Good morning, ladies and gentlemen. Thank you for standing by and welcome to Haemonetics Corporation fourth quarter fiscal 2022 earnings conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press the star then the one key on your touchtone telephone. Please be advised that today's conference is being recorded. If you require operator assistance, please press star then zero. I would now like to hand the conference over to your speaker host for today, Olga Guyette, Senior Director of Investor Relations and Treasury. Please go ahead.
Good morning, everyone. Thank you for joining us for Haemonetics fourth quarter fiscal 2022 conference call and webcast. I'm joined today by Chris Simon, our CEO, and James D'Arecca, our CFO. This morning, we posted our fourth quarter fiscal 2022 results to our investor relations website, along with our fiscal 2023 guidance and the analytical tables with the information that we'll refer to on this call. Additionally, we provided a complete P&L, balance sheet, summary statement of cash flows, as well as reconciliations of our GAAP to non-GAAP financial results and guidance. Before we get started, unless otherwise noted, all revenue growth rates discussed today are on an organic basis and exclude the impact of currency fluctuation, strategic exits of product lines, acquisitions and divestitures, and the impact of the 53rd week in fiscal 2021.
As in the past, we'll refer to non-GAAP financial measures throughout this call to help investors understand Haemonetics' ongoing business performance. Please note that these measures exclude certain charges and income items. Please refer to this morning's earnings release for details and excluded items, including comparisons with the same periods of fiscal 2021 and a reconciliation to our GAAP results. Our remarks today include forward-looking statements and our actual results may differ materially from the anticipated results. Haemonetics cautions that these forward-looking statements are subject to risks and uncertainties, including the potential impact from the pandemic on our results and other factors referenced in the safe harbor statement in our earnings release and our filings with the SEC. We do not undertake any obligation to update these forward-looking statements. Now, I'd like to turn it over to Chris.
Thanks, Olga, and thank you all for joining our earnings call. Today, we reported organic revenue growth of 19% in the fourth quarter and 7% in fiscal 2022, and an adjusted earnings per diluted share of $0.65 in the fourth quarter and $2.58 in fiscal 2022, an increase of 41% versus the prior year fourth quarter and an increase of 10% versus the prior fiscal year. The past year was a challenging one, but we are proud of how our people have responded. Our fourth quarter performance reflects our resilience and our commitment to meet the needs of our customers and deliver on our purpose of improving standards of care. Our agility and perseverance helped us achieve growth in all businesses, and we continue to distinguish Haemonetics for the meaningful value we are creating across our markets.
As the industry leader, we delivered integrated solutions to help our plasma customers realize much needed growth in the volume of collections. In the face of unprecedented blood shortages, our blood center products help maximize the impact of donations and attract and retain donors. Hospital, including Vascular Closure, continued to exceed expectations and was our fastest growing business in fiscal 2022, helping customers improve patient care and outcomes at less cost. As we evolve our portfolio and we expand our reach and relevance, hospital will increasingly drive our growth and diversification. Our Operational Excellence Program proved fundamental to our resilience and ability to quickly address supply chain disruptions and serve all who depend on us. It will continue to play a critical role in sustaining our success, enabling us to be a more agile, efficient, and productive company, creating lasting cost savings and freeing resources to fund investments.
Turning now to our business unit results. Plasma revenue increased 31% in the fourth quarter, driven by a 12% increase in U.S. plasma volume, price benefits, and a $6 million stocking order. Excluding the stocking order, U.S. plasma volume declined 4% sequentially, which compares favorably to a typical seasonal decline of about 7% in the fourth quarter and last year's fourth quarter decline of 13%. In fiscal 2022, plasma revenue grew 10% driven by growth in volume. We remain committed to enabling our customers to improve donor satisfaction, maximize plasma volume, and lower cost per liter collected. Our technology and ongoing product development are essential to helping our customers meet these critical needs.
