(A) Our Business

Haemonetics is a blood management solutions company for our customers. Anchored by our reputable medical devices systems, we also provide information technology platforms and value added services to provide customers with business solutions which support improved clinical outcomes for patients and efficiency in the blood supply chain.

Our systems automate the collection and processing of donated blood; assess likelihood for blood loss; and salvage and process surgical patient blood. These systems include devices and single-use, proprietary disposable sets ("disposables") that operate only with our specialized devices. Our systems allow users to collect and process only the blood component(s) they target - plasma, platelets, or red blood cells - increasing donor and patient safety as well as collection efficiencies. Our information technology platforms are used by blood and plasma collectors to improve the safety and efficiency of blood collection logistics by eliminating previously manual functions at not-for-profit blood banks and commercial plasma centers. Our business services products include consulting, Six Sigma, LEAN manufacturing and Insight Opportunity Model offerings that support our customers' needs for regulatory compliance and operational efficiency in the blood supply chain.

We either sell our devices to customers (resulting in equipment revenue) or place our devices with customers subject to certain conditions. When the device remains our property, the customer has the right to use it for a period of time as long as the customer meets certain conditions we have established, which among other things, generally include one or more of the following:

• Purchase and consumption of a minimum level of disposables products;

• Payment of monthly rental fees; and

• An asset utilization performance metric, such as performing a minimum level of procedures per month per device.

Our disposable revenue stream (including sales of disposables and fees for the use of our equipment) accounted for approximately 87% of our total revenues for fiscal year 2009, 86% of our total revenues for fiscal year 2008 and 88% of our total revenues for fiscal year 2007.

(B) Product Families

Although we manage our business as one operating segment, we address our customer constituents through three global product families: Donor, Patient, and Software Solutions and Services.

Our donor products include systems to collect plasma, platelets and red cells from blood donors. We market our donor products primarily to blood collectors which include both for-profit plasma collectors and not-for-profit blood banks.

Our patient products include systems to collect blood during and after surgery, wash and filter unwanted substances from the blood, and prepare the blood for reinfusion to the surgical patient. Our patient products also include a surgical diagnostic system that measures a patient's likelihood to bleed during surgery. We market these patient products to hospitals and hospital service providers.

Software solutions and services revenues includes revenue generated from Haemonetics Software Solutions and our business services contracts, such as blood management consulting, as well as revenue from equipment repairs performed under preventive maintenance contracts or emergency service billings, training programs and spare part sales.

Donor Products and Services

1) Plasma systems: Our PCS brand systems automate the collection of plasma from donors who are most often paid a fee for their donation. The collected plasma is then processed into therapeutic

pharmaceuticals. Automated plasma collection is a safe and cost-effective improvement to manual (non-automated) plasma collection which is time-consuming, labor-intensive, produces relatively poor yields, and poses risks to donors. Currently the majority of plasma collections worldwide are automated collections.

2) Blood bank systems:

a) Our MCS brand system automates the collection of platelets and other blood components from volunteer donors. The systems enable the donation of a larger volume of the donor's platelets, which are then generally given to cancer patients and others with bleeding disorders. Before the advent of our platelet collections technology, the "pooling" or combination of platelets from 4 to 7 different donors was the only alternative to prepare a single therapeutic dose for transfusion to a patient. Our MCS line of products allows the collection of a sufficient number of platelets from only one donor to produce one or two therapeutic doses.

b) Our ACP brand systems automate the process used to freeze, thaw and wash red blood cells which enables blood collectors and the military to better manage blood inventories. The ACP systems can also be used to wash other cellular parts from red blood cells units before transfusion to patients with special transfusion requirements.

3) Red cell systems: Our MCS and Cymbal systems automate the collection of red cells from volunteer donors. The systems improve the blood collector's operational efficiency by increasing the volume of blood components collected per donation event and number of red cells than the traditional (non-automated) collection method. It helps blood collectors address red cell shortages that commonly plague health care systems. The Cymbal system received CE marking in February 2006 and received FDA clearance in February 2007. The highest sales volume product in the MCS red cell product line is our double red cell collection technology which allows for two units of red cells to be collected from one donor. Specialty protocols enabling the simultaneous collection of a unit of red cells and a unit of plasma or a unit of red cells and a unit of platelets are also available in various parts of the world.

