Item 7A. Quantitative and Qualitative Disclosures About Market Risk
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our exposures relative to market risk are due to foreign exchange risk and interest rate risk.
Foreign Exchange Risk
See the section above entitled Foreign Exchange for a discussion of how foreign currency affects our business. It is our policy to minimize, for a period of time, the unforeseen impact on our financial results of fluctuations in foreign exchange rates by using derivative financial instruments known as forward contracts to hedge anticipated cash flows from forecasted foreign currency denominated sales and costs. We do not use the financial instruments for speculative or trading activities.
We estimate the change in the fair value of all forward contracts assuming both a 10% strengthening and weakening of the U.S. Dollar relative to all other major currencies. As of March 28, 2026, in the event of a 10% strengthening of the U.S. Dollar, the change in fair value of all forward contracts would result in a $4.9 million increase in the fair value of the forward contracts, whereas a 10% weakening of the U.S. Dollar would result in a $6.0 million decrease in the fair value of the forward contracts.
Interest Rate Risk
Our exposure to changes in interest rates is associated with borrowings under our credit facilities, all of which is variable rate debt. Total outstanding debt under our senior unsecured term loan as of March 28, 2026 was $239.1 million with an effective interest rate of 5.6% based on prevailing Term SOFR rates. An increase of 100 basis points in Term SOFR rates would result in additional annual interest expense of $0.4 million. As of March 28, 2026 , the notional amount on our two active interest rate swap agreements to effectively convert borrowings under our 2024 Revised Credit Facilities from a variable rate to a fixed rate were $199.3 million . These interest rate swaps are intended to mitigate the exposure to fluctuations in interest rates and qualify for hedge accounting treatment as cash flow hedges.
Investment Risk
As part of our business development activities, we hold strategic investments in privately held entities, including preferred stock. Certain of these investments are accounted for under the equity method, as we have the ability to exercise significant influence over the operating and financial policies of the investees. For equity instruments that do not have readily determinable fair values and are not accounted for under the equity method, we apply the measurement alternative, recording them at cost less impairment. The carrying amount of these investments is subsequently adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer. In addition, these investments are periodically evaluated for impairment. There is also a risk that we could lose all or a substantial portion of our investment in these privately held entities depending on their solvency and ability to achieve their business objectives.
As part of our business development activities, we hold strategic investments in certain entities. We have made total strategic investments and loans totaling $19.2 million as of March 28, 2026 and $61.6 million as of March 29, 2025, including $48.7 million in strategic investments and loans to Vivasure as of March 29, 2025. On January 9, 2026 we completed the acquisition of Vivasure. Our strategic investments are classified as other long-term assets on our consolidated balance sheets, and we have not recorded any material adjustments to the carrying value of our strategic investments, other than those related to the Vivasure acquisition, in fiscal 2026 or fiscal 2025. For further discussion, refer to Note 3, Acquisitions, Divestitures and Strategic Investments, within the accompanying financial statements.
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Haemonetics Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Haemonetics Corporation and subsidiaries (the Company) as of March 28, 2026 and March 29, 2025, the related consolidated statements of income, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended March 28, 2026, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at March 28, 2026 and March 29, 2025, and the results of its operations and its cash flows for each of the three years in the period ended March 28, 2026, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of March 28, 2026, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated May 20, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
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Business combination
Description of the Matter As described in Note 3 to the consolidated financial statements, during fiscal year 2026, the Company completed the acquisition of Vivasure Medical Limited for a purchase price of $164.4 million, inclusive of contingent consideration with an initial fair value of $20.7 million. The acquisition was accounted for as a business combination.
Auditing the Company’s accounting for the business combination was complex due to the significant estimation required by management to determine the $117.1 million fair value of the acquired developed technology intangible asset. The significant estimation was primarily due to the judgmental nature of the inputs to the valuation model used to measure the fair value of the developed technology intangible asset. The Company used the income approach to measure the fair value of the developed technology intangible asset. The significant assumptions used to estimate the fair value of the intangible asset included the discount rate and certain assumptions that form the basis of the forecasted results, specifically revenue growth rates and EBITDA margin.
How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of the controls over the Company’s accounting for the business combination. We tested controls over the valuation of intangible assets, including the valuation models and underlying assumptions used to develop such estimates.
To test the fair value of the acquired developed technology intangible asset, our audit procedures included, among others, evaluating the significant assumptions used. We also tested the valuation model used. Our testing procedures over certain significant assumptions included, among others, comparing them to current industry and market trends and to the assumptions used by management to value similar assets in other acquisitions. We also performed sensitivity analyses of the significant assumptions to evaluate the change in the fair value resulting from changes in the assumptions. In addition, we involved valuation professionals to assist in our evaluation of the methodology, computations, and certain significant assumptions included in the fair value estimates.
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Valuation of goodwill
Description of the Matter As described in Note 10 to the consolidated financial statements, the Company had approximately $656 million of goodwill allocated among its reporting units as of March 28, 2026. The Company performs its annual impairment analysis as of the first day of the fourth quarter, and more frequently if the Company believes indicators of impairment exist. For reporting units tested quantitatively, the Company estimates the fair value primarily utilizing the discounted cash flow income approach.
Auditing the annual goodwill impairment test for the Interventional Technologies reporting unit was especially complex and judgmental due to the significant estimation required in the discounted cash flow income analysis utilized to determine the fair value. In particular, the fair value estimates involve judgmental assumptions including the amount and timing of expected future cash flows from revenue growth rates and the discount rate, which are affected by expectations about future market or economic conditions and reporting unit specific risk factors.
How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s goodwill impairment review process. For example, we tested controls over management's review of the significant inputs and assumptions used in determining the reporting unit fair value.
To test the estimated fair value of the Interventional Technologies reporting unit, we performed audit procedures that included, among others, assessing fair value estimation methodologies, testing the significant assumptions discussed above and the completeness and accuracy of the underlying data used by the Company in its analysis. We compared the significant assumptions used by management to historical financial results of the reporting unit and information generated by external parties. We considered the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the reporting unit that would result from changes in the assumptions. In addition, we involved our valuation professionals to assist in our evaluation of the significant assumptions used to develop the fair value estimates.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2002.
Boston, Massachusetts
May 20, 2026
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