Nearly all of our major customers in the U.S. are now experiencing the full value of our technology through a network of bidirectionally connected NexSys PCS devices with NexLynk DMS and Donor360 apps. Working closely with our customers, we have designed NexSys to streamline the collection process. These advances have proven especially important at a time when our customers are facing unprecedented staffing challenges. Our fully integrated system plays a vital role in a positive donor experience and collection center productivity. From instant check-in upon arrival through streamlined donation and expedited payment, NexSys contributes to a demonstrated 16-minute reduction in average donor door-to-door times, improved compliance, including a 98% elimination of documentation errors and increased donor satisfaction.
Our customers are also collecting an additional 9%-12% of plasma yield on average on NexSys with Persona, enabling them to both increase plasma supply and reduce the average cost per liter. We are leveraging extensive customer experience and real-world data from nearly 30 million NexSys collections to focus our ongoing innovation agenda. Our product development efforts continue to help customers improve center operations by driving growth in collections and improving plasma volume output while increasing donor retention and satisfaction. We look forward to sharing more about these programs at our Investor Day in June. The patient need for plasma-derived pharmaceuticals has never been greater. We continue to see long-term plasma market collections demand of 8%-10%, and we expect to see volume growth in excess of that as fractionators strive to replenish depleted plasma inventories.
Moving to hospital, revenue increased 19% in the fourth quarter and 16% in fiscal 2022. All four of our product lines grew this year despite the challenges posed by the Omicron variant outbreaks, hospital staffing shortages and COVID-19 related lockdowns in China. Hemostasis Management delivered 12% revenue growth in the quarter and 20% revenue growth in fiscal 2022. In the US, our largest market, TEG delivered robust growth both in the quarter and in fiscal 2022. We also benefited from strong growth in Europe, primarily driven by successful market penetration with our ClotPro viscoelastic diagnostic device, which was acquired in April 2020. Growth in the US and Europe was partially offset by weaker sales in China.
As you will hear during our Investor Day, we remain enthusiastic about our ability to grow organically and inorganically in what we estimate is a $700 million global market. Transfusion Management revenue grew 18% in the fourth quarter and 11% in fiscal 2022, and was equally strong for BloodTrack and for SafeTrace Tx as we completed a series of new account installations. Our fourth quarter results also benefited from a catch-up in software implementations in the US after a few months of delay due to Omicron. Cell Salvage revenue increased 17% in the quarter and 8% in fiscal 2022, driven by procedure recovery and strong capital sales. Growth in the quarter also benefited from back order relief from the temporary supply chain constraints we experienced in the third quarter.
Vascular Closure continues to excel, delivering a record $27 million of revenue in the fourth quarter and $94 million in fiscal 2022. With the integration of this business essentially complete, our focus is on accelerating our penetration into the $2.8 billion under-penetrated market while advancing our product portfolio to continue strengthening the role of our hospital business as a growth engine for Haemonetics. Blood Center revenue grew 7% in the fourth quarter and declined 1% in fiscal 2022. Apheresis revenue declined 1% in the quarter and fiscal 2022 as the strong recovery in platelet collections in Japan was offset by lower revenue from convalescent plasma and staffing shortages that affected collection centers across the US. Whole blood grew 26% in the quarter, driven by favorable order timing among distributors in the EMEA and additional opportunities in North America.
Our supply chain resilience enabled us to serve customers in need. For the full- year, whole blood revenue declined 3%, driven by blood center staffing shortages and previously discontinued customer contracts in North America. To carry our momentum into fiscal 2023 and beyond, Haemonetics is set for robust transformational growth, propelled by investments in the advancement of our technologies and expansion of our global commercial capabilities. We look forward to sharing our updated long-range plans, key business initiatives, innovation agenda and revised financial outlook at our Investor Day on Wednesday, June 29 at 10 A.M. Eastern Time, and we invite you to join us either in person in Boston or virtually. I'll now turn the call over to James D'Arecca and take this opportunity to welcome him as our new Executive Vice President and Chief Financial Officer.
James brings to Haemonetics substantial experience in financial leadership from prominent global healthcare organizations, and I look forward to working together to support our company's growth, resource allocation and long-term value creation. James?