4) Services and programs related to blood supply chain efficiency and effectiveness such as LEAN and Six Sigma consulting as well as InSight, a program application supporting blood center resource allocation and utilization, are available to Donor customers generally associated with broad commitments.

Patient Products and Services

1) Blood salvage: Our surgical blood salvage systems allow for the recovery, segregation and washing of red cells from blood lost by a patient during or after surgery, so that red cells can be made available to transfuse back to the patient if needed. In this way, a surgical patient can receive transfusions of the safest blood possible, his or her own. Our surgical blood salvage systems include:

a) Our Cell Saver brand systems for higher blood loss surgeries and trauma;

b) Our OrthoPAT brand systems for lower, slower blood loss orthopedic procedures; and

c) Our cardioPAT brand system for lower blood loss cardiovascular procedures, like beating heart surgeries or coronary artery bypass graft (CABG) surgeries. The cardioPAT is our newest blood salvage system.

2) Surgical suction: Our SmartSuction product clears blood and debris from the surgical field in conjunction with surgical blood salvage.

3) Blood demand assessment: In November 2007, we acquired the TEG Thrombelastograph Hemostasis Analyzer business from Haemoscope. The TEG system is a diagnostic tool which allows surgeons to determine if a patient will need a transfusion so the surgeon can then decide the best blood-related clinical treatment for the individual patient.

4) Blood Management consulting: In July 2007, we acquired Infonalé, a hospital services company, focused on peer to peer blood management consulting primarily in the US. Equipped with a unique database approach Haemonetics provides hospitals a baseline view of their blood management metrics and then

monitors and measures key improvements associated with recommended best practice approaches to transfusion therapy and the avoidance of transfusions.

Software Solutions and Services

1) Software: At this time, our software solutions and services business principally provides support to our plasma and blood collection customers. Our goal in expanding the business is to add complementary products and services for our Patient and Donor Division customers. Through our Haemonetics Software Solutions division, (formerly 5Dtm Information Management ("5D") and Information Data Management ("IDM")), we provide information technology platforms and technical support for blood drive management that facilitate the efficient and compliant operations of blood and plasma collection centers. For plasma customers, we also provide information technology platforms for managing distribution of plasma units to, and within, plasma fractionation facilities. This division also provides data maintenance services that include hosting of these applications.

2) Services: Through our services group, we offer business solutions to support process excellence, donor recruitment, business design, and blood management efforts. For example, we provide Six Sigma and LEAN manufacturing consulting services to blood banks. We also provide hospital blood management assessment tools to hospitals through our Infonalé subsidiary, acquired in July 2007. Included in our services reporting are equipment repair services under preventive maintenance contracts or emergency service visits, training programs and spare part sales.

Financial Summary


                                                 For the Years Ended                   % Increase/         % Increase/
                                      March 28,       March 29,       March 31,        (Decrease)          (Decrease)
                                         2009            2008            2007           09 vs. 08           08 vs. 07
                                                    (In thousands)

Net revenues                          $  597,879      $  516,440      $  449,607               15.8 %              14.9 %
Gross profit                          $  308,170      $  257,725      $  227,300               19.6 %              13.4 %
   % of net revenues                        51.5 %          49.9 %          50.6 %
Operating income                      $   85,567      $   70,287      $   62,745               21.7 %              12.0 %
   % of net revenues                        14.3 %          13.6 %          14.0 %
Interest expense                      $      (64 )    $     (377 )    $   (1,256 )            (49.3 )%            (70.0 )%
Interest income                       $    1,968      $    5,418      $    7,864              (61.4 )%            (31.1 )%
Other income/(expense), net           $   (2,469 )    $    1,974      $    2,983             (225.1 )%            (33.8 )%
Income before taxes                   $   85,002      $   77,302      $   72,336               10.0 %               6.9 %
Provision for income tax              $   25,698      $   25,322      $   23,227                1.5 %               9.0 %
   % of pre-tax income                      30.2 %          32.8 %          32.1 %
Net income                            $   59,304      $   51,980      $   49,109               14.1 %               5.8 %
   % of net revenues                         9.9 %          10.1 %          10.9 %

