What changed in this filing

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Item 1. Financial Statements

2026-08-10 compared with 2026-05-11 · 202 added, 153 removed, 337 unchanged (51% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

(in thousands, except per share data)

2 unchanged sentences

Selling, general and administrative expenses

Transaction breakage fee

Acquisition-related charges and intangible amortization

Exit and realignment (income) charges, net

Exit and realignment charges, net

Total operating costs and expenses

Operating income

Operating loss

Interest expense, net

Loss on modification and extinguishment of debt

Transaction financing fees, net

Other expense, net

Loss from continuing operations before income taxes

Income tax benefit

Income tax provision (benefit)

Loss from continuing operations, net of tax

11 unchanged sentences

Three Months Ended

Six Months Ended

(in thousands)

Other comprehensive income (loss), net of tax:

Other comprehensive (loss) income, net of tax:

Currency translation adjustments

1 unchanged sentence

Change in gains and losses on derivative instruments

Total other comprehensive income, net of tax

Total other comprehensive (loss) income, net of tax

Comprehensive loss

22 unchanged sentences

Long-term debt, excluding current portion

Operating lease liabilities, excluding current portion

Operating lease liabilities, excluding current portion of $ 38,397 and $ 43,272

Other liabilities

11 unchanged sentences

Total deficit

Total liabilities and (deficit) equity

Total liabilities and deficit

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

1 unchanged sentence

Loss from discontinued operations, net of tax

Adjustments to reconcile net loss to cash used for operating activities:

Adjustments to reconcile net loss to cash (used for) provided by operating activities:

Depreciation and amortization

Share-based compensation expense

Deferred income tax expense (benefit)

Deferred income tax (benefit) provision

Changes in operating lease right-of-use assets and lease liabilities

2 unchanged sentences

Accounts receivable, net

Inventories, net

Accounts payable

Net change in other assets and liabilities

Cash used for operating activities from discontinued operations

Cash used for operating activities

Cash provided by operating activities from discontinued operations

Cash (used for) provided by operating activities

Investing activities:

5 unchanged sentences

Financing activities:

Borrowings under Revolving Credit Facility

Repayments under Revolving Credit Facility

Borrowings under Revolving Credit Agreement

Repayments under Revolving Credit Agreement

( 1,495,184 )

Proceeds from debt issuance

Repayments of debt

( 1,237,315 )

Financing costs paid

Repurchase of common stock

Cash used for financing activities from discontinued operations

Cash provided by financing activities

Cash (used for) provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

Net increase in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

9 unchanged sentences

Condensed Consolidated Statements of Changes in (Deficit) Equity

(Accumulated Deficit)

Comprehensive

(in thousands, except per share data)

(Accumulated Deficit)

(Deficit) Equity

5 unchanged sentences

( 1,086,220 )

Other comprehensive loss

Share-based compensation expense, exercises and other

Balance, June 30, 2026

( 1,175,290 )

Balance, December 31, 2024

3 unchanged sentences

Balance, March 31, 2025

Other comprehensive income

Share-based compensation expense, exercises and other

Shares repurchased and retired

Balance, June 30, 2025

See accompanying notes to unaudited condensed consolidated financial statements.

11 unchanged sentences

Our continuing operations’ business activities comprise a single operating and reporting segment.

This determination is in accordance with ASC No.

280, Segment Reporting .

This determination is in accordance with ASC 280, Segment Reporting .

Reclassifications.

14 unchanged sentences

Accounts Receivable, Net.

Due to the nature of our industry and the reimbursement environment in which we operate, certain estimates are required to record net revenues and accounts receivable at their net realizable values, including estimating variable consideration.

Due to the nature of our industry and the reimbursement environment in which we operate, certain estimates are required to record net revenue and accounts receivable at their net realizable values, including estimating variable consideration.

Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available.

1 unchanged sentence

Such adjustments are typically identified and recorded at the point of cash application, claim amount or account review.

Included in accounts receivable were earned but unbilled receivables of $ 39 million as of March 31, 2026 and $ 30 million as of December 31, 2025.

Included in accounts receivable were earned but unbilled receivables of $ 33 million as of June 30, 2026 and $ 30 million as of December 31, 2025.

Delays, ranging from a single day to several weeks, between the date of service and billing can occur due to delays in obtaining certain required payor-specific documentation from internal and external sources.

6 unchanged sentences

Proceeds from the sales of accounts receivable were recorded as an increase to cash and cash equivalents and a reduction to accounts receivable, net in the condensed consolidated balance sheets.

Cash received from the sales of accounts receivable is reflected in the change in accounts receivable within cash provided by operating activities in the condensed consolidated statements of cash flows.

Total accounts receivable sold and net cash proceeds under the Receivables Sale Program were $ 343 million during the three months ended March 31, 2025, approximately $ 69 million of which related to continuing operations.

We collected $ 209 million of the sold accounts receivable during the three months ended March 31, 2025, approximately $ 42 million of which related to continuing operations.

The losses on sales of accounts receivable of continuing operations, inclusive of professional fees incurred to establish the agreement, recorded in selling, general, and administrative (SG&A) expenses in the condensed consolidated statements of operations were $ 0.4 million for the three months ended March 31, 2025.

Cash received from the sales of accounts receivable is reflected in the change in accounts receivable, net within cash (used for) provided by operating activities in the condensed consolidated statements of cash flows.

Total accounts receivable sold and net cash proceeds under the Receivables Sale Program were $ 496 million and $ 840 million during the three and six months ended June 30, 2025, approximately $ 99 million and $ 168 million of which related to continuing operations.

We collected $ 495 million and $ 704 million of the sold accounts receivable during the three and six months ended June 30, 2025, approximately $ 99 million and $ 141 million of which related to continuing operations.

The losses on sales of accounts receivable of continuing operations, inclusive of professional fees incurred to establish the agreement, recorded in selling, general, and administrative expenses (SG&A) in the condensed consolidated statements of operations were $ 0.6 million and $ 1.1 million for the three and six months ended June 30, 2025.