Thank you, Chris, and good morning, everyone. I'd like to begin by saying how excited I am to be part of Haemonetics. Tomorrow will mark one month since I joined the company, and as I onboard, I'm incredibly impressed with our people, our leadership and the exciting possibilities ahead of us. I very much look forward to being part of this journey and applying my experience towards growth and value creation. Now let's discuss our business results and fiscal 2023 guidance. Our results for the fourth quarter and fiscal 2022 show continued resilience across the business. Chris already discussed our revenue results, so I will focus on the rest of the financials.
Our adjusted gross margin was 53.6% in the fourth quarter and 53.9% in fiscal 2022, an increase of 360 basis points when compared with the same periods of the prior year. The adjusted gross margin expansion was driven by the addition of the Vascular Closure business and benefits from the Operational Excellence Program. These benefits were partially offset by inflationary pressures in our supply chain and manufacturing, including freight, labor, and raw material costs, as well as higher depreciation costs, primarily related to the increasing installed base of our NexSys devices in the U.S.
Price had a positive impact on the fourth quarter results, but a limited impact on our fiscal 2022, since price adjustments in our plasma business in the first nine months of the year largely offset price benefits from NexSys and Persona conversions in the second half of fiscal 2022. As a reminder, these price adjustments were related to the expiration of fixed-term pricing on historical PCS2 technology and were fully annualized at the end of the third quarter of fiscal 2022. Adjusted operating expenses in the fourth quarter were $95.4 million, an increase of $13.4 million or 16% compared with fourth quarter of the prior year. As a percentage of revenue, adjusted operating expenses decreased by 40 basis points to 36%. Adjusted operating expenses in the fourth quarter included a ramp-up in investments that were delayed earlier in fiscal 2022.
Adjusted operating expenses for fiscal 2022 were $348.6 million, an increase of $65.6 million or 23% compared with the prior year. As a percentage of revenue, adjusted operating expenses increased by 260 basis points to 35.1%. Vascular Closure had the largest impact on adjusted operating expenses in the quarter and in fiscal 2022. Additionally, we had higher investments, higher outbound freight costs, and increases in other expenses associated with the return to normal spending levels. Contributions from our productivity savings, lower variable compensation, and the impact of the 53rd week in fiscal 2021 helped offset some of the cost increases, both in the quarter and in fiscal 2022.
As a result of changes in our adjusted gross margin and adjusted operating expenses, fourth quarter adjusted operating income was $46.6 million, an increase of $16.1 million or 53%. Adjusted operating income for fiscal 2022 was $187.1 million, an increase of $32.6 million or 21% compared with the prior year. As a percentage of revenue, adjusted operating income margin was 17.6% in the fourth quarter and 18.8% in fiscal 2022, up 410 basis points and 100 basis points respectively, compared with the same periods in fiscal 2021. The macroeconomic-driven inflationary environment continues to be challenging. The impacts in fiscal 2022 have been broad-based, including freight, raw materials, and labor.
We estimate an approximately 300 basis points impact from inflationary pressures on our adjusted operating income margin. Our Operational Excellence Program is an important lever in making us more efficient and agile, especially during periods of high macroeconomic uncertainty. In our fiscal 2022, this program delivered $37 million of gross savings, freeing up resources to fund additional investments. Since the inception of this program, we have generated $71 million in cumulative gross savings, slightly ahead of our plan. We also had positive contributions from Vascular Closure. This business continues to exceed our expectations, and within the first year of our ownership of this business, it has delivered a robust revenue growth and positive contribution to our adjusted earnings per diluted share, compared with $0.15-$0.20 of dilution we had originally guided to in the first year following the acquisition.
We are excited about the opportunities in Vascular Closure and will continue to allocate investments to fund its growth. The adjusted income tax rate was 22% for both the fourth quarter and fiscal 2022, compared with 12% and 14% respectively for the same periods of the prior year. The adjusted income tax rate in fiscal 2021 was lower than fiscal 2022 due to the benefit of higher share vesting and option exercises in fiscal 2021, which did not recur in fiscal 2022. Fourth quarter adjusted net $X million or 40%. Adjusted earnings per diluted share was $0.65, up 41% when compared with the fourth quarter of fiscal 2021. Adjusted net income for fiscal 2022 was $132.6 million, up $11.9 million or 10%.