Net revenues for fiscal year 2009 increased 15.8% over fiscal year 2008. The effects of foreign exchange accounted for an increase of 2.8% over fiscal year 2008. The remaining increase of 13.0% is mainly due to increases in our disposables revenue, software solutions revenues and equipment sales. The increase in disposables revenue resulted primarily from disposable unit increases in Plasma and Surgical & Diagnostic. Surgical & Diagnostic disposables revenue include $19.8 million of revenues related to the TEG Thrombelastograph Hemostasis Analyzer business which was acquired in the third quarter of fiscal year 2008 and the Medicell business which was acquired in the first quarter of fiscal year 2009. The software solutions growth was driven by two factors:
(1) increased sales to commercial plasma customers and (2) the recognition of $2.0 million of revenue, that would otherwise not have been recognizable until fiscal year 2010, in the fourth quarter of fiscal year 2009 as a result of a customer's decision to forego the option year on a software development contract.

Gross profit increased 19.6% over fiscal year 2008. The favorable effects of foreign exchange accounted for an increase of 5.8% over fiscal year 2008. The remaining increase of 13.8% was due primarily to increased sales driving fixed cost leverage. This was partly offset by changes in product mix driven by higher sales of lower margin plasma products.

Operating income increased 21.7% over fiscal year 2008. The effects of foreign exchange accounted for an increase in operating income of 16.7%. Without the effects of foreign exchange operating income increased 5.0% over fiscal year 2008. This increase was a result of the gross profit changes described above offset by higher operating expenses of 17.5% for the fiscal year 2009. The noted higher operating expenses are largely related to the expenses from the recent acquisitions, including the TEG system, increased employee performance based compensation expense in fiscal year 2009 based on strong Company performance versus pre-established targets, and higher expenses due to increased sales.

Net income increased 14.1% over fiscal year 2008. The main factors that affected net income were the increase in operating income, due to the reasons mentioned above, partly offset by reductions in interest income and other income. The decrease in interest income was the result of a lower investment yield. The reduction in other income/(expense), net was the result of foreign exchange losses on foreign currency denominated assets increase and lower hedge points on forward contracts.

Net revenues for fiscal year 2008 increased 14.9% over fiscal year 2007. The effects of foreign exchange accounted for an increase of 2.2% over fiscal year 2007. The remaining increase of 12.7% is mainly due to increases in our disposables revenue, software revenues and equipment sales. The increase in disposable revenue resulted primarily from disposable unit increases across all of our Donor and Patient product lines, and reflects the acquired TEG business which took place in fiscal year 2008. The software growth was due to growth in the existing business and the acquisition of IDM, Inc. which took place in fiscal year 2007.

Gross profit increased 13.4% over fiscal year 2007. The favorable effects of foreign exchange accounted for an increase of 1.5% over fiscal year 2007. The remaining increase of 11.9% was due primarily to increased sales offset partly by changes in product mix.

Operating income increased 12.0% over fiscal year 2007. The effects of foreign exchange accounted for a decrease in operating income of 2.1%. Without the effects of foreign exchange operating income increased 14.1% over fiscal year 2007. The increase in operating income was primarily the result of the increases in gross profit and a reduction in in-process research and development expenses that were incurred during fiscal year 2007 in connection with the acquisition of Arryx, Inc.

These increases were partly offset by an increase in Selling, General and Administrative expenses of 19.0% which were largely related to the acquisitions of IDM and Haemoscope, to increases in administrative spending as we implemented a new global enterprise planning system for automated services, field services and finance, to increased employee performance based compensation expense, and to a reduction in settlement income.

Net income increased 5.8% over fiscal year 2007. The main factors that affected net income were the increases in operating income due to the reasons mentioned above, partly offset by lower interest income and other income, and an increase in the income tax rate.

Market Trends

Plasma Market

The continued increase in demand for plasma derived pharmaceuticals, particularly intravenous immunoglobulin ("IVIG"), is a key driver of increased plasma collections in the worldwide commercial plasma collection markets. Various factors related to the supply of plasma and the production of plasma derived pharmaceuticals also affect the demand, including the following:

• There has been significant industry consolidation among plasma collectors and fractionators. Industry consolidation impacts us when a collector changes the total number of its collection centers, the total

number of collections performed per center or changes the plasma collection system (Haemonetics or competitive technology) used to perform some or all of those collections.

