HAE Haemonetics Corp - 10-K

ITEM 1A. RISK FACTORS

In addition to the other information contained in this Annual Report on Form 10-K and the exhibits hereto, the following risk factors should be considered carefully in evaluating our business. Our business, financial condition, cash flows or results of operations could be materially adversely affected by any of these risks. This section contains forward-looking statements. Please refer to the cautionary statements made under the heading “Cautionary Statement Regarding Forward-Looking Information” at the end of Item 1 of this Annual Report on Form 10-K for more information on the qualifications and limitations on forward-looking statements.

Risks Related to our Business and Industry

If our business strategy does not yield the expected results or we fail to implement the necessary changes to our operations, we could see material adverse effects on our business, financial condition or results of operations.

We view our operations and manage our business in three principal reporting segments: Plasma, Blood Center and Hospital. We believe that Plasma and Hospital have the greatest growth potential and are well positioned to drive long-term value. Blood Center operates in more challenging markets, and we have sharpened our focus accordingly on targeted opportunities – particularly in plasma and platelets – while ensuring continued alignment of this business with the Company’s broader strategic objectives. If we have not correctly identified the product categories with the greatest growth potential, we will not allocate our resources appropriately which could have a material adverse effect on our business, financial condition or results of operations.

Material reductions in purchasing from or loss of a significant customer could adversely affect our business.

In fiscal 2026, our ten largest customers accounted for approximately 44% of our net reve nues. A material portion of sales in our Plasma segment come from (and we anticipate will continue to come from) a limited number of customers. In fiscal 2026, one Plasma customer accounted for approximately 13% of total net revenues. Any non-renewal, termination, material reduction in purchasing or material reduction in per unit pricing by any of our largest customers for any reason, includin g material decreases in demand for plasma or development of alternative processes, could have a material adverse effect on our business, financial condition or results or operations.

We face intense competition, and if we are unable to successfully expand our product lines through internal research and new product development or keep pace with rapid technological changes in the healthcare industry, our business may be materially and adversely affected.

A significant element of our strategy is to increase revenue growth by focusing on innovation and new product development. The medical device markets in which we participate, however, are highly competitive. We encounter significant competition across our product lines and in each market in which our products are sold from various medical device companies, some of whom have greater financial and marketing resources than we do. In addition, the medical device markets in which we participate and the healthcare industry generally are characterized by extensive research and development and rapid technological change.

New product development requires significant investment in research and development, clinical trials and regulatory approvals. The results of our product development efforts may be affected by a number of factors, including our ability to anticipate customer needs, innovate and develop new products and technologies, effectively use artificial intelligence (“AI”) and machine learning capabilities, successfully complete clinical trials, obtain regulatory approvals in the United States and abroad, manufacture products in a cost-effective manner, obtain appropriate intellectual property protection for our products, gain and maintain market acceptance of our products, and comply with existing and future regulatory requirements. In addition, patents attained by others could preclude or delay our commercialization of a product. There can be no assurance that any products now in development or that we may seek to develop in the future will achieve technological feasibility, obtain regulatory approval or gain market acceptance. If we fail to develop new products or enhance existing products, or if competitive technologies or therapeutic alternatives to plasma-derived pharmaceuticals in development, such as FcRn-targeted therapies, emerge and gain market acceptance, such events could have a material adverse effect on our business, financial condition or results of operations. In addition, a delay in the timing of the launch of next-generation products and the overall performance of, and continued customer confidence in, those products may result in declines in our market share and have an adverse impact on our business, financial condition or results of operations.

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Defects or quality issues associated with our products could adversely affect the results of operations.

Quality is extremely important to us and our customers due to the serious and costly consequences of product failure. Manufacturing or design defects, component failures, unapproved or improper use of our products, or inadequate disclosure of risks or other information relating to the use of our products can lead to injury or other serious adverse events. These events could lead to recalls or safety alerts relating to our products (either voluntary or as required by the FDA or similar governmental authorities in other countries), and could result, in certain cases, in the removal of a product from the market. A recall could result in significant costs and lost sales and customers, enforcement actions and/or investigations by state and federal governments or other enforcement bodies, as well as negative publicity and damage to our reputation that could reduce future demand for our products. Personal injuries relating to the use of our products can also result in significant product liability claims being brought against us. In some circumstances, such adverse events could also cause delays in regulatory approval of new products or the imposition of post-market approval requirements.

If our business development activities are unsuccessful, we may not realize the intended benefits.

We have sought and in the future may seek to supplement our organic growth through strategic acquisitions, investments and alliances, including our acquisitions of Vivasure Medical Limited, OpSens Inc. and Attune Medical. We have also sought and in the future may seek to divest certain assets deemed non-core to our long-term strategic objectives, including our divestiture in January 2025 of the Whole Blood product line and related assets within our Blood Center business unit. Such transactions are inherently risky and require significant effort and management attention. The success of any acquisition, investment or alliance, or of any divestiture, may be affected by a number of factors, including our ability to properly assess and value the potential business opportunity or to successfully integrate any business we may acquire into our existing business.

Promising partnerships and acquisitions may also not be completed for reasons such as competition among prospective partners or buyers, the inability to reach satisfactory terms, the need for regulatory approvals or the existence of economic conditions affecting our access to capital for acquisitions and other capital investments. If we are successful in completing partnerships and acquisitions, we may be required to expend significant funds, incur additional debt or other obligations, or issue additional securities, which may negatively affect our operating results and financial condition. If we spend significant funds or incur additional debt or obligations, our ability to obtain financing for working capital or other purposes could be adversely affected, and we may be more vulnerable to economic downturns and competitive pressures.

If our business development activities are unsuccessful, we may not realize the intended benefits of such activities, including that acquisition and integration costs may be greater than expected or the possibility that expected return on investment synergies and accretion, or on new growth opportunities funded in whole or part by divestitures, will not be realized or will not be realized within the expected timeframe.

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We are increasingly dependent on information technology systems and subject to privacy and security laws and a cyber-attack or other breach of these systems could have a material adverse effect on our business, financial condition or results of operations.

We increasingly rely on information technology systems, including cloud-based computing, to process, transmit and store electronic information for our day-to-day operations and for our customers, including sensitive personal information and proprietary or confidential information. Additionally, certain of our products collect data regarding patients and donors and connect to our systems for maintenance and other purposes or are actively managed by Haemonetics on behalf of specific customers. Similar to other large multi-national companies, the size and complexity of our information technology systems makes them vulnerable to a cyber-attack, malicious intrusion, breakdown, destruction, loss of data privacy, or other significant disruption. We outsource certain elements of our information technology systems to third parties that, as a result of this outsourcing, could have access to certain confidential information and whose systems may also be vulnerable to these types of attacks or disruptions. While we conduct security risk assessments prior to engaging third-party suppliers and other vendors and business partners to validate that they maintain appropriate safeguards to protect our and their information systems in connection with the services they provide, it is possible that they suffer a cyber-attack that impacts us, our suppliers or our customers. Security threats, including cyber and other attacks are becoming increasingly sophisticated, frequent, and adaptive and, like other large multi-national companies, we have experienced cyber incidents in the past and may experience them in the future. Accordingly, our information systems require an ongoing commitment of significant resources to maintain, protect and enhance existing systems and develop new systems to keep pace with continuing changes in information processing technology, evolving systems and regulatory standards, the increasing need to protect patient and customer information and changing customer patterns. This includes opportunities as well as risks associated with the integration of AI into our or our suppliers’ or customers’ operations. While AI presents significant opportunities for innovation and efficiency, it could also introduce new risks in managing information systems and in the cybersecurity threat landscape. Based on the information available as of the date of this Annual Report on Form 10-K, we are not aware of any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operation or financial condition. While we have invested and continue to invest in the protection of personal information and proprietary or confidential information, there can be no assurance that our efforts will prevent cyber-attacks, intrusions, breakdowns or other incidents or ensure compliance with all applicable securities and privacy laws, regulations and standards. In addition, third parties may attempt to hack into our products to obtain data relating to patients with our products or our proprietary information. Emerging technologies such as generative AI may be used by malicious actors to create more targeted phishing narratives or otherwise strengthen social engineering capabilities, which may increase our threat landscape. Any failure by us or third parties we work with to maintain or protect our respective information technology systems and data integrity, including from cyber-attacks, intrusions or other breaches, could result in the unauthorized access to patient data and personally identifiable information, theft of intellectual property or other misappropriation of assets, or otherwise compromise our confidential or proprietary information and disrupt our operations. Any of these events, in turn, may cause us to lose existing customers, have difficulty preventing, detecting and controlling fraud, have disputes with customers, physicians and other healthcare professionals, be subject to legal claims and liability, have regulatory sanctions or penalties imposed, have increases in operating expenses, incur expenses or lose revenues as a result of a data privacy breach or theft of intellectual property, or suffer other adverse consequences, any of which could have a material adverse effect on our business, financial condition or results of operations.

Additionally, the legal and regulatory environment surrounding information security and privacy is increasingly demanding, with the imposition of new and changing requirements across businesses, including rules requiring timely public disclosure of cybersecurity incidents. We are required to comply with increasingly complex and changing legal and regulatory requirements that govern the collection, use, storage, security, transfer, disclosure and other processing of personal data in the United States and in other countries, including, but not limited to, HIPAA, HITECH, the California Consumer Privacy Act (“CCPA), the California Privacy Rights Act, and the EU’s General Data Protection Regulation (“GDPR”). The GDPR imposes stringent EU data protection requirements and provides for significant penalties for noncompliance. HIPAA also imposes stringent data privacy and security requirements and the regulatory authority has imposed significant fines and penalties on organizations found to be out of compliance. CCPA provides consumers with a private right of action against companies who have a security breach due to lack of appropriate security measures, and several other U.S. states have introduced or proposed similar privacy laws which may apply to us directly or indirectly through our customers, manufacturers, suppliers or other third-party partners. In addition, information security and privacy laws continue to come into effect in China and other countries where we conduct business. We or our third-party providers and business partners may also be subjected to audits or investigations by one or more domestic or foreign government agencies relating to compliance with information security and privacy laws and regulations, and noncompliance with the laws and regulations could result in material fines or litigation.

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An inability to successfully manage the implementation of our new global enterprise resource planning system could adversely affect our operations and operating results.

We are in the process of implementing a new global enterprise resource planning system. This system will replace many of our existing operating and financial systems. The implementation is a major undertaking, both financially and from a management and personnel perspective. Any material disruptions, delays or deficiencies in the design and implementation of our new enterprise resource planning system could adversely affect our ability to process orders, ship products, provide services and customer support, send invoices and track payments, fulfill contractual obligations or otherwise operate our business.

We outsource certain aspects of our business to a single third-party vendor that subjects us to risks, including disruptions in business and increased costs.

Currently, we rely on a single vendor to support several of our business processes, including customer service and support and elements of enterprise technology, procurement, accounting and human resources. We make diligent efforts to ensure that the provider of these outsourced services is observing proper internal control practices. However, there are no guarantees that failures will not occur, including as a result of cyber-attacks. Accordingly, we are subject to the risks associated with the vendor’s ability to successfully provide the necessary services to meet our needs.

If our vendor is unable to adequately protect our data or information is lost, if our ability to deliver our services is interrupted (including as a result of significant outbreaks of disease, natural disasters, extreme weather and other conditions caused by or related to climate change, strikes, terrorism attacks, cyber incidents or other adverse events in the countries in which the vendor operates), if our vendor's fees are higher than expected, if our vendor makes mistakes in the execution of operations support, or if the vendor terminates our relationship, then our business and operating results may be negatively affected.

Consolidation of healthcare providers and blood collectors, healthcare cost containment pressures, government payment and delivery system reforms and changes in private payer policies could decrease demand for our products, the prices which customers are willing to pay for those products and/or the number of procedures performed using our devices, which could have an adverse effect on our business, financial condition and results of operations.

Political, economic and policy influences are causing the healthcare and blood collection industries to make substantial structural and financial changes that affect our results of operations. Government and private sector initiatives limiting the growth of healthcare costs are causing structural reforms in healthcare delivery, including the reduction in blood use and reduced payments for care. These trends have placed greater pricing pressure on suppliers and, in some cases, decreased average selling prices and increased the number of sole source relationships. This pressure impacts our Hospital and Blood Center businesses. Our vascular closure devices, for example, are often perceived as physician preference devices with a relatively higher price point compared to certain vascular closure alternatives such as sutures or manual compression, and purchases are commonly made by a hospital only after approval by its value analysis committee. If a hospital value analysis committee does not approve or revokes prior approval for any of the reasons set forth above, the demand for our vascular closure devices may decrease and we could experience an adverse effect on our results of operations or financial condition. Additionally, the influence of integrated delivery networks, group purchasing organizations and large single accounts has the potential to put price pressure on our Hospital business.

