ACCENDRA HEALTH INC/VA/ 10-Q

Item 1. Financial Statements Owens & Minor, Inc. and Subsidiaries Consolidated Statements of Operations (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended Nine Months Ended ​ ​ ​ September 30, ​ September 30, ​ (in thousands, except per share data) ​ 2024 2023 2024 2023 ​ Net revenue ​ $ 2,721,125 ​ $ 2,591,742 ​ $ 8,004,810 ​ $ 7,677,817 ​ Cost of goods sold ​ 2,161,419 ​ 2,053,244 ​ 6,365,421 ​ 6,122,579 ​ Gross profit ​ 559,706 ​ 538,498 ​ 1,639,389 ​ 1,555,238 ​ Distribution, selling and administrative expenses ​ 469,798 ​ 452,583 ​ 1,416,724 ​ 1,356,334 ​ Acquisition-related charges and intangible amortization ​ 21,097 ​ 30,217 ​ 61,395 ​ 74,609 ​ Exit and realignment charges, net ​ ​ 28,880 ​ ​ 30,180 ​ ​ 85,530 ​ ​ 74,817 ​ Other operating expense, net ​ 15,727 ​ 1,677 ​ 21,542 ​ 4,991 ​ Operating income ​ 24,204 ​ 23,841 ​ 54,198 ​ 44,487 ​ Interest expense, net ​ 36,554 ​ 38,127 ​ 108,108 ​ 121,053 ​ Other expense (income), net ​ 1,438 ​ ( 3,302 ) ​ 3,796 ​ ( 843 ) ​ Loss before income taxes ​ ( 13,788 ) ​ ( 10,984 ) ​ ( 57,706 ) ​ ( 75,723 ) ​ Income tax (benefit) provision ​ ( 1,018 ) ​ ( 4,558 ) ​ 8,864 ​ ( 16,638 ) ​ Net loss ​ $ ( 12,770 ) ​ $ ( 6,426 ) ​ $ ( 66,570 ) ​ $ ( 59,085 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per common share ​ ​ ​ ​ ​ Basic ​ $ ( 0.17 ) ​ $ ( 0.08 ) ​ $ ( 0.87 ) ​ $ ( 0.78 ) ​ Diluted ​ $ ( 0.17 ) ​ $ ( 0.08 ) ​ $ ( 0.87 ) ​ $ ( 0.78 ) ​ ​ See accompanying notes to consolidated financial statements. ​ ​ ​ 3 Table of Contents Owens & Minor, Inc. and Subsidiaries Consolidated Statements of Comprehensive Income (Loss ) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended Nine Months Ended ​ ​ September 30, ​ September 30, (in thousands) ​ 2024 2023 ​ 2024 2023 Net loss ​ $ ( 12,770 ) ​ $ ( 6,426 ) ​ $ ( 66,570 ) ​ $ ( 59,085 ) Other comprehensive income (loss), net of tax: ​ ​ ​ ​ ​ ​ ​ ​ Currency translation adjustments ​ 25,966 ​ ( 9,891 ) ​ 7,398 ​ ( 9,940 ) Change in unrecognized net periodic pension costs ​ 265 ​ 152 ​ 699 ​ 141 Change in gains and losses on derivative instruments ​ ( 4,905 ) ​ 777 ​ ( 3,697 ) ​ 699 Total other comprehensive income (loss), net of tax ​ 21,326 ​ ( 8,962 ) ​ 4,400 ​ ( 9,100 ) Comprehensive income (loss) ​ $ 8,556 ​ $ ( 15,388 ) ​ $ ( 62,170 ) ​ $ ( 68,185 ) ​ See accompanying notes to consolidated financial statements. ​ ​ ​ 4 Table of Contents Owens & Minor, Inc. and Subsidiaries Consolidated Balance Sheets (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, (in thousands, except per share data) ​ 2024 2023 Assets ​ ​ Current assets ​ ​ Cash and cash equivalents ​ $ 45,454 ​ $ 243,037 Accounts receivable, net of allowances of $ 5,515 and $ 7,861 ​ 661,664 ​ 598,257 Merchandise inventories ​ 1,242,453 ​ 1,110,606 Other current assets ​ 166,967 ​ 150,890 Total current assets ​ 2,116,538 ​ 2,102,790 Property and equipment, net of accumulated depreciation and amortization of $ 570,033 and $ 546,397 ​ 498,746 ​ 543,972 Operating lease assets ​ 357,264 ​ 296,533 Goodwill ​ 1,642,196 ​ 1,638,846 Intangible assets, net ​ 313,284 ​ 361,835 Other assets, net ​ 153,254 ​ 149,346 Total assets ​ $ 5,081,282 ​ $ 5,093,322 Liabilities and equity ​ ​ Current liabilities ​ ​ Accounts payable ​ $ 1,338,021 ​ $ 1,171,882 Accrued payroll and related liabilities ​ 100,002 ​ 116,398 Current portion of long-term debt ​ ​ 42,626 ​ ​ 206,904 Other current liabilities ​ 453,517 ​ 396,701 Total current liabilities ​ 1,934,166 ​ 1,891,885 Long-term debt, excluding current portion ​ 1,842,348 ​ 1,890,598 Operating lease liabilities, excluding current portion ​ 288,043 ​ 222,429 Deferred income taxes, net ​ 25,650 ​ 41,652 Other liabilities ​ 116,483 ​ 122,592 Total liabilities ​ 4,206,690 ​ 4,169,156 Commitments and contingencies ​ ​ Equity ​ ​ Common stock, par value $ 2 per share; authorized - 200,000 shares; issued and outstanding - 77,062 shares and 76,546 shares as of September 30, 2024 and December 31, 2023 ​ 154,123 ​ 153,092 Paid-in capital ​ 445,749 ​ 434,185 Retained earnings ​ 302,138 ​ 368,707 Accumulated other comprehensive loss ​ ( 27,418 ) ​ ( 31,818 ) Total equity ​ 874,592 ​ 924,166 Total liabilities and equity ​ $ 5,081,282 ​ $ 5,093,322 ​ See accompanying notes to consolidated financial statements. ​ ​ ​ 5 Table of Contents Owens & Minor, Inc. and Subsidiaries Consolidated Statements of Cash Flows (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, (in thousands) ​ 2024 2023 Operating activities: ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 66,570 ) ​ $ ( 59,085 ) Adjustments to reconcile net loss to cash provided by operating activities: ​ ​ Depreciation and amortization ​ 199,588 ​ 216,640 Share-based compensation expense ​ 19,281 ​ 17,417 Benefit for losses on accounts receivable ​ ( 1,538 ) ​ ( 487 ) Loss (gain) on extinguishment of debt ​ 311 ​ ( 4,379 ) Deferred income tax benefit ​ ( 15,119 ) ​ ( 16,315 ) Changes in operating lease right-of-use assets and lease liabilities ​ 7,156 ​ ( 1,517 ) Gain from sales and dispositions of property and equipment ​ ( 37,682 ) ​ ( 26,462 ) Changes in operating assets and liabilities: ​ ​ Accounts receivable ​ ( 59,349 ) ​ 77,197 Merchandise inventories ​ ( 132,433 ) ​ 247,057 Accounts payable ​ 164,261 ​ 46,338 Net change in other assets and liabilities ​ 4,719 ​ 122,867 Other, net ​ 7,869 ​ 9,674 Cash provided by operating activities ​ 90,494 ​ 628,945 Investing activities: ​ ​ Additions to property and equipment ​ ( 148,031 ) ​ ( 140,478 ) Additions to computer software ​ ( 8,695 ) ​ ( 11,089 ) Proceeds from sales of property and equipment ​ 84,759 ​ 53,645 Other, net ​ 7,738 ​ ( 418 ) Cash used for investing activities ​ ( 64,229 ) ​ ( 98,340 ) Financing activities: ​ ​ Borrowings under amended Receivables Financing Agreement ​ 1,286,400 ​ 476,000 Repayments under amended Receivables Financing Agreement ​ ( 1,286,400 ) ​ ( 572,000 ) Repayments of debt ​ ( 211,447 ) ​ ( 270,189 ) Other, net ​ ( 13,060 ) ​ 74 Cash used for financing activities ​ ( 224,507 ) ​ ( 366,115 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash ​ 408 ​ ( 515 ) Net (decrease) increase in cash, cash equivalents and restricted cash ​ ( 197,834 ) ​ 163,975 Cash, cash equivalents and restricted cash at beginning of period ​ 272,924 ​ 86,185 Cash, cash equivalents and restricted cash at end of period ​ $ 75,090 ​ $ 250,160 Supplemental disclosure of cash flow information: ​ ​ Income taxes paid (received), net ​ $ 7,610 ​ $ ( 6,798 ) Interest paid ​ $ 104,278 ​ $ 101,079 Noncash investing activity: ​ ​ Unpaid purchases of property and equipment and computer software at end of period ​ $ 75,176 ​ $ 60,870 ​ See accompanying notes to consolidated financial statements. ​ ​ 6 Table of Contents Owens & Minor, Inc. and Subsidiaries Consolidated Statements of Changes in Equity (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common ​ ​ ​ ​ Accumulated ​ ​ ​ ​ Common ​ Stock ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ Shares ​ ( $ 2 par ​ Paid-In ​ Retained ​ Comprehensive ​ Total (in thousands, except per share data) ​ Outstanding ​ value) ​ Capital ​ Earnings ​ Loss ​ Equity Balance, December 31, 2023 76,546 ​ $ 153,092 ​ $ 434,185 ​ $ 368,707 ​ $ ( 31,818 ) ​ $ 924,166 Net loss — ​ — ​ — ​ ( 21,886 ) ​ — ​ ( 21,886 ) Other comprehensive loss — ​ — ​ — ​ — ​ ( 11,619 ) ​ ( 11,619 ) Share-based compensation expense, exercises and other ( 97 ) ​ ( 195 ) ​ 4,402 ​ — ​ — ​ 4,207 Balance, March 31, 2024 76,449 ​ ​ 152,897 ​ ​ 438,587 ​ ​ 346,821 ​ ​ ( 43,437 ) ​ ​ 894,868 Net loss — ​ — ​ — ​ ( 31,913 ) ​ — ​ ( 31,913 ) Other comprehensive loss — ​ — ​ — ​ — ​ ( 5,307 ) ​ ( 5,307 ) Share-based compensation expense, exercises and other 599 ​ 1,199 ​ 1,855 ​ — ​ — ​ 3,054 Balance, June 30, 2024 77,048 ​ ​ 154,096 ​ ​ 440,442 ​ ​ 314,908 ​ ​ ( 48,744 ) ​ ​ 860,702 Net loss — ​ — ​ — ​ ( 12,770 ) ​ — ​ ( 12,770 ) Other comprehensive income — ​ — ​ — ​ — ​ 21,326 ​ 21,326 Share-based compensation expense, exercises and other 14 ​ 27 ​ 5,307 ​ — ​ — ​ 5,334 Balance, September 30, 2024 77,062 ​ $ 154,123 ​ $ 445,749 ​ $ 302,138 ​ $ ( 27,418 ) ​ $ 874,592 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, December 31, 2022 76,279 ​ $ 152,557 ​ $ 418,894 ​ $ 410,008 ​ $ ( 35,855 ) ​ $ 945,604 Net loss — ​ — ​ — ​ ( 24,418 ) ​ — ​ ( 24,418 ) Other comprehensive income — ​ — ​ — ​ — ​ 1,594 ​ 1,594 Share-based compensation expense, exercises and other ( 83 ) ​ ( 166 ) ​ 1,786 ​ — ​ — ​ 1,620 Balance, March 31, 2023 76,196 ​ 152,391 ​ 420,680 ​ 385,590 ​ ( 34,261 ) ​ 924,400 Net loss — ​ — ​ — ​ ( 28,241 ) ​ — ​ ( 28,241 ) Other comprehensive loss — ​ — ​ — ​ — ​ ( 1,732 ) ​ ( 1,732 ) Share-based compensation expense, exercises and other 244 ​ 489 ​ 1,313 ​ — ​ — ​ 1,802 Balance, June 30, 2023 76,440 ​ ​ 152,880 ​ ​ 421,993 ​ ​ 357,349 ​ ​ ( 35,993 ) ​ ​ 896,229 Net loss — ​ — ​ — ​ ( 6,426 ) ​ — ​ ( 6,426 ) Other comprehensive loss — ​ — ​ — ​ — ​ ( 8,962 ) ​ ( 8,962 ) Share-based compensation expense, exercises and other 59 ​ 117 ​ 5,902 ​ — ​ — ​ 6,019 Balance, September 30, 2023 76,499 ​ $ 152,997 ​ $ 427,895 ​ $ 350,923 ​ $ ( 44,955 ) ​ $ 886,860 ​ See accompanying notes to consolidated financial statements. ​ ​ ​ 7 Table of Contents Owens & Minor, Inc. and Subsidiaries Notes to Consolidated Financial Statements (unaudited) (in thousands, except per share data, unless otherwise indicated) Note 1—Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements include the accounts of Owens & Minor, Inc. and the subsidiaries it controls (we, us, or our) and contain all adjustments necessary to conform with U.S. generally accepted accounting principles (GAAP). All significant intercompany accounts and transactions have been eliminated. The results of operations for interim periods are not necessarily indicative of the results expected for the full year. We report our business under two segments: Products & Healthcare Services and Patient Direct. The Products & Healthcare Services segment includes our Medical Distribution division, which includes our U.S. distribution business, along with our outsourced logistics and value-added services businesses, and our Global Products division which manufactures and sources medical surgical products through our production and kitting operations. The Patient Direct segment includes our home healthcare divisions (Byram and Apria). Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires us to make assumptions and estimates that affect reported amounts and related disclosures. Actual results may differ from these estimates. Cash, Cash Equivalents and Restricted Cash Cash, cash equivalents and restricted cash includes cash and marketable securities with an original maturity or maturity at acquisition of three months or less. Cash, cash equivalents and restricted cash are stated at cost. Nearly all of our cash, cash equivalents and restricted cash are held in cash depository accounts in major banks in North America, Europe, and Asia. Cash that is held by a major bank and has restrictions on its availability to us is classified as restricted cash. Restricted cash as of September 30, 2024 and December 31, 2023 includes cash held in an escrow account as required by the Centers for Medicare & Medicaid Services in conjunction with the Bundled Payments for Care Improvement initiatives related to wind-down costs of Fusion5, as well as $ 13.2 million and $ 13.5 million of cash deposits received subject to limitations on use until remitted to a third-party financial institution (the Purchaser), pursuant to the Master Receivables Purchase Agreement (RPA). The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying consolidated balance sheets that sum to the total of those same amounts presented in the accompanying consolidated statements of cash flows. ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2024 December 31, 2023 Cash and cash equivalents ​ $ 45,454 ​ $ 243,037 Restricted cash included in Other current assets ​ 13,230 ​ 29,887 Restricted cash included in Other assets, net ​ ​ 16,406 ​ ​ — Total cash, cash equivalents, and restricted cash ​ $ 75,090 ​ $ 272,924 ​ 8 Table of Contents Rental Revenue Within our Patient Direct segment, revenues are recognized under fee-for-service arrangements for equipment we rent to patients and sales of equipment, supplies and other items we sell to patients. Revenue that is generated from equipment that we rent to patients is primarily recognized over the noncancelable rental period, typically one month, and commences on delivery of the equipment to the patients. Revenues are recorded at amounts estimated to be received under reimbursement arrangements with third-party payors, including private insurers, prepaid health plans, Medicare, Medicaid and patients. Rental revenue, less estimated adjustments, is recognized as earned on a straight-line basis over the noncancelable lease term. Net revenue related to equipment that we rent to patients was $ 148 million and $ 158 million for the three months ended September 30, 2024 and 2023 and $ 442 million and $ 458 million for the nine months ended September 30, 2024 and 2023. Sales of Accounts Receivable On March 14, 2023, we entered into the RPA, pursuant to which accounts receivable with an aggregate outstanding amount not to exceed $ 200 million are sold, on a limited-recourse basis, to the Purchaser in exchange for cash. As of September 30, 2024 and December 31, 2023, there were a total of $ 121 million and $ 124 million of uncollected accounts receivable, that were accounted for as sales and removed from our consolidated balance sheets. Under the RPA, we provide certain servicing and collection actions on behalf of the Purchaser; however, we do not maintain any beneficial interest in the accounts receivable sold. Proceeds from