• The supply of source plasma also affects demand for additional collections of source plasma. During fiscal year 2009, the supply and demand for plasma in the U.S. and Europe came into balance. In Asia, supply and demand remains balanced.

• The newer plasma fractionation facilities are more efficient in their production processes, utilizing less plasma to make similar quantities of pharmaceuticals and vaccines.

• Reimbursement guidelines affect the demand for end product pharmaceuticals.

• Newly approved indications and diagnosis of new patients requiring plasma derived therapies increase the demand for plasma.

Blood Bank Market

Despite modest increases in the demand for platelets in our major markets, improved collection efficiencies that increase the yield of platelets per collection and more efficient use of collected platelets have resulted in a flat market for disposables.

Red Cell Market

Increased demand for red cell transfusions, a general shortage of volunteer donors (currently and predicted to decline over time), a need for greater operating efficiency among collectors, and a stringent regulatory environment continue to drive demand for our red cell products. Our business continues to grow as we gain new customers and expand the use of our products at existing customer sites.

Patient Market

Our Cell Saver brand system is aimed at high blood loss cardiovascular procedures. This part of the surgical blood salvage market is declining and will probably continue to decline due to improved surgical techniques which minimizes blood loss and a decrease in the number of open-heart (bypass) surgeries performed. The cardioPAT system, a surgical blood salvage system targeted at open heart surgeries when there is less blood loss, is designed to meet the market needs created by these improved surgical techniques. The cardioPAT is used post-operatively while the patient is in recovery.

The main driver of growth in the Patient market is the lower blood loss orthopedic procedures, including hip and knee replacement surgeries, served by our OrthoPAT system. The OrthoPAT is the only system on the market designed to collect a patient's blood lost during and after surgery. Cell salvage is not yet a standard of care for U.S. orthopedic procedures. We are positioning this device as an effective alternative to patient pre-donation or non-washed autotransfusion systems.

During the fiscal year, we integrated the TEG diagnostic business. TEG product line sales further strengthened fiscal year 2009 revenue growth as the TEG business grew organically in fiscal year 2009. The TEG system is a diagnostic tool which allows surgeons to assess a patient's hemostasis so the surgeon can then decide the best blood-related clinical treatment for the individual patient.

RESULTS OF OPERATIONS

Net Revenues by Geography


                     March 28,      March 29,      March 31,      % Increase      % Increase
                        2009           2008           2007         09 vs. 08       08 vs. 07
                                  (In thousands)

     United States   $  279,029     $  232,812     $  211,044            19.9 %          10.3 %
     International      318,850        283,628        238,563            12.4 %          18.9 %

     Net revenues    $  597,879     $  516,440     $  449,607            15.8 %          14.9 %

International Operations and the Impact of Foreign Exchange

Our principal operations are in the U.S., Europe, Japan and other parts of Asia. Our products are marketed in more than 80 countries around the world via a direct sales force as well as independent distributors.

Approximately 53%, 55% and 57% of our revenues were generated outside the U.S. during fiscal year 2009, 2008 and 2007, respectively. During fiscal years 2009, 2008 and 2007 revenues from Japan accounted for approximately 16%, 17% and 20% of our total revenues, respectively and revenues from Europe comprised approximately 29%, 30% and 28% of our total revenues, respectively. These sales are primarily conducted in local currencies, specifically the Japanese Yen and the Euro. Accordingly, our results of operations are significantly affected by changes in the value of the Yen and the Euro relative to the U.S. dollar. For fiscal year 2009 as compared to fiscal year 2008, the favorable effects of foreign exchange resulted in a 2.8% increase in sales. For fiscal year 2008 as compared to fiscal year 2007, the favorable effects of foreign exchange accounted for a 2.2% increase in sales.

Please see section entitled "Foreign Exchange" in management's discussion for a more complete discussion of how foreign currency affects our business and our strategy to manage this exposure.