We expect that market demand, government regulation, third-party reimbursement policies, government contracting requirements and societal pressures will continue to change the worldwide healthcare industry, resulting in further business consolidations and alliances among our customers and competitors. This may exert further downward pressure on the prices of our products and adversely impact our business, financial condition or results of operations.

An interruption in our ability to manufacture our products, obtain key components or raw materials, or the failure of a sole source supplier or sterilization service provider may adversely affect our business.

We have a complex global supply chain that involves integrating key suppliers and our manufacturing capacity into a global movement of components and finished goods. This complexity is enhanced by global macroeconomic conditions and uncertainty, including inflation, tariffs, interest rates, monetary policy, exchange rates and geopolitical developments.

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We manufacture certain key disposables and devices at single locations with limited alternate facilities. If natural disasters, extreme weather and other conditions caused by or related to climate change, strikes, terrorism attacks, cyber incidents or other adverse events occur that result in the closure of or damage to one or more of these facilities, we may be unable to supply the relevant products at previous levels or at all for some period. Additionally, for reasons of quality assurance or cost effectiveness, we purchase certain finished goods, components and raw materials from sole suppliers who have their own complex supply chains. We have experienced increased levels of unpredictability in the supply of certain raw materials and components used in the manufacturing of our products. While we continue to believe we will have access to the raw materials and components that we need, any disruption to one or more of our suppliers’ production or delivery of sufficient volumes of raw materials and components conforming to our specifications could disrupt or delay our ability to deliver finished products to our customers. For example, we purchase components in Asia for use in manufacturing in the U.S. and Mexico. We source all of our apheresis equipment from Asia and regularly ship finished goods from the U.S. and Mexico to the rest of the world.

Many of our products also require sterilization prior to sale or distribution and we utilize contract sterilizers to perform this service. To the extent our contract sterilizers are unable to sterilize our products, whether due to capacity, availability of materials for sterilization, regulatory or other constraints, including federal and state regulations on the use of ethylene oxide, we may be unable to transition to alternative resources or methods in a timely or cost effective manner, or at all, which could have a material impact on our results of operations and financial condition.

In addition, we manufacture our VASCADE vascular closure devices under a shelter plan service agreement with Offshore International Incorporated (d/b/a Tetakawi) pursuant to which we lease our manufacturing facility in Guaymas, Mexico. Tetakawi is responsible for a number of ongoing services related to the facility, including provision of external security and maintenance, manufacturing personnel related human resource matters, recruiting support, government compliance, workforce transportation and cross-border shipping of raw components. We are reliant on Tetakawi to provide these services and any disruption in these services or our failure to maintain our contractual relationship with Tetakawi could significantly harm our ability to manufacture our vascular closure devices and maintain sufficient quality standards, which would negatively impact our business and results of operations.

Due to the high standards and stringent requirements of the FDA and other similar non-U.S. regulatory agencies applicable to manufacturing our products, such as the FDA’s QMSR and cGMP regulations, we also may not be able to quickly establish additional or replacement sources for certain raw materials, components or finished goods. A reduction or interruption in manufacturing, or an inability to secure alternative sources of raw materials, components or finished goods on commercially reasonable terms or in a timely manner, could compromise our ability to manufacture our products on a timely and cost-competitive basis, which may have a material adverse effect on our business, financial condition and results of operations.

Changes in the cost, composition or availability of the plastics we purchase, or of other raw materials and components used in our products, could adversely affect our business, financial condition and results of operations.

Our results of operations could be materially neg atively impacted by volatility in the cost or availability of plastic raw materials used in our disposable products as well as other raw materials and components used in our products that, in turn, increase the costs of producing and distributing our products. In recent years, we have experienced inflationary pressures that have significantly increased the cost of raw materials, transportation, construction, services and energy necessary for the production and distribution of our products. The global macroeconomic environment has continued to present challenging conditions and uncertainty, including around inflation, tariffs, interest rates, monetary policy, exchange rates and geopolitical developments, which could adversely impact our business, financial condition, cash flows and results of operations. Wh ile we have implemented cost containment measures, selective price increases and taken other actions to offset these inflationary pressures and potential limitations in our global supply chain, we may not be able to completely offset all the increases in our operational costs and ensure the continued availability of materials we use. Additionally, climate change (including laws or regulations passed in response thereto) could increase our supply costs, including energy and transportation/freight-related expenses, or reduce the availability of raw materials.

The composition of the plastic we purchase is also important. Due to regulatory changes and evolving customer expectations, we may be required to remove materials such as phthalates or PFAS from our devices, find alternative materials which then need to be validated or obtain regulatory approvals from the regulatory authorities for a number of products.

While we have not experienced significant shortages in the past, any interruption in the supply for plastics and other raw materials used in our products could have a material impact on our business by limiting our ability to manufacture and sell products. These outcomes may in turn result in customers transitioning to available competitive products, loss of market share, negative publicity, reputational damage, loss of customer confidence or other negative consequences (including a decline in stock price).

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We may not realize the benefits we expect from cost reduction initiatives.

We have implemented various cost reduction initiatives to align our cost structure with our operations and ongoing portfolio rationalization activities. During the first quarter of fiscal 2026, our Board of Directors approved our ongoing market and regional alignment initiative, a company-wide restructuring initiative designed to improve operational performance and reduce costs by directing the Company’s resources toward the markets and geographies that offer the greatest growth and portfolio advancement opportunities, and delegated authority to the Company's management to determine the details of the specific actions that will comprise the initiative. While cost savings from this initiative to date have been consistent with our expectations, it is possible that events and circumstances, such as financial or strategic difficulties, delays and unexpected costs may occur that could result in our not realizing all of the anticipated benefits or our not realizing the anticipated benefits on our expected timetable. Our market and regional alignment initiative could also yield unintended consequences, such as business disruption, the loss of institutional knowledge as a result of turnover and reduced employee productivity, which could negatively affect our business, sales, financial condition and results of operations. Our inability to realize all of the anticipated benefits from our market and regional alignment initiative could have a material adverse effect on our business, results of operations, cash flows and financial condition.

Risks Related to Government Regulation

As a medical device manufacturer, we operate in a highly regulated industry, and non-compliance with applicable laws or regulations could adversely affect our financial condition and results of operations.

The manufacture, distribution and marketing of our products are subject to extensive regulation by the FDA and other state and non-U.S. regulatory bodies. Our operations are also subject to review and monitoring by the FDA and other regulatory authorities. Government regulation of medical devices is meant to assure their safety and effectiveness, and includes regulation of, among other things, the product’s development, testing, premarket clearance, de novo classification or approval, manufacture, marketing, labeling, post-market surveillance, reporting, and imports and exports. Before a new medical device, or a new use of an existing product, can be marketed in the United States, it must first receive either premarket clearance under Section 510(k) of the FDCA, a grant of a request for de novo classification or a premarket approval, or PMA, from the FDA, unless an exemption applies. For example, in 2025 Vivasure submitted a PMA application to the FDA for the PerQseal Elite arterial closure system that is currently under FDA review. The process of obtaining regulatory authorization to market a medical device can be costly and time-consuming, and we may not be able to obtain these authorizations on a timely basis, if at all.

Many of our currently commercialized products have received 510(k) clearance. In the future, the FDA may determine that our products, as they currently exist or as they may be changed in the future, will require more costly, lengthy and uncertain de novo classification or PMA processes. Modifications to Class III devices, like our vascular closure products, may require additional clinical studies or supplemental PMA submissions. If the FDA requires us to go through a lengthier, more rigorous process for future products or modifications to existing products, our product introductions or modifications could be delayed or canceled, which could adversely affect our revenue. In particular, the FDA has recently placed increased scrutiny on cybersecurity for medical devices, which may necessitate additional time and cost for product development, submission and approval, de novo classification or clearance. In addition, even if we do obtain clearance, de novo classification or approval, the FDA may not authorize these products for the indications that we requested. Any delay in, or failure to receive or maintain, clearances, de novo classifications or approvals for our products under development could prevent us from generating revenue from these products.

Failure to substantially comply with applicable regulations could subject our products to recall or seizure of our products by government authorities, or an order to suspend manufacturing and distribution activities. If our products were determined to have design or manufacturing flaws, this could also result in their recall or seizure. Either of these situations could also result in administrative actions like untitled or warning letters or in the imposition of fines and other penalties or sanctions.

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Our products are also subject to approval and regulation by foreign regulatory and safety agencies. For example, the EU has adopted the EU Medical Device Regulation, or EU MDR, and the EU In Vitro Diagnostic Regulation, or EU IVDR, each of which impose stricter requirements for the marketing and sale of medical devices beyond those of the current medical device directives they replace, including in the area of clinical evaluation requirements, quality systems and post-market surveillance. Complying with the requirements of these regulations may require us to incur significant expenditures and we may experience delays that negatively impact the ability to sell our full suite of products in certain jurisdictions. Similarly, the separation of states from participation in the EU, such as Brexit and Swexit, may result in further regulatory risk and complexity as the former EU member or participant state establishes separate laws and regulations governing medical products. More stringent regulations have also been introduced in many countries outside of Europe that previously did not have medical device regulations, had minimal regulations or relied on reciprocal recognition of approval in other markets. Failure to meet these requirements could adversely impact our business in the EU and other applicable regions.

Additionally, FDA and foreign regulations and guidance are often revised or reinterpreted by the FDA and foreign counterparts in ways that may significantly affect our business and our products. Any new statutes, regulations or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of any future products or make it more difficult to obtain clearance, approval, or certification to manufacture, market or distribute our products. We cannot determine what effect changes in regulations, statutes, legal interpretation or policies, when and if promulgated, enacted or adopted may have on our business in the future. Such changes could, among other things, require: additional testing prior to obtaining clearance, approval, or certification; changes to manufacturing methods; recall, replacement or discontinuance of our products; or additional record keeping. For example, on February 2, 2026, the FDA’s final rule implementing the QMSR became effective. The QMSR, which replaced the FDA’s former Quality System Regulation, sets forth the FDA’s cGMP requirements for medical devices, and among other things, incorporates by reference certain elements of the quality management system requirements of ISO 13485:2016. Although the FDA has stated that the standards contained in ISO 13485:216 are substantially similar to those set forth in the QSR, and although we have obtained ISO 13485:2016 certification for our quality management system, the FDA has indicated that ISO:13485 certification alone will not ensure compliance under the QMSR, nor will ISO certification exempt manufacturers from FDA inspection. The QMSR also includes certain compliance obligations, such as those relating to unique device identification, product traceability, and maintenance of complaint and service records, which align more closely with FDA’s existing medical device requirements than with ISO standards. Accordingly, it remains unclear the extent to which the QMSR may impose additional or different regulatory requirements on us that could increase the costs of compliance or otherwise negatively affect our business. If we are unable to comply with QMSR or with any other changes in the laws or regulations enforced by FDA or comparable regulatory authorities, we may be subject to enforcement action, which could have an adverse effect on our business, financial condition and results of operations.

If we or our suppliers fail to comply with laws and regulations governing the manufacture and production of our products, our products could be subject to restrictions or withdrawal from the market.

Any product for which we obtain clearance, de novo classification or approval, and the manufacturing processes, reporting requirements, post-approval clinical data and promotional activities for such product, will be subject to continued regulatory review and oversight, and our facilities will be subject to periodic inspection (both routine and unannounced) by the FDA and other domestic and foreign regulatory bodies. In particular, we and our third-party suppliers must comply with the FDA’s QMSR or cGMP requirements (depending on the products at issue), which address, among other things, the methods of documentation of the design, testing, production, control, quality assurance, labeling, packaging, sterilization, storage and shipping of our products.

Any future failure by us or one of our suppliers to comply with applicable statutes and regulations administered by the FDA or other regulatory authority could result in administrative actions, field actions, or civil or criminal enforcement actions.

Furthermore, our key component suppliers may not currently be or may not continue to be in compliance with all applicable regulatory requirements, which could result in our failure to produce our products on a timely basis and in the required quantities, if at all. Any sanctions by the FDA or other regulatory authority could have a material adverse effect on our reputation, business, results of operations and financial condition.

We are also subject to environmental laws, which are becoming more stringent throughout the world. For example, the U.S. Environmental Protection Agency regulates the use of ethylene oxide for sterilization of medical devices, and is increasingly focused on reducing emissions from the ethylene oxide sterilization process, which could increase our costs of operations and necessitate changes to our manufacturing plants and processes. Other environmental laws may have similar consequences to us or our suppliers, or result in liability to us. Additionally, increased environmental regulation, including the enactment of laws and regulations to address climate change, may increase our compliance costs or restrict certain aspects of our activities.