the sale of accounts receivable are recorded as an increase to cash and cash equivalents and a reduction to accounts receivable, net of allowances, in the consolidated balance sheets. Cash received from the sale of accounts receivable, net of payments made to the Purchaser, is reflected as cash provided by operating activities in the consolidated statements of cash flows. Total accounts receivable sold under the RPA were $ 542 million and $ 1.6 billion for the three and nine months ended September 30, 2024. During the three and nine months ended September 30, 2024, we received net cash proceeds of $ 538 million and $ 1.6 billion from the sale of accounts receivable under the RPA and collected $ 550 million and $ 1.6 billion of the sold accounts receivable. Total accounts receivable sold under the RPA were $ 482 million and $ 894 million for the three and nine months ended September 30, 2023. During the three and nine months ended September 30, 2023, we received net cash proceeds of $ 478 million and $ 888 million from the sale of accounts receivable under the RPA and collected $ 508 million and $ 805 million of the sold accounts receivable. The losses on sale of accounts receivable, inclusive of professional fees incurred to establish the agreement, recorded in other operating expense, net in the consolidated statements of operations were $ 3.6 million and $ 3.5 million for the three months ended September 30, 2024 and 2023 and $ 10.8 million and $ 7.1 million for the nine months ended September 30, 2024 and 2023. The RPA is separate and distinct from the accounts receivable securitization program (the Receivables Financing Agreement). Acquisition-Related Charges Acquisition-related charges, included in the ‘acquisition-related charges and intangible amortization’ line item of our consolidated statements of operations, consist primarily of one-time costs related to acquisitions, including transaction costs necessary to consummate acquisitions, which consist of investment banking advisory fees and legal fees, director and officer tail insurance expense, severance and retention bonuses, and professional fees. Acquisition-related charges also include transition expenses and costs to integrate personnel, systems and processes. For the three and nine months ended September 30, 2024, we incurred $ 6.5 million and $ 10.2 million of acquisition-related costs related to the expected acquisition of Rotech Healthcare Holdings Inc. (Rotech), which consisted primarily of legal and professional fees. For the three and nine months ended September 30, 2023, we incurred $ 9.4 million and $ 11.9 million of acquisition-related costs, consisting of costs primarily related to the acquisition of Apria, Inc. (Apria). ​ 9 Table of Contents Note 2—Fair Value Fair value is determined based on assumptions that a market participant would use in pricing an asset or liability. The assumptions used are in accordance with a three-tier hierarchy, defined by GAAP, that draws a distinction between market participant assumptions based on (i) observable inputs such as quoted prices in active markets (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2) and (iii) unobservable inputs that require the use of present value and other valuation techniques in the determination of fair value (Level 3). The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued payroll and related liabilities reported in the consolidated balance sheets approximate fair value due to the short-term nature of these instruments. 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. The fair value of our derivative contracts is determined based on the present value of expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Observable Level 2 inputs are used to determine the present value of expected future cash flows. See Note 7 for the fair value of derivatives. Our acquisitions may include contingent consideration as part of the purchase price. The fair value of contingent consideration is estimated as of the acquisition date and at the end of each subsequent reporting period based on the present value of the contingent payments to be made using a weighted probability of possible payments (Level 3). Subsequent changes in fair value are recorded as adjustments to acquisition-related charges and intangible amortization within the consolidated statements of operations. ​ Note 3—Goodwill and Intangible Assets The following table summarizes the goodwill balances by segment and the changes in the carrying amount of goodwill at September 30, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Products & ​ ​ ​ ​ ​ ​ ​ Healthcare ​ ​ ​ ​ ​ Patient Direct ​ Services ​ Consolidated Carrying amount of goodwill, December 31, 2023 ​ $ 1,535,252 ​ $ 103,594 ​ $ 1,638,846 Currency translation adjustments ​ — ​ 3,350 ​ 3,350 Carrying amount of goodwill, September 30, 2024 ​ $ 1,535,252 ​ $ 106,944 ​ $ 1,642,196 ​ Intangible assets subject to amortization, which exclude indefinite-lived intangible assets at September 30, 2024 and December 31, 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2024 ​ December 31, 2023 ​ Customer ​ ​ Other Customer ​ ​ Other ​ ​ Relationships ​ Tradenames ​ Intangibles ​ Relationships ​ Tradenames ​ Intangibles Gross intangible assets ​ $ 332,811 ​ $ 202,000 ​ $ 73,055 ​ $ 433,750 ​ $ 202,000 ​ $ 73,958 Accumulated amortization ​ ( 163,350 ) ​ ( 84,324 ) ​ ( 48,908 ) ​ ( 236,791 ) ​ ( 69,655 ) ​ ( 41,427 ) Net intangible assets ​ $ 169,461 ​ $ 117,676 ​ $ 24,147 ​ $ 196,959 ​ $ 132,345 ​ $ 32,531 Weighted average useful life ​ 14 years ​ 10 years ​ 6 years ​ 13 years ​ 10 years ​ 6 years ​ At September 30, 2024 and December 31, 2023, $ 218 million and $ 250 million in net intangible assets were held in the Patient Direct segment and $ 96 million and $ 112 million were held in the Products & Healthcare Services segment. Amortization expense for intangible assets was $ 14.6 million and $ 20.8 million for the three months ended September 30, 2024 and 2023 and $ 51.2 million and $ 62.7 million for the nine months ended September 30, 2024 and 2023. 10 Table of Contents As of September 30, 2024, based on the current carrying value of intangible assets subject to amortization, estimated amortization expense were as follows: ​ ​ ​ ​ ​ Year ​ ​ 2024 (remainder) ​ $ 13,680 2025 ​ 54,716 2026 ​ 50,364 2027 ​ 42,015 2028 ​ 32,117 Thereafter ​ ​ 118,392 Total future amortization ​ $ 311,284 ​ ​ ​ Note 4—Exit and Realignment Costs We incur exit and realignment and other charges associated with optimizing our operations which includes the consolidation of certain facilities, information technology (IT) strategic initiatives and other strategic actions. These charges also include costs associated with our Operating Model Realignment Program, which include professional fees, severance and other costs to streamline functions and processes. These amounts are excluded from our segments’ operating income. During the three months ended September 30, 2024 and 2023, exit and realignment charges, net of $ 28.9 million and $ 30.2 million included $ 27.1 million and $ 27.8 million in charges under our Operating Model Realignment Program and IT strategic initiatives. During the nine months ended September 30, 2024 and 2023, exit and realignment charges, net included $ 90.2 million and $ 70.6 million in charges under our Operating Model Realignment Program and IT strategic initiatives. Exit and realignment charges, net for the nine months ended September 30, 2024 also included a gain of $ 7.4 million associated with the sale of our corporate headquarters. During the nine months ended September 30, 2024 and 2023, exit and realignment charges, net were $ 85.5 million and $ 74.8 million. We may incur material future costs relating to certain exit and realignment actions, which remain underway and we are not able to reasonably estimate. ​ 11 Table of Contents The following table summarizes the activity related to exit and realignment cost accruals, which are classified as other current liabilities in our consolidated balance sheets, through September 30, 2024 and 2023: ​ ​ ​ ​ ​ ​ Total Accrued exit and realignment costs, December 31, 2023 ​ $ 20,047 Provision for exit and realignment activities: ​ Severance ​ 184 Professional fees ​ 25,625 IT strategic initiatives - related costs ​ ​ 1,241 Other ​ 1,252 Cash payments ​ ( 11,728 ) Accrued exit and realignment costs, March 31, 2024 ​ 36,621 Provision for exit and realignment activities: ​ Severance ​ ( 205 ) Professional fees ​ 19,182 IT strategic initiatives - related costs ​ ​ 4,809 Other ​ 3,606 Cash payments ​ ( 33,908 ) Accrued exit and realignment costs, June 30, 2024 ​ ​ 30,105 Provision for exit and realignment activities: ​ ​ ​ Severance ​ ​ 1,770 Professional fees ​ ​ 15,013 IT strategic initiatives - related costs ​ ​ 4,476 Vendor contract and lease termination costs ​ ​ 2,728 Other ​ ​ 3,481 Cash payments ​ ​ ( 28,450 ) Accrued exit and realignment costs, September 30, 2024 ​ $ 29,123 ​ ​ ​ ​ Accrued exit and realignment costs, December 31, 2022 ​ $ 969 Provision for exit and realignment activities: ​ Severance ​ 4,127 Professional fees ​ ​ 9,012 IT strategic initiatives - related costs ​ ​ 123 Vendor contract and lease termination costs ​ ​ 1,824 Other ​ 588 Cash payments ​ ( 5,546 ) Accrued exit and realignment costs, March 31, 2023 ​ 11,097 Provision for exit and realignment activities: ​ Severance ​ 505 Professional fees ​ 22,953 IT strategic initiatives - related costs ​ ​ 3,374 Vendor contract and lease termination costs ​ ​ 1,707 Other ​ 424 Cash payments ​ ( 20,196 ) Accrued exit and realignment costs, June 30, 2023 ​ ​ 19,864 Provision for exit and realignment activities: ​ Severance ​ 2,361 Professional fees ​ ​ 16,800 IT strategic initiatives - related costs ​ ​ 3,256 Vendor contract and lease termination costs ​ ​ 4,300 Other ​ 2,164 Cash payments ​ ​ ( 26,311 ) Accrued exit and realignment costs, September 30, 2023 ​ $ 22,434 ​ ​ 12 Table of Contents In addition to the exit and realignment accruals in the preceding table and the $ 7.4 million gain associated with the sale of our corporate headquarters, we also incurred $ 1.4 million and $ 9.8 million of costs that were expensed as incurred for the three and nine months ended September 30, 2024, which were primarily related to accelerated depreciation of certain assets held in our Products & Healthcare Services segment. We incurred $ 1.3 million of costs that were expensed as incurred for the three and nine months ended September 30, 2023, which primarily related to charges associated with a lease termination. ​ ​ ​ Note 5—Debt Debt, net of unamortized deferred financing costs, consists of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2024 December 31, 2023 ​ Carrying Estimated Carrying Estimated ​ ​ Amount ​ Fair Value ​ Amount ​ Fair Value 4.375 % Senior Notes, due December 2024 ​ $ — ​ $ — ​ $ 171,232 ​ $ 168,754 Term Loan A ​ 353,511 ​ 356,606 ​ 387,591 ​ 390,668 4.500 % Senior Notes, due March 2029 ​ 473,701 ​ 433,857 ​ 472,869 ​ 422,647 Term Loan B ​ 500,716 ​ 513,141 ​ 503,212 ​ 518,293 6.625 % Senior Notes, due April 2030 ​ 541,848 ​ 536,314 ​ 540,445 ​ 529,472 Finance leases and other ​ 15,198 ​ 15,198 ​ 22,153 ​ 22,153 Total debt ​ 1,884,974 ​ 1,855,116 ​ 2,097,502 ​ 2,051,987 Less current maturities ​ ( 42,626 ) ​ ( 42,626 ) ​ ( 206,904 ) ​ ( 206,904 ) Long-term debt ​ $ 1,842,348 ​ $ 1,812,490 ​ $ 1,890,598 ​ $ 1,845,083 ​ On September 16, 2024 (the Redemption Date), we redeemed all of our outstanding 4.375 % senior notes due in December 2024 (the 2024 Notes), which had an outstanding aggregate principal balance amount of $ 171.3 million, pursuant to the terms of the indenture governing the 2024 Notes, at a redemption price equal to 100 % of the principal amount of the 2024 Notes, plus accrued and unpaid interest to, but excluding, the Redemption Date. As of the Redemption Date, the 2024 Notes were no longer deemed outstanding and interest on the 2024 Notes ceased to accrue. On March 29, 2022, we entered into a Security Agreement Supplement pursuant to which the Security and Pledge Agreement (the Security Agreement), dated March 10, 2021 was supplemented to grant collateral on behalf of the holders of the 2024 Notes, and the parties secured under the credit agreements including first priority liens and security interests in (a) all present and future shares of capital stock owned by the Grantors (as defined in the Security Agreement) in the Grantors’ present and future subsidiaries, subject to certain customary exceptions, and (b) all present and future personal property and assets of the Grantors, subject to certain exceptions. The Receivables Financing Agreement has a maximum borrowing capacity of $ 450 million. The interest rate under the Receivables Financing Agreement is based on a spread over a benchmark SOFR rate (as described in the Fourth Amendment to the Receivables Financing Agreement, as further amended by the Fifth Amendment to the Receivables Financing Agreement). Under the Receivables Financing Agreement, certain of our accounts receivable balances are sold to our wholly owned special purpose entity, O&M Funding LLC (O&M Funding). The Receivables Financing Agreement was amended on October 18, 2024, as described in Note 14 – Subsequent Events. We had no borrowings at September 30, 2024 and December 31, 2023 under our Receivables Financing Agreement. At September 30, 2024 and December 31, 2023, we had maximum revolving borrowing capacity of $ 450 million under our Receivables Financing Agreement. 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 13 Table of Contents 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. In addition to our scheduled principal payment of $ 6.3 million on the Term Loan A, we made an unscheduled principal payment of $ 20.0 million on the Term Loan A during the three months ended September 30, 2024. 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 %. We may redeem all or part of the 2029 Unsecured Notes at the applicable redemption prices described in the Indenture dated March 10, 2021 (the Indenture), plus accrued and unpaid interest, if any, to, but not including, the redemption date. 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 %. We may redeem all or part of the 2030 Unsecured Notes, prior to April 1, 2025, at a price equal to 100 % of the principal amount of the 2030 Unsecured Notes 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 Indenture dated March 29, 2022 (the New Indenture). From and after April 1, 2025, we may redeem all or part of the 2030 Unsecured Notes at the applicable redemption prices described in the New Indenture, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. We may also redeem up to 40 % of the aggregate principal amount of the 2030 Unsecured Notes at any time prior to April 1, 2025, at a redemption price equal to 106.625 % with an amount equal to or less than the net cash proceeds from certain equity offerings, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. The 2029 Unsecured Notes and the 2030 Unsecured Notes are subordinated to any of our secured indebtedness, including indebtedness under our credit agreements. We have a revolving credit agreement with an administrative agent and collateral agent and a syndicate of financial institutions, as lenders (the Revolving Credit Agreement) with a maximum borrowing capacity of $ 450 million. The interest rate under our Revolving Credit Agreement is based on the Adjusted Term SOFR Rate (as defined in the Revolving Credit Agreement). The Revolving Credit Agreement matures in March 2027. At September 30, 2024 and December 31, 2023, our Revolving Credit Agreement was undrawn, and we had letters of credit, which reduce Revolving Credit Agreement availability, totaling $ 31.5 million and $ 27.4 million, leaving $ 419 million and $ 423 million available for borrowing at the end of each period. We also had letters of credit and bank guarantees which support certain leased facilities as well as other normal business activities in the U.S. and Europe that were issued outside of the Revolving Credit Agreement for $ 3.0 million as of September 30, 2024 and December 31, 2023. The Revolving Credit Agreement, the Credit Agreement, the Receivables Financing 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 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 September 30, 2024. ​ 14 Table of Contents As of September 30, 2024, scheduled future principal payments of debt, excluding finance leases and other, were as follows: ​ ​ ​ ​ ​ Year ​ ​ 2024 (remainder) ​ $ 7,750 2025 ​ 40,375 2026 ​ 43,500 2027 ​ 285,375 2028 ​ 6,000 2029 ​ 965,654 2030 ​ 552,189 ​ Current maturities at September 30, 2024 include $ 31.3 million in principal payments on our Term Loan A, $ 6.0 million in principal payments on our Term Loan B, and $ 5.4 million in current portion of finance leases and other. Note 6—Retirement Plans We have a frozen noncontributory, unfunded retirement plan for certain retirees in the U.S. (U.S. Retirement Plan). As of September 30, 2024 and December 31, 2023, the accumulated benefit obligation of the U.S. Retirement Plan was $ 32.9 million and $ 34.1 million. Certain of our foreign subsidiaries also have defined benefit pension plans covering substantially all of their respective teammates. The components of net periodic benefit cost for the three and nine months ended September 30, 2024 and 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, ​ 2024 2023 2024 2023 Service cost ​ $ 446 ​ $ 429 ​ $ 1,362 ​ $ 1,316 Interest cost ​ ​ 635 ​ ​ 705 ​ ​ 1,925 ​ ​ 2,128 Recognized net actuarial loss ​ 79 ​ 124 ​ 241 ​ 370 Net periodic benefit cost ​ $ 1,160 ​ $ 1,258 ​ $ 3,528 ​ $ 3,814 ​ ​ ​ Note 7—Derivatives We are directly and indirectly affected by changes in foreign currency, which may adversely impact our financial performance and are referred to as “market risks.” When deemed appropriate, we use derivatives as a risk management tool to mitigate the potential impact of certain market risks. We do not enter into derivative financial instruments for trading purposes. We enter into foreign currency contracts to manage our foreign exchange exposure related to certain balance sheet items that do not meet the requirements for hedge accounting. These derivative instruments are adjusted to fair value at the end of each period through earnings. The gain or loss recorded on these instruments is substantially offset by the remeasurement adjustment on the foreign currency denominated asset or liability. We pay interest on our Credit Agreement which fluctuates based on changes in our 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 foreign currency derivatives and 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 15 Table of Contents are carried at fair value in our 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 derivative financial instruments as of September 30, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Notional ​ Derivative Assets Derivative Liabilities ​ Amount Maturity Date Classification Fair Value Classification Fair Value Cash flow hedges ​ ​ ​ ​ ​ ​ Interest rate swaps ​ $ 300,000 ​ March 2027 Other assets, net ​ $ 3,451 ​ Other liabilities ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Economic (non-designated) hedges ​ ​ ​ ​ ​ Foreign currency contracts ​ $ 33,350 ​ October 2024 Other current assets ​ $ 106 ​ Other current liabilities ​ $ 8 ​ The following table summarizes the terms and fair value of our outstanding derivative financial instruments as of December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Notional ​ Derivative Assets Derivative Liabilities ​ Amount Maturity Date Classification Fair Value Classification Fair Value Cash flow hedges ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate swaps ​ $ 350,000 ​ March 2027 ​ Other assets, net ​ $ 8,447 ​ Other liabilities ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Economic (non-designated) hedges ​ ​ ​ ​ ​ Foreign currency contracts ​ $ 78,436 ​ January 2024 Other current assets ​ $ 1,043 ​ Other current liabilities ​ $ — ​ 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 consolidated statements of operations for the three and nine months ended September 30, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Amount of Expense ​ ​ ​ Amount of (Loss) Gain ​ ​ ​ Line Items Presented in the ​ Amount of Gain Reclassified ​ ​ Recognized in Other ​ Location of Gain ​ Consolidated Statement of ​ from Accumulated Other ​ ​ Comprehensive Income ​ Reclassified from ​ Operations in Which the ​ Comprehensive Loss into ​ (Loss) Accumulated Other Effects are Recorded Net Loss ​ ​ Three months ended ​ Nine months ended ​ Comprehensive Loss ​ Three months ended ​ Nine months ended ​ Three months ended ​ Nine months ended ​ ​ September 30, 2024 ​ September 30, 2024 ​ into Income ​ September 30, 2024 ​ September 30, 2024 ​ September 30, 2024 ​ September 30, 2024 Interest rate swaps ​ $ ( 4,872 ) ​ $ 1,283 Interest expense, net ​ $ 36,554 ​ $ 108,108 ​ $ 1,757 ​ $ 6,280 The amount of ineffectiveness associated with these contracts was immaterial for the periods presented. ​ 16 Table of Contents The following table summarizes the effect of cash flow hedge accounting on our consolidated statements of operations for the three and nine months ended September 30, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Amount of Expense ​ ​ ​ Amount of Gain ​ ​ ​ Line Items Presented in the ​ Amount of Gain Reclassified ​ ​ Recognized in Other ​ Location of Gain ​ Consolidated Statement of ​ from Accumulated Other ​ Comprehensive Income ​ Reclassified from ​ Operations in Which the ​ Comprehensive Loss into ​ ​ (Loss) Accumulated Other Effects are Recorded Net Loss ​ ​ Three months ended ​ Nine months ended ​ Comprehensive Loss ​ Three months ended ​ Nine months ended ​ Three months ended ​ Nine months ended ​ ​ September 30, 2023 ​ September 30, 2023 ​ into Income ​ September 30, 2023 ​ September 30, 2023 ​ September 30, 2023 ​ September 30, 2023 Interest rate swaps ​ $ 3,621 ​ $ 8,026 Interest expense, net ​ $ 38,127 ​ $ 121,053 ​ $ 2,569 ​ $ 7,080 ​ The amount of ineffectiveness associated with these contracts was immaterial for the periods presented. For the three and nine months ended September 30, 2024, we recognized a gain of $ 4.2 million and a loss of $ 1.0 million associated with our economic (non-designated) foreign currency contracts. For the three and nine months ended September 30, 2023, we recognized losses of $ 2.4 million and $ 3.3 million associated with our economic (non-designated) foreign currency contracts. We recorded the change in fair value of derivative instruments and the remeasurement adjustment of the foreign currency denominated asset or liability in other operating expense, net for our foreign exchange contracts. Note 8—Income Taxes The effective tax rate was 7.4 % and ( 15.4 )% for the three and nine months ended September 30, 2024, compared to 41.5 % and 22.0 % in the same periods of 2023. The change in these rates for the three month periods resulted primarily from changes in results of operations in the jurisdictions in which we operate and the incremental tax benefit recorded for foreign derived intangible income in the third quarter of 2023. The change in these rates for the nine month periods resulted primarily from remeasurement of our uncertain tax positions, as described below, as well as the factors described for the three month periods. ​ On August 26, 2020, we received a Notice of Proposed Adjustment (NOPA) from the IRS regarding our 2015 and 2016 consolidated income tax returns. On June 30, 2021, we received a NOPA from the IRS regarding our 2017 and 2018 consolidated income tax returns. 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 United States in connection with our sourcing of products by our foreign subsidiaries for sale in the United States by our domestic subsidiaries. The transfer pricing methodology was consistently applied for all years subject to the NOPAs and 2019 into 2022, but is no longer employed. ​ During the three months ended June 30, 2024, the IRS and the relevant foreign taxing authority mutually agreed to proposed adjustments to our 2015 through 2018 consolidated tax returns. This was communicated to us in late June 2024. As a result, we remeasured the uncertain tax position for the 2015 through 2018 tax years, as well as the affected 2019 through 2022 tax years, to the amount expected to be paid upon a final agreement with the IRS. This matter does not impact our 2023, 2024 or future tax years. The total change in estimate, net of an income tax benefit from the foreign taxing authority, is $ 17.9 million, or $( 0.23 ) impact per basic and diluted common share, including $ 4.7 million of interest, for the nine months ended September 30, 2024 and is reflected within the income tax provision on our consolidated statements of operations. The total change in estimate reflects an increase in the liability for unrecognized tax benefits of $ 19.7 million recorded within other current liabilities, partially offset by a $ 1.9 million increase in the receivable from the foreign taxing authority recorded within other current assets, on our consolidated balance sheet at September 30, 2024. The balance sheet classification and amount owed may be subject to change depending on the timing of a final agreement with the IRS. Excluding the impact of $ 0.7 million of interest, there has been no change in estimate for the three months ended September 30, 2024. ​ 17 Table of Contents The liability for unrecognized tax benefits was $ 38.2 million at September 30, 2024 and $ 22.7 million at December 31, 2023. Unrecognized tax benefits of $ 35.5 million and $ 20.0 million at September 30, 2024 and December 31, 2023 would impact our effective tax rate if recognized. ​ We regularly assess the likelihood of adverse outcomes resulting from examinations such as this to determine the adequacy of our tax reserves. We believe that we have adequately reserved for this matter and that the final adjudication of this matter will not have a material impact on our consolidated financial position, results of operations or cash flows beyond the amounts described herein. Note 9—Net Loss per Common Share The following summarizes the calculation of net loss per common share attributable to common shareholders for the three and nine months ended September 30, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, (in thousands, except per share data) 2024 2023 2024 2023 Net loss ​ $ ( 12,770 ) ​ $ ( 6,426 ) ​ $ ( 66,570 ) ​ $ ( 59,085 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding - basic ​ 77,090 ​ 76,203 ​ 76,657 ​ 75,691 Dilutive shares ​ — ​ — ​ — ​ — Weighted average shares outstanding - diluted ​ 77,090 ​ 76,203 ​ 76,657 ​ 75,691 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per common share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ ( 0.17 ) ​ $ ( 0.08 ) ​ $ ( 0.87 ) ​ $ ( 0.78 ) Diluted ​ $ ( 0.17 ) ​ $ ( 0.08 ) ​ $ ( 0.87 ) ​ $ ( 0.78 ) ​ Share-based awards of approximately 1.4 million and 1.5 million shares for the three and nine months ended September 30, 2024 and approximately 1.5 million and 1.6 million shares for the three and nine months ended September 30, 2023 were excluded from the calculation of net loss per diluted common share as the effect would be anti-dilutive. Note 10—Accumulated Other Comprehensive (Loss) Income The following table shows the changes in accumulated other comprehensive (loss) income by component for the three and nine months ended September 30, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Currency ​ ​ ​ ​ ​ ​ Retirement ​ Translation ​ ​ ​ ​ ​ ​ ​ ​ Plans ​ Adjustments ​ Derivatives ​ Total Accumulated other comprehensive (loss) income, June 30, 2024 ​ $ ( 4,681 ) ​ $ ( 51,522 ) ​ $ 7,459 ​ $ ( 48,744 ) Other comprehensive income (loss) before reclassifications ​ 275 ​ 25,966 ​ ( 4,872 ) ​ 21,369 Income tax ​ ( 68 ) ​ — ​ 1,267 ​ 1,199 Other comprehensive income (loss) before reclassifications, net of tax ​ 207 ​ 25,966 ​ ( 3,605 ) ​ 22,568 Amounts reclassified from accumulated other comprehensive income (loss) ​ 79 ​ — ​ ( 1,757 ) ​ ( 1,678 ) Income tax ​ ( 21 ) ​ — ​ 457 ​ 436 Amounts reclassified from accumulated other comprehensive income (loss), net of tax ​ 58 ​ — ​ ( 1,300 ) ​ ( 1,242 ) Other comprehensive income (loss) ​ 265 ​ 25,966 ​ ( 4,905 ) ​ 21,326 Accumulated other comprehensive (loss) income, September 30, 2024 ​ $ ( 4,416 ) ​ $ ( 25,556 ) ​ $ 2,554 ​ $ ( 27,418 ) ​ 18 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Currency ​ ​ ​ ​ ​ ​ Retirement ​ Translation ​ ​ ​ ​ ​ ​ ​ ​ Plans ​ Adjustments ​ Derivatives ​ Total Accumulated other comprehensive (loss) income, June 30, 2023 ​ $ ( 7,212 ) ​ $ ( 40,144 ) ​ $ 11,363 ​ $ ( 35,993 ) Other comprehensive (loss) income before reclassifications ​ — ​ ( 9,891 ) ​ 3,621 ​ ( 6,270 ) Income tax ​ — ​ — ​ ( 941 ) ​ ( 941 ) Other comprehensive (loss) income before reclassifications, net of tax ​ — ​ ( 9,891 ) ​ 2,680 ​ ( 7,211 ) Amounts reclassified from accumulated other comprehensive income (loss) ​ 124 ​ — ​ ( 2,569 ) ​ ( 2,445 ) Income tax ​ 28 ​ — ​ 666 ​ 694 Amounts reclassified from accumulated other comprehensive income (loss), net of tax ​ 152 ​ — ​ ( 1,903 ) ​ ( 1,751 ) Other comprehensive income (loss) ​ 152 ​ ( 9,891 ) ​ 777 ​ ( 8,962 ) Accumulated other comprehensive (loss) income, September 30, 2023 ​ $ ( 7,060 ) ​ $ ( 50,035 ) ​ $ 12,140 ​ $ ( 44,955 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Currency ​ ​ ​ ​ ​ ​ Retirement ​ Translation ​ ​ ​ ​ ​ ​ ​ ​ Plans ​ Adjustments ​ Derivatives ​ Total Accumulated other comprehensive (loss) income, December 31, 2023 ​ $ ( 5,115 ) ​ $ ( 32,954 ) ​ $ 6,251 ​ $ ( 31,818 ) Other comprehensive income before reclassifications ​ 694 ​ 7,398 ​ 1,283 ​ 9,375 Income tax ​ ( 173 ) ​ — ​ ( 334 ) ​ ( 507 ) Other comprehensive income before reclassifications, net of tax ​ 521 ​ 7,398 ​ 949 ​ 8,868 Amounts reclassified from accumulated other comprehensive income (loss) ​ 241 ​ — ​ ( 6,280 ) ​ ( 6,039 ) Income tax ​ ( 63 ) ​ — ​ 1,634 ​ 1,571 Amounts reclassified from accumulated other comprehensive income (loss), net of tax ​ 178 ​ — ​ ( 4,646 ) ​ ( 4,468 ) Other comprehensive income (loss) ​ 699 ​ 7,398 ​ ( 3,697 ) ​ 4,400 Accumulated other comprehensive (loss) income, September 30, 2024 ​ $ ( 4,416 ) ​ $ ( 25,556 ) ​ $ 2,554 ​ $ ( 27,418 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Currency ​ ​ ​ ​ ​ ​ Retirement ​ Translation ​ ​ ​ ​ ​ ​ ​ ​ Plans ​ Adjustments ​ Derivatives ​ Total Accumulated other comprehensive (loss) income, December 31, 2022 ​ $ ( 7,201 ) ​ $ ( 40,095 ) ​ $ 11,441 ​ $ ( 35,855 ) Other comprehensive (loss) income before reclassifications ​ — ​ ( 9,940 ) ​ 8,026 ​ ( 1,914 ) Income tax ​ — ​ — ​ ( 2,086 ) ​ ( 2,086 ) Other comprehensive (loss) income before reclassifications, net of tax ​ — ​ ( 9,940 ) ​ 5,940 ​ ( 4,000 ) Amounts reclassified from accumulated other comprehensive income (loss) ​ 370 ​ — ​ ( 7,080 ) ​ ( 6,710 ) Income tax ​ ( 229 ) ​ — ​ 1,839 ​ 1,610 Amounts reclassified from accumulated other comprehensive income (loss), net of tax ​ 141 ​ — ​ ( 5,241 ) ​ ( 5,100 ) Other comprehensive income (loss) ​ 141 ​ ( 9,940 ) ​ 699 ​ ( 9,100 ) Accumulated other comprehensive (loss) income, September 30, 2023 ​ $ ( 7,060 ) ​ $ ( 50,035 ) ​ $ 12,140 ​ $ ( 44,955 ) ​ 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. 19 Table of Contents Note 11—Segment Information We periodically evaluate our application of accounting guidance for reportable segments and disclose information about reportable segments based on the way management organizes the enterprise for making operating decisions and assessing performance. We report our business under two segments: Products & Healthcare Services and Patient Direct. The Products & Healthcare Services segment includes our Medical Distribution division, which includes our U.S. distribution business, along with our outsourced logistics and value-added services businesses, and our Global Products division which manufactures and sources medical surgical products through our production and kitting operations. The Patient Direct segment includes our home healthcare divisions (Byram and Apria). We evaluate the performance of our segments based on their operating income excluding acquisition-related charges and intangible amortization and exit and realignment charges, net, along with other adjustments, that, as a result of their nature, would not be expected to occur as part of our normal business operations on a regular basis. Segment assets exclude inter-segment account balances as we believe their inclusion would be misleading and not meaningful. The following tables present financial information by segment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, ​ 2024 2023 2024 2023 Net revenue: ​ ​ ​ ​ Products & Healthcare Services ​ $ 2,034,279 ​ $ 1,943,467 ​ $ 6,019,721 ​ $ 5,789,679 Patient Direct ​ 686,846 ​ 648,275 ​ 1,985,089 ​ 1,888,138 Consolidated net revenue ​ $ 2,721,125 ​ $ 2,591,742 ​ $ 8,004,810 ​ $ 7,677,817 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income: ​ ​ ​ ​ Products & Healthcare Services ​ $ 4,233 ​ $ 19,803 ​ $ 27,187 ​ $ 24,564 Patient Direct ​ 79,932 ​ 64,435 ​ 190,598 ​ 169,349 Acquisition-related charges and intangible amortization ​ ( 21,097 ) ​ ( 30,217 ) ​ ( 61,395 ) ​ ( 74,609 ) Exit and realignment charges, net ​ ​ ( 28,880 ) ​ ​ ( 30,180 ) ​ ​ ( 85,530 ) ​ ​ ( 74,817 ) Litigation and related charges (1) ​ ( 9,984 ) ​ — ​ ( 16,662 ) ​ — Consolidated operating income ​ $ 24,204 ​ $ 23,841 ​ $ 54,198 ​ $ 44,487 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization: ​ ​ ​ ​ Products & Healthcare Services ​ $ 18,382 ​ $ 20,021 ​ $ 60,832 ​ $ 57,360 Patient Direct ​ 43,232 ​ 53,631 ​ 138,756 ​ 159,280 Consolidated depreciation and amortization ​ $ 61,614 ​ $ 73,652 ​ $ 199,588 ​ $ 216,640 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Share-based compensation: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Products & Healthcare Services ​ $ 4,141 ​ $ 2,917 ​ $ 13,696 ​ $ 10,649 Patient Direct ​ ​ 1,198 ​ ​ 1,699 ​ ​ 4,131 ​ ​ 5,113 Other (2) ​ ​ 341 ​ ​ 1,126 ​ ​ 1,454 ​ ​ 1,655 Consolidated share-based compensation ​ $ 5,680 ​ $ 5,742 ​ $ 19,281 ​ $ 17,417 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital expenditures: ​ ​ ​ ​ Products & Healthcare