In connection with the amendment to the Receivables Sale Program, as described below, any uncollected accounts receivable sold were settled on December 31, 2025.

6 unchanged sentences

The Amended Receivables Sale Program has a scheduled termination date of October 18, 2027.

Total accounts receivable sold under the Amended Receivables Sale Program were $ 246 million during the three months ended March 31, 2026.

We collected $ 231 million of the sold accounts receivable during the three months ended March 31, 2026.

The losses on sale of accounts receivable recorded in SG&A were $ 1.5 million for the three months ended March 31, 2026.

As of March 31, 2026 and December 31, 2025, there was a total of $ 148 million and $ 134 million of uncollected accounts receivable sold and removed from our condensed consolidated balance sheets under the Amended Receivables Sale Program.

Total accounts receivable sold under the Amended Receivables Sale Program were $ 221 million and $ 466 million during the three and six months ended June 30, 2026.

We collected $ 239 million and $ 470 million of the sold accounts receivable during the three and six months ended June 30, 2026.

The losses on sales of accounts receivable recorded in SG&A were $ 1.8 million and $ 3.3 million for the three and six months ended June 30, 2026.

As of June 30, 2026 and December 31, 2025, there was a total of $ 130 million and $ 134 million of uncollected accounts receivable sold and removed from our condensed consolidated balance sheets under the Amended Receivables Sale Program.

Retirement Plan.

1 unchanged sentence

Retirement Plan).

As of March 31, 2026 and December 31, 2025, the accumulated benefit obligation of the U.S.

As of June 30, 2026 and December 31, 2025, the accumulated benefit obligation of the U.S.

Retirement Plan was $ 30 million and $ 31 million.

3 unchanged sentences

Revenue generated from equipment that we rent to customers is primarily recognized as earned on a straight-line basis over the non-cancellable rental period, typically one month, and commences on delivery of the equipment to the customers.

Certain revenues are recognized under arrangements with third-party payors for which we stand ready to provide all necessary healthcare services to members for the period of the stand ready obligation which generally

extends beyond one year.

These agreements are generally referred to as capitation arrangements.

2 unchanged sentences

Capitation payments are typically received in the month members are entitled to healthcare services.

Revenue for these agreements amounted to $ 32 million and $ 60 million for the three months ended March 31, 2026 and 2025.

Revenue for these agreements amounted to $ 4.4 million and $ 37 million for the three and six months ended June 30, 2026 and $ 61 million and $ 121 million for the three and six months ended June 30, 2025.

Fee-for-service arrangement revenues are recorded only to the extent it is probable that a significant reversal will not occur in the future as amounts may include implicit price concessions under reimbursement arrangements with third-party payors, including private insurers, prepaid health plans, Medicare, Medicaid and customers.

2 unchanged sentences

Payment terms and conditions vary by contract.

Sales of equipment and supplies inclusive of amounts recognized under capitation arrangements for the three months ended March 31, 2026 and 2025 were $ 481 million and $ 504 million.

Rental revenues inclusive of amounts recognized under capitation arrangements for the three months ended March 31, 2026 and 2025 were $ 146 million and $ 170 million.

The following table summarizes net revenue by product category for the three months ended March 31, 2026 and 2025:

Sales of equipment and supplies inclusive of amounts recognized under capitation arrangements were $ 482 million and $ 963 million for the three and six months ended June 30, 2026 and $ 511 million and $ 1.0 billion for the three and six months ended June 30, 2025.

Rental revenues inclusive of amounts recognized under capitation arrangements were $ 132 million and $ 278 million for the three and six months ended June 30, 2026 and $ 171 million and $ 341 million for the three and six months ended June 30, 2025.

The following table summarizes net revenue by product category for the three and six months ended June 30, 2026 and 2025:

Three Months Ended

Six Months Ended

Sleep therapy

Home respiratory therapy

The following table summarizes net revenue by payor type for the three months ended March 31, 2026 and 2025:

The following table summarizes net revenue by payor type for the three and six months ended June 30, 2026 and 2025:

Three Months Ended

Six Months Ended

Commercial payors (1)

2 unchanged sentences

Cost of net revenue includes the cost of products sold, patient service equipment depreciation expense, and other costs which are primarily personnel costs related to the set-up and utilization of equipment.

Cost of product sold includes non-cash expenses primarily for equipment converted from rental to sales in the amount of $ 10 million and $ 12 million for the three months ended March 31, 2026 and 2025.

The following table summarizes cost of net revenue for the three months ended March 31, 2026 and 2025:

Cost of products sold includes non-cash expenses primarily for equipment converted from rental to sales in

the amount of $ 8.5 million and $ 19 million for the three and six months ended June 30, 2026 and $ 14 million and $ 26 million for the three and six months ended June 30, 2025.

The following table summarizes cost of net revenue for the three and six months ended June 30, 2026 and 2025:

Three Months Ended

Cost of product sold

Six Months Ended

Cost of products sold

Patient service equipment depreciation

Cost of net revenue

Transaction Breakage Fee.

As previously disclosed, on July 22, 2024, we entered into an Agreement and Plan of Merger (the Merger Agreement) pursuant to which we agreed to acquire Rotech Healthcare Holdings Inc.

(Rotech) subject to the terms and conditions within the Merger Agreement.

On June 3, 2025, the Company, Rotech and Hitchcock Merger Sub Inc.

(Merger Sub) mutually agreed to terminate the Merger Agreement and entered into a mutual termination agreement (the Termination Agreement).

In accordance with the terms of the Termination Agreement, we incurred and made a cash payment to Rotech of $ 80 million during the three and six months ended June 30, 2025.

Acquisition-Related Charges and Intangible Amortization.

Acquisition-related charges consist primarily of one-time costs related to the terminated acquisition of Rotech Healthcare Holdings Inc.

(Rotech), which consisted primarily of legal and professional fees.