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As a medical device manufacturer, we are subject to safety reporting requirements.

Under the FDA’s medical device reporting regulations, medical device manufacturers are required to report to the FDA information of which they become aware that a device has or may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction of the device or one of our similar devices were to recur. Similar reporting requirements exist in some of the other jurisdictions in which we operate. Failure to report these events to the FDA or other applicable regulatory authorities within the required timeframes, or at all, could lead to enforcement actions, fines and criminal sanctions against us.

Our relationships with customers and third-party payers are subject to applicable anti-kickback, fraud and abuse, transparency and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, exclusion, contractual damages, reputational harm and diminished profits and future earnings.

We are subject to fraud and abuse and other healthcare laws and regulations that constrain the business or financial arrangements and relationships through which we market, sell and distribute our products. In addition, we are subject to transparency laws and patient privacy regulation by U.S. federal and state governments and by governments in foreign jurisdictions in which we conduct our business.

The shifting commercial compliance environment and the need to build and maintain robust and expandable systems to comply with different compliance or reporting requirements in multiple jurisdictions increase the possibility that a healthcare company may fail to comply fully with one or more of these requirements. Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations may involve substantial costs. It is possible that governmental authorities will conclude that our business practices do not comply with applicable fraud and abuse or other healthcare laws and regulations or guidance, or anti-bribery laws such as the Foreign Corrupt Practices Act of 1977, or equivalent laws in other jurisdictions. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, exclusion from government funded healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations. If any of the physicians or other providers or entities with whom we expect to do business are found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs. Even if we are not determined to have violated these laws, government investigations into these issues typically require the expenditure of significant resources and generate negative publicity, which could harm our financial condition and divert resources and the attention of our management from operating our business.

Changes in tax laws or exposure to additional income tax liabilities could have a material impact on our financial condition, results of operations and/or liquidity.

We are subject to income taxes, non-income based taxes and tax audits in the U.S. and various foreign jurisdictions. Tax authorities may disagree with certain positions we have taken and assess additional taxes. We regularly assess the likely outcomes of these audits in order to determine the appropriateness of our tax provision and have established contingency reserves for material, known tax exposures. However, the calculation of such tax exposures involves the application of complex tax laws and regulations in many jurisdictions, as well as interpretations as to the legality under various rules in certain jurisdictions. Therefore, there can be no assurance that we will accurately predict the outcomes of these disputes or other tax audits or that issues raised by tax authorities will be resolved at a financial cost that does not exceed our related reserves and the actual outcomes of these disputes and other tax audits could have a material impact on our results of operations or financial condition.

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The tax regimes we are subject to or operate under are unsettled and may be subject to significant change. Changes in applicable tax laws and regulations, or their interpretation and application, including the possibility of retroactive effect, could affect our income tax expense and profitability, as they did in fiscal 2017 and fiscal 2018 upon passage of the U.S. Tax Cuts and Jobs Act, and in 2020 with the passage of the Coronavirus Aid, Relief, and Economic Security Act. Certain provisions of the Inflation Reduction Act passed in 2022, including a 15% corporate alternative minimum tax, as well as the similar 15% global minimum tax under the Organization for Economic Cooperation and Development's Pillar Two Global Anti-Base Erosion Rules, may impact our income tax expense, profitability, and capital allocation decisions. The Pillar Two Global Anti-Base Erosion Rules are currently effective in some of the jurisdictions in which we operate. Other countries are considering enacting laws consistent with the Pillar Two rules, while others have yet to announce their intention to adopt. The United States has not enacted the Pillar Two global minimum tax, and in June 2025, the G7 countries announced an agreement to exempt U.S. companies from certain elements of the Pillar Two framework. While we continue to monitor legislative adoption of Pillar Two by country, as well as for additional guidance from the OECD, there is significant uncertainty that exists regarding the interpretation of the detailed Pillar Two rules, whether such rules will be implemented consistently across taxing jurisdictions, how such rules interact with existing national tax laws and whether such rules are consistent with existing tax treaty obligations. Accordingly, the final adoption, implementation, and interpretation of Pillar Two across all jurisdictions where we do business could have a material adverse impact on our financial condition, results of operations and cash flows.

The One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. on July 4, 2025. The OBBBA legislation provides for the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017, revisions to the international tax framework and the reinstatement of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented in future periods. The Company has accounted for the impact of the OBBBA on the Company’s consolidated financial statements and has determined that it has no material impact on the reported tax rate in the current year.

As we expand the scale of our international business activities, any changes in the U.S. or foreign taxation of such activities may increase our worldwide effective tax rate and harm our business, financial condition and results of operations. Such changes may also apply prospectively or retroactively to our historical operations and result in taxes greater than the amounts estimated and recorded in our consolidated financial statements, and any such changes could have a material impact on our effective tax rate and on our business, results of operations, financial condition, and cash flows.

Risks Related to our Financial Obligations and Indebtedness

We have a significant amount of debt that may decrease our business flexibility, access to capital, and/or increase our borrowing costs, and we may still incur additional debt in the future, which may adversely affect our operations and financial results.

In April 2024, the Company entered into a second amended and restated credit agreement with certain lenders to refinance the existing senior unsecured term loan and senior unsecured revolving credit facility and extend their maturity date through April 2029. The second amended and restated credit agreement provides for a $250.0 million senior unsecured term loan and a $750.0 million senior unsecured revolving credit facility, or together, the 2024 Revised Credit Facilities. In May 2024, the Company issued $700.0 million aggregate principal amount of indebtedness under the Company’s convertible notes due 2029 (“2029 Notes”), and used $230.0 million of the proceeds to repay the entirety of the previously outstanding balance under the Company’s senior unsecured revolving credit facility and $185.5 million of the proceeds to repurchase $200.0 million in aggregate principal amount of the Company’s convertible senior notes due 2026 (“2026 Notes”). In March 2026, the Company repaid the remaining $300.0 million balance of the 2026 Notes at maturity, funded by cash on hand and $300.0 million of borrowings under the Company’s revolving credit facility. As of March 28, 2026, the Company had $239.1 million of debt outstanding under the senior unsecured term loan, $700.0 million aggregate principal amount of indebtedness under the 2029 Notes, and $300.0 million outstanding under the revolving credit facility.

Our 2024 Revised Credit Facilities contain financial covenants that require us to maintain specified financial ratios that may limit our ability to borrow additional funds and that require us to make interest and principal payments. As of March 28, 2026, we were in compliance with the covenants pursuant to our 2024 Revised Credit Facilities, and we currently forecast that we will be in compliance with these covenants through the period ending April 3, 2027.

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The conditional conversion feature of the 2029 Notes, if triggered, may adversely affect our financial condition and operating results.

Under certain circumstances, the noteholders may convert their 2029 Notes at their option prior to their scheduled maturity. If one or more noteholders elect to convert their 2029 Notes, we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity. In addition, holders of our Notes will have the right to require us to repurchase their 2029 Notes upon the occurrence of a fundamental change (as defined in the applicable indenture (the “Indenture”)), at a repurchase price equal to the principal amount of the 2029 Notes to be repurchased, plus accrued and unpaid special interest, if any, to but not including, the fundamental change repurchase date. We may not have enough available cash or be able to obtain financing at the time we are required to repurchase the 2029 Notes or pay the cash amounts due upon conversion. In addition, applicable law, regulatory authorities and the agreements governing our other indebtedness may restrict our ability to repurchase the 2029 Notes or pay the cash amounts due upon conversion. Our failure to repurchase the 2029 Notes or to pay the cash amounts due upon conversion when required will constitute a default under the Indenture. A default under the Indenture or the fundamental change itself could also lead to a default under agreements governing our other indebtedness, including our 2024 Revised Credit Facilities, which may result in that other indebtedness becoming immediately payable in full. We may not have sufficient funds to satisfy all amounts due under the other indebtedness and the 2029 Notes.

Even if holders do not elect to convert their 2029 Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2029 Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

The Capped Call Transactions may affect the value of the 2029 Notes and our common stock.

In connection with the issuance of the 2029 Notes, we entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain financial institutions (the “Option Counterparties”). The Capped Call Transactions are expected generally to reduce the potential dilution to our common stock upon any conversion of the 2029 Notes and/or offset any potential cash payments we are required to make in excess of the principal amount of converted 2029 Notes, as the case may be, with such reduction and/or offset subject to a cap.

From time to time, the Option Counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the 2029 Notes. This activity could also cause or avoid an increase or a decrease in the market price of our common stock or the 2029 Notes.

We are subject to counterparty risk with respect to the Capped Call Transactions.

The Option Counterparties are financial institutions, and we are subject to the risk that one or more of the Option Counterparties may default or otherwise fail to perform, or may exercise certain rights to terminate, their obligations under the Capped Call Transactions. Our exposure to the credit risk of the option counterparties is not secured by any collateral. Past global economic conditions have from time to time resulted in the actual or perceived failure or financial difficulties of many financial institutions. If an Option Counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at the time under such transactions with such Option Counterparty. Our exposure depends on many factors, but our exposure will generally increase if the market price or the volatility of our common stock increases. In addition, upon default by an Option Counterparty, we may suffer more dilution than we currently anticipate with respect to our common stock. We can provide no assurances as to the financial stability or viability of the Option Counterparties.

In addition, the Capped Call Transactions are complex, and they may not operate as planned. For example, the terms of the Capped Call Transactions may be subject to adjustment, modification or, in some cases, renegotiation if certain corporate or other transactions occur. Accordingly, these transactions may not operate as we intend if we are required to adjust their terms as a result of transactions in the future or upon unanticipated developments that may adversely affect the functioning of the Capped Call Transactions.

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Provisions in the Indentures could delay or prevent an otherwise beneficial takeover of us.

Certain provisions in the 2029 Notes and the Indentures could make a third party attempt to acquire us more difficult or expensive. For example, if a takeover constitutes a fundamental change, then noteholders will have the right to require us to repurchase their 2029 Notes for cash. In addition, if a takeover constitutes a make-whole fundamental change, then we may be required to temporarily increase the conversion rate. In either case, and in other cases, our obligations under the 2029 Notes and the Indentures could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that noteholders or holders of our common stock may view as favorable.

Conversion of the 2029 Notes may dilute the ownership interest of existing stockholders.

The conversion of some or all of the 2029 Notes will dilute the ownership interests of existing stockholders to the extent we deliver shares of our common stock upon conversion of any of the 2029 Notes. Any sales in the public market of the common stock issuable upon such conversion could adversely affect our common stock’s prevailing market prices. In addition, the existence of the 2029 Notes may encourage short selling by market participants because the conversion of the 2029 Notes could be used to satisfy short positions, or anticipated conversion of the 2029 Notes into shares of our common stock could depress the price of our common stock.

Risks Related to Operating Internationally

As a substantial amount of our revenue comes from outside the U.S., we are subject to geopolitical events, economic volatility, violations of anti-corruption laws, export and import restrictions and tariffs, decisions by local regulatory authorities and the laws and medical practices in foreign jurisdictions.

We market and sell our products in approximately 90 countries and have distributors in approximately 87 of these countries. This exposes us to currency fluctuation, geopolitical risk, economic volatility, anti-corruption laws, export and import restrictions, local regulatory authorities and the laws and medical practices in foreign jurisdictions. Recently, t he U.S. government implemented substantial changes to U.S. trade policies, including increased tariffs and changes to multilateral trade agreements. Additionally, the President of the United States has directed various federal agencies to further evaluate key aspects of U.S. trade policy and there has been ongoing discussion and commentary regarding potential significant changes to U.S. trade policies, treaties and tariffs. Global trade policy continues to evolve and the ultimate impact of recent developments with respect to U.S. tariffs is unclear. There remains substantial uncertainty regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, or suspended, and the impacts of such actions on our business. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the U.S. These changes could prevent or make it difficult or more expensive for us to obtain the materials or components needed for new products. Tariff increases could negatively impact our costs and/or require us to increase our prices, which likely would decrease customer demand for our products. Retaliatory tariff and trade measures imposed by other countries could affect our ability to export products and therefore adversely affect our sales. Any significant changes in current U.S. trade or other policies that restrict imports or increase import tariffs could have a material adverse effect upon our results of operations. Further, in addition to fluctuations in foreign exchange rates, discussed below, our business in markets outside the United States is subject to changing political, social and geopolitical conditions, such as tensions between China and Taiwan and the wars in Ukraine, Iran and other parts of the Middle East, including any political instability resulting from war, terrorism, insurrections and civil unrest, and changing economic conditions in these markets, such as inflation, deflation, interest rate volatility and credit availability. Additionally, a number of factors, including U.S. relations with the governments of the foreign countries in which we operate, changes to international trade agreements and treaties, changes in tax laws and regulations, economic sanctions (including those imposed by the U.S. and other governments against Russia), export controls, restrictions on the ability to transfer capital across borders, tariffs and other increases in trade protectionism and barriers to market participation, or the weakening or loss of certain intellectual property protection rights in some countries, may affect our business, financial condition and results of operations. Many of these risks are rapidly evolving and subject to an accelerating pace of change. We are continuing to monitor the situations in Ukraine, Iran and other parts of the Middle East and globally as well as to assess its potential impact on our business. Although our business in Russia accounted for less than 1% of fiscal 2026 net revenues, a significant escalation or further expansion of the conflict’s current scope or related disruptions to the global markets could have a material adverse effect on our results of operations.