Net Revenues by Product Type


                                      March 28,       March 29,       March 31,       % Increase       % Increase
                                         2009            2008            2007          09 vs. 08        08 vs. 07
                                                    (In thousands)

Disposables                           $  518,101      $  444,130      $  393,660             16.7 %           12.8 %
Software Solutions and Services           44,263          39,498          33,718             12.1 %           17.1 %
Equipment                                 35,515          32,812          22,229              8.2 %           47.6 %

Net revenues                          $  597,879      $  516,440      $  449,607             15.8 %           14.9 %

Disposables Revenue by Product Line


                                      March 28,       March 29,       March 31,       % Increase       % Increase
                                         2009            2008            2007          09 vs. 08        08 vs. 07
                                                    (In thousands)

Donor:
Plasma                                $  202,176      $  155,219      $  126,971             30.3 %           22.2 %
Blood Bank                               143,420         136,148         126,216              5.3 %            7.9 %
Red Cell                                  49,508          46,377          43,406              6.8 %            6.8 %

Subtotal                              $  395,104      $  337,744      $  296,593             17.0 %           13.9 %

Patient:
Surgical & Diagnostic                 $   87,578      $   72,085      $   66,552             21.5 %            8.3 %
OrthoPAT                              $   35,419      $   34,301      $   30,515              3.3 %           12.4 %

Subtotal                              $  122,997      $  106,386      $   97,067             15.6 %            9.6 %

Total disposables revenue             $  518,101      $  444,130      $  393,660             16.7 %           12.8 %

Donor

Donor products include the Plasma, Blood Bank and Red Cell product lines. Disposable revenue for donor products increased 17.0% over that of fiscal year 2008. Foreign exchange resulted in a 3.4% increase over fiscal year 2008. The remaining increase of 13.6% was primarily driven by increases in Plasma along with increases in the other product lines, as discussed below.

For fiscal year 2008 as compared to fiscal year 2007, disposable revenue for donor products increased 13.9%. Foreign exchange resulted in a 1.9% increase over fiscal year 2007. The remaining increase of 12.0% was the result of increases across all of our Donor product lines, as discussed below.

Plasma

During fiscal year 2009, plasma disposable revenue increased 30.3%. Foreign exchange resulted in a 1.9% increase over fiscal year 2008. The main reason for the remaining 28.4% increase was increased demand for our products due to the demand for plasma derived pharmaceuticals. Demand for source plasma to make pharmaceuticals remains strong, increasing collections by our customers and resulting in higher sales. To meet this higher demand, over the past year we have continued to place additional equipment with existing and new customers. Over the next twelve to twenty-four months, as market growth rates trend down and our customers' demand levels normalize, we expect plasma disposable growth rates to moderate to a low to mid double-digit rate.

During fiscal year 2008, plasma disposable revenue increased 22.2%. Foreign exchange resulted in a 2.7% increase over fiscal year 2007. The remaining increase of 19.5% was driven by increased plasma disposable sales in the U.S. and Europe. The U.S. increase was due to market growth. Growth in Europe also reflected the market trends and the implementation of expanded business with Haema AG and Octapharma. The market growth is the result of increases in collections by our customers as the demand for source plasma continues to strengthen.

Blood Bank

During fiscal year 2009, blood bank disposable revenue increased 5.3%. Foreign exchange resulted in a 5.6% increase in blood bank disposable revenue over fiscal year 2008. Without the effect of currency, blood bank revenue decreased 0.3%. This decrease was due to share loss in both Europe and Japan, as well as challenges in South Korea associated with the significant devaluation of South Korea's currency, the Won. The decrease was partially offset by strength in North American and China and other emerging markets.

During fiscal year 2008, blood bank disposable revenue for donor products increased 7.9%. Foreign exchange resulted in a 1.4% increase in blood bank disposable revenue over fiscal year 2007. Without the effect of currency, blood bank revenue increased 6.5%. This increase was due to increased sales in Asia and our European distribution markets. These increases were a result of market growth in these emerging markets and increases in market share.

Red Cell

During fiscal year 2009, red cell disposable revenue increased 6.8% compared to fiscal year 2008. Foreign exchange accounted for an increase of 0.8%. Without this effect, disposables revenue increased 6.0%. Our red cell products are sold primarily to blood collectors, such as blood banks and government agencies. Sales are driven by the total level of red cell collections, the percentage of those collections done with apheresis devices and our market share of those automated collections. With worldwide blood donation increasing low single digits, sales increases are driven primarily by collectors adopting our . . .