For the three months ended March 31, 2026, we incurred no acquisition-related costs.

For the three months ended March 31, 2025, we incurred $ 16 million of acquisition-related costs.

Acquisition-related charges consist primarily of one-time costs related to the terminated acquisition of Rotech, which consisted primarily of legal and professional fees.

For the three and six months ended June 30, 2026, we incurred no acquisition-related charges.

For the three and six months ended June 30, 2025, we incurred $ 6.4 million and $ 22 million of acquisition-related charges.

Acquisition-related charges and intangible amortization also include amortization of intangible assets established during acquisition method of accounting for business combinations.

These amounts are highly dependent on the size and frequency of acquisitions.

Other Liabilities.

Other liabilities include $ 115 million of principal recapture resulting from our Balance Sheet Optimization Transaction, as defined and described in Note 5.

The principal recapture liability does not represent a cash settled obligation and will be amortized ratably through the life of the Secured Notes, as defined and described in Note 5, through interest expense, net.

F air value is determined based on assumptions that a market participant would use in pricing an asset or liability.

1 unchanged sentence

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued payroll and related liabilities reported in the condensed consolidated balance sheets approximate fair value due to the short-term nature of these instruments.

When a quantitative goodwill test is performed, the estimated fair value of our reporting unit is determined with the use of unobservable inputs (Level 3).The fair value of debt is estimated based on quoted market prices or dealer quotes for the identical liability when traded as an asset in an active market (Level 1) or, if quoted market prices or dealer quotes are not available, on the borrowing rates currently available for loans with similar terms, credit ratings, and average remaining maturities (Level 2).

When a quantitative goodwill test is performed, the estimated fair value of our reporting unit is determined with the use of unobservable inputs (Level 3).

The fair value of debt is estimated based on quoted market prices or dealer quotes for the identical liability when traded as an asset in an active market (Level 1) or, if quoted market prices or dealer quotes are not available, on the borrowing rates currently available for loans with similar terms, credit ratings, and average remaining maturities (Level 2).

See Note 5 for the fair value of debt.

5 unchanged sentences

The P&HS business was initially classified as discontinued operations and assets held for sale as of June 30, 2025.

Accordingly, the results of operations from our P&HS business are reported in the accompanying condensed consolidated statements of operations as “loss from discontinued operations, net of tax” for the three months ended March 31, 2025.

Accordingly, the results of operations from our P&HS business are reported in the accompanying condensed consolidated statements of operations as loss from discontinued operations, net of tax for the three and six months ended June 30, 2025.

We have allocated interest expense, net to discontinued operations as a ratio of net assets and total debt in accordance with ASC 205, Presentation of Financial Statements .

On December 31, 2025, we received cash proceeds of $ 342 million and recorded a $ 20 million investment for a 5 % retained equity interest, which was recorded in other assets, net on our condensed consolidated balance sheet as of December 31, 2025.

Net proceeds of $ 324 million from the P&HS Sale, net of cash sold, reflects $ 342 million of cash proceeds received and $ 18 million of P&HS cash conveyed.

Net proceeds of $ 324 million from the P&HS Sale, net of cash sold, reflect $ 342 million of cash proceeds received and $ 18 million of P&HS cash conveyed.

The final purchase price will be determined subsequent to the completion of the sale to reflect adjustments in accordance with the Purchase Agreement, including final net working capital adjustments.

As of December 31, 2025, we estimated a purchase price adjustment receivable of approximately

$ 12 million to $ 15 million, which was recorded within other current assets on our condensed consolidated balance sheet.

As of December 31, 2025, we estimated a purchase price adjustment receivable of approximately $ 12 million to $ 15 million, which was recorded within other current assets on our condensed consolidated balance sheet.

Subsequent changes in fair value will be recorded within discontinued operations.

During the three months ended March 31, 2026, we incurred $ 18 million in separation costs to be reimbursed by the Company which are recorded within exit and realignment (income) charges, net on our condensed consolidated statement of operations and within accounts payable on our condensed consolidated balance sheet.

We have agreed to reimburse the Purchaser and its affiliates for 80 % of certain costs incurred in connection with the separation of P&HS from the Company’s retained business, subject to an aggregate cap of $ 65 million.

We will be obligated to reimburse the Purchaser for any such costs incurred after December 31, 2025, except that such reimbursements will not need to be paid:

We will be obligated to reimburse the Purchaser for any such costs incurred after December 31, 2025, except that such reimbursements did not and will not need to be paid:

(1) in advance of April 1, 2026;

(2) for amounts in excess of $ 15 million prior to October 1, 2026, or (3) for amounts in excess of $ 55 million prior to January 1, 2027.

We and the Purchaser will provide certain transition services to the other party pursuant to a certain customary transition services agreement (TSA).

During the three and six months ended June 30, 2026, we incurred $ 17 million and $ 35 million in separation costs to be reimbursed to the Purchaser which are recorded within exit and realignment charges, net on our condensed consolidated statement of operations and within accounts payable and other current liabilities on our condensed consolidated balance sheet.

We and the Purchaser provide certain transition services to the other party pursuant to a certain customary transition services agreement (TSA).

Pursuant to the terms of the TSA, we have agreed that, in certain circumstances, we may be obligated to provide up to $ 115 million in credit support to the P&HS business.

The TSA includes customary services including information technology support and is anticipated to be substantially completed within two years , with some services being completed by December 31, 2026.

During the three months ended March 31, 2026, we have incurred $ 8.7 million in net fees for services received and for services provided under the TSA which are recorded within selling, general, and administrative expenses, net on our condensed consolidated statement of operations.

During the three months ended March 31, 2026, we exited certain TSA activities and replaced them with internal capabilities.

The TSA includes customary services including information technology support and is anticipated to be substantially completed within two years of the P&HS Sale, with some services being completed by December 31, 2026.

During the three and six months ended June 30, 2026, we have incurred $ 7.7 million and $ 16 million in net fees for services received and for services provided under the TSA which are recorded within SG&A on our condensed consolidated statement of operations.

