Haemonetics (NYSE: HAE) is a global healthcare company dedicated to providing a suite of innovative hematology products and solutions for our customers, to help them improve patient care and reduce the cost of healthcare. Our technology addresses important medical markets: blood and plasma component collection, the surgical suite, and hospital transfusion services. To learn more about Haemonetics, visit http://www.haemonetics.com.

Forward Looking Statements

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The Company provides forward-looking statements that could be influenced by risks and uncertainties, including the effects of disruption from the manufacturing transformation making it more difficult to maintain relationships with employees and timely deliver high quality products, changes in executive management, changes in operations, asset revaluations to reflect current business conditions, technological advances in the medical field and standards for transfusion medicine and our ability to successfully implement products that incorporate such advances and standards, demand for whole blood and blood components, product quality, market acceptance, regulatory uncertainties, including in the receipt or timing of regulatory approvals, the effect of economic and political conditions, the impact of competitive products and pricing, blood product reimbursement policies and practices, foreign currency exchange rates, changes in customers’ ordering patterns including single-source tenders, the effect of industry consolidation as seen in the plasma and blood center markets, the effect of communicable diseases and the effect of uncertainties in markets outside the U.S. (including Europe and Asia) in which we operate and other risks detailed in the Company's filings with the Securities and Exchange Commission.

The foregoing list should not be construed as exhaustive.

Forward-looking statements are based on estimates and assumptions made by management of the Company and are believed to be reasonable, though inherently uncertain and difficult to predict. Actual results and experience could differ materially from the forward-looking statements. Information set forth in this press release is current as of today and the Company undertakes no duty or obligation to update this information.

¹ A reconciliation of GAAP to adjusted financial results is included at the end of the financial sections of this press release as well as on the web at http://www.haemonetics.com.

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Haemonetics Corporation Financial Summary
Condensed Consolidated Statements of Loss for the First Quarter of FY17 and FY16
(Data in thousands, except per share data)
		7/2/2016			6/27/2015			% Inc/(Dec)
								vs Prior Year
		(unaudited)
Net revenues		$	209,956		$	213,413		(1.6)%
Gross profit		91,056			102,539			(11.2)%
	R&D	11,437			11,321			1.0%
	S,G&A	87,500			87,612			(0.1)%
Operating expenses		98,937			98,933			—%
Operating (loss) income		(7,881		)	3,606			n/m
Interest and other expense, net		(2,177		)	(2,009		)	8.4%
(Loss) income before taxes		(10,058		)	1,597			n/m
Tax expense		288			1,864			n/m
Net loss		$	(10,346	)	$	(267	)	n/m
Net loss per common share assuming dilution		$	(0.20	)	$	(0.01	)	n/m
Weighted average number of shares:
	Basic	51,021			51,360
	Diluted	51,021			51,360
Profit Margins:								Inc/(Dec) vs prior year profit margin %
Gross profit		43.4		%	48.0		%	(4.6)%
R&D		5.4		%	5.3		%	0.1%
S,G&A		41.7		%	41.1		%	0.6%
Operating (loss) income		(3.8		)%	1.7		%	(5.5)%
(Loss) income before taxes		(4.8		)%	0.7		%	(5.5)%
Net loss		(4.9		)%	(0.1		)%	(4.8)%

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Revenue Analysis for the First Quarter of FY17 and FY16
(Data in thousands)
		Three Months Ended
		7/2/2016		6/27/2015		Percent change		Currency impact		Constant currency growth (1)
		(unaudited)
Revenues by geography
	United States	$	125,700	$	120,695	4.1	%	—	%	4.1	%
	International	84,256		92,718		(9.1	)%	(4.4	)%	(4.7	)%
Net revenues		$	209,956	$	213,413	(1.6	)%	(1.9	)%	0.3	%
Revenues by franchise
	Plasma	$	97,649	$	88,527	10.3	%	(2.0	)%	12.3	%
	Blood Center	70,943		83,083		(14.6	)%	(1.3	)%	(13.3	)%
	Cell Processing	26,076		27,813		(6.2	)%	(3.3	)%	(2.9	)%
	Hemostasis Management	15,288		13,990		9.3	%	(2.2	)%	11.5	%
Net revenues		$	209,956	$	213,413	(1.6	)%	(1.9	)%	0.3	%

⁽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 description of non-GAAP financial measures contained in this release.

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Condensed Consolidated Balance Sheets
(Data in thousands)
			As of
			7/2/2016		4/2/2016
			(unaudited)
Assets
Cash and cash equivalents			$	118,248	$	115,123
Accounts receivable, net			149,668		157,093
Inventories, net			189,431		187,028
Other current assets			32,248		28,842
		Total current assets	489,595		488,086
Property, plant & equipment, net			339,666		337,634
Intangible assets, net			198,121		204,458
Goodwill			268,589		267,840
Other assets			21,420		21,110
	Total assets		$	1,317,391	$	1,319,128
Liabilities & Stockholders' Equity
Short-term debt & current maturities			$	46,804	$	43,471
Other current liabilities			152,169		142,080
		Total current liabilities	198,973		185,551
Long-term debt			352,908		364,529
Other long-term liabilities			49,950		47,483
Stockholders' equity			715,560		721,565
	Total liabilities & stockholders' equity		$	1,317,391	$	1,319,128

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Condensed Consolidated Statements of Cash Flows
(Data in thousands)
	Three Months Ended
	7/2/2016			6/27/2015
	(unaudited)
Cash Flows from Operating Activities:
Net loss	$	(10,346	)	$	(267	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	22,544			22,255
Stock-based compensation expense	1,840			3,164
Provision for losses on accounts receivable and inventory	2,571			1,742
Change in other non-cash operating activities	1,116			85
Change in accounts receivable, net	8,239			6,524
Change in inventories	(3,721		)	(2,410		)
Change in other working capital	8,452			(21,843		)
Net cash provided by operating activities	30,695			9,250
Cash Flows from Investing Activities:
Capital expenditures	(22,479		)	(24,246		)
Proceeds from sale of property, plant and equipment	87			116
Other	—			(3,000		)
Net cash used in investing activities	(22,392		)	(27,130		)
Cash Flows from Financing Activities:
Change in (repayments) / borrowings, net	(8,375		)	4,104
Change in employee stock programs	3,389			5,156
Share repurchases	—			(39,032		)
Net cash used in financing activities	(4,986		)	(29,772		)
Effect of exchange rates on cash and cash equivalents	(192		)	(806		)
Net Change in Cash and Cash Equivalents	3,125			(48,458		)
Cash and Cash Equivalents at Beginning of the Period	115,123			160,662
Cash and Cash Equivalents at End of Period	$	118,248		$	112,204
Free Cash Flow Reconciliation*:
Free cash flow after restructuring and restructuring related costs	$	8,303		$	(14,880	)
Restructuring and restructuring related costs	10,724			15,550
Tax benefit on restructuring and restructuring related costs	(3,188		)	(3,788		)
Capital expenditures on VCC initiatives	—			4,406
Free cash flow before restructuring, restructuring related costs and VCC capital expenditures	$	15,839		$	1,288

* Free cash flow is defined as cash provided by operating activities less capital expenditures and proceeds from sale of property, plant and equipment.

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Haemonetics Corporation Financial Summary

Reconciliation of Non-GAAP Measures

Haemonetics has presented supplemental non-GAAP financial measures as part of this earnings release. A reconciliation is provided below that reconciles each non-GAAP financial measure with the most comparable GAAP measure. The presentation of non-GAAP financial measures should not be considered in isolation from, or as a substitute for, the most directly comparable GAAP measures. There are material limitations to the usefulness of non-GAAP measures on a standalone basis, including the lack of comparability to the GAAP financial results of other companies.

These measures are used by management to monitor the financial performance of the business, make informed business decisions, establish budgets and forecast future results. Performance targets for management are established based upon these non-GAAP measures. In the reconciliations below, we have removed restructuring, restructuring related and other costs from our GAAP expenses. Our restructuring and restructuring related costs for the periods reported are principally related to employee severance and retention, product line simplification, accelerated depreciation and other costs associated with the fiscal 2017 restructuring initiative announced May 9, 2017.

In addition to restructuring and restructuring related costs, we are reporting adjusted earnings before deal amortization and asset impairments.

We believe this information is useful to investors because it allows for an evaluation of the Company with a focus on the performance of our core operations.