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Our international operations are governed by the U.S. Foreign Corrupt Practices Act, or FCPA, and other similar anti-corruption laws in other countries. Generally, these laws prohibit companies and their business partners or other intermediaries from making improper payments to foreign governments and government officials in order to obtain or retain business. Global enforcement of such anti-corruption laws has increased in recent years, including aggressive investigations and enforcement proceedings. While we have an active compliance program and various other safeguards to discourage impermissible practices, we have distributors in approximately 87 countries, several of which are considered high risk for corruption. As a result, our global operations carry some risk of unauthorized impermissible activity on the part of one of our distributors, employees, agents or consultants. Any alleged or actual violation could subject us to government scrutiny, severe criminal or civil fines, or sanctions on our ability to export product outside the U.S., which could adversely affect our reputation and financial condition.

Export of U.S. technology or goods manufactured in the U.S. to some jurisdictions requires special U.S. export authorization or local market controls that may be influenced by factors, including political dynamics, outside our control.

Finally, any other significant changes in the competitive, legal, regulatory, reimbursement or economic environments of the jurisdictions in which we conduct our international business could have a material impact on our business.

We sell our products in certain emerging economies which exposes us to less mature regulatory systems, more volatile markets for our products and greater credit risks. A loss of funding for our products or changes to the regulatory regime could lead to lost revenue or account receivables.

There are risks with doing business in emerging economies, such as Brazil, Russia, India and China. These economies tend to have less mature product regulatory systems and more volatile financial markets. In addition, the government-controlled healthcare system’s ability to invest in our products and systems may abruptly shift due to changing government priorities, geopolitical events or funding capacity. Our ability to sell products in these economies is dependent upon, among other factors, our ability to hire qualified employees or agents to represent our products locally and our ability to obtain and maintain the necessary regulatory approvals in a less mature regulatory environment. If we are unable to retain qualified representatives or maintain the necessary regulatory approvals, we will not be able to continue to sell products in these markets. We are also exposed to a higher degree of financial risk if we extend credit to customers in these economies.

In many of the international markets in which we do business, including certain parts of Europe, South America, the Middle East and Asia, our employees, agents or distributors offer to sell our products in response to public tenders issued by various governmental agencies.

There is additional risk in selling our products through agents or distributors, particularly in public tenders. If they misrepresent our products, do not provide appropriate service and delivery, or commit a violation of local or U.S. law, our reputation could be harmed and we could be subject to fines, sanctions or both.

We are exposed to fluctuations in currency exchange rates, which could adversely affect our cash flows and results of operations.

International revenues and expenses account for a substantial portion of our operations. In fiscal 2026, our international revenues accounted for 26.4% of our total revenues. The exposure to fluctuations in currency exchange rates takes different forms. Reported revenues, as well as manufacturing and operational costs denominated in foreign currencies by our international businesses, fluctuate due to exchange rate movement when translated into U.S. dollars for financial reporting purposes. Fluctuations in exchange rates could adversely affect our profitability in U.S. dollars of products and services sold by us into international markets, where payment for our products and services and related manufacturing and operational costs is made in local currencies.

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Our effective tax rate may fluctuate and we may incur obligations in tax jurisdictions in excess of amounts that have been accrued.

We are subject to taxation in numerous countries, states and other jurisdictions. In preparing our consolidated financial statements, we record the amount of tax payable in each of the jurisdictions in which we operate. Our future effective tax rate, however, may be lower or higher than prior years due to numerous factors, including a change in our geographic earnings mix, changes in the measurement of our deferred taxes and recently enacted and future tax law changes in jurisdictions in which we operate. Certain provisions of the Inflation Reduction Act passed in 2022, including a 15% corporate alternative minimum tax, as well as the similar 15% global minimum tax under the Organization for Economic Cooperation and Development's Pillar Two Global Anti-Base Erosion Rules, may impact our income tax expense, profitability, and capital allocation decisions. The Pillar Two Global Anti-Base Erosion Rules are currently effective in some of the jurisdictions in which we operate. The United States has not enacted the Pillar Two global minimum tax and, in June 2025, the G7 countries announced an agreement to exempt U.S. companies from certain elements of the Pillar Two framework. We are also subject to tax audits in various jurisdictions and tax authorities may disagree with certain positions we have taken and assess additional taxes. Any of these factors could cause us to experience an effective tax rate significantly different from previous periods or our current expectations, which could adversely affect our business, results of operations and cash flows.

Risks Related to Intellectual Property and Litigation

There is a risk that our intellectual property may be subject to misappropriation in some countries.

Certain countries, particularly China and Russia, do not enforce compliance with laws that protect intellectual property rights with the same degree of vigor as is available under the U.S. and European systems of justice. In order to aggressively protect our intellectual property throughout the world, we have a program of patent disclosures and filings in markets where we conduct significant business. While we believe this program is reasonable and adequate, the risk of loss is inherent in litigation as different legal systems offer different levels of protection to intellectual property and it is still possible that even patented technologies may not be protected absolutely from infringement.

Pending and future intellectual property litigation could be costly and disruptive to us.

We operate in an industry that is susceptible to significant intellectual property litigation. This type of litigation is expensive, complex and lengthy and its outcome is difficult to predict. Patent litigation may result in adverse outcomes and could significantly divert the attention of our technical and management personnel. As described in Note 15, Commitments & Contingencies , within the consolidated financial statements in Item 8 of this Annual Report on Form 10-K, we are currently party to intellectual property litigation. Intellectual property litigation that we institute from time to time may be settled on terms less favorable than desired or we may encounter challenges in enforcing judgments in our favor that require additional legal action, which could affect our financial performance and strategic objectives. Additionally, in the event that our right to market any of our products is successfully challenged, we may be required to obtain a license on terms which may not be favorable to us, if at all. If we fail to obtain a required license or are unable to design around a patent, our business, financial condition or results of operations could be materially adversely affected.

Our products may be determined to infringe on another party’s patent, which could lead to financial losses or adversely affect our ability to market our products.

There is a risk that one or more of our products may be determined to infringe a patent held by another party. If this were to occur, we may be subject to an injunction or to payment of royalties, or both, which may adversely affect our ability to market the affected product or otherwise have an adverse effect on our results of operations. In addition, competitors may patent technological advances that may give them a competitive advantage or create barriers to entry.

In order to guard against the risk of infringement of intellectual property rights held by third parties we conduct freedom to operate studies through qualified counsel on all newly developed or acquired technologies. While we believe this practice is reasonable and adequate, there is risk that third-party patents or trademarks were not identified in such studies or that litigation outcomes regarding infringement or validity may be contrary to our understanding of the facts or the established law.

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We operate in an industry susceptible to significant product liability claims. Pending and future product liability claims and other litigation may adversely affect our financial condition and results of operations or liquidity, and they also have the potential to damage our reputation, impair our ability to market our products and impact our ability to maintain applicable insurance coverage on reasonable terms or at all.

The medical devices we design, manufacture, and market are used by health care professionals in connection with the treatment of patients and the collection of blood or blood components from donors. As with all medical technologies, the use of our products involves inherent risks, including potential injury or death to patients or donors. Additionally, if the health care professionals that utilize our products are not properly trained, are negligent in using our products or use our products “off-label,” the capabilities of our products may be diminished or the patient may suffer critical injury. As a result, we are exposed to potential product liability claims alleging that the use of our devices caused adverse outcomes due to factors such as design defects, manufacturing flaws, inadequate labeling, failure to warn or misuse. Product liability lawsuits, whether or not they have merit, can be costly to defend, divert management’s attention, and damage our reputation in the marketplace. Adverse judgments or settlements could result in significant monetary damages or injunctive relief that limits or prohibits the sale of our products. In addition, such claims may prompt regulatory investigations, product recalls, safety alerts, or enhanced reporting and post-market surveillance requirements, any of which could further affect our operations and financial performance. We may face liability even when injuries are caused by user error, pre-existing health conditions, or off-label use of our devices. While we seek to ensure proper physician training, we cannot guarantee that all users are appropriately trained or use our products as intended.

Some of our products are also subject to performance guarantee programs, which may require us to compensate customers when clinical outcomes do not meet specified thresholds. Adverse events associated with these products could increase the frequency or cost of such payments.

While we believe that our current product liability insurance coverage is sufficient, there is no assurance that such coverage will be adequate to cover incurred liabilities or that we will be able to obtain acceptable product and professional liability coverage in the future. Additionally, we do not maintain third-party insurance coverage for all categories of potential liability, which increases our exposure to unanticipated claims and adverse decisions and these losses could have a material adverse effect on our financial condition, results of operations or liquidity.

General Risk Factors

Our success depends on our ability to attract and retain key personnel needed to successfully operate the business and to plan for future executive transitions.

Our ability to compete effectively depends on our ability to attract and retain key employees, including people in senior management, sales, marketing and R&D positions, and to facilitate seamless leadership transitions for key positions. Our ability to recruit and retain key talent will depend on a number of factors, including hiring practices of our competitors, compensation and benefits, work location, work environment, hybrid work environment policies and industry economic conditions. If we fail to attract and retain key personnel in senior management and other positions, or if our succession planning efforts are not effective, it could have a material adverse effect on our business, financial condition and results of operations.

Our share price has been volatile and may fluctuate, and accordingly, the value of an investment in our common stock may also fluctuate.

Stock markets in general and our common stock in particular have experienced significant price and trading volume volatility over recent years. The market price and trading volume of our common stock may continue to be subject to significant fluctuations due to factors described under this Item 1A. Risk Factors, as well as economic and geopolitical conditions in general and to variability in the prevailing sentiment regarding our operations or business prospects, as well as, among other things, changing investment priorities of our shareholders. Because the market price of our common stock fluctuates significantly, shareholders may not be able to sell their shares at attractive prices.

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Share repurchase programs, including under our existing share repurchase authorization, could affect the price of our common stock and increase volatility and may be suspended or terminated at any time, which may result in a decrease in the trading price of our common stock.

The $500 million share repurchase authorization approved by our Board of Directors in April 2025 extends through April 2028. Under this share repurchase program, we are authorized to repurchase, from time to time, outstanding shares of common stock in accordance with applicable laws both on the open market, including under trading plans established pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, and in privately negotiated transactions. The actual timing, number and value of shares repurchased is determined by us and depends on a number of factors, including market conditions, applicable legal requirements and compliance with the terms of loan covenants. The share repurchase program may be suspended, modified or discontinued at any time and we have no obligation to repurchase any amount of our common stock under the programs. Repurchases pursuant to our share repurchase program could affect our stock price and increase its volatility. The existence of a share repurchase program could also cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our common stock. There can be no assurance that any share repurchases will enhance shareholder value because the market price of our common stock may decline below the levels at which we repurchased our common stock. Although our share repurchase program is intended to enhance long-term shareholder value, short-term stock price fluctuations could reduce the program’s effectiveness. As of March 28, 2026, the total remaining authorization for repurchases of the Company’s common stock under the 2025 share repurchase program was $325.0 million. Refer to Note 7, Earnings per Share , within the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for additional information.

Our business could be negatively impacted by corporate responsibility matters.

There has been increased focus from certain regulatory bodies, investors, customers, employees and other stakeholders concerning corporate responsibility matters, including topics identified under the framework of Environmental, Social and Governance (“ESG”). Customer preferences or requirements may be influenced by company progress across various ESG topics related to, among other things, human capital and environmental impact matters. From time to time, we may announce certain initiatives, including goals, regarding corporate responsibility focus areas for our company. We may not achieve, or may be perceived as not achieving, against such initiatives, including as a result of changes in our business. The standards by which corporate responsibility efforts and related matters are measured are developing and evolving. For example, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their respective approaches to corporate responsibility matters, which are increasingly being employed by investors, lenders, and customers to inform their investment, financing or purchasing decisions. Any failure, or perceived failure, to achieve against our corporate responsibility initiatives or to establish goals that align with stakeholder expectations could result in declines in our market share and have an adverse impact on our business, financial condition or results of operations, including as a result of reputational harm, an inability to attract customers, and an inability to attract and retain top talent.