During the six months ended June 30, 2026, we exited certain TSA activities and replaced them with internal capabilities.

We expect to continue to exit certain TSA activities and replace with internal capabilities throughout the remainder of 2026.

The following table summarizes the financial results of our discontinued operations for the three months ended March 31, 2025:

The following table summarizes the financial results of our discontinued operations for the three and six months ended June 30, 2025:

Three Months Ended

March 31, 2025

Six Months Ended

June 30, 2025

Cost of goods sold

2 unchanged sentences

Exit and realignment charges, net

Goodwill impairment charge

Loss on classification to held for sale

Other operating expense, net

5 unchanged sentences

Loss from discontinued operations, net of tax

Total accounts receivable sold and net cash proceeds under the Receivables Sale Program were $ 343 million during the three months ended March 31, 2025, approximately $ 274 million of which related to discontinued operations.

We collected $ 209 million of the sold accounts receivable during the three months ended March 31, 2025, approximately $ 167 million of which related to discontinued operations.

The losses on sales of accounts receivable of continuing operations, inclusive of professional fees incurred to establish the agreement, recorded in loss on discontinued operations, net of tax in the condensed consolidated statements of operations were $ 1.7 million for the three months ended March 31, 2025.

Total accounts receivable sold and net cash proceeds under the Receivables Sale Program were $ 496 million and $ 840 million during the three and six months ended June 30, 2025, approximately $ 397 million and $ 672 million of which related to discontinued operations.

We collected $ 495 million and $ 704 million of the sold accounts receivable during the three and six months ended June 30, 2025, approximately $ 396 million and $ 563 million of which related to discontinued operations.

The losses on sales of accounts receivable were $ 3.1 million and $ 5.2 million for the three and six months ended June 30, 2025, $ 2.5 million and $ 4.1 million of which relate to losses recorded in other operating expense, net in the financial results from discontinued operations.

As of December 31, 2025, there was no uncollected accounts receivable sold and removed from our consolidated balance sheet related to discontinued operations.

Note 3—Goodwill and Intangible Assets, Net

At March 31, 2026 and December 31, 2025, we had goodwill of $ 1.2 billion, net of accumulated goodwill impairment of $ 307 million.

Intangible assets, net subject to amortization, at March 31, 2026 and December 31, 2025 were as follows:

March 31, 2026

At June 30, 2026 and December 31, 2025, we had goodwill of $ 1.2 billion, net of accumulated goodwill impairment of $ 307 million.

Intangible assets, net subject to amortization at June 30, 2026 and December 31, 2025 were as follows:

June 30, 2026

December 31, 2025

5 unchanged sentences

Weighted average useful life

Amortization expense for intangible assets was $ 29 million for the three months ended March 31, 2026 and $ 7.6 million for the three months ended March 31, 2025.

Amortization expense for intangible assets was $ 29 million and $ 58 million for the three and six months ended June 30, 2026 and $ 7.6 million and $ 15 million for the three and six months ended June 30, 2025.

The increase as compared to the prior year was driven by the remaining useful life for an intangible asset being modified as of June 30, 2025, as a result of a notice of a contract termination with a commercial Payor.

The updated future intangible amortization is reflected in the table below.

As of March 31, 2026, based on the current carrying value of intangible assets subject to amortization and expected remaining useful life, estimated amortization expense was as follows:

As of June 30, 2026, this customer relationship intangible asset has been fully amortized and removed from our condensed consolidated balance sheet.

As of June 30, 2026, based on the current carrying value of intangible assets subject to amortization and expected remaining useful life, estimated amortization expense was as follows:

2026 (remainder)

Total future amortization

Note 4—Exit and Realignment (Income) Charges, Net

We incur exit and realignment and other charges associated with optimizing our operations which include IT strategic initiatives and other strategic actions.

These charges include professional fees, severance and other costs to streamline functions and enhance processes and separation costs.

Separation costs primarily consist of professional fees including costs reimbursable to the Purchaser as described below and other wind-down costs incurred after the divestiture of the P&HS business.

These costs are not normal, cash operating expenses necessary for the Company to operate its business on an ongoing basis.

Exit and realignment (income) charges, net were $( 24 ) million and $ 14 million for the three months ended March 31, 2026 and 2025.

These charges were primarily related to strategic operational improvements to increase net revenue and lower costs.

During the three months ended March 31, 2026 exit and realignment income, net also included a $ 52 million gain on sales of patient service equipment in connection with the contract termination with a commercial Payor and P&HS Sale separation costs.

During the three months ended March 31, 2025 exit and realignment charges, net also include a provision to accounts receivable related to our Fusion5 business which was in the process of being wound down.

As a result of the sale of our P&HS business, we have incurred $ 18 million in reimbursable separation costs during the three months ended March 31, 2026.

Note 4—Exit and Realignment Charges, Net

We incur exit and realignment and other charges associated with optimizing our operations which include IT strategic initiatives and other strategic actions, professional fees, severance and other costs to streamline functions and enhance processes and separation costs.

Separation costs primarily consist of professional fees including costs reimbursable to the Purchaser as described below and other wind-down costs incurred after the sale of the P&HS business.

These costs are not normal recurring, cash operating expenses necessary for the Company to operate its business on an ongoing basis.

Exit and realignment charges, net were $ 26 million and $ 2.2 million for the three and six months ended June 30, 2026 and $ 2.5 million and $ 16 million for the three and six months ended June 30, 2025.

During the three and six months ended June 30, 2026 exit and realignment charges, net included a $ 0.6 million loss and $( 51 ) million gain on

sales of patient service equipment in connection with the contract termination with a commercial Payor and P&HS Sale separation costs.

During the six months ended June 30, 2025 exit and realignment charges, net also include a provision to accounts receivable related to our Fusion5 business which was in the process of being wound down.