Services ​ $ 17,763 ​ $ 5,023 ​ $ 29,130 ​ $ 17,957 Patient Direct ​ 43,755 ​ 45,565 ​ 127,596 ​ 133,610 Consolidated capital expenditures ​ $ 61,518 ​ $ 50,588 ​ $ 156,726 ​ $ 151,567 ​ (1) Litigation and related charges includes settlement costs and related fees of legal matters within our Apria division, which do not occur in the ordinary course of our business, are non-recurring/infrequent and are inherently 20 Table of Contents unpredictable in timing and amount. These charges are reported within Other operating expense, net in our Statements of Operations for the three and nine months ended September 30, 2024. ​ (2) Other share-based compensation expense is captured within Exit and realignment charges, net or Acquisition-related charges for the three and nine months ended September 30, 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2024 ​ December 31, 2023 Total assets: ​ ​ Products & Healthcare Services ​ $ 2,519,690 ​ $ 2,359,825 Patient Direct ​ ​ 2,516,138 ​ ​ 2,490,460 Segment assets ​ ​ 5,035,828 ​ ​ 4,850,285 Cash and cash equivalents ​ 45,454 ​ 243,037 Consolidated total assets ​ $ 5,081,282 ​ $ 5,093,322 ​ Non-cash last-in, first-out (LIFO) charges (credits) to merchandise inventories valued at the lower of cost or market, with the approximate cost determined by the LIFO method for distribution inventories in the U.S. within our Products & Healthcare Services segment, were $ 6.7 million and $( 3.7 ) million for the three months ended September 30, 2024 and 2023, and $ 11.0 million and $( 3.3 ) million for the nine months ended September 30, 2024 and 2023. The net book value of patient service equipment sales and dispositions within the Patient Direct segment, net of the gain for returned equipment to Philips Respironics for previously recalled equipment, were $ 7.9 million and $ 10.0 million for the three months ended September 30, 2024 and 2023 and $ 22.7 million and $ 27.2 million for the nine months ended September 30, 2024 and 2023. ​ The following table presents net revenue by geographic area, which were attributed based on the location from which we ship products or provide services: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, ​ ​ 2024 2023 2024 2023 Net revenue: ​ ​ ​ ​ United States ​ $ 2,661,469 ​ $ 2,518,952 ​ $ 7,821,088 ​ $ 7,470,424 International ​ 59,656 ​ 72,790 ​ 183,722 ​ 207,393 Consolidated net revenue ​ $ 2,721,125 ​ $ 2,591,742 ​ $ 8,004,810 ​ $ 7,677,817 ​ ​ 21 Table of Contents Note 12—Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which will require disclosure of additional detailed information about a reportable segment’s expenses, including significant segment expenses regularly provided to the Chief Operating Decision Maker (CODM), the title and position of the CODM, and how the CODM uses the reported measure(s) of a segment’s profit or loss. This ASU is effective for us in annual periods beginning after December 15, 2023 and interim periods within annual years beginning after December 15, 2024. The amendments in this ASU must be applied on a retrospective basis to all prior periods presented in the financial statements and early adoption is permitted. We expect this ASU to only impact our disclosures with no impacts to our results of operations, financial condition and cash flows. In December 2023, the FASB Issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which will require additional annual income tax disclosures, including disclosure of reconciling items by jurisdiction and nature to the extent those items exceed a specified threshold. In addition, this ASU will require disclosure of income taxes paid, net of refunds received disaggregated by federal, state, and foreign and by jurisdiction if the amount is more than 5% of total income tax payments, net of refunds received. The amendments in this ASU are effective for us in annual periods beginning after December 15, 2024. The amendments in this ASU are required to be applied on a prospective basis and retrospective adoption is permitted. We expect this ASU to only impact our disclosures with no impacts to our results of operations, financial condition and cash flows . Note 13—Commitments, Contingent Liabilities, and Legal Proceedings Commitments include $ 48.4 million of legally binding lease payments for the Morgantown, West Virginia center of excellence for medical supplies and logistics lease signed, but not yet commenced. Refer to our Annual Report on Form 10-K for the year ended December 31, 2023 for disclosure of other material contractual obligations. We are party to various legal claims that are ordinary and incidental to our business, including ones 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. 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 September 30, 2024 for currently pending matters considered probable of loss, which is not material, 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. On July 22, 2024, we entered into an Agreement and Plan of Merger to acquire Rotech for $ 1.36 billion in cash. Given anticipated tax benefits of approximately $ 40 million from the transaction, the net purchase price is approximately $ 1.32 billion. Rotech is a national leader in providing home medical equipment in the US. The definitive agreement contains certain termination rights for the Company and Rotech. In the event that we terminate the contract, we will be required to pay Rotech a termination fee of $ 70.0 million. The transaction is subject to customary closing conditions, including expiration or termination of the applicable waiting period under the Hart Scott Rodino Act, and is expected to close in the first half of 2025. We have fully committed financing in place and expect to use a combination of cash and incremental borrowings to fund the purchase price. Note 14 - Subsequent Events On October 18, 2024, O&M Funding and Owens & Minor Medical, LLC., each a wholly-owned subsidiary of the Company, entered into a Receivables Purchase Agreement (the Receivables Sale Program) with persons from time to time party hereto, as Purchasers, PNC Bank, National Association, as Administrative Agent, and PNC Capital Markets LLC, as Structuring Agent, pursuant to which accounts receivable with an aggregate outstanding amount not to exceed 22 Table of Contents $ 450 million are sold, on a limited-recourse basis, to the Purchasers in exchange for cash. The Receivables Sale Program amends and restates in its entirety, the Receivables Financing Agreement, dated as of February 19, 2020. Transactions under this agreement will be accounted for as sales in accordance with ASC 860, Transfers and Servicing, with the sold receivables removed from our consolidated balance sheets. Under the Receivables Sale Program, we provide certain servicing and collection actions on behalf of the Purchasers; however, we do not maintain a ny beneficial interest in the accounts receivable sold.