Climate change, or legal, regulatory or market measures to address climate change, could adversely affect our business, results of operations and financial condition.

The long-term effects of climate change are difficult to predict and may be widespread. Extreme weather or other conditions could adversely impact our operations and supply chain, including the variability and cost of raw materials and components required for the operation of our business. In addition, access to and pricing of certain natural resources, such as water, could impact our manufacturing operations. There has been increased focus by federal, international, state and local regulatory and legislative bodies and by other stakeholders such as customers and investors to combat and/or limit the effects of climate change. If legislation or regulations are enacted in jurisdictions in which we do business that are more stringent than our current obligations or other stakeholders effectively require more stringent compliance, we and companies in our supply chain may experience increased compliance burdens and costs to meet these obligations, which could cause disruption in the sourcing, manufacturing and distribution of our products and adversely affect our business, financial condition or results of operations. Additionally, the impacts of climate change may further include customer preferences and requirements. Failure to meet these preferences or requirements could potentially result in loss of market shares.

Actual or threatened public health crises could harm our business.

Global pandemics or other public health crises, such as the COVID-19 pandemic, could adversely impact our business, financial condition or results of operations, and those of our customers and suppliers, and any such future pandemics or public health crises could include disruptions in global economic activity, global supply chains and labor markets, operational challenges such as site shutdowns, workplace disruptions or limited provider capacity to perform procedures using our products, volatile financial market dynamics and significant volatility in price and availability of goods and services.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our Business

Haemonetics is a global medical technology company dedicated to improving the quality, effectiveness and efficiency of health care. Our innovative solutions addressing critical medical needs include a suite of hospital technologies designed to advance standards of care and help enhance outcomes for patients; end-to-end plasma collection technologies to optimize operations for plasma centers; and products to enable blood centers to collect in-demand blood components.

We view our operations and manage our business in three principal reporting segments: Plasma, Blood Center and Hospital. For that purpose, “Plasma” includes plasma collection devices and disposables, donor management software and supporting software solutions sold to plasma customers. “Blood Center” includes blood collection and processing devices and disposables for plasma, red cells and platelets. “Hospital” is comprised of Interventional Technologies, which includes Vascular Closure, Sensor-Guided Technologies and Esophageal Protection product lines, and Blood Management Technologies, which includes Hemostasis Management, Cell Salvage and Transfusion Management product lines. Financial information concerning these segments is provided in Note 18, Segment and Enterprise-Wide Information , within the consolidated financial statements in Item 8 of this Annual Report on Form 10-K.

We believe that Plasma and Hospital have the greatest growth potential and are well positioned to drive long-term value. Blood Center operates in more challenging markets, and we have sharpened our focus accordingly on targeted opportunities – particularly in plasma and platelets – while ensuring continued alignment of this business with our broader strategic objectives.

Recent Developments

Acquisitions

Vivasure Medical Limited

On January 9, 2026, we acquired all of the outstanding equity interests of Vivasure for a net purchase price of $164.4 million. The net purchase price included $60.2 million paid in cash at closing, net of $0.4 million cash acquired and after giving effect to the value of certain prior investments and loans we made to Vivasure, as well as other customary closing adjustments, and the fair value of contingent consideration of $20.7 million. The contingent consideration is based on sales growth over the three years following the completion of the acquisition and the achievement of certain other milestones, and is also subject to adjustments based on the value of certain prior investments and loans. The Company financed this transaction through available cash on hand.

Vivasure is a Galway, Ireland-based company pioneering next-generation technology for percutaneous vessel closure. Vivasure’s PerQseal Elite system uses a proprietary bioabsorbable patch to seal large-bore (up to 26 F) arteriotomies and venotomies from inside the vessel, offering a sutureless, fully absorbable solution for structural heart and endovascular procedures. In 2025, Vivasure submitted a premarket approval, or PMA, application to the FDA for the PerQseal Elite arterial closure system and received CE Mark in Europe for both arterial and venous indications. The addition of Vivasure expands our Hospital business unit portfolio in the interventional cardiology market and will be included in the Hospital reportable segment.

Share Repurchase Programs

In accordance with our previously announced three-year share repurchase program, During the fourth quarter of fiscal 2026, we repurchased $25.0 million of our common stock pursuant to a previously executed Rule 10b5-1 trading plan. The total number of shares repurchased pursuant to the Rule 10b5-1 trading plan was 360,457 at an average price per share upon final settlement of $69.36. Additionally, in March 2026, we completed a $75.0 million repurchase of our common stock pursuant to an ASR entered into with Goldman Sachs in February 2026. The total number of shares repurchased under the ASR was 1,218,798 at an average price per share upon final settlement of $61.54. As of March 28, 2026, the total remaining authorization for repurchases of our common stock under the share repurchase program was $325.0 million.

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Convertible Debt Repayment and Revolving Credit Facility Drawdown

On March 2, 2026, we repaid in full at maturity our outstanding 2026 Notes for an aggregate amount of $300.0 million in cash, representing the outstanding principal amount of the 2026 Notes. The repayment was funded with cash on hand and borrowings under the Company’s revolving credit facility. No holders exercised conversion rights with respect to the 2026 Notes prior to the close of business on the second scheduled trading day immediately preceding the maturity date. The capped call transactions entered into in connection with the issuance of the 2026 Notes expired in accordance with their terms upon the maturity of the 2026 Notes.

Market Trends

Plasma Market

There are two key aspects to the market for our plasma products - the growth in demand for plasma-derived biopharmaceuticals and the limited number of significant biopharmaceutical companies in this market.

Changes in demand for plasma-derived therapies, particularly immunoglobulin, are the key driver of plasma collection volumes in the plasma biopharmaceutical market. Various factors related to the supply of plasma and the production of plasma-derived therapies also affect collection volume, including the following:

• Biopharmaceutical companies continue to increase yield from plasma collections in order to meet growing demand for plasma-derived therapies without requiring an equivalent increase in plasma donations;

• Newly approved indications for diseases treated with plasma-derived therapies, the growing understanding and diagnosis of diseases treatable with plasma derived therapies, longer lifespans and a growing aging patient population increase the demand for plasma; and

• Expansion in the availability of plasma-derived therapies across new geographic markets also increases demand for plasma.

Despite the overall growth in the market, there are few biopharmaceutical companies that collect and fractionate source plasma. Significant barriers to entry exist for new entrants due to high capital outlay requirements for fractionation, long regulatory pathways to the licensing of collection centers and fractionation facilities and approval of plasma-derived biopharmaceuticals. As a result, there are relatively few customers for our Plasma products, especially in the U.S. where over two-thirds of the world’s source plasma is collected and only a few customers provide the majority of our Plasma revenue. However, certain jurisdictions, such as Egypt, Canada, Belgium and the United Kingdom have begun or expanded dedicated programs to collect plasma for fractionation for their local needs, which has expanded the Plasma market.

Blood Center Market

In the Blood Center market, we sell automated blood component collection systems. While we sell products around the world, a significant portion of our sales are to a limited number of customers due to the relatively limited number of blood collectors.

Within the Blood Center market, we have seen two trends that have negatively impacted growth of the overall marketplace despite the overall increase in aging populations:

• Declining transfusion rates in mature markets due to the development of more minimally invasive procedures with lower associated blood loss as well as better blood management; and

• Competition in multi-unit collection technology for automated blood component collection systems has intensified and has negatively impacted our sales in markets where these collections are prevalent.

As Blood Center operates in more challenging markets, we have sharpened our focus accordingly on targeted opportunities – particularly in plasma and platelets – while ensuring continued alignment of this business with the Company’s broader strategic objectives.

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Hospital Markets

Interventional Technologies:

Vascular Closure Market - The target markets for our vascular closure products used in coronary, structural heart, peripheral and electrophysiology procedures, are highly concentrated in the U.S. The mature market of coronary and peripheral procedures consists of interventions to diagnose and treat vascular diseases. Our products also address many of the vascular closure needs for the structural heart (“contralateral access sites”) and electrophysiology procedures. In August 2024, we successfully launched the VASCADE MVP XL, which allowed us to capitalize more broadly in procedures as part of electrophysiology, coronary and peripheral markets. In January 2026, we successfully completed the acquisition of Vivasure, which included the PerQseal Elite large bore closure system, which is designed for percutaneous vessel closure following catheter-based procedures requiring large bore femoral access, including TAVR, EVAR and mechanical circulatory support procedures. PerQseal Elite has received CE Mark in Europe for arterial and venous indications, and we have submitted a PMA application to the FDA for an arterial indication in the United States. We believe PerQseal Elite complements and expands our Vascular Closure portfolio into the large bore market.

Sensor-Guided Technologies Market - The market for sensor-guided technologies reflects varying dynamics across different interventional cardiology procedures. In the TAVR market, characterized by high growth, the demand for innovative solutions like SavvyWire is driven by an aging population and increasing prevalence of aortic valve diseases globally. Conversely, in the more mature percutaneous coronary intervention (“PCI”) market, the steady demand for sensor-guided technologies such as OptoWire remains driven by persistent prevalence of coronary artery disease, emphasizing the need for advanced diagnostic and therapeutic interventions. Our strategic investment in sensor-guided technologies positions us to capitalize on these trends, leveraging innovation to address evolving needs in both high-growth and mature markets while expanding our global market presence through initiatives such as receiving CE Mark for our Savvywire.

Esophageal Protection Market - The market for esophageal protection devices, such as our ensoETM, is driven by radiofrequency, or RF, ablation for the treatment of atrial fibrillation, which has a risk of thermal injury to the esophagus. One of the perceived benefits of pulse field ablation, or PFA, is that its mechanism of action is tissue selective, which is believed to spare the esophagus from serious injury and may, therefore, obviate the need for esophageal cooling devices. While there are cardiac ablation procedures currently performed using RF ablation, the immediate opportunity for esophageal cooling during an atrial fibrillation ablation has substantially diminished over the last two years due to the launch of PFA in the US and Japan. PFA has been available in Europe for several years already.

Blood Management Technologies:

Hemostasis Management Market - The use of routine coagulation testing is well established throughout the world in various medical procedures, including cardiovascular surgery, organ transplantation, trauma, post-partum hemorrhage and percutaneous coronary intervention. While standard tests like prothrombin time, partial thromboplastin time and platelet count have limited ability to reveal a patient’s risk for bleeding, they do not provide information on the patient’s risk for thrombosis. In addition, these routine tests do not provide specific data about clot quality or stability. As a result of these limitations, clinicians are increasingly utilizing advanced hemostasis testing to provide more information about a patient’s hemostasis status, resulting in improved clinical decision-making. In addition, advanced hemostasis testing supports hospital efforts to reduce the risks, complications and costs associated with unnecessary blood component transfusions.

Haemonetics’ TEG hemostasis analyzer system is an advanced diagnostic tool that provides a comprehensive assessment of a patient’s overall hemostasis. This information enables clinicians to decide the most appropriate clinical treatment for the patient to minimize blood loss and reduce clotting risk. For example, TEG analyzers have been used to support clinical decision making in open cardiovascular surgery and organ transplantation, becoming the standard of care in liver transplants. In more recent years, interest has grown into the utilization of TEG in trauma and other procedures in which the risk of hemorrhage and thrombosis are high.

Geographically, TEG systems have achieved the highest market penetration in North America and Europe. However, there are considerable growth opportunities in these as well as other markets, as TEG systems become more established as the standard of care around the wor ld.

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Cell Salvage Market - In recent years, more efficient blood use and less invasive surgeries have reduced demand for autotransfusion in these procedures and contributed to intense competition in mature markets, while increased access to healthcare in emerging economies has provided new markets and sources of growth. Orthopedic procedures have seen similar changes with improved blood management practices, including the use of tranexamic acid to treat and prevent postoperative bleeding, significantly reducing the number of transfusions and autotransfusion. Geographically, the Cell Saver has achieved the highest market penetration in North America, Europe and Japan. We believe there are growth opportunities in Asia Pacific as the use of autotransfusion is becoming accepted as a standard of care.

Transfusion Management Market - Revenues from BloodTrack have increased in the U.S. and Europe in recent years as hospitals seek means to improve efficiencies and meet compliance guidelines for tracking and dispositioning blood components to patients. SafeTrace Tx’s leading market share continues in the U.S. and SafeTraceTX has expanded into the United Kingdom as hospitals seek solutions to address operational efficiency, cybersecurity and interoperability with enterprise systems.