As a result of the sale of our P&HS business, we have incurred $ 17 million and $ 35 million in reimbursable separation costs during the three and six months ended June 30, 2026.

We expect to incur up to $ 65 million in exit and realignment costs associated with reimbursement to the Purchaser for certain future separation costs incurred by the Purchaser, as described in Note 2.

The following table summarizes the activity related to exit and realignment cost accruals, which are generally classified as other current liabilities or accounts payable in our condensed consolidated balance sheets, through March 31, 2026 and 2025:

Accrued exit and realignment costs, December 31, 2025

5 unchanged sentences

Accrued exit and realignment costs, March 31, 2026

Provision for exit and realignment activities:

P&HS Sale separation costs

Professional fees

IT and other strategic initiatives

Cash payments

Accrued exit and realignment costs, June 30, 2026

Accrued exit and realignment costs, December 31, 2024

4 unchanged sentences

Accrued exit and realignment costs, March 31, 2025

In addition to the exit and realignment accruals in the preceding table and the $ 52 million gain on patient service equipment, we also incurred $ 4.1 million of costs that were expensed as incurred during the three months ended March 31, 2026, which primarily related to P&HS Sale separation costs and $ 7.1 million of costs that were expensed as incurred for the three months ended March 31, 2025, which primarily related to wind-down costs of Fusion5.

Debt, net of unamortized deferred financing costs, as of March 31, 2026 and December 31, 2025 consisted of the following:

March 31, 2026

Provision for exit and realignment activities:

Professional fees

IT strategic initiatives and other

Cash payments

Accrued exit and realignment costs, June 30, 2025

In addition to the exit and realignment accruals in the preceding table and the $ 0.6 million loss and $( 51 ) million gain on sales of patient service equipment, we also incurred $ 0.2 million and $ 4.2 million of costs that were expensed as incurred during the three and six months ended June 30, 2026, which primarily related to P&HS Sale separation costs and $ 0.4 million and $ 7.6 million of costs that were expensed as incurred for the three and six months ended June 30, 2025, which primarily related to wind-down costs of Fusion5.

Debt, net of unamortized deferred financing costs, as of June 30, 2026 and December 31, 2025 consisted of the following:

June 30, 2026

December 31, 2025

Revolving Credit Facility

Revolving Credit Agreement

4.500 % Senior Notes, due March 2029

6.625 % Senior Notes, due April 2030

9.000 % Senior Secured Notes, due June 2032

9.750 % Senior Secured Notes, due June 2033

Less current maturities, including anticipated repayments

Long-term debt

On March 29, 2022, we entered into a term loan credit agreement with an administrative agent and collateral agent and a syndicate of financial institutions, as lenders (the Credit Agreement) that provides for two credit facilities:

(i) a $ 500 million Term Loan A facility (the Term Loan A), and (ii) a $ 600 million Term Loan B facility (the Term Loan B).

The interest rate on the Term Loan A is based on the sum of either Term SOFR or the Base Rate and an Applicable Rate which varies depending on the current Debt Ratings or Total Leverage Ratio, determined as to whichever shall result in more favorable pricing to the Borrowers (each as defined in the Credit Agreement).

The interest rate on the Term Loan B is based on either the Term SOFR or the Base Rate plus an Applicable Rate.

The Term Loan A will mature in March 2027 and the Term Loan B will mature in March 2029.

The Term Loan A and Term Loan B have $ 326 million and $ 511 million of principal outstanding excluding unamortized deferred financing costs as of March 31, 2026.

On March 10, 2021, we issued $ 500 million of 4.500 % senior unsecured notes due in March 2029 (the 2029 Unsecured Notes), with interest payable semi-annually.

The 2029 Unsecured Notes were sold at 100 % of the principal amount with an effective yield of 4.500 %.

The 2029 Unsecured Notes have $ 479 million in principal outstanding excluding unamortized deferred financing costs as of March 31, 2026.

On March 29, 2022, we issued $ 600 million of 6.625 % senior unsecured notes due in April 2030 (the 2030 Unsecured Notes), with interest payable semi-annually.

The 2030 Unsecured Notes were sold at 100 % of the principal amount with an effective yield of 6.625 %.

The 2030 Unsecured Notes have $ 552 million in principal outstanding excluding unamortized deferred financing costs as of March 31, 2026.

The 2029 Unsecured Notes and the 2030 Unsecured Notes are subordinated to any of our secured indebtedness, including indebtedness under our credit agreements.

On March 29, 2022, we entered into an amendment to our revolving credit agreement, dated as of March 10, 2021 with an administrative agent and collateral agent and a syndicate of financial institutions, as lenders (Revolving Credit Agreement).

The amendment:

(i) increased the aggregate revolving credit commitments under the Revolving Credit Agreement by $ 150 million, to an aggregate amount of $ 450 million and (ii) replaced the Eurocurrency Rate with the Adjusted Term SOFR Rate (each as defined in the Revolving Credit Agreement).

The Revolving Credit Agreement matures in March 2027.

At March 31, 2026 and December 31, 2025, we had $ 255 million and $ 204 million in outstanding borrowings on our Revolving Credit Agreement.

At March 31, 2026 and December 31, 2025, we had letters of credit, which reduce Revolving Credit Agreement availability, totaling $ 29 million and $ 30 million, leaving $ 166 million and $ 217 million available for borrowing.

As of March 31, 2026, the Term Loan A and the Revolving Credit Agreement are scheduled to mature within twelve months.

Absent refinancing, extension, or repayment of these obligations, the Company would need additional liquidity to meet its obligations as they come due during the twelve-month period following the issuance of these financial statements.

On May 11, 2026, we announced that we have received commitments from existing creditors to exchange and/or extend a substantial portion of our debt, which would extend the maturity of these obligations beyond twelve months from the balance sheet date (Balance Sheet Optimization Transaction), subject to satisfaction of certain customary conditions.

Based on the signed commitments received and the actions planned and described below, management expects the Company will have sufficient liquidity to meet its obligations as they come due during the twelve-month period following the issuance of these financial statements.