Adjusted earnings per diluted share was $2.58, up 10% when compared with the prior year. Changes in the adjusted income tax rate, higher interest expense, and FX had a negative $0.10 impact on the fourth quarter and a negative $0.31 impact on the full- year adjusted earnings per diluted share when compared with the prior year. Cash on hand at the end of the fourth quarter was $259 million, up $67 million since the beginning of the year. Free cash flow before restructuring and restructuring-related costs was $117 million, compared with $99 million at the end of the last fiscal year.
The higher free cash flow before restructuring and restructuring-related costs in fiscal 2022 was mainly due to lower accounts payable, largely due to a $54 million payment for a compensation-related liability as part of the Cardiva Medical acquisition in fiscal 2021. We also had higher accounts receivable as revenue continued to recover from the effects of the pandemic and higher capital expenditures, primarily related to NexSys upgrades and the Operational Excellence Program, partially offset by a decrease in inventory. We have enough NexSys PCS devices in the U.S. inventory to convert the remainder of our major customers with no impact to future cash flow. Our current debt structure includes a $700 million credit facility that matures in June 2023, with balloon payments starting in September 2022.
At the end of the fourth quarter, total debt outstanding under the facility was $284 million, with no borrowings outstanding under the $350 million revolving credit line at the end of fiscal 2022. We plan to refinance our credit facility before the balloon payments are due. Additionally, we have $500 million in convertible notes that expire in March of 2026. Our EBITDA leverage ratio, as calculated in accordance with the terms set forth in the company's existing credit agreement, was 3.08 at the end of fiscal 2022. Now let's move on to our guidance. We expect total organic revenue growth of 6%-10% in fiscal 2023. We remain confident in our plasma business and expect plasma revenue to grow 7%-12% in fiscal 2023, with price and volume both contributing meaningfully.
Additionally, our guidance includes a $88 million minimum purchase commitment from CSL, compared with $102 million of revenue in fiscal 2022. We are excited about the opportunity in our hospital business. Our go-to-market strategies are working, and we're looking forward to another year of strong commercial performance. In fiscal 2023, we expect the hospital business to deliver revenue growth of 16%-19%, driven by continued robust growth in Hemostasis Management and Vascular Closure. Our blood center revenue guidance is a year-over-year decline of 4%-7% and reflects additional geopolitical risk and an unfavorable impact from distributor order timing when compared with fiscal 2022. We expect fiscal 2023 adjusted operating margins in the range of 18%-19%.
Our adjusted operating margin guidance includes higher operating expenses driven by continuous investment into our business as we broaden our product portfolio to strengthen our technology and expand our commercial footprint and a return to normalized spending levels. Our adjusted operating income margin also includes about 250 basis points of additional headwinds due to inflation and geopolitical risk. We expect our Operational Excellence Program to deliver additional gross savings of approximately $22 million, with total cumulative savings reaching $93 million by the end of our fiscal 2023. About half of these savings will be in cost of goods sold, with the rest in operating expenses, helping us generate additional efficiency across our business. Our adjusted earnings per diluted share guidance for fiscal 2023 is a range of $2.50-$2.90.
The midpoint of our adjusted earnings per diluted share guidance includes about $0.09 headwind from FX and share count. Additionally, consistent with our fiscal 2022 results, we expect our adjusted earnings per diluted share to be higher in the second half of fiscal 2023. Lastly, our free cash flow before restructuring and turnaround expenses in fiscal 2023 is expected to be $100 -130 million. Our capital allocation priorities remain unchanged, and we will continue to allocate capital to prioritize organic investments followed by inorganic opportunities and share repurchases. Before we open the call up for Q&A, I wanted to reiterate the key points that we hope you take away from today's call. First, we continue to strengthen and grow our business despite the continued challenges caused by the pandemic.
The end market demand, particularly for our plasma and hospital products, is strong, and we're focused on maintaining an uninterrupted supply of our products. Second, our product portfolio continues to evolve and increase our reach within large, underserved, and fast-growing markets. The acquisition of Cardiva Medical was an important step in our transformational growth journey. We remain focused on further optimizing our portfolio and accelerating our growth. Third, our Operational Excellence Program improves our operating performance, enabling us to respond quickly to supply chain disruptions. We made significant progress by achieving more than half of the target program gross savings by the end of fiscal 2022, while managing through a series of macroeconomic-driven headwinds. We plan to achieve the remaining $44 -54 million in target savings by the end of fiscal 2025.