Financial Summary

Fiscal Year

Reported change

(Dollars in Thousands, Except Per Share Data)

Net revenues

Gross profit

% of net revenues

Operating expenses

Operating income

% of net revenues

Interest and other expense, net

Income before provision for income taxes

Provision for income taxes

% of pre-tax income

Net income

% of net revenues

Net income per share – basic

Net income per share – diluted

Our fiscal year ends on the Saturday closest to the last day of March. Each fiscal year presented includes 52 weeks with each quarter having 13 weeks.

Net revenues decreased 2.0% during fiscal 2026 as compared with fiscal 2025. The decrease was driven by prior year portfolio transitions in Plasma and Blood Center—including the previously announced customer transition of CSL Plasma and the divestiture of the Whole Blood product line—that together represented approximately $153 million of nonrecurring fiscal 2025 revenue, partially offset by an increase in Hospital, primarily attributable to the Hemostasis Management and Transfusion Management product lines within the Blood Management Technologies franchise.

Operating income decreased 29.3% during fiscal 2026 as compared with fiscal 2025. The decrease was primarily due to the impairment of intangible assets related to Attune Medical, partially offset by pricing benefits across all business units, decreased restructuring costs related to portfolio rationalization initiatives and decreased amortization of fair value inventory step-up related to the acquisition of Attune Medical.

Information pertaining to fiscal year 2024 results of operations, including a year-to-year comparison against fiscal year 2025, was included in our Annual Report on Form 10-K for the year ended March 29, 2025 under Part II, Item 7, “Management’s Discussion and Analysis of Financial Position and Results of Operations,” which was filed with the SEC on May 21, 2025. This information is incorporated by reference herein.

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Management’s Use of Non-GAAP Measures

In addition to financial measures in accordance with accounting principles generally accepted in the United States of America (“GAAP”), management uses non-GAAP financial measures to monitor the financial performance of the business, make informed business decisions, establish budgets and forecast future results. These non-GAAP financial measures should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with U.S. GAAP. Constant currency growth, a non-GAAP financial measure, measures the change in revenue between the current and prior year periods using a constant currency conversion rate. We have provided this non-GAAP financial measure because we believe it provides meaningful information regarding our results on a consistent and comparable basis for the periods presented.

RESULTS OF OPERATIONS

Net Revenues by Geography

Fiscal Year

Reported growth

Currency impact

Constant currency growth (1)

(Dollars in Thousands)

United States

International

Total net revenues

(1)     Constant currency growth, a non-GAAP financial measure, measures the change in revenue between the current and prior year periods using a constant currency. See “Management’s Use of Non-GAAP Measures.”

International Operations and the Impact of Foreign Exchange

Our principal operations are in the United States, Europe, Japan and other parts of Asia. We market and sell our products in approximately 90 countries through a combination of our direct sales force and independent distributors.

The percentage of revenue generated in our principal operating regions is summarized below:

Fiscal Year

United States

Japan

Europe

Rest of Asia

Other

Total net revenues

International sales are generally conducted in local currencies, primarily Japanese Yen, Euro and Chinese Yuan. Our results of operations are impacted by changes in foreign exchange rates, particularly in the value of the Yen, Euro and Yuan, relative to the U.S. Dollar. We have placed foreign currency hedges on certain foreign currencies to mitigate our exposure to foreign currency fluctuations.

Please see the section entitled “Foreign Exchange” in this discussion for a more complete explanation of how foreign currency affects our business and our strategy for managing this exposure.

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Net Revenues by Business Unit

Fiscal Year

Reported growth

Currency impact

Constant currency growth (1)

(Dollars in Thousands)

Plasma

Plasma net revenues

Blood Center

Apheresis

Whole Blood

Blood Center net revenues

Hospital

Interventional Technologies (2)

Blood Management Technologies (3)

Hospital net revenues

Total net revenues

(1)     Constant currency growth, a non-GAAP financial measure, measures the change in revenue between the current and prior year periods using a constant currency. See “Management’s Use of Non-GAAP Measures.”

(2)     Interventional Technologies includes Vascular Closure, Sensor Guided Technologies and Esophageal Protection product lines of the Hospital business unit.

(3)     Blood Management Technologies includes Hemostasis Management, Cell Salvage and Transfusion Management product lines of the Hospital business unit.

Plasma

Plasma revenue decreased by 2.0% on an as reported basis and decreased by 2.7% without the effect of foreign exchange during fiscal 2026 as compared with fiscal 2025. This revenue decrease was primarily driven by lower sales volumes in North America relating to the previously announced customer transition of CSL Plasma, partially offset by share gains, higher volume and pricing benefits.

Blood Center

Blood Center revenue decreased 15.3% on an as reported basis and decreased 16.5% without the effect of foreign exchange during fiscal 2026 as compared with fiscal 2025. The decrease in Blood Center’s reported revenue was primarily driven by the divestiture of our Whole Blood product line in January 2025, partially offset by favorable product mix and higher volume.

Hospital

Hospital revenue increased 4.3% on an as reported basis and increased 3.5% without the effect of foreign exchange during fiscal 2026 as compared with fiscal 2025. The increase was primarily attributable to increased sales volume and market expansion in the Hemostasis and Transfusion Management product lines within the Blood Management Technologies franchise, which was partially offset by lower sales volume in the Interventional Technologies franchise.

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Gross Profit

Fiscal Year

Reported growth

Currency impact

Constant currency growth (1)

(Dollars in Thousands)

Gross profit

% of net revenues

(1)     Constant currency growth, a non-GAAP financial measure, measures the change in revenue between the current and prior year periods using a constant currency. See “Management’s Use of Non-GAAP Measures.”

Gross profit increased 5.2% on an as reported basis and increased 3.9% without the effect of foreign exchange during fiscal 2026 as compared with fiscal 2025. The increase was primarily driven by the continued transformation of the product portfolio to higher margin offerings, benefits from product innovation, decreased restructuring costs related to portfolio rationalization initiatives and decreased amortization of fair value inventory step-up related to the Attune Medical acquisition.

Operating Expenses

Fiscal Year

Reported change

Currency impact

Constant currency change (1)

Research and development

% of net revenues

Selling, general and administrative

% of net revenues

Amortization of acquired intangible assets

% of net revenues

Remeasurement of contingent consideration

% of net revenues

Impairment of intangible assets

% of net revenues

Total operating expenses

% of net revenues

(1)     Constant currency growth, a non-GAAP financial measure, measures the change in revenue between the current and prior year periods using a constant currency. See “Management’s Use of Non-GAAP Measures.”

Research and Development

Research and development expenses decreased 4.7% on an as reported basis and decreased 5.3% without the effect of foreign exchange during fiscal 2026 as compared with fiscal 2025. The decrease in fiscal 2026 was primarily due to lower costs related to compliance with EU MDR and EU IVDR requirements.

Selling, General and Administrative

Selling, general and administrative expenses increased 1.3% on an as reported basis and increased 0.2% without the effect of foreign exchange during fiscal 2026 as compared with fiscal 2025. The increase in fiscal 2026 was primarily due to costs associated with the acquisition of Vivasure, impacts from tariffs and higher performance-based compensation costs.

Amortization of Acquired Intangible Assets

We recognized amortization expense related to our acquired intangible assets of $44.0 million and $48.3 million during fiscal 2026 and fiscal 2025, respectively. The decrease in fiscal 2026 is primarily due to the impairment of intangible assets related to Attune Medical and certain intangible assets becoming fully amortized or impaired during fiscal 2025 and fiscal 2026.

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Remeasurement of Contingent Consideration

We recognized a benefit of $1.9 million and $23.0 million during fiscal 2026 and fiscal 2025, respectively, related to the remeasurement of acquisition-related contingent consideration.

Impairment of Intangible Assets

We recognized impairment of intangible assets of $86.5 million and $2.4 million during fiscal 2026 and fiscal 2025, respectively. Impairment of intangible assets in fiscal 2026 related to the Attune Medical asset group and the intellectual property associated with the HAS viscoelastic diagnostic devices, related assays and disposables. Impairment of intangible assets in fiscal 2025 related to internally developed software assets. For further discussion, refer to Note 10, Goodwill & Intangible Assets within the accompanying consolidated financial statements for further information.

Interest and Other Expense, Net

Interest and other expenses, net increased 194.5% during fiscal 2026 as compared with fiscal 2025.  The increase was primarily driven by gains recognized in the first quarter of fiscal 2025 on the repurchase of $200.0 million of aggregate principal of our 2026 Notes. For further discussion on the 2026 Notes, refer to Note 12, Notes Payable and Long-Term Debt within the accompanying consolidated financial statements for further information.

Income Taxes

Fiscal Year

Reported change

Reported income tax rate

Reported Tax Rate

We conduct business globally and report our results of operations in a number of foreign jurisdictions in addition to the United States. Our reported tax rate differs from the statutory tax rate due to the jurisdictional mix of earnings in any given period as the foreign jurisdictions in which we operate have tax rates that differ from the U.S. statutory tax rate. Our effective tax rate is adversely impacted by non-deductible expenses including executive compensation and transaction costs, and is favorably impacted by changes in contingent consideration revaluation, the expiration of the statute of limitations with respect to certain uncertain tax position reserves, jurisdictional mix of earnings, impact of foreign tax law changes and research credits generated.

For the year ended March 28, 2026, we recorded income tax expense of $30.7 million on our worldwide pre-tax income of $128.0 million, resulting in a reported tax rate of 24.0%. Our reported tax rate for the year ended March 28, 2026 is higher than our reported tax rate of 20.9% for fiscal 2025, primarily due to tax benefits attributable to the expiration of the statute of limitations associated with uncertain tax positions reserves and contingent consideration benefits recorded in FY25, partially offset by the impact of the jurisdictional mix of earnings.

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Liquidity and Capital Resources

The following table contains certain key performance indicators we believe depict our liquidity and cash flow position:

March 28, 2026

March 29, 2025

(Dollars in Thousands)

Cash and cash equivalents

Availability under revolving credit facilities (1)

Working capital

Current ratio

Net debt position (2)

Days sales outstanding

Inventory turnover

(1)     Availability under our revolving credit facilities is reduced by eligible outstanding letters of credit allowable of $1.3 million as of March 28, 2026 and March 29, 2025, respectively.

(2)     Net debt position is the sum of cash and cash equivalents less total debt.

Our primary sources of liquidity are cash and cash equivalents, internally generated cash flow from operations and our senior unsecured revolving credit facility. We believe these sources are sufficient to fund our cash requirements over at least the next twelve months and to meet our known long-term cash requirements, including our 2029 Notes. Our expected cash outlays relate primarily to acquisitions, investments, capital expenditures, share repurchases, our ongoing market and regional alignment initiative, and payments of principal and interest under our credit facilities.

As of March 28, 2026, we had $245.4 million in cash and cash equivalents, the majority of which is held in the U.S. or in countries from which it can be repatriated to the U.S.

Convertible Senior Notes

In the first quarter of fiscal 2025, we used a portion of our proceeds from the 2029 Notes to repurchase, for $185.5 million, $200.0 million of the $500.0 million aggregate principal amount of our 2026 Notes, resulting in a gain of $14.5 million related to the discount on repurchase. As the repurchase of the 2026 Notes met the criteria for extinguishment accounting, $1.9 million of unamortized debt issuance costs were allocated to the repurchase, resulting in a net gain of $12.6 million.

On March 2, 2026, we repaid in full at maturity our 2026 Notes for an aggregate amount of $300.0 million in cash, representing the outstanding principal amount of the 2026 Notes. The repayment was funded with cash on hand and borrowings under the Company’s revolving credit facility. No holders exercised conversion rights with respect to the 2026 Notes prior to maturity. The capped call transactions entered into in connection with the issuance of the 2026 Notes expired in accordance with their terms upon the maturity of the 2026 Notes.

As of March 28, 2026, the $700.0 million principal balance of the 2029 Notes was netted down by $11.2 million of remaining debt issuance costs, resulting in a net convertible note payable of $688.8 million. The 2029 Notes will mature on June 1, 2029, unless earlier converted, redeemed or repurchased. As of March 28, 2026, the 2029 Notes were not convertible. Interest expense related to the 2029 Notes was $20.8 million for fiscal 2026, which includes nominal interest expense and the amortization of the debt issuance costs. For further discussion on the 2029 Notes, refer to Note 12, Notes Payable and Long-Term Debt within the accompanying consolidated financial statements for further information.