We intend to amend and extend the Revolving Credit Agreement into a revolving credit facility maturing in 2030, subject to earlier maturity in December 2028 based on the amount of certain levels of future indebtedness, with aggregate commitments of up to $ 300 million, for which, subsequent to the balance sheet date, we received commitments from existing lenders under the Revolving Credit Agreement.

We anticipate repaying the existing Revolving Credit Agreement using the proceeds from the P&HS business sale.

We intend to refinance the Term Loan A through the proceeds from the new 9.000 % senior secured first lien notes due 2032 to be issued in connection with the Balance Sheet Optimization Transaction, for which subsequent to the balance sheet date, we received commitments from certain holders of the 2029 Unsecured Notes and 2030 Unsecured Notes, subject to satisfaction of certain customary conditions.

While we have the intent and ability to refinance the Term Loan A beyond the next twelve months, these commitments expire within twelve months of the balance sheet date and therefore, the outstanding balance of the Term Loan A has been classified as a current liability as of March 31, 2026.

In addition to the impacts to the Term Loan A and the Revolving Credit Agreement described above, the Balance Sheet Optimization Transaction will include offers to exchange the 2029 Unsecured Notes into a combination of new 9.000 % senior secured first lien notes due 2032 and new 9.750 % senior secured second lien notes due 2033, as well as the 2030 Unsecured Notes into new 9.750 % senior secured second lien notes due 2033.

The Revolving Credit Agreement, the Credit Agreement, the 2029 Unsecured Notes and the 2030 Unsecured Notes contain cross-default provisions which could result in the acceleration of payments due in the event of default of any of the related agreements.

The Term Loan A was extinguished on June 15, 2026 as described below.

The interest rate on the Term Loan B is based on either the Term SOFR or the Base Rate plus an Applicable Rate, as defined in the Credit Agreement.

The Term Loan B matures in March 2029 and has $ 511 million of principal outstanding excluding unamortized deferred financing costs as of June 30, 2026.

In June 2026, we exchanged and/or extended a substantial portion of our debt (the Balance Sheet Optimization Transaction).

In exchange (the Exchange Offers) for our outstanding 4.500 % Senior Notes due 2029 (the 2029 Notes) and 6.625 % Senior Notes due 2030 (the 2030 Notes and together with the 2029 Notes, the Unsecured Notes), we offered (i) newly issued 9.000 % Senior Secured First Lien Notes due 2032 (the 2032 Notes) to holders that participated in the new money issuance of the First Lien Notes and (ii) newly issued 9.750 % Senior Secured Second Lien Notes due 2033 (the 2033 Notes, and together with the 2032 Notes, the Secured Notes).

In connection with the Exchange Offers for the 2029 Notes, we offered $ 326 million in aggregate principal amount of the newly issued 2032 Notes for cash.

The Secured Notes were issued and guaranteed on a senior secured basis by the Company’s existing and future wholly owned domestic subsidiaries (including each subsidiary guarantor of the Unsecured Notes), subject to certain exceptions.

The 2032 Notes were used to extinguish the $ 326 million in outstanding principal on the Term Loan A.

At the expiration of the Exchange Offers, $ 478 million in aggregate principal amount of 2029 Notes were tendered and $ 548 million in aggregate principal amount of 2030 Notes were tendered and cancelled representing approximately 99.9 % and 99.2 % of the principal outstanding.

Following such cancellation, and as of June 30, 2026, $ 0.3 million in aggregate principal amount of the 2029 Notes and $ 4.2 million in aggregate principal amount of the 2030 Notes remain outstanding.

The Unsecured Notes are effectively subordinated to any of our secured indebtedness, including the Secured Notes and outstanding indebtedness under our credit agreements.

The Exchange Offers of the Unsecured Notes for Secured Notes have been accounted for as a modification of debt in accordance with ASC 470, Debt .

The 2032 Notes bear interest at a rate of 9.000 % per year, payable semi-annually in cash in arrears on June 15 and December 15 of each year, commencing December 15, 2026.

We may redeem at any time and from time to time, all or part of the 2032 Notes, prior to June 15, 2029, at a price equal to 100 % of the principal amount to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, plus a “make-whole” premium, as described

in the First Lien Indenture.

On and after June 15, 2029, we may redeem all or part of the 2032 Notes at the applicable redemption prices described in the First Lien Indenture.

The 2032 Notes will mature in June 2032 and have $ 539 million of principal outstanding excluding unamortized deferred financing costs as of June 30, 2026.

The 2033 Notes bear interest at a rate of 9.750 % per year, payable semi-annually in cash in arrears on June 15 and December 15 of each year, commencing December 15, 2026.

We may redeem at any time and from time to time, all or part of the 2033 Notes, prior to June 15, 2029, at a price equal to 100 % of the principal amount to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, plus a “make-whole” premium, as described in the Second Lien Indenture.

On and after June 15, 2029, we may redeem all or part of the 2033 Notes at the applicable redemption prices described in the Second Lien Indenture.

The 2033 Notes will mature in June 2033 and have $ 698 million of principal outstanding excluding unamortized deferred financing costs as of June 30, 2026.

The completion of the Balance Sheet Optimization Transaction resulted in a loss on modification and extinguishment of debt of $ 17 million, including $ 16 million debt modification third party fees and $ 0.8 million in recognition of previously deferred debt issuance costs.

On June 15, 2026, we entered into an amendment, extending the maturity date to January 2030 with potential springing maturities, the earliest being December 2028, to our revolving credit agreement, dated as of March 10, 2021 and with an administrative agent and collateral agent and a syndicate of financial institutions, as lenders (Revolving Credit Agreement).

The amendment decreased the aggregate revolving credit commitments under the Revolving Credit Agreement by $ 150 million, to an aggregate amount of $ 300 million.