This program is essential for our ongoing transformation, and once the macro environment stabilizes, these efficiency benefits will continue to expand our margins. Finally, we remain committed to driving value for our customers and our shareholders. We are proud of the work we've done to meet the challenges over the past few years. We recognize more challenges are ahead, and we remain committed to taking action, implementing necessary changes, and mitigating impacts without compromising growth of our business. We look forward to sharing more detail about our plans to deliver value at our Investor Day. Thank you. Now I would like to open the line for Q&A.
Ladies and gentlemen, if you'd like to ask a question at this time, you will need to press the star then the one key on your touchtone telephone. Please stand by while we compile the Q&A roster. Now, first question coming from the line of Larry Solow with CJS Securities. Your line is open.
Good morning and welcome James to Haemonetics. First question, I guess, just on the guidance range. It's a fairly wide range. Just trying to decipher some of, you know, the major disparities, sort of not everything, right? Probably a long list, but sort of the between the low end and the high end, you know, how we just sort of get to that $290, you know, versus that $250.
Hey, all right, it's Chris. Let me get us started, and then I'll invite James to comment as well. You know, it first and foremost has to do with revenue, right? We, you know, are dependent upon our customers who are doing everything within their power to drive both donations and procedures. We saw meaningful recovery in the fourth quarter of our fiscal year. We expect that to continue through the year. It's, you know, as you can appreciate, the last eight quarters, particularly in Plasma and Blood Center, have been difficult to forecast. We wanna be cautious there. There's also a series of macro challenges that James had highlighted in the prepared remarks.
We look at a combination of inflation, supply chain disruption, potentially, and then geopolitical risk, particularly in markets like China and Russia, as potential headwinds in the overlay FX and some other factors. It's a turbulent environment, and we just wanna be mindful of that and reflect that with a wider range that we obviously will look forward to narrowing as we get further in the year and some of these externalities play out.
Okay. Just in terms of your operating margin, looks like relatively flat year-over-year. Can we speak sort of the moving parts to that? I guess the moving parts. A couple of questions there. Gross margin is that, you know, it's been trending upwards. It doesn't sound like you're losing a lot of this to CSL revenue this year. I guess maybe you'll have to absorb that next year. How do you view sort of gross margin? I know there's a lot of, you know, lot of moving parts, inflation maybe getting a little bit worse for you guys. Then you also mentioned just part two of that question on the Operational Excellence Program, $22 million in savings, half of that going back into gross margin.
Are you spending the other half in operating expenses? Is that what I heard, or will some of that actually flow to the bottom line? Thanks.
Thanks, Larry. On the gross margins, we do expect those, you know, to improve slightly. You know, what's benefiting them, I think you brought it up, is price and mix, of course, you know, to Cardiva, as well as our Operational Excellence programs. What takes us back the other way, however, but not as much, is depreciation from the NexSys systems, as well as, you know, the inflationary headwinds that we've spoken about, along with some negative FX in there. Those would be sort of the levers that we're looking at to affect gross margins. Then, you know, that obviously has an impact on operating margin as well.
Yeah, you're right on the $22 million. It's roughly half to cost of goods savings, the other half going to OpEx.
In terms of we will be making some investments next year on the S&M line and the R&D line, so not all that drops through. We're also keeping a careful eye on the geopolitical risk as well as inflation. I think you know once you net through all of that you know that's how the operating margins are essentially flat, and it could skew either way based on you know where the world turns as we go through the remainder of 2022 into 2023.
Yeah, got you. Certainly a lot of moving parts. Okay, great. I appreciate all that color, guys. Thank you.
Now next question coming from the line of Drew Ranieri with Morgan Stanley. Your line is open.
Hi. Thanks, Chris. Thanks for taking the question. Maybe just first on VASCADE, you've had the asset for a year now. Just curious how you're thinking about maybe the growth opportunity here in front of you, if you could lay out a number. I mean, it looks like hospital pre-VASCADE might've been growing high single digits. Is the right way to think about VASCADE adding maybe 10 points to your hospital growth? Just any help would be appreciated. Thank you.
Yeah, Drew, appreciate the question. We're excited by what hospital as a business is contributing and will continue to contribute, right? We, you know, as a business, we're forecasting high teens, 16%-19%, which is a continuation of where the combined business was in FY 2022. You know, obviously the two big drivers there are Hemostasis Management, you know, the TEG franchise and VASCADE, as you highlight. We expect Hemostasis Management's performance to rival what it did in 2022, which is great given the larger base. Then VASCADE, you know, VASCADE's exciting, right? We've continued to focus primarily on the U.S. market. We're building out our plans for international expansion both clinically from a regulatory perspective and our sales presence.
This year, FY 2023, again, will be defined by further penetration into those top 500-600 electrophysiology hospitals here in the U.S.
Got it. Thank you. Just maybe on plasma recovery, can you give a little bit more details on what you're seeing in the market, just as customers are trying to work through costs for donor fees, just maybe what you're seeing? With just the CSL revenue, I think I heard you say $88 million for fiscal 2023. Just curious about the cadence there. Should that be kind of a ratable basis across the quarters, or is there any weighting that we should be thinking about? Thanks for taking the questions.
Yeah. Thanks, Drew. Clearly, plasma's in recovery. It's been long coming, but I think you hear that from our customers as they're speaking publicly about this. We certainly saw that in our fourth quarter. You know, typically the fiscal fourth quarter is the weakest quarter of the year, in total collection volumes, just given a bunch of seasonality. We expect to build from that, and that's what's reflected in our guidance, essentially, you know, building throughout the course of the year, you know, culminating in, you know, with the winter holidays. We feel good about that. Clearly it looks different than it has historically, more coming from new center openings, you know, a disproportionate share of that growth, and that's a testament to the hard work that our customers are doing.
They haven't backed off. Their pace of new center openings is as fast as it has ever been, and they continue to do what they can to recruit and retain their donor base. We stand ready to serve them. The great news is we have the devices, they're ready to go, and we're well on track for our conversions, both to NexSys and to Persona. We feel quite good about it. Obviously, there's factors that, you know, FY 2022 was challenging in that regard. We think 2023 will be different and better, but we wanna be cautious, which I know you can appreciate after eight quarters of trying to forecast this, probably caution's the operative term here.
Our next question coming from the line of Andrew Cooper with Raymond James. Your line is open.
Hi. Thanks for the questions, everybody. Maybe first, I just wanna get a better sense when we think about the plasma guide. You know, can you give us a little bit more flavor, excuse me, how the comment on the fractionator's time to make up some of that safety stock and maybe growing volumes faster than 8%-10% in the near term? You know, what's really reflected in the guidance there? That'd be the first one, and then I'll have some more after that.
Yeah, Andrew, it's Chris. You know, what we experienced in our fiscal 2022 was essentially 10% growth across the network, maybe a touch higher than that in North America and a touch below that outside the U.S. If you think about that 10% growth in volume, we expect, you know, 2023 will, at the high end of our range, replicate that. There's things that can be done above and beyond that. We made comments in my prepared remarks. You know, we still see the underlying demand for IG at unprecedented levels. Think 6%-8% demand for IG. That translates to the number of factors we've outlined in the past to 8%-10% long-term growth in collections.
We know that our customers and we are committed to helping them, you know, gain inventory, to get off of this, you know, incredibly low base that they're operating at today. We would expect double-digit growth on top of that, and we just need, you know, for, you know, the various economic and societal factors to line up to enable them to do that. We're in a good position to support it, and we think it grows over the course of the year. We'll look forward to, you know, updating and focusing that guidance as we watch the recovery unfold.
Okay, helpful. Maybe just to sneak two in together here, but can you give us a better sense for sort of where specifically you are in the rollout of NexSys and Persona in terms of, you know, how many of the folks that are adding NexSys either have or are planning to add Persona and how we should think about that. Lastly, you made a comment about broadening the portfolio and talked about innovation. Anything you can kind of give us some hints towards as to, you know, where new products might be and how the portfolio might expand would be helpful as well.
Yeah. You know, as we think about, you know, kind of the build-out and where we're going with, you know, collection volumes, you know, it's something that we'll see unfold. I think it's a combination, as I've said before, about new center openings and recovery, hopefully in the existing centers. You know, that builds gradually over the course of the year. For us, we've got essentially everything contracted at this point, and we still believe we will have completed the NexSys PCS device rollout by the middle of our fiscal 2023. You know, end of summer or early fall. In terms of Persona, what's included in our guidance is the pricing benefits of everything that is already contracted. We're not, you know, introducing any risk in terms of contracts beyond where we are.
Obviously, it's a very powerful technology, 9%-12% yield. It's the only thing like it in the market today. We think that when we look at the early adopters of the NexSys platform, so they've got NexLynk, they have the PCS device, and then they also have Persona. Those customers in our fiscal fourth quarter collected more plasma than they had in any other prior quarter. It, you know, and I'm talking now back prior to the pandemic. It's a powerful enabler of what they're very keen to do in terms of accelerating their growth rate. We think that'll build, but it comes with some challenges. It's a larger model. They have to make logistical changes.
Some of our customers are feeling compelled to validate the protein concentration, which we'll work with them to do clinically as we have in our regulatory filings. You know, it takes a bit of time and, you know, hopefully get more clarity as the year goes forward. It's an exciting technology, and we're seeing that in the marketplace. You asked about portfolio evolution. I think as we've said, right, our capital allocation priorities really focus primarily on growth, both organic and inorganic. We've seen the additions we've made to the hospital portfolio. We now feel very good about our focus in cardiovascular, specifically electrophysiology and interventional cardiology. There's good convergence there.
We think it's a target-rich opportunity set for us and, you know, hopefully have a chance to talk more about it at the Investor Day in June, where we'll outline our priorities and how we're pursuing it.
Great. Thanks. I'll stop there.
As a reminder, ladies and gentlemen, to ask a question, please press star one. Our next question coming from the line of Mike Matson with Needham & Company. Your line is open.
Yeah. Thanks for taking my question. So I appreciate you breaking out the CSL revenue that you're expecting in 2023. You know, what should we be assuming, if any, in 2024? Should we assume that it's largely done heading into fiscal 2024?
Yeah, Mike, we're not in a, you know, I think, you know, we've just given the guidance in the last hour on 2023. I'm gonna reserve comment on 2024 till we get a little closer. But obviously, we stand ready to serve all of our customers. We did think the breakout's helpful, just so you could see it, you know, 2022 versus FY 2023. But, and then when we talk more at Investor Day, we'll be very clear over the next, you know, four or five years how that growth trend line continues. I think you'll be appropriately impressed with the organic capability of that business to scale and grow profitably.
Yeah. Sorry. I guess I was talking specifically about CSL within the plasma business. I mean, if you're not willing to answer, I understand 'cause it is more than a year away, so.
Yeah. No, I think we'll, as we get closer, there's a bunch of things we don't have visibility into or don't control. Obviously, we'll serve CSL and all of our customers to the best of our ability, within the existing agreements, which do go out in CSL's case through December of 2023.
Okay. All right. I wanted to ask about this debt refinancing. You went through it kind of quickly, so I just wanna make sure I understand the timing, the amount. You know, is there a risk here that results in higher interest expense just given that rates have, you know, surged lately?
Yeah. Thanks, Mike. Yeah, the debt we'll look to refinance the debt in some way, you know, over the next quarter or so. I think the end result of that will look an awful lot like it does today. With regards to interest rates, we do have interest rate swap coverage on 70% of the debt, which is now, you know, it's floating rate debt. It's been swapped to fixed. We're covered there to 4% all the way through June of 2023.
At that point in time, which seems a long time away, we'll see where the rates are, and we'll look to see whether or not we wanna re-up. At the moment, we are not forecasting any increase in interest expense related to our refi activities.
Okay, got it. Then, just on the operational excellence savings, the $37 million of gross savings, I think that was for last fiscal year. What was the net savings if it was $37 million gross?
Yes. We don't break out gross versus net savings. We've, you know, to get to those, to just give you some color, you know, we certainly had made some investments in the business. Plus, you know, there was some offsets during the year because of the inflationary headwinds, which took back some of that. As we move forward, I think, you know, we'll see some of the same things, you know. Our guidance assumes an additional, you know, savings next year.
as I talked about earlier with regard to operating margins, you know, there's some pieces that take it back as we, you know, make investments in S&M and R&D as we move forward.
Okay, got it. Thank you.
Our next question coming from the lineup, David Turkaly from JMP Securities. Your line is open.
Great. Thanks. Good morning. I apologize, I was jumping on a couple calls, but Chris, I just wanted to see if you... Did you guys make any comments about the Terumo device? I know it's still very early. I don't know if it's out anywhere. Any of the features or, you know, obviously we know CSL is there. I kinda looked at your device thinking, "Hey, you know, you can't really collect too much more from somebody or do it faster." I just love to get your thoughts on sort of what it is or if anyone has seen it or where it kinda stands today.
Yeah, Mike, Dave, I appreciate the question. You know, I think folks were a little surprised how little information is out there, right? Obviously, we pay close attention to this. My understanding, you know, having studied with our teams the publications on the dot gov site, they got the device approved with a trial size of 124 donations. It's kinda hard to draw a bunch of conclusions from that. We did over 20,000 donations to get Persona approved two years ago. They didn't publish anything on yield. We kinda pieced together the metrics. We assume, and it's an assumption, that it was approximately 830 milliliters per collection. Obviously, we're well above that, right?
We've now got, as we mentioned in the call, you know, 30 million, you know, nearly 30 million NexSys donations, right? We stand behind the value proposition on the integrated NexSys platform. It is easy to use and set up, and that leads to a safe collection, as evidenced by the 98% elimination of documentation errors and an impeccable safety record. Donors like the device. They express a 93% affinity for NexSys. Donor satisfaction leads to, you know, more frequent donations and greater retention, which is absolutely key to the recovery we've been talking about. You know, we've got good quantifiable evidence, you know, created with real-world work with our existing customers, that NexSys lowers the cost to collect a liter of plasma.
That's a combination of the 9%-12% yield coupled with speeding up door-to-door time, 16 minutes on average in our work with NexSys in the base configuration. It's a good value proposition. We are building on that value proposition. I encourage you to come talk to the team, you know, here in Boston when we do the Investor Day in June, because we're gonna unveil additional aspects of our innovation agenda, where we will further improve upon every one of those dimensions going forward. We're excited. It's our platform, and it's doing good things with customers to support their growth aspirations. Feel good about it.
I appreciate that. Maybe just as a quick follow-up, I know blood center certainly not, you know, a growth driver or super important sort of part of probably the future of Haemonetics, but you know a decent quarter. I'd love to just get your thoughts on, you know, does that bottom at some point? Is it something that strategically is still an important part of sort of the go-forward plans? Or you know could it flatten out or. I mean, I know your guidance is calling for another, you know, whatever mid-single digit decline, but does that stop at some point?
Dave, we care deeply about our blood center business and the customers we serve there. Yes, they had a very good quarter. In fact, they had a very good year overall relative to our initial expectations. In no small part that was because our teams were able to step up, aided by our operational excellence program. We talked about the gross to net savings, and that's important. We wanna free up resources to reinvest in growth, typically in other franchises. You know, what we also get from that OEP program is meaningful agility and resilience, not to mention the highest possible levels of product quality. We benefited in the quarter and in the year in that blood center business.
We were able to step in and meet customer demands, you know, large stocking orders in some cases as a contingency, in other cases where maybe their existing source of supply had let them down. We were able to step in and fill that, and that bodes well. The guidance we gave, fairly wide range and down again reflects disproportionately, geopolitical risk and some potential headwinds in FX. That business is concentrated outside the U.S. and, we have some exposure there that we have to be mindful of. We think it's actually, you know, increasingly stable and a good source of, you know, of continued EBITDA for the company.
Thank you.
Thank you. I'm not showing anyone else in queue at this time. Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect. Everyone, have a great day.