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Credit Facilities

On July 16, 2022, the Company entered into an amended and restated credit agreement to refinance its credit facilities initially entered into in 2018 and extended their maturity dates through June 2025 (the “2022 Revised Credit Facilities”). On April 30, 2024, we entered into a second amended and restated credit agreement with certain lenders to refinance the 2022 Revised Credit Facilities and extend their maturity date through April 2029. The second amended and restated credit agreement provides for a $250.0 million senior unsecured term loan, the proceeds of which, along with $12.5 million of cash on hand, were used to retire the balance of the term loan under the 2022 Revised Credit Facilities, and a $750.0 million senior unsecured revolving credit facility (together, the “2024 Revised Credit Facilities”). Loans under the 2024 Revised Credit Facilities bear interest at an annual rate equal to the Adjusted Term SOFR Rate (as specified in the second amended and restated credit agreement), which is subject to a floor of 0.0%, plus an applicable rate ranging from 1.125% to 1.750% based on the our consolidated net leverage ratio (as specified in the second amended and restated credit agreement) at the applicable measurement date. The revolving credit facility carries an unused fee that ranges from 0.125% to 0.250% annually based on our consolidated net leverage ratio at the applicable measurement date. The 2024 Revised Credit Facilities mature on April 30, 2029. The principal amount of the term loan under the 2024 Revised Credit Facilities amortizes quarterly through the maturity date at a rate of 2.5% for the first three years following the closing date, 5.0% for the fourth year following the closing date and 7.5% for the fifth year following the closing date, with the unpaid balance due at maturity.

As of March 28, 2026, $239.1 million was outstanding under the term loan with an effective interest rate of 5.6%, which was netted down by the $3.9 million of remaining debt discount, resulting in a net note payable of $235.1 million. In connection with the settlement of the 2026 Notes, we borrowed $300.0 million under the revolving credit facility, which was outstanding as of March 28, 2026. We also had $17.7 million of uncommitted operating lines of credit to fund our global operations under which there were no outstanding borrowings as of March 28, 2026.

We have scheduled princ ipal payments of $7.8 million required during fiscal 2027 related to our term loan . See Note 12, Notes Payable and Long-Term Debt within the accompanying consolidated financial statements for further information.

2025 Share Repurchase Program

In April 2025, our Board approved a new three-year share repurchase program authorizing the repurchase of up to $500 million of our common stock, based on market conditions, through April 2028. In September 2025, we completed a $75.0 million repurchase of our common stock pursuant to an ASR entered into with Citibank N.A. in August 2025. The total number of shares repurchased under this ASR was 1,430,579 for an average price per share upon final settlement of $52.43. During the fourth quarter of fiscal 2026, we repurchased $25.0 million of our common stock pursuant to a previously executed Rule 10b5-1 trading plan. The total number of shares repurchased pursuant to the Rule 10b5-1 trading plan was 360,457 at an average price per share upon final settlement of $69.36. Additionally, in March 2026 we completed a $75.0 million repurchase of our common stock pursuant to an ASR entered into with Goldman Sachs in February 2026. The total number of shares repurchased under this ASR was 1,218,798 for an average price per share upon final settlement of $61.54. As of March 28, 2026, the total remaining authorization for repurchases of our common stock under the share repurchase program was $325.0 million.

Market and Regional Alignment Initiative

In May 2025, our Board approved our currently ongoing market and regional alignment initiative and delegated authority to management to determine the details of the specific actions that will comprise the initiative. This strategic initiative is designed to improve operational performance and reduce costs by directing our resources toward the markets and geographies that offer the greatest growth and portfolio advancement opportunities. During fiscal 2026, we incurred restructuring and restructuring related costs of $5.1 million under this initiative . Total cumulative charges under this initiative are $5.6 million as of March 28, 2026. The amounts and timing of estimated costs and savings are subject to change until finalized. The actual amounts and timing may vary materially based on various factors.

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Cash Flows

Fiscal Year

(Dollars in Thousands)

Net cash provided by (used in):

Operating activities

Investing activities

Financing activities

Effect of exchange rate changes on cash and cash equivalents (1)

Net change in cash and cash equivalents

(1)     The consolidated balance sheets are affected by spot exchange rates used to translate local currency amounts into U.S. Dollars. In accordance with U.S. GAAP, we have eliminated the effect of foreign currency throughout our consolidated statements of cash flows, except for its effect on our cash and cash equivalents.

Operating Activities

Net ca sh provided by ope rating activities increased $111.5 million during fiscal 2026 as compared with fiscal 2025 . Cash flows from operating activities for fiscal 2026 included net income of $97.3 million, adjusted for non-cash depreciation and amortization of $111.7 million, share-based compensation expense of $33.8 million and impairment charges of $86.5 million, partially offset by cash outflows for working capital of $23.7 million driven by digital transformation costs. Cash flows from operating activities for fiscal 2025 included net income of $167.7 million, adjusted for non-cash items, primarily depreciation and amortization of $115.6 million and share-based compensation of $29.6 million; partially offset by cash outflows for non-cash adjustments related to a $23.0 million gain on the remeasurement of contingent consideration, a $15.7 million gain on the sale of property, plant and equipment, a $12.6 million gain on the repurchase of convertible senior notes, and cash outflows for working capital of $102.0 million driven by increased outflows for inventory.

Investing Activities

Net cash used in investing activities decreased $17.7 million during fiscal 2026 as compared with fiscal 2025. Cash flows used in investing activities for fiscal 2026 included cash outflows of $60.2 million for the acquisition of Vivasure, non-cash transfers from inventory of $51.9 million, strategic investments of $36.1 million, and capital expenditures of $32.8 million. Cash flows used in investing activities for fiscal 2025 included cash outflows of $150.9 million for the acquisition of Attune Medical, capital expenditures of $39.3 million, non-cash transfers from inventory of $21.1 million, and other strategic investments of $17.1 million, partially offset by $43.3 million in proceeds from divestitures and the sale of assets and $23.3 million from the sale of property, plant and equipment .

Financing Activities

Net cash used in fin ancing ac tivities decreased $287.3 million during fiscal 2026 as compared to net cash provided by financing activities during fiscal 2025 . Cash flows used in financing activities for fiscal 2026 included cash outflows for the repayment of the 2026 Notes of $300.0 million, share repurchases of $175.0 million, repayments of term loan borrowings of $6.3 million, and employee equity award settlements of $5.0 million, partially offset by proceeds from the revolving credit facility of $300.0 million. Cash flows provided by financing activities for fiscal 2025 included cash inflows relating to proceeds from the issuance of the 2029 Notes of $700.0 million and proceeds from term loan borrowings of $250.0 million, partially offset by cash outflows for the repurchase of a portion of the 2026 Notes of $185.5 million, capped call purchases of $88.2 million, term loan redemptions of $262.5 million, shares repurchases of $225.0 million, payments on the revolving credit facility of $50.0 million, debt issuance costs of $23.1 million and employee equity award settlements of $10.2 million .

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Contractual Obligations

A summary of our contractual and commercial commitments as of March 28, 2026 is as follows:

Payments Due by Period

Total

Less than 1 year

1-3 years

3-5 years

More than 5 years

(Dollars in Thousands)

Convertible senior notes

Contingent consideration

Debt

Interest payments (1)

Operating leases

Purchase commitments (2)

Expected retirement plan benefit payments

Total contractual obligations

(1)      Interest payments reflect the contractual interest payments on outstanding debt related to the term loan under our 2024 Revised Credit Facilities and exclude the impact of interest rate swap agreements. Interest payments are projected using interest rates in effect as of March 28, 2026. Certain of these projected interest payments may differ in the future based on changes in market interest rates.

(2)     Includes amounts we are committed to spend on purchase orders entered in the normal course of business which includes capital equipment and commitments with contractors for the manufacture of certain disposable products and equipment. The majority of our operating expense spending does not require any advance commitment.

The above table does not reflect our long-term liabilities associated with unrecognized tax benefits of $0.8 million recorded in accordance with ASC 740, Income Taxes . We cannot reasonably make a reliable estimate of the period in which we expect to settle these long-term liabilities due to factors outside of our control, such as tax examinations.

Concentration of Credit Risk

While approximately 44% of our revenue during fiscal 2026 was generated by our ten largest customers, concentrations of credit risk with respect to trade accounts receivable are generally limited due to our large number of customers and their diversity across many geographic areas. Certain markets and industries, however, can expose us to concentrations of credit risk. For example, in the Plasma business unit, sales are concentrated with several large customers. As a result, accounts receivable extended to any one of these customers can be significant at any point in time. Additionally, a portion of our trade accounts receivable outside the U.S. include sales to government-owned or supported healthcare systems which are subject to payment delays and local economic conditions. Payment is dependent upon the financial stability and creditworthiness of those countries’ national economies.

We have not incurred significant losses on trade accounts or other receivables. We continually evaluate all receivables for potential collection risks associated with the availability of government funding and reimbursement practices. If the financial condition of customers or the countries’ healthcare systems deteriorate such that their ability to make payments is uncertain, allowances may be required in future periods.

Legal Proceedings

In accordance with U.S. GAAP, we record a liability in our consolidated financial statements for legal matters when a loss is known or considered probable and the amount may be reasonably estimated. Actual settlements may be different than estimated and could have a material impact on our consolidated earnings, financial position and/or cash flows. For a discussion of our material legal proceedings refer to Note 15, Commitments & Contingencies, within the accompanying consolidated financial statements.

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Inflation

The global macroeconomic environment has continued to present challenging conditions and uncertainty, including inflation, tariffs, interest rates, monetary policy, exchange rates and geopolitical developments, which could adversely impact the costs associated with our manufacturing operations. We continue to monitor inflationary pressures generally and raw materials indices that may affect our procurement, production and distribution costs. Historically, we have been able to limit the impact of the effects of inflation by improving our manufacturing and purchasing efficiencies, by increasing employee productivity and by adjusting the selling prices of products, but we may not be able to fully mitigate these increases in our operational costs in the future.

Foreign Exchange

Although o ur reporting currency is the U.S. Dollar, 26.4% and 25.7% of our sales in fiscal 2026 and fiscal 2025, respectively, were generated outside the U.S., generally in foreign currencies. We also incur certain manufacturing, marketing and selling costs in international markets in local currency. Our primary foreign currency exposures relate to sales denominated in Japanese Yen, Euro and Chinese Yuan. We also have foreign currency exposure related to manufacturing and other operational costs denominated in Swiss Francs, Canadian Dollars, Mexican Pesos and Malaysian Ringgit. The Yen, Euro and Yuan sales exposure is partially mitigated by costs and expenses for foreign operations and sourcing products denominated in foreign currencies.

Since our foreign currency denominated Yen, Euro and Yuan sales exceed the foreign currency denominated costs, whenever the U.S. Dollar strengthens relative to the Yen, Euro or Yuan, there is an adverse effect on our results of operations and, conversely, whenever the U.S. Dollar weakens relative to the Yen, Euro or Yuan, there is a positive effect on our results of operations. For Swiss Francs, Canadian Dollars, Mexican Pesos and Malaysian Ringgit, our primary cash flows relate to product costs or costs and expenses of local operations. Whenever the U.S. Dollar strengthens relative to these foreign currencies, there is a positive effect on our results of operations. Conversely, whenever the U.S. Dollar weakens relative to these currencies, there is an adverse effect on our results of operations.

We have a program in place that is designed to mitigate our exposur e to changes in foreign currency exchange rates. That program includes the use of derivative financial instruments to minimize, for a period of time, the unforeseen impact on our financial results from changes in foreign exchange rates. We utilize forward foreign currency contracts to hedge the anticipated cash flows from transactions denominated in foreign currencies, primarily Japanese Yen, Mexican Peso and Euro, and to a lesser extent Canadian Dollar, Swiss Franc and Chinese Yuan. This does not eliminate the volatility of foreign exchange rates, but because we generally enter into forward contracts into the future, rates are fixed at the time of execution; thereby facilitating financial planning and resource allocation. Hedges are executed on a rolling ba sis over an 18-month horizon, informed by forecasted net income exposures. Both forecasted exposures and active hedges are reviewed periodically throughout the year to ensure effective and efficient mitigation of foreign currency exchange rate risk. These contracts are designated as cash flow hedges. The final impact of currency fluctuations on the results of operations is dependent on the local currency amounts hedged and the actual local currency results. We do no t use forward foreign currency contracts for speculative or trading activities.

Recent Accounting Pronouncements

Refer to Note 2, Summary of Significant Accounting Policies , within the accompanying consolidated financial statements for a discussion of recently issued accounting pronouncements.