At June 30, 2026, we had no outstanding borrowings on our Revolving Credit Agreement and letters of credit outstanding, which reduce Revolving Credit Agreement availability, totaling $ 29 million, leaving $ 271 million available for borrowing.

At December 31, 2025, we had $ 204 million in outstanding borrowings on our Revolving Credit Agreement and letters of credit outstanding, which reduce Revolving Credit Agreement availability, totaling $ 30 million, leaving $ 217 million available for borrowing.

The Revolving Credit Agreement, the Credit Agreement, the 2032 Notes and the 2033 Notes contain cross-default provisions which could result in the acceleration of payments due in the event of default of any of the related agreements.

The terms of the applicable credit agreements also require us to maintain ratios for leverage and interest coverage, including on a pro forma basis in the event of an acquisition or divestiture.

We were in compliance with our debt covenants at March 31, 2026.

As of March 31, 2026, future principal payments due under our debt agreements or anticipated to be repaid within twelve months, excluding the impact of the Balance Sheet Optimization Transaction described above, were as follows:

Current maturities at March 31, 2026 include $ 255 million in debt anticipated to be repaid within the next twelve months in connection with net cash proceeds received from the P&HS business sale and $ 326 million in principal outstanding on the Term Loan A which matures in March 2027.

We were in compliance with our debt covenants at June 30, 2026.

As of June 30, 2026, future principal payments due under our debt agreements were as follows:

2026 (remainder)

There are no current maturities at June 30, 2026.

Note 6—Derivatives

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We do not enter into derivative financial instruments for trading purposes.

We pay interest on our Credit Agreement at rates that fluctuate based on changes in benchmark interest rates.

In order to mitigate the risk of increases in benchmark rates on our term loans, we entered into an interest rate swap agreement whereby we agree to exchange with the counterparty, at specified intervals, the difference between fixed and variable amounts calculated by reference to the notional amount.

The interest rate swaps were designated as cash flow hedges.

Cash flows related to the interest rate swap agreement are included in interest expense, net.

We determine the fair value of our interest rate swaps based on observable market-based inputs or unobservable inputs that are corroborated by market data.

We do not view the fair value of our derivatives in isolation, but rather in relation to the fair values or cash flows of the underlying exposure.

All derivatives are carried at fair value in our condensed consolidated balance sheets.

We consider the risk of counterparty default to be minimal.

We report cash flows from our hedging instruments in the same cash flow statement category as the hedged items.

The following table summarizes the terms and fair value of our outstanding cash flow hedges as of March 31, 2026 and December 31, 2025:

March 31, 2026

We voluntarily terminated our interest rate swap in May 2026, which resulted in a cash receipt of $ 1.4 million, net of fees and the removal of the derivative asset from our condensed consolidated balance sheet.

At the time of the termination, the total amount of gain deferred in accumulated other comprehensive income (AOCI) related to the terminated interest rate swap was $ 1.5 million which will be reclassified into earnings as an adjustment to interest expense, net when the originally hedged interest payments affect earnings.

We expect the full AOCI derivative amount to be reclassified into earnings through March 2027.

The following table summarizes the terms and fair value of our outstanding cash flow hedge as of December 31, 2025:

December 31, 2025

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Classification

other current assets

Other assets, net

The notional amount of the interest rate swaps represents the amount in effect at the end of the period.

Based on contractual terms, the notional amount will decrease in increments of $ 50 million on the last business day of March of each year until the maturity date.

The following table summarizes the effect of cash flow hedge accounting on our condensed consolidated statements of operations for the three months ended March 31, 2026 and 2025:

The following table summarizes the effect of cash flow hedge accounting on our condensed consolidated statements of operations for the three and six months ended June 30, 2026 and 2025:

Three Months Ended

Amount of Gain Recognized in Other Comprehensive Income (Loss)

Location of Gain Reclassified from Accumulated Other Comprehensive Loss into Income

Six Months Ended

Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss)

Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income

Interest expense, net

Total Amount of Expense Line Items Presented in the Condensed Consolidated Statements of Operations in Which the Effects are Recorded

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Note 7—Income Taxes

The effective tax rate was 60.2 % for the three months ended March 31, 2026, compared to 29.4 % for the three months ended March 31, 2025.

The change in these rates was primarily from changes in results of operations and changes in forecasted results reflected in the tax rates.

The liability for unrecognized tax benefits was $ 32 million and $ 49 million at March 31, 2026 and December 31, 2025.

Included in the liability at March 31, 2026 and December 31, 2025 were no tax positions for which ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

The effective tax rate was ( 1.6 )% and 8.0 % for the three and six months ended June 30, 2026, compared to 1.3 % and 3.0 % for the three and six months ended June 30, 2025.

The change in these rates was primarily from changes in results of operations, primarily due to the tax impact of the completion of the Balance Sheet Optimization Transaction in the second quarter of 2026, and the tax treatment associated with the $ 80 million transaction breakage fee recorded in the second quarter of 2025.

The liability for unrecognized tax benefits was $ 33 million and $ 49 million at June 30, 2026 and December 31, 2025.

Included in the liability at June 30, 2026 and December 31, 2025 were no tax positions for which ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

The deferred tax

asset balance within other assets, net on our condensed consolidated balance sheet was $ 135 million and $ 78 million at June 30, 2026 and December 31, 2025.

On August 26, 2020, we received a Notice of Proposed Adjustment (NOPA) from the Internal Revenue Service (IRS) regarding our 2015 and 2016 consolidated income tax returns.

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Within the NOPAs, the IRS has asserted that our taxable income for the aforementioned years should be higher based on their assessment of the appropriate amount of taxable income that we should report in the U.S.

in connection with our sourcing of products by our foreign subsidiaries for sale in the U.S.

by our domestic subsidiaries.

in connection with the sourcing of products by our former foreign subsidiaries for sale in the U.S.

by our former domestic subsidiaries.

These former foreign and domestic subsidiaries were sold as part of the P&HS Sale.

The transfer pricing methodology was consistently applied for all years subject to the NOPAs and 2019 into 2022, but is no longer employed.