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Reconciliation of Non-GAAP Measures for the First Quarter of FY17 and FY16
(Data in thousands)
	Three Months Ended
	7/2/2016			6/27/2015
	(unaudited)
GAAP operating (loss) income	$	(7,881	)	$	3,606
Restructuring and restructuring related costs (1)	18,816			14,816
Asset impairments (2)	1,315			—
Deal amortization (3)	7,075			7,405
Non-GAAP operating income	$	19,325		$	25,827
GAAP net loss	$	(10,346	)	$	(267	)
Restructuring and restructuring related costs (1)	18,816			14,816
Asset impairments (2)	1,315			—
Deal amortization (3)	7,075			7,405
Tax benefit associated with non-GAAP adjustments	(3,963		)	(3,970		)
Non-GAAP net income	$	12,897		$	17,984
GAAP net loss per common share	$	(0.20	)	$	(0.01	)
Non-GAAP items after tax per common share assuming dilution	$	0.45		$	0.36
Non-GAAP net income per common share assuming dilution	$	0.25		$	0.35
(1)Includes restructuring and restructuring related costs included in gross profit of $0.2M and $1.0M for the three months ended   July 2, 2016 and June 27, 2015, respectively.
(2)Includes impairment charges included in gross profit of $0.9M for the three months ended July 2, 2016. There were no impairment charges included in gross profit during the three months ended June 27, 2015.
(3) Deal amortization is included within operating expenses.

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EX-99.2

Comments on 1st Quarter Fiscal 2017 Results

August 1, 2016

Please note that these comments include forward looking statements. Our actual results may differ materially from anticipated results. Additional information concerning factors that could cause results to differ materially is available in the Form 8K we are filing today, as well as in our recent 10K and 10Q filings.

Haemonetics presents supplemental non-GAAP financial measures. The presentation of non-GAAP financial measures should not be considered in isolation from, or as a substitute for, the most directly comparable GAAP measures. There are material limitations to the usefulness of non-GAAP measures on a standalone basis, including the lack of comparability to GAAP financial results of other companies.

These measures are used by management to monitor the financial performance of the business, make informed business decisions, establish budgets and forecast future results. Performance targets for management are established based upon these non-GAAP measures.

Consistent with our past practice, we have excluded certaincosts and charges from our adjusted financial results and adjusted financial guidance. In the first quarter of fiscal 2017 and in guidance for the full year fiscal 2017 we excluded certain charges and reserves related to fiscal 2017 restructuring and related activities, as well as their tax effects. In the first quarter of fiscal 2016 we excluded certain charges for certain restructuring and related activities and their tax effects. The earnings information discussed for all periods, including guidance for future periods, also exclude deal related amortization expense and its tax effects.

Further details of first quarter fiscal year 2017 excluded amounts, including reconciliation of each non-GAAP financial measure with the most comparable GAAP measure and comparisons with the first quarter of fiscal 2016, are provided in our Form 8K and have been posted to our Investor Relations website. Our press release and website also include reconciliations of our GAAP and adjusted results for reported and prospective periods.

SUMMARY: 1^st Quarter Fiscal 2017 Results

In the first quarter, total Company revenue was down 2% as reported and flat on a constant currency basis, as compared with the prior year’s first quarter. Strong performances in the Plasma and Hemostasis Management franchises continued, as did declines in the Blood Center business.

Our North America Plasma franchise delivered 15% growth in the first quarter, with approximately half of such growth from the continued ramp up of liquid solutions shipments. TEG disposables grew 14% as reported this quarter and 17% in constant currency.

1

There was one notable item in the first quarter that decreased our earnings. That item was the North American leukoreduction filter recall and its impact of $3 million on operating income, or $0.06 per share.

Our manufacturing engineering team determined the root cause and determined it affected only a single type of filter shipped to U. S. customers between mid-April and mid-June. The issue has been corrected and shipments have resumed to customers. Based on our knowledge of customer usage patterns and inventory levels, we expect affected product to be returned and discarded at a value of $2 million. Additionally, we have discarded $1 million of inventory on hand.

Revenue

Total revenue was $210 million in the first quarter of fiscal 2017, a decrease of 2% as reported and flat on a constant currency basis.

In the first quarter, Plasma disposables revenue was $90 million, an increase of approximately $9 million or 11% as reported, and 13% in constant currency. Shipments of saline and sodium citrate contributed about 6 percentage points of our plasma growth in the first quarter of fiscal 2017. Plasma growth was realized in all of our geographic regions.

Hemostasis Management revenue was $15 million in the first quarter, up 9% as reported and 12% in constant currency over the first quarter of fiscal 2016. TEG 5000 device sales slowed in anticipation of the TEG 6s full market release late in fiscal 2017. TEG disposables revenue, however, was $13 million in the first quarter, up 14% as reported and up 17% in constant currency.

Cell Processing revenue was $26 million in the first quarter, down 6% as reported and 3% in constant currency. Surgical, or Cell Saver, revenue was relatively flat, while OrthoPAT revenue represented most of the decline in Cell Processing.

In the first quarter, Blood Center revenue was $71 million, down $12 million or 15%. Excluding the impact of currency, Blood Center revenue declined by $11 million or 13% in the quarter.

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Platelet disposables revenue was $27 million in the first quarter, down $4 million or 13% as reported, and down $3 million or 11% in constant currency, as declines in Japan were only partially offset by emerging markets growth.

The decline in Japan was attributable to order timing between the fourth quarter of fiscal 2016 and the first quarter of fiscal 2017, and the decreasing use of single-dose collection technology by our largest customer in that geography. Approximately 20% of platelet collections in Japan are currently performed with a competitor’s double-dose technology versus 8% a year ago.

Red cell disposables revenue was $8 million, down $3 million or 26% as reported and down 25% in constant currency, versus last year’s first quarter. The majority of the revenue decline is due to previously announced volume and pricing reductions in the U.S. We continued to implement our long-term contract with the American Red Cross during the first quarter. Through this agreement, we expect to achieve 100% of the ARC’s double red cell business, achieving greater volume at a lower price.

Whole blood revenue was $27 million in the first quarter, down $6 million or 18% as reported and down 16% in constant currency. North America whole blood revenue continues to be impacted by reductions in the U.S. red cell transfusion rates. The market decline rate in fiscal 2017 appears to be moderating, however patient blood management practices have not been implemented at all U.S. hospitals, so declines are expected to continue.

Gross Profit and Operating Income

The leukoreduction filter quality issue surfaced late in the first quarter of fiscal 2017 and resulted in $3 million of costs. Such costs are included in the GAAP and adjusted gross profit and operating income amounts discussed below.

First quarter gross profit was $91 million on a GAAP basis, down $11 million. Adjusted gross profit was $92 million, down $11 million of 11% from

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the prior year first quarter. A $4 million currency headwind was partially offset by a $2 million benefit from cost reduction initiatives implemented partway through the quarter.

First quarter fiscal 2017 gross margin was 43.4% on a GAAP basis and adjusted gross margin was 43.9%, down 460 basis points versus the first quarter of fiscal 2016. Currency headwinds, recall expenses, reduced pricing in U.S. red cells and unfavorable product mix (greater sales of plasma liquid solutions, lower sales of platelets in Japan) were only partially offset by the $2 million savings from cost reduction initiatives.

Operating expenses were $99 million as reported on a GAAP basis in the first quarters of fiscal 2017 and 2016 and included restructuring and related charges and deal amortization of $27 million and $22 million, respectively. Fiscal 2017 operating expenses also included $5 million benefit from cost reduction initiatives implemented partway through the quarter.

First quarter fiscal 2017 operating expenses included $0.3 million of incremental unfavorable currency headwind and $5 million higher restructuring and related charges than the first quarter of fiscal 2016. Additionally, fiscal 2017 expenses benefited by $5 million from cost reduction initiatives implemented partway through the quarter.

First quarter fiscal 2017 GAAP operating loss was $8 million, a $12 million decline from operating income of $4 million in the first quarter of fiscal 2016. Adjusted operating income was $19 million, down $7 million including $3 million of currency headwinds and a $3 million impact of the filter recall.

On a GAAP basis, first quarter operating margin was (4%) in fiscal 2017 and 2% in fiscal 2016. On an adjusted basis excluding restructuring and related expenses, adjusted operating margin was 9% in the first quarter, down 290 basis points from 12% in the prior year first quarter.

First quarter fiscal 2017 operating margin benefited by operating cost reductions, but was adversely impacted by increased restructuring and related charges, unfavorable currency and product mix, and the filter recall.

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Interest Expense, Taxes and EPS

Interest expense associated with loans was $1.9 million in the first quarter.

The income tax provision on our GAAP pre-tax loss was 3% in the first quarter of fiscal 2017; in fiscal 2016 the tax provision was 117% of GAAP pre-tax income, as tax benefits of foreign restructuring activities were not certain and not accrued.

The income tax rate on pre-tax adjusted earnings was 24.7% in the first quarter of fiscal 2017 and 24.5% in the prior year first quarter.

First quarter losses per share on a GAAP basis were $0.20 and $0.01 cent, respectively, in fiscal 2017 and 2016. Adjusted earnings per share were $0.25 in the first quarter of fiscal 2017, down $0.10 or 29%. Both the GAAP and adjusted earnings per share included $0.06 negative impact of the leukoreduction filter recall.

Cash and free cash flow

We ended the first quarter of fiscal 2017 with $118 million of cash on hand, up $3 million from our fiscal 2016 year end. Including $8 million of net after-tax restructuring and related costs, we reported $8 million of free cash flow, defined as cash provided by operating activities, less capital expenditures. Excluding the restructuring and related charges, free cash flow was $16 million.

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