Critical Accounting Policies and Estimates

Our significant accounting policies are summarized in Note 2, Summary of Significant Accounting Policies , within the accompanying consolidated financial statements. While all of these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our consolidated financial statements and require management to use a greater degree of judgment and/or estimates. Actual results may differ from those estimates. We consider an estimate to be a “critical accounting estimate” when (i) the nature of the estimate is material due to the level of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change; and (ii) the impact of the estimate on financial condition or operating performance is material. The accounting policies and estimates identified as critical are as follows:

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Revenue Recognition

Revenues from product sales are recorded at the net sales price, which includes estimates of variable consideration related to rebates, product returns and volume discounts. These reserves, which are based on estimates of the amounts earned or to be claimed on the related sales, are recorded as a reduction of revenue and a current liability. Our estimates take into consideration historical experience, current contractual and statutory requirements, specific known market events and trends, industry data, and forecasted customer buying and payment patterns. Overall, these reserves reflect our best estimates of the amount of consideration to which we are entitled based on the terms of the contract. The amount of variable consideration included in the net sales price is limited to the amount that is probable not to result in a significant reversal in the amount of the cumulative revenue recognized in a future period. Revenue recognized in the current period related to performance obligations satisfied in prior periods was not material. If we are unable to estimate the expected rebates reasonably, we record a liability for the maximum potential rebate or discount that could be earned. In circumstances where we provide upfront rebate payments to customers, we capitalize the rebate payments and amortize the resulting asset as a reduction of revenue using a systematic method over the life of the contract. Refer to Note 2, Summary of Significant Accounting Policies and Note 4, Revenue , within the accompanying consolidated financial statements for further information.

Goodwill and Intangible Assets

Although we use consistent methodologies in developing the assumptions and estimates underlying the fair value calculations used in our impairment tests, these estimates are uncertain by nature and can vary from actual results. The use of alternative valuation assumptions, including estimated revenue projections, growth rates, cash flows and discount rates could result in different fair value estimates.

Future events that could have a negative impact on the levels of excess fair value over carrying value of our reporting units include, but are not limited to, the following:

• Decreases in estimated market sizes or market growth rates due to greater-than-expected declines in procedural volumes, pricing pressures, product actions and/or competitive technology developments;

• Declines in our market share and penetration assumptions due to increased competition, an inability to develop or launch new and next-generation products and technology features in line with our commercialization strategies and market and/or regulatory conditions that may cause significant launch delays or product recalls;

• Decreases in our forecasted profitability due to an inability to implement successfully and achieve timely and sustainable cost improvement measures consistent with our expectations;

• Changes in our reporting units or in the structure of our business as a result of future reorganizations, acquisitions or divestitures of assets or businesses; and

• Increases in our market-participant risk-adjusted weighted average cost of capital and increases in our market-participant tax rate and/or changes in tax laws or macroeconomic conditions.

Negative changes in one or more of these factors, among others, could result in future goodwill impairment charges.

Goodwill is tested for impairment at least annually as of the first day of the fourth quarter in fiscal 2026, or more frequently if events or changes in circumstances indicate potential goodwill impairment. The test is performed at the reporting unit level by comparing the estimated fair value of each reporting unit to its carrying value, including goodwill.

The estimation of fair value requires significant judgment and is based primarily on a discounted cash flow approach, supplemented by market-based methods where appropriate. Key assumptions include projected revenue growth rates, operating margins, and the discount rate. These inputs are based on management’s expectations of future performance and market conditions and are inherently uncertain.

As of the first day of the fourth quarter in fiscal 2026, the estimated fair values of all reporting units exceeded their carrying values. However, the fair value of the Interventional Technologies reporting unit, which is within the Hospital reportable segment, was $867.8 million, which only exceeded its carrying value of $821.6 million by 6%. The fair value of the Interventional Technologies reporting unit was primarily determined using a discounted cash flow approach utilizing a discount rate of 10.5%, which reflects a market-participant weighted average cost of capital based on the risk profile, size and capital structure of the reporting unit.

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The Interventional Technologies reporting unit remains sensitive to changes in key assumptions. A decline in projected revenue growth rates, or an increase in the discount rate, could result in the carrying value exceeding fair value. For example, a 50-basis point increase in the discount rate or a reduction in projected revenue growth rates of 1% could eliminate headroom for this reporting unit.

We monitor for goodwill impairment indicators throughout the year, including changes in macroeconomic conditions, industry trends, and business performance. No interim goodwill impairment indicators were identified during fiscal 2026 that required an interim impairment test for goodwill.

Although no goodwill impairment was recorded during fiscal 2026, the Interventional Technologies reporting unit remains at risk of future goodwill impairment if actual results differ from current estimates or if market conditions deteriorate.

We also evaluate long-lived intangible assets subject to amortization for intangible impairment quarterly to determine if any adverse conditions exist that would indicate that the carrying value of an asset or asset group may not be recoverable, or that a change in the remaining useful life is required. Conditions indicating that an intangible impairment exists include but are not limited to a change in the competitive landscape, internal decisions to pursue new or different technology strategies, a loss of a significant customer or a significant change in the marketplace including prices paid for our products or the size of the market for our products. Recoverability is assessed by comparing the carrying value of the asset group to the undiscounted cash flows expected to result from its use and eventual disposition. If the carrying value exceeds those undiscounted cash flows, an intangible impairment loss is measured as the excess of carrying value over fair value.

The determination of recoverability and fair value requires significant judgment. Estimated cash flows are based on management’s assumptions regarding future revenues, operating margins, customer attrition, and economic conditions. When required, fair value is typically determined using a discounted cash flow approach. Key assumptions include projected growth rates, profitability, and discount rates, all of which are inherently uncertain and may differ from actual results.

In the fourth quarter of fiscal 2026, we identified intangible impairment indicators related to the Attune Medical asset group within the Interventional Technologies reporting unit, including lower revenue projections, changes in market conditions and declines in operating performance. As a result, we performed a recoverability test as of the first day of the fourth quarter in fiscal 2026 for the Attune Medical asset group and determined that the carrying value of the asset group exceeded the estimated undiscounted cash flows, indicating that the asset group was not recoverable. As a result, we performed an additional fair value measurement for the Attune Medical asset group.

The fair value of the Attune Medical asset group was measured using an income approach based on a discounted cash flow methodology and is classified within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs. As of the first day of the fourth quarter in fiscal 2026, the estimated fair value of the asset group was approximately $12.3 million, compared to a carrying value of $89.5 million, resulting in the recognition of an intangible impairment charge of $77.2 million in the fourth quarter of fiscal 2026.

Significant unobservable inputs used in the fair value measurement included projected revenues, operating margins, and a discount rate reflecting the estimated weighted average cost of capital of a market participant. The revenue and margin assumptions were based on management’s internal forecasts, which incorporate assumptions about future market conditions, product adoption rates, pricing, and competitive dynamics. The discount rate utilized in the valuation of the Attune Medical asset group was 19.8%, which reflects the higher risk profile, earlier stage of commercialization, and greater uncertainty in projected cash flows relative to the broader Interventional Technologies reporting unit. The discount rate was developed using market-based inputs, including a risk-free rate, equity risk premium, and company-specific risk adjustments.

Changes in these significant unobservable inputs could result in a materially higher or lower fair value measurement. For example, increases in the discount rate or decreases in projected revenues or operating margins would result in a lower estimated fair value, while decreases in the discount rate or improvements in projected operating performance would result in a higher estimated fair value.

We continue to monitor the Attune Medical asset group for intangible impairment indicators, including macroeconomic conditions, industry trends, and changes in business performance. While the intangible impairment charge recognized reflects management’s best estimate of fair value as of the testing date, it is reasonably possible that changes in assumptions or future business conditions could result in additional intangible impairment charges in future periods. Refer to Note 2, Summary of Significant Accounting Policies and Note 10, Goodwill & Intangible Assets, within the accompanying consolidated financial statements for additional information.

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Inventory Provisions

We base our provisions for excess, expired and obsolete inventory primarily on our estimates of forecasted net sales. A significant change in the timing or level of demand for our products as compared with forecasted amounts may result in recording additional provisions for excess, expired and obsolete inventory in the future. Additionally, uncertain timing of next-generation product approvals, variability in product launch strategies, product recalls and variation in product utilization all affect our estimates related to excess, expired and obsolete inventory.

Income Taxes

The income tax provision is calculated for all jurisdictions in which we operate. The income tax provision process involves calculating current taxes due and assessing temporary differences arising from items that are taxable or deductible in different periods for tax and accounting purposes and are recorded as deferred tax assets and liabilities. Deferred tax assets are evaluated for realizability and a valuation allowance is maintained for the portion of our deferred tax assets that are not more-likely-than-not realizable. All available evidence, both positive and negative, has been considered to determine whether, based on the weight of that evidence, a valuation allowance is needed against the deferred tax assets. Refer to Note 6, Income Taxes, within the accompanying consolidated financial statements for further information and discussion of our income tax provision and balances.

We file income tax returns in all jurisdictions in which we operate. We record a liability for uncertain tax positions taken or expected to be taken in income tax returns. Our consolidated financial statements reflect expected future tax consequences of such positions presuming the taxing authorities’ full knowledge of the position and all relevant facts. We record a liability for the portion of unrecognized tax benefits claimed that we have determined are not more-likely-than-not realizable. These tax reserves have been established based on management’s assessment as to the potential exposure attributable to our uncertain tax positions as well as interest and penalties attributable to these uncertain tax positions. All tax reserves are analyzed quarterly and adjustments are made as events occur that result in changes in judgment.

Contingencies

We are currently involved in or may become involved in various legal proceedings and claims, including, without limitation, patent infringement, product liability, breach of contract and employee-related matters. Accruals recorded for various contingencies including legal proceedings, employee related litigation, self-insurance and other claims are based on judgment, the probability of losses and, where applicable, the consideration of opinions of internal and/or external legal counsel and actuarially determined estimates. When a loss is probable and a range of loss is established but a best estimate cannot be made, we record the minimum loss contingency amount. These estimates are often initially developed substantially earlier than the ultimate loss is known and the estimates are reevaluated each accounting period, as additional information is available. When we are initially unable to develop a best estimate of loss, we record the minimum amount of loss, which could be zero. As information becomes known, an additional loss provision is recorded when either a best estimate can be made or the minimum loss amount is increased. When events result in an expectation of a more favorable outcome than previously expected, our best estimate is changed to a lower amount. With respect to the specific legal proceedings and claims described in Note 15 Commitments & Contingencies , unless otherwise noted, the amount or range of possible losses is not reasonably estimable. There can be no assurance that the settlement, resolution, or other outcome of one or more matters, including the matters set forth in Note 15 Commitments & Contingencies , during any subsequent reporting period will not have a material adverse effect on our results of operations or cash flows for that period or on the our financial condition.

Business Combinations

We record tangible and intangible assets acquired and liabilities assumed in business combinations under the purchase method of accounting. Amounts paid for each acquisition are allocated to the assets acquired and liabilities assumed based on their fair values at the dates of acquisition. The fair value of identifiable intangible assets is based on detailed valuations that use information and assumptions including forecasted cash flows, revenues attributable to existing technology and discount rates. When estimating the significant assumptions to be used in the valuation we included a consideration of current industry information, market and economic trends, historical results of the acquired business and other relevant factors. These significant assumptions are forward-looking and could be affected by future economic and market conditions. We allocate any excess purchase price over the fair value of the net tangible and intangible assets acquired and liabilities assumed to goodwill.

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Contingent consideration is recorded at fair value as measured on the date of acquisition using an appropriate valuation model, such as the Monte Carlo simulation model. The value recorded is based on estimates of future financial projections under various potential scenarios, in which the model runs many simulations based on comparable companies’ growth rates and their implied volatility. Our estimates of forecasted revenues in the earn out period include a consideration of current industry information, market and economic trends, historical results of the acquired business and other relevant factors. These cash flow projections are discounted with a risk adjusted rate. At each reporting period until such contingent amounts are earned, the fair value of the liability is remeasured and adjusted as a component of operating expenses based on changes to the underlying assumptions. The estimates used to determine the fair value of the contingent consideration liability are subject to significant judgment and given the inherent uncertainties in making these estimates, actual results are likely to differ from the amounts originally recorded and could be materially different.

In cases where we acquire a company in which we previously held an equity stake, we attribute a portion of the purchase price to the previously-held equity interest, which is implied based on the total purchase consideration allocable to each of the shareholders, including Haemonetics, according to priority of equity interests. We record a gain or loss in Interest and other expense, net in the consolidated statements of income equal to the difference between the implied fair value of our prior ownership and the book value immediately prior to the acquisition.