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The uncertain tax position for these years and related accrued interest have been remeasured to reflect the final amount to be paid.

This matter does not impact our 2023, 2024 or future tax years.

This matter does not impact any tax years subsequent to 2022.

In March 2026, we paid $ 19 million to the IRS to settle the 2015 through 2018 audit years, inclusive of $ 5.8 million of accrued interest.

As of March 31, 2026, the remaining amount owed associated with the transfer pricing matter was $ 16 million, which includes $ 5.2 million of interest accrued on the matter through March 31, 2026.

As of June 30, 2026, the remaining amount owed associated with the transfer pricing matter was $ 16 million, which includes $ 5.3 million of interest accrued on the matter through June 30, 2026.

The balance sheet classification and amount owed may be subject to change depending on the timing of a final assessment from the IRS for the 2019-2022 audit years.

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Note 8—Net Loss per Common Share

The following summarizes the calculation of net loss per common share attributable to common shareholders for the three months ended March 31, 2026 and 2025:

The following summarizes the calculation of net loss per common share attributable to common shareholders for the three and six months ended June 30, 2026 and 2025:

Three Months Ended

(in thousands, except per share data)

Six Months Ended

Loss from continuing operations, net of tax

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Loss from discontinued operations, net of tax

Share-based awards for the three months ended March 31, 2026 and 2025 of approximately 1.3 million and 1.8 million were excluded from the calculation of diluted loss per common share as the effect would be anti-dilutive.

Share-based awards of approximately 1.1 million and 1.2 million for the three and six months ended June 30, 2026 and 2.5 million and 2.2 million for the three and six months ended June 30, 2025 were excluded from the calculation of diluted loss per common share as the effect would be anti-dilutive.

Note 9—Shareholders’ Equity

On February 26, 2025, our Board of Directors authorized a share repurchase program of up to $ 100 million through February 2027.

Under the program, we may repurchase shares of common stock on a discretionary basis from time to time through open market repurchases, privately negotiated transactions and 10b5-1 trading plans.

During the three months ended March 31, 2026, we did no t repurchase any shares.

We do not intend to make use of the authorized repurchase program.

During the three and six months ended June 30, 2026, we did no t repurchase any shares.

During the period from February 26, 2025 (the date the share repurchase program was authorized) through December 31, 2025, we repurchased shares in open-market transactions and retired approximately 2.0 million shares of our common stock for an aggregate of $ 10 million, or a weighted average price per share of $ 5.19 .

Note 10—Accumulated Other Comprehensive (Loss) Income

The following table shows the changes in accumulated other comprehensive (loss) income by component for the three months ended March 31, 2026 and 2025:

The following table shows the changes in accumulated other comprehensive (loss) income by component for the three and six months ended June 30, 2026 and 2025:

Accumulated other comprehensive (loss) income, March 31, 2026

Other comprehensive income (loss) before reclassifications

Other comprehensive income (loss) before reclassifications, net of tax

Amounts reclassified from accumulated other comprehensive income (loss)

Amounts reclassified from accumulated other comprehensive income (loss), net of tax

Other comprehensive income (loss)

Accumulated other comprehensive (loss) income, three months ended June 30, 2026

Accumulated other comprehensive (loss) income, March 31, 2025

Other comprehensive income (loss) before reclassifications

Other comprehensive income (loss) before reclassifications, net of tax

Amounts reclassified from accumulated other comprehensive income (loss)

Amounts reclassified from accumulated other comprehensive income (loss), net of tax

Other comprehensive income (loss)

Accumulated other comprehensive (loss) income, three months ended June 30, 2025

Accumulated other comprehensive (loss) income, December 31, 2025

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Other comprehensive income (loss)

Accumulated other comprehensive (loss) income, three months ended March 31, 2026

Accumulated other comprehensive (loss) income, June 30, 2026

Accumulated other comprehensive (loss) income, December 31, 2024

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Other comprehensive income (loss)

Accumulated other comprehensive (loss) income, three months ended March 31, 2025

Accumulated other comprehensive (loss) income, June 30, 2025

We include amounts reclassified out of accumulated other comprehensive (loss) income related to defined benefit pension plans as a component of net periodic pension cost recorded in Other expense, net.

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We are party to various legal claims that are ordinary and incidental to our business, including claims related to commercial disputes, employment, workers’ compensation, product liability, regulatory and other matters.

We maintain insurance coverage for employment, product liability, workers’ compensation and other personal injury litigation matters, subject to policy limits, applicable deductibles and insurer solvency.

insurance coverage for employment, product liability, workers’ compensation and other personal injury litigation matters, subject to policy limits, applicable deductibles and insurer solvency.

We establish reserves from time to time based upon periodic assessment of the potential outcomes of pending matters.

Based on current knowledge and the advice of counsel, we believe that the accrual as of March 31, 2026 for currently pending matters considered probable of loss, is sufficient.

Based on current knowledge and the advice of counsel, we believe that the accrual as of June 30, 2026 for currently pending matters considered probable of loss is sufficient.

In addition, we believe that other currently pending matters are not reasonably possible to result in a material loss, as payment of the amounts claimed is remote, the claims are immaterial, individually and in the aggregate, or the claims are expected to be adequately covered by insurance, subject to policy limits, applicable deductibles, exclusions and insurer solvency.

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Refer to our Annual Report on Form 10-K for the year ended December 31, 2025 for disclosure of recent accounting pronouncements.

Note 14—Subsequent Events

On May 11, 2026, subsequent to March 31, 2026 but prior to the issuance of these condensed consolidated financial statements, the Company announced the Balance Sheet Optimization Transaction with commitments from existing creditors.

We intend to refinance the Term Loan A through the proceeds from the issuance of new 9.000 % senior secured first lien notes due 2032.

We intend to amend and extend the Revolving Credit Agreement into a revolving credit facility maturing in 2030 with aggregate commitments of up to $ 300 million.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements