What changed in this filing

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Item 9A. Controls and Procedures

2025-02-28 compared with 2024-02-20 · 286 added, 270 removed, 1098 unchanged (34% of the section changed)

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Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934.

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended.

Our internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

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Pesicka, President, Chief Executive Officer & Director

/s/ Alexander J.

Bruni, Executive Vice President & Chief Financial Officer

/s/ Jonathan A.

Leon, Executive Vice President & Chief Financial Officer

Changes in Internal Control over Financial Reporting

Beginning with the first quarter of 2023, management’s evaluation and conclusion as to the effectiveness of the design and operation of our disclosure controls and procedures as of and for the period covered by this report includes the evaluation of the internal control over financial reporting of Apria, Inc.

There were no other changes in our internal control over financial reporting that occurred during the period of this report that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

There were no changes in our internal control over financial reporting that occurred during the fourth quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information

During the three months ended December 31, 2024, none of our directors or officers informed us of the adoption or termination of a trading plan intended to satisfy Rule 10b5-1(c).

Amended and Restated Severance Arrangements

On February 27, 2025, our Board approved the amendment and restatement of the Owens & Minor, Inc.

Officer Severance Policy (the “Officer Severance Policy”), in which each of our named executive officers participates, and the Company’s existing Executive Change of Control Severance Agreements with each of our named executive officers (the “CIC Agreements”).

Among other things, (i) the Officer Severance Policy was updated to increase the applicable severance multiplier and severance period from 1.50x and 18 months, respectively, to 2.0x and 24 months, and (ii) the Board approved the amendment of the CIC Agreements to increase (a) the applicable severance multiplier from 2.0x to 3.0x, and (b) the applicable period for the employer portion of COBRA premiums from two years to three years.

The material terms of the Officer Severance Policy and CIC Agreements, as previously described in the Company’s 2024 Proxy Statement filed with the Securities and Exchange Commission on March 27, 2024, otherwise remain unchanged.

The foregoing descriptions are qualified in their entirety by reference to the amended Officer Severance Policy, a copy of which is filed herewith as Exhibit 10.13, and the Form of Amended and Restated Executive Change of Control Severance Agreement, a copy of which is filed herewith as Exhibit 10.61, each of which are incorporated by reference herein.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Information required by Items 10-14 can be found under Information about our Executive Officers under Part I of this Form 10-K and the registrant’s 2025 Proxy Statement pursuant to instructions G(3) of the General Instructions to Form 10-K.

We have adopted an insider trading policy which governs transactions in our securities by the Company and its directors, officers, and employees that is designed to promote compliance with insider trading laws, rules and regulations applicable to the Company.

A copy of our insider trading policy is filed as an exhibit to this Annual Report on Form 10-K.

Because our common stock is listed on the New York Stock Exchange (NYSE), our Chief Executive Officer is required to make, and he has made, an annual certification to the NYSE stating that he was not aware of any violation of the corporate governance listing standards of the NYSE.

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Distribution, selling and administrative expenses

Goodwill impairment charge

Acquisition-related charges and intangible amortization

Exit and realignment charges

Exit and realignment charges, net

Other operating expense (income), net

Operating income

Operating (loss) income

Interest expense, net

(Gain) loss on extinguishment of debt

Loss (gain) on extinguishment of debt

Other expense, net

(Loss) income before income taxes

Income tax (benefit) provision

Income tax provision (benefit)

Net (loss) income

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Net (loss) income

Other comprehensive income (loss) net of tax:

Other comprehensive (loss) income, net of tax:

Currency translation adjustments

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Change in gains and losses on derivative instruments

Total other comprehensive income (loss), net of tax

Total other comprehensive (loss) income, net of tax

Comprehensive (loss) income

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Depreciation and amortization

Goodwill impairment charge

Share-based compensation expense

(Gain) loss on extinguishment of debt

Loss (gain) on extinguishment of debt

Deferred income tax benefit

(Benefit) provision for losses on accounts receivable

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

Gain on sale and dispositions of property and equipment

Changes in operating assets and liabilities, net of acquisitions:

Gain from sales and dispositions of property and equipment

Changes in operating assets and liabilities:

Accounts receivable

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Additions to computer software

Proceeds from sale of property and equipment

Proceeds from sales of property and equipment

Cash used for investing activities

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( 1,465,800 )

( 1,156,300 )

Borrowings under Revolving Credit Facility

Repayments under Revolving Credit Facility

Repayments of debt

Proceeds from issuance of debt

Borrowings (repayments) under revolving credit facility, net and Receivables Financing Agreement

Borrowings under Receivables Financing Agreement

Financing costs paid

Cash dividends paid

Payment for termination of interest rate swaps

Cash (used for) provided by financing activities

Effect of exchange rate changes on cash, cash equivalents and restricted cash

Net increase in cash, cash equivalents and restricted cash

Net (decrease) increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

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Supplemental disclosure of cash flow information:

Income taxes (received) paid, net

Income taxes paid (received), net

Interest paid

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Balance, December 31, 2021

Other comprehensive loss

Dividends declared ($ 0.01 per share)

Other comprehensive income

Share-based compensation expense, exercises and other

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Balance, December 31, 2023

Other comprehensive income

Other comprehensive loss

Share-based compensation expense, exercises and other

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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 December 31, 2023 and 2022 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.

Restricted cash as of December 31, 2023 also includes $ 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).

Restricted cash as of 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 and $ 14 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.

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Restricted cash included in Other current assets

Restricted cash included in Other assets, net

Total cash, cash equivalents, and restricted cash

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Allowances for losses on accounts receivable of $ 6.2 million and $ 7.9 million have been applied as reductions of accounts receivable at December 31, 2024 and 2023.

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 December 31, 2023, there were a total of $ 124 million of uncollected accounts receivable that had been sold or removed from our consolidated balance sheet.

Receivables Financing Agreement.

On March 29, 2022, we entered into an amendment to our accounts receivable securitization program (Receivables Financing Agreement) which has a maximum borrowing capacity of $ 450 million.

Under the Receivables Financing Agreement, certain of our accounts receivable balances are sold to our wholly owned special purpose entity, O&M Funding LLC.

The sold accounts receivable balances are collateral and outstandings are recorded as debt.

This agreement was not in effect as of December 31, 2024, as it was amended and restated i n its entirety on October 18, 2024, as described below.

Receivables Purchase Agreement.

We account for these transactions as sales with the sold receivables removed from our consolidated balance sheets.

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however, we do not maintain any beneficial interest in the accounts receivable sold.

The RPA is separate and distinct from the accounts receivable securitization program (the Receivables Financing Agreement).

The RPA is separate and distinct from the Receivables Financing Agreement and the amendment as described below.

As a result of the amendment described below, we do not expect to utilize the RPA in the future.

Proceeds from the sales 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 sales of accounts receivable, net of payments made to the Purchaser, is reflected in the change in accounts receivable within cash provided by operating activities in the consolidated statements of cash flows.

Total accounts receivable sold under the RPA and net cash proceeds were $ 1.4 billion during the year ended December 31, 2023.

We collected $ 1.3 billion of the sold accounts receivable for the year ended December 31, 2023.

The losses on sales of accounts receivable are recorded

in other operating expense (income), net in the consolidated statements of operations and were $ 10.6 million for the year ended December 31, 2023.

Total accounts receivable sold under the RPA and net cash proceeds were $ 1.7 billion and $ 1.4 billion during the years ended December 31, 2024 and 2023.

We collected $ 1.9 billion and $ 1.3 billion of the sold accounts receivable for the years ended December 31, 2024 and 2023.

The losses on sales of accounts receivable are recorded in other operating expense (income), net in the consolidated statements of operations and were $ 11 million for the years ended December 31, 2024 and 2023.

Receivables Sale Program.

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, 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 $ 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.

Transactions under this agreement are 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 any beneficial interest in the accounts receivable sold.

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

Total accounts receivable sold and net cash proceeds under the Receivables Sale program were $ 168 million during the year ended December 31, 2024.

We collected $ 98 million of the sold accounts receivable for the year ended December 31, 2024.

The losses on sales of accounts receivable, inclusive of professional fees incurred to establish the agreement, recorded in other operating expense (income), net in the consolidated statements of operations were $ 1.9 million for the year ended December 31, 2024.

As of December 31, 2024, there was a total of $ 70 million of uncollected accounts receivable sold and removed from our consolidated balance sheet under the Receivables Sale Program.

As of December 31, 2023 there was a total of $ 124 million of uncollected accounts receivable sold and removed from our consolidated balance sheet under the RPA.

As of December 31, 2024 the Receivables Sale Program was utilized and we do not anticipate utilizing the RPA in the future.

Merchandise Inventories.

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Shifts in market trends and conditions, as well as changes in customer preferences and behavior could affect the value of our inventories.

At December 31, 2024 and 2023 we had net inventory of $ 1.1 billion and $ 1.1 billion, of which $ 658 million and $ 718 million were valued under LIFO, all of which relates to inventory in our Products & Healthcare Services segment.

If LIFO inventories had been valued on a current cost or FIFO basis, they would have been $ 234 million and $ 233 million greater as of December 31, 2024 and 2023.

Inventory, net, consists of the following:

December 31, 2024

December 31, 2023

Finished goods

Raw materials

Work in process

Inventory, gross

Inventory valuation allowances

Inventory, net

For the year ended December 31, 2022, primarily due to demand declines and builds in excess personal protective equipment (PPE), we increased our estimate of inventory valuation allowances.

This change in estimate contributed to a $ 92 million (approximately $ 70 million, net of tax) valuation adjustment, or an approximate $ 0.93 and $ 0.91 impact per basic and diluted common share.

Property and Equipment, net.

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Patient service equipment depreciation is classified in our consolidated statements of operations within cost of goods sold as the equipment is rented to patients as part of our primary operations within the Patient Direct segment.

We enter into non-cancelable agreements to lease most of our office and warehouse facilities with remaining terms generally ranging from one to nine years.

We enter into non-cancelable agreements to lease most of our office and warehouse facilities with remaining terms generally ranging from one to 11 years.

Certain leases include renewal options, generally for one to five-year increments.

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We evaluate goodwill for impairment annually, as of October 1, and if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

Qualitative factors

are first assessed to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

If it is determined that it is more likely than not that the fair value does not exceed the carrying amount, then a quantitative test is performed.

Qualitative factors are first assessed to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

If it is determined that it is more likely than not that the fair value does not exceed the carrying amount, then a

quantitative test is performed.

The quantitative goodwill impairment test involves a comparison of the estimated fair value of the reporting unit to the respective carrying amount.

As of October 1, 2023, due to changes in our long-term financial plan assumptions, we elected to bypass the qualitative test and performed a quantitative goodwill impairment test for all reporting units with goodwill.

We determine the estimated fair value of our reporting units by using an equally weighted combination of the income-based approach and the market-based approach.

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Under the market-based approach, significant estimates and assumptions also include the selection of appropriate guideline public companies whose stock is actively traded in public markets and the determination of appropriate valuation multiples to apply to the reporting unit.

Although we believe our assumptions and estimates are reasonable and appropriate, any significant adverse changes in one or a combination of key assumptions, including, but not limited to, a failure to meet our business plans or expected earnings and cash flows, unanticipated events and circumstances such as changes in assumptions about the duration and magnitude of increased supply chain expense, commodities costs or inflationary pressures and our planned efforts to mitigate such impacts, disruptions in the supply chain, estimated demand and selling prices for PPE or other products, an increase in the discount rate, a decrease in the terminal growth rate, increases in tax rates (including potential tax reform) or a significant change in industry or economic trends, may affect the accuracy or validity of such estimates and may result in goodwill impairment.

Although we believe our assumptions and estimates are reasonable and appropriate, any significant adverse changes in one or a combination of key assumptions, including, but not limited to, a failure to meet our business plans or expected earnings and cash flows, unanticipated events and circumstances such as the loss of a contract with a large payor, changes in assumptions about the duration and magnitude of increased supply chain expense, commodities costs or inflationary pressures and our planned efforts to mitigate such impacts, disruptions in the supply chain, estimated demand and selling prices for PPE or other products, a decline in our market capitalization, an increase in the discount rate, a decrease in the terminal growth rate, increases in tax rates (including potential tax reform) or a significant change in industry or economic trends, may affect the accuracy or validity of such estimates and may result in goodwill impairment.

We may be required to record a material charge to earnings in our consolidated financial statements during the period in which any impairment of our goodwill is determined, which could adversely affect our results of operations.

During the year ended December 31, 2024 we recognized a pre-tax impairment charge of $ 307 million ($ 305 million net of tax), or a $ 3.97 negative impact per share, related to the Apria reporting unit.

No impairment of goodwill was recorded for the years ended December 31, 2023 and 2022.

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Liabilities are estimated for healthcare costs using current and historical claims data.

Liabilities for workers’ compensation and

automobile liability claims are estimated using historical claims data and loss development factors.

Liabilities for workers’ compensation and automobile liability claims are estimated using historical claims data and loss development factors.

If the underlying facts and circumstances of existing claims change or historical trends are not indicative of future trends, then we may be required to adjust the liability and related expense accordingly.

Self-insurance liabilities are included in other current liabilities and other liabilities in the consolidated balance sheets and were $ 26.0 million and $ 25.6 million in total at December 31, 2023 and 2022.

Self-insurance liabilities are included in other current

liabilities and other liabilities in the consolidated balance sheets and were $ 27 million and $ 26 million in total at December 31, 2024 and 2023.

Revenue Recognition.

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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.

Revenue is recognized under a portfolio approach, as we expect that this approach would not differ materially from considering each contract or performance obligation separately.

Rental revenue, less estimated adjustments, is recognized as earned on a straight-line basis over the noncancellable lease term.

We recorded $ 617 million and $ 447 million in revenue related to equipment we rent to patients for the years ended December 31, 2023 and 2022.

Equipment rental revenue was no t material in 2021.

We recorded $ 591 million, $ 617 million and $ 447 million in revenue related to equipment we rent to patients for the years ended December 31, 2024, 2023, and 2022.

See Note 16 for disaggregation of revenue by segment and geography as we believe that best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.

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Within our Patient Direct segment, patient service equipment depreciation and the net book value of dispositions are classified in the Company’s consolidated statements of operations within cost of goods sold as the equipment is rented to patients as part of the Company’s primary operations.

Depreciation expense for patient service equipment was $ 138 million and $ 88.7 million for the years ended December 31, 2023 and 2022.

Equipment depreciation was no t material for the year ended 2021.

The net book value of patient service equipment dispositions were $ 36.3 million and $ 22.1 million for the years ended December 31, 2023 and 2022.

We did no t incur material dispositions during the year ended December 31, 2021.

As a result of different practices of categorizing costs and different business models throughout our industry, our gross margins may not necessarily be comparable to other companies in our industry.

Depreciation expense for patient service equipment was $ 127 million, $ 138 million and $ 89 million for the years ended December 31, 2024, 2023 and 2022.

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 $ 34 million, $ 36 million and $ 22 million for the years ended December 31, 2024, 2023 and 2022.

As a result of different practices of categorizing costs and different business models throughout our industry, our gross profits may not necessarily be comparable to other companies in our industry.

Inventory valuation allowance adjustments, including for excess and obsolete inventory, are recorded as a charge to cost of goods sold.

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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 estimated fair value of our reporting units determined during a quantitative review of goodwill utilizes 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).

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Acquisition-Related Charges and Intangible Amortization .

Acquisition-related charges consist primarily of one-time costs related to the Apria Acquisition, including transaction costs necessary to consummate the acquisition, which consisted of investment banking advisory fees and legal fees, director and officer tail insurance expense, severance and retention bonuses, and professional fees.

Acquisition-related charges consist primarily of one-time costs related to the expected acquisition of Rotech Healthcare Holdings Inc., (Rotech) and the Agreement and Plan of Merger dated January 7, 2022 to acquire Apria, Inc.

(Apria Acquisition), including transaction costs necessary to consummate the acquisition, which consisted of investment banking advisory fees and legal fees, director and officer tail insurance expense, severance and retention bonuses, and professional fees.

Acquisition-related charges and intangible amortization also includes transition expenses and costs to integrate personnel, systems and processes along with 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 and are excluded to allow for a more consistent comparison with forecasted, current and historical results.

Exit and Realignment Charges .

Exit and realignment charges consist of costs associated with optimizing our operations which includes the consolidation of certain production facilities, distribution centers, warehouses, administrative offices and IT strategic initiatives, divestiture related costs and other strategic actions.

These amounts are highly dependent on the size and frequency of acquisitions and are excluded from our segment results to allow for a more consistent comparison with forecasted, current and historical results.

Exit and Realignment Charges, net .

Exit and realignment charges, net consist of costs associated with optimizing our operations which includes the consolidation of certain production facilities, distribution centers, warehouses, administrative offices and IT strategic initiatives, divestiture related costs and other strategic actions.

These charges also include costs associated with our 2023-2024 Operating Model Realignment Program, which includes professional fees, severance and other costs to streamline functions and processes.

Costs associated with exit and realignment activities are recorded at their fair value when incurred.

Liabilities are established at the cease-use date for remaining contractual obligations discounted using a credit-adjusted risk-free rate of interest.

Liabilities are established at the cease-use date for

remaining contractual obligations discounted using a credit-adjusted risk-free rate of interest.

We evaluate these assumptions quarterly and adjust the liability accordingly.

Severance benefits are generally recorded when payment is considered probable and reasonably

Severance benefits are generally recorded when payment is considered probable and reasonably estimable.

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

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Recently Adopted Accounting Pronouncements .

In June 2016, the FASB issued Accounting Standards Update (ASU) No.

2016-13 Financial Instruments - Credit Losses, Measurement of Credit Losses on Financial Instruments, which changes the way entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net earnings.

Subsequent to the issuance of ASU No.

2016-13, the FASB issued various ASUs related to Credit Losses, Measurement of Credit Losses on Financial Instruments.

These ASUs do not change the core principle of the guidance in ASU No.

Instead these amendments are intended to clarify and improve operability of certain topics included within the credit losses standard.

We adopted ASU No.

2016-13 and subsequent amendments beginning January 1, 2023.

The adoption did not have a material impact on our consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted .

In November 2023, the FASB issued 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 will be effective for us in annual periods beginning after December 15, 2023 and interim periods within annual years beginning after December 15, 2024.

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 requires 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.

We adopted this ASU effective with the annual year ending December 31, 2024.

Its adoption impacted our disclosures with no impacts to our results of operations, financial condition and cash flows.

Recently Issued Accounting Pronouncements Not Yet Adopted.

In December 2023, the FASB Issued ASU 2023-09, Income Taxes (Topic 740):

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We expect this ASU to only impact our disclosures with no impacts to our results of operations, financial condition and cash flows .

Note 2—Significant Risks and Uncertainties

I n November 2024, the FASB issued ASU No.

2024-03, Income Statement – Reporting Comprehensive Income – Expense disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses which will require additional disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions .

The amendments in this ASU are effective for us in annual periods beginning after December 15, 2026.

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 2—Significant Concentration Risk

Many of our hospital customers in the U.S.

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GPOs representing a significant portion of our business are Vizient, Premier, Inc.

(Premier) and Health Trust Purchasing Group (HPG).

and Health Trust Purchasing Group.

Members of these GPOs have incentives to purchase from their primary selected distributor;

however, they operate independently and are free to negotiate directly with distributors and manufacturers.

For 2023, net revenue from hospitals under contract with these GPOs represented the following approximate percentages of our consolidated net revenue:

Vizient— 34 %;

Premier— 19 %;

and HPG— 11 %.

For 2024, net revenue from hospitals under contract with these GPOs represented approximately 65 % of our consolidated net revenue.

In 2024, 2023 and 2022, no sales of products of any individual suppliers exceeded 10% of our consolidated net revenue.

Note 3—Acquisition

On March 29, 2022 (the Acquisition Date), we completed the acquisition (the Apria Acquisition) of 100 % of Apria Inc.

Note 3—Acquisitions

Acquisition of Apria.

On March 29, 2022 (the Apria Acquisition Date), we completed the acquisition of 100 % of Apria, Inc.

(Apria) pursuant to the Agreement and Plan of Merger dated January 7, 2022, in exchange for approximately $ 1.7 billion, net of $ 144 million of cash acquired.

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This division is reported as part of the Patient Direct segment.

The following table presents the final fair value of the assets acquired and liabilities assumed recognized as of the Acquisition Date.

The fair value and useful lives of tangible and intangible assets acquired were determine based on various valuation methods, including the income and cost approach, using several significant unobservable inputs including, but not limited to projected cash flows and a discount rate.

These inputs are considered Level 3 inputs.

as of Acquisition Date

Assets acquired:

Current assets

Intangible assets

Other non-current assets

Liabilities assumed:

Current liabilities

Noncurrent liabilities

Total liabilities

Fair value of net assets acquired, net of cash

Current assets acquired include $ 88.7 million in fair value of receivables, which reflects the approximate amount contractually owed.

We are amortizing the fair value of acquired intangible assets, primarily customer relationships, including Payor and capitated relationships, and trade names over their estimated weighted average useful lives of one to 15 years .

Goodwill of $ 1.3 billion, which we assigned to our Patient Direct segment, consists largely of expected opportunities to expand into new markets and further develop a presence in the home healthcare business.

Approximately $ 33 million of the goodwill is deductible for income tax purposes.

The following table provides pro forma results of net revenue and net loss for the year ended December 31, 2022 and 2021 as if Apria was acquired on January 1, 2021, based on the final purchase price allocation.

The pro forma

results below are not necessarily indicative of the results that would have been if the acquisition had occurred on the dates indicated, nor are the pro forma results indicative of results which may occur in the future.

Years Ended December 31,

Net (loss) income

The following table provides pro forma results of net revenue and net loss for the year ended December 31, 2022 as if Apria was acquired on January 1, 2021, based on the final purchase price allocation.

The pro forma results below are not necessarily indicative of the results that would have been if the acquisition had occurred on the dates indicated, nor are the pro forma results indicative of results which may occur in the future.

Year Ended December 31, 2022

Pro forma net loss of $ 98 million for the year ended December 31, 2022 includes pro forma adjustments for interest expense of $ 21 million and amortization of intangible assets of $ 11 million.

The pro forma net loss for the year ended December 31, 2022 also includes $ 39 million in seller transaction expenses and stock compensation expense associated with $ 108 million owed to the holders of Apria stock awards in connection with the Apria Acquisition.

Revenue and net loss of Apria since the Acquisition Date included in the consolidated statement of operations for the year ended December 31, 2022 were $ 937 million and $ 3.3 million, respectively.

Acquisition-related charges within acquisition-related charges and intangible amortization presented in our consolidated statements of operations were $ 17.5 million, $ 48.1 million, and $ 3.0 million for the years ended December 31, 2023, 2022, and 2021.

Revenue and net loss of Apria since the Apria Acquisition Date included in the consolidated statement of operations for the year ended December 31, 2022 were $ 937 million and $ 3.3 million, respectively.

Acquisition-related charges within acquisition-related charges and intangible amortization presented in our consolidated statements of operations for the year ended December 31, 2024 were $ 22 million, related to the expected acquisition of Rotech, which consisted primarily of legal and professional fees.

Acquisition-related charges for the years ended December 31, 2023 and 2022 were $ 18 million, and $ 48 million, consisting of costs primarily related to the acquisition of Apria.

These amounts are excluded from our segments’ operating income.

Note 4—Merchandise Inventories

At December 31, 2023 and 2022 we had net inventory of $ 1.1 billion and $ 1.3 billion, of which $ 718 million and $ 840 million were valued under LIFO, all of which relates to inventory in our Products & Healthcare Services segment.

If LIFO inventories had been valued on a current cost or FIFO basis, they would have been greater by $ 233 million and $ 231 million as of December 31, 2023 and 2022.

At December 31, 2023 and 2022, included in our inventory was $ 75.7 million and $ 84.4 million in raw materials, $ 61.5 million and $ 73.7 million in work in process and the remainder was finished goods.

For the year ended December 31, 2022, primarily due to demand declines and builds in excess personal protective equipment (PPE), we increased our estimate of inventory valuation allowances.

This change in estimate contributed to a $ 92.3 million (approximately $ 69.6 million, net of tax) valuation adjustment, or an approximate $ 0.93 and $ 0.91 impact per basic and diluted common share.

For the year ended December 31, 2023, our inventory valuation allowances declined primarily due to inventory reductions, including excess PPE previously reserved.

At December 31, 2023 and 2022 we had inventory valuation allowances of $ 78.2 million and $ 128 million.

Note 4—Property and Equipment, Net

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Patient Direct

Net carrying amount of goodwill, December 31, 2021

Currency translation adjustments

Carrying amount of goodwill, December 31, 2022

Currency translation adjustments

Acquisition adjustment

Carrying amount of goodwill, December 31, 2023

Goodwill impairment charge

Currency translation adjustments

Carrying amount of goodwill, December 31, 2024

As of October 1, 2023, due to changes in our long-term financial plan assumptions, we elected to bypass the qualitative test and a quantitative goodwill impairment test was performed to compare the estimated fair value for all reporting units with goodwill to the respective carrying amount.

As of October 1, 2024, we performed our annual impairment test and there were no impairments of goodwill.

During the three months ended December 31, 2024, we experienced financial market changes inclusive of a decline in Owens & Minor’s stock price and an increase in the risk free interest rate resulting in an increase in the discount rate used for impairment analysis.

Additionally, anticipated changes in pricing of a capitated contract contributed to a reduction in projected future cash flows within our Apria reporting unit.

As a result of these factors during the three months ended December 31, 2024, we performed an interim quantitative goodwill impairment test and concluded that the fair value for our Apria reporting unit within our Patient Direct segment was below its carrying amount.

The amount by which the carrying value of the impaired reporting unit exceeded its fair value was $ 305 million and we recognized a pre-tax impairment charge of $ 307 million ($ 305 million after-tax) for the quarter ended December 31, 2024.

We recorded these amounts in ‘Goodwill impairment charge’ in our consolidated statements of operations.

No impairment of goodwill was recorded for the years ended December 31, 2023 and 2022.

Intangible assets at December 31, 2023 and 2022 were as follows:

Intangible assets subject to amortization, which excludes indefinite-lived intangible assets at December 31, 2024 and 2023 were as follows:

Relationships

Gross intangible assets

Intangible assets, gross

Accumulated amortization

Net intangible assets

Intangible assets, net

Weighted average useful life

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Amortization expense for intangible assets was $ 65 million for 2024, $ 84 million for 2023 and $ 79 million for 2022.

As of December 31, 2023, based on the carrying value of intangible assets subject to amortization, estimated future amortization expense is as follows:

As of December 31, 2024, based on the carrying value of intangible assets subject to amortization, estimated future amortization expense was as follows:

Total future amortization

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Variable lease cost consists primarily of taxes, insurance, and common area or other maintenance costs for our leased facilities and patient service equipment which are paid as incurred.

Supplemental balance sheet information is as follows:

Supplemental balance sheet information was as follows:

As of December 31,

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Total lease liabilities

The gross value recorded under finance leases was $ 22.2 million and $ 21.5 million with associated accumulated depreciation of $ 13.7 million and $ 11.3 million as of December 31, 2023 and 2022.

The gross values recorded under finance leases were $ 22 million and $ 22 million with associated accumulated depreciation of $ 16 million and $ 14 million as of December 31, 2024 and 2023.

Other information related to leases was as follows:

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Present value of lease liabilities

Note 8—Exit and Realignment Costs

Note 7—Exit and Realignment Costs, Net

We periodically incur exit and realignment and other charges associated with optimizing our operations which includes the consolidation of certain facilities, IT strategic initiatives, and other strategic actions.

These charges also include costs associated with our 2023-2024 Operating Model Realignment Program, which includes professional fees, severance and other costs to streamline functions and processes.

Exit and realignment charges were $ 99.1 million, $ 6.9 million and $ 31.1 million for the years ended December 31, 2023, 2022 and 2021.

Exit and realignment charges, net were $ 110 million, $ 99 million and $ 6.9 million for the years ended December 31, 2024, 2023 and 2022.

These amounts are excluded from our segments’ operating income.

We have incurred $ 92.2 million in charges under our Operating Model Realignment Program and IT strategic initiatives for the year ended December 31, 2023, which are included in the total exit and realignment charges above.

expect to incur material future costs relating to our Operating Model Realignment Program and IT strategic initiatives, which we are not able to reasonably estimate.

We have incurred $ 110 million and $ 92 million in charges under our 2023-2024 Operating Model Realignment Program and IT strategic initiatives for the years ended December 31, 2024, and 2023, which are included in the total exit and realignment charges above.

Exit and realignment charges, net for the year ended December 31, 2024 also

included a gain of $ 7.4 million associated with the sale of our corporate headquarters.

We may incur material future costs relating to certain exit and realignment actions , which remain underway and we are not able to reasonably estimate.

The following table summarizes the activity related to exit and realignment cost accruals through December 31, 2024:

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Provision for exit and realignment activities:

Information system restructuring costs

Lease obligations

Cash payments

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Provision for exit and realignment activities:

Professional Fees

Vendor contract and lease termination costs

IT strategic initiatives

Cash payments

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Accrued exit and realignment charges, December 31, 2024

In addition to the exit and realignment accruals in the preceding table, we also incurred $ 3.4 million of costs that were expensed as incurred for the year ended December 31, 2023, which primarily related to charges associated with a lease termination and wind-down costs related to Fusion5.

We also incurred $ 0.7 million and $ 11.2 million of costs that were expensed as incurred for the years ended December 31, 2022 and 2021, which primarily included wind-down costs related to Fusion5.

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 $ 15 million of costs that were expensed as incurred for the year ended December 31, 2024, which primarily related to accelerated depreciation of certain assets held in our Products & Healthcare Services segment.

We also incurred $ 3.4 million and $ 0.7 million of costs that were expensed as incurred for the years ended December 31, 2023 and 2022, which primarily related to charges associated with a lease termination and wind-down costs related to a subsidiary, Fusion5.

Debt consists of the following:

4.375 % Senior Notes, due December 2024

Receivables Securitization Program

4.500 % Senior Notes, due March 2029

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Long-term debt

We have $ 171 million of 4.375 % senior notes due in December 2024 (the 2024 Notes), with interest payable semi-annually.

The 2024 Notes were sold at 99.6 % of the principal amount with an effective yield of 4.422 %.

We have the option to redeem the 2024 Notes in part or in whole prior to maturity at a redemption price equal to the greater of 100 % of the principal amount or the present value of the remaining scheduled payments discounted at the applicable Benchmark Treasury Rate (as defined) plus 30 basis points.

We used $ 73.5 million of cash to repurchase $ 74.7 million aggregate principal of the 2024 Notes during 2023.

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 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 (the Secured Parties) 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.

This agreement was terminated on the Redemption Date.

On March 29, 2022, we entered into an amendment to our Receivables Financing Agreement.

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Under the Receivables Financing Agreement, certain of our accounts receivable balances are sold to our wholly owned special purpose entity, O&M Funding LLC.

The Receivables Financing Agreement matures in March 2025.

We had no borrowings at December 31, 2023 and $ 96.0 million outstanding at December 31, 2022 under our Receivables Financing Agreement.

At December 31, 2023 and 2022, we had maximum revolving borrowing capacity of $ 450 million and $ 354 million available under our Receivables Financing Agreement.

On October 18, 2024, we entered into the Receivables Sale Program, which amends and restates in its entirety, the Receivables Financing Agreement.

Refer to Note 1 for additional content related to the Receivables Sale Program.

We had no borrowings at December 31, 2023 under our Receivables Financing Agreement.

At December 31, 2023, we had maximum revolving borrowing capacity of $ 450 million available 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 new 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).

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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 payments of $ 9.4 million on the Term Loan A and $ 6.0 million on the Term Loan B, we made unscheduled principal payments of $ 97.5 million on Term Loan A and $ 72.5 million on Term Loan B during 2023.

In addition to our scheduled principal payments of $ 22 million on the Term Loan A and $ 6.0 million on the Term Loan B, we made unscheduled principal payments of $ 45 million on Term Loan A during 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 Notes Offering).

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We may also redeem up to 40 % of the aggregate principal amount of the 2029 Unsecured Notes at any time prior to March 31, 2024, at a redemption price equal to 104.5 % 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.

We used $ 18.2 million of cash to repurchase $ 21.3 million aggregate principal of the 2029 Unsecured Notes during 2023.

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).

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.

We used $ 43.5 million of cash to repurchase $ 47.8 million aggregate principal of the 2030 Unsecured Notes during 2023.

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

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and Europe that were issued outside of the Revolving Credit Agreement for $ 2.9 million and $ 3.0 million as of December 31, 2024 and 2023.

The Revolving Credit Agreement, the Credit Agreement, the Receivables Financing Agreement, the 2024 Notes, 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 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 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.

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As of December 31, 2024, scheduled future principal payments of debt, excluding finance leases and other, were as follows:

Of the $ 199 million due in 2024, $ 179 million is due in December 2024.

Current maturities at December 31, 2023 include $ 171 million in principal payments on our 2024 Notes, $ 21.9 million in principal payments on our Term Loan A, $ 6.0 million in principal payments on our Term Loan B, and $ 7.7 million in current portion of finance leases and other.

Current maturities at December 31, 2024 include $ 34 million in principal payments on our Term Loan A, $ 6.0 million in principal payments on our Term Loan B, and $ 5.2 million in current portion of finance leases and other.

Note 9—Share-Based Compensation

We maintain a share-based compensation plan (the Plan) that is administered by the Our People & Culture Committee of the Board of Directors.

The Plan allows us to award or grant to officers, directors and teammates incentive, non-qualified and deferred compensation stock options, stock appreciation rights (SARs), performance stock units and performance shares (collectively Performance Stock Awards (PSAs)), restricted stock units and restricted stock

(collectively Restricted Stock Awards (RSAs)) and unrestricted stock.

We use authorized and unissued common shares for grants of RSAs, SARs, PSAs or for stock option exercises.

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Nonvested awards at end of year

The total fair value of RSAs and PSAs vesting during the years ended December 31, 2023, 2022 and 2021 was $ 24.4 million, $ 21.6 million and $ 16.8 million.

The total fair value of RSAs and PSAs vested during the years ended December 31, 2024, 2023 and 2022 was $ 28 million, $ 24 million and $ 22 million.

Note 10—Retirement Plans

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Classification

Cash flow hedge

Interest rate swap

Cash flow hedges

Interest rate swaps

Other assets, net

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Classification

Cash flow hedge

Interest rate swap

Cash flow hedges

Interest rate swaps

Other assets, net

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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.

In March 2021, we terminated $ 300 million in notional value of interest rate swaps concurrent with the debt financing transaction.

The balance of the fair value adjustments of $ 25.1 million, which related to these terminated interest rate swaps, within accumulated other comprehensive loss was reclassified to (gain) loss on extinguishment of debt within our consolidated statements of operations for the year ended December 31, 2021.

The following table summarizes the effect of cash flow hedge accounting on our consolidated statements of operations for the year ended December 31, 2024:

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Comprehensive Loss

(Loss) Income

Effects are Recorded

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Interest rate swaps

(Gain) loss on extinguishment of debt

Interest expense, net

The amount of ineffectiveness associated with these contracts was immaterial for the periods presented.

For the years ended December 31, 2023, 2022 and 2021 we recognized a loss of $ 0.3 million, $ 0.9 million and $ 2.3 million, associated with our economic (non-designated) foreign currency contracts.

For the years ended December 31, 2024, 2023 and 2022 we recognized losses of $ 3.5 million, $ 0.3 million and $ 0.9 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 (income), net for our foreign exchange contracts.

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Total deferred tax benefit

Total income tax benefit

Total income tax provision (benefit)

A reconciliation of the federal statutory rate to our effective income tax rate is shown below:

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Increases (decreases) in the rate resulting from:

Net capital loss on divestiture

Unrecognized tax benefits

State income taxes, net of federal income tax impact

Research and development credit

Research and development (R&D) credit

Foreign income taxes

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Global intangible low-taxed income

Goodwill impairment

Effective income tax rate

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The valuation allowances relate to deferred tax assets for U.S.

federal and state capital loss carryforwards and net operating loss carryforwards in various state jurisdictions.

federal and state capital loss carryforwards and net operating loss carryforwards and credit carryforwards in various state jurisdictions.

capital loss carryforward, which has a full valuation allowance, has an expiration date of five years.

As of December 31, 2023, federal net operating losses of approximately $ 116 million are available to offset future federal taxable income.

As of December 31, 2024,

federal net operating losses of approximately $ 32 million are available to offset future federal taxable income.

The entire $ 32 million of net operating losses have an unlimited carryforward period and will not expire.

The capital loss and net operating loss carryforwards in various state jurisdictions have various expiration dates ranging from five years to an unlimited carryforward period.

As of December 31, 2024, there are $ 3.8 million of credit carryforwards available, with various expiration dates ranging from five to twenty years.

Based on management’s judgment using available evidence about historical and expected future taxable earnings, management believes it is more likely than not that we will realize the benefit of the existing deferred tax assets, net of valuation allowances, at December 31, 2024.

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Unrecognized tax benefits at December 31,

Included in the liability for unrecognized tax benefits at December 31, 2023 and 2022, were $ 2.7 million of tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

Included in the liability for unrecognized tax benefits at December 31, 2024 and 2023, there were no and $ 2.7 million of tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

These tax positions are temporary differences which do not impact the annual effective tax rate under deferred tax accounting.

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by our domestic subsidiaries.

Our amount of taxable income in the U.S.

is based on our transfer pricing methodology, which has been consistently applied for all years subject to the NOPAs.

We strongly disagree with the IRS position and will pursue all available administrative and judicial remedies, including those available under the U.S.

- Ireland Income Tax Treaty to alleviate double taxation.

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.

However, the ultimate outcome of disputes of this nature is uncertain, and if the IRS were to prevail on its assertions, the additional tax, interest, and any potential penalties could have a material adverse impact on our financial position, results of operations or cash flows.

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

In late June 2024, the IRS and the relevant foreign taxing authority mutually agreed to proposed adjustments to our 2015 through 2018 consolidated tax returns.

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, was $ 19 million, or a $ 0.24 negative impact per basic and diluted common share, including $ 5.3 million of interest, for the twelve months ended December 31, 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 $ 20 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 December 31, 2024.

As of December 31, 2024, we owed $ 43 million associated with the NOPA matter, which includes $ 12 million of interest accrued on the matter through December 31,

The balance sheet classification and amount owed may be subject to change depending on the timing of a final agreement with the IRS.

We file income tax returns in the U.S.

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however, certain returns may be subject to examination for differing periods.

The former owners are contractually obligated to indemnify us for all income tax liabilities incurred by Byram entities prior to its acquisition on August 1, 2017, and for all income tax liabilities incurred by the Halyard foreign entities located in Thailand, Mexico, and Honduras prior to its acquisition on April 30, 2018 .

The former owners are contractually obligated to indemnify us for all income tax liabilities incurred by the Halyard foreign entities located in Thailand prior to its acquisition on April 30, 2018.

Note 13—Net (Loss) Income per Common Share

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(in thousands, except per share data)

Years Ended December 31,

Year Ended December 31,

Net (loss) income

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Net (loss) income per common share

Share-based awards for the year ended December 31, 2023, of approximately 1.6 million shares were excluded from the calculation of net loss per diluted common share as the effect would be anti-dilutive.

Share-based awards for the years ended December 31, 2024 and 2023, of approximately 1.5 million and 1.6 million shares were excluded from the calculation of net loss per diluted common share as the effect would be anti-dilutive.

Note 14—Accumulated Other Comprehensive (Loss) Income

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Accumulated other comprehensive (loss) income, December 31, 2023

Other comprehensive (loss) income before reclassifications

Other comprehensive (loss) income 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 loss

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

Accumulated other comprehensive (loss) income, December 31, 2022

Other comprehensive income before reclassifications

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Accumulated other comprehensive income (loss), December 31, 2022

Accumulated other comprehensive loss, December 31, 2020

Other comprehensive income (loss) before reclassifications

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

Amounts reclassified from accumulated other comprehensive loss

Amounts reclassified from accumulated other comprehensive loss, net of tax

Other comprehensive income (loss)

Accumulated other comprehensive loss, December 31, 2021

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

Note 15— Commitments, Contingent Liabilities, and Legal Proceedings

O&M Halyard N95 Mask FDA Release

On April 5, 2023, we received a communication from the National Institute for Occupational Safety & Health (NIOSH) that products from one lot of a model (No.

46827) of surgical N95 respirator manufactured by O&M Halyard did not pass laboratory tests for fluid resistance and for filtration efficiency, and that products from one lot of another model (No.

46727) did not pass fluid resistance testing, but did pass filtration efficiency testing.

Our investigation determined that a limited number of lots were potentially implicated by the results of the NIOSH particulate filtration testing on model No.

46827, and that the vast majority of the products in those lots remained in our possession and under our control.

Those lots have been segregated for disposal.

We also determined that a limited quantity of products from one lot did reach the market.

Although products from that lot passed internal and external follow-up testing for filtration efficiency, we initiated a voluntary recall of the lot on August 9, 2023 out of an abundance of caution.

O&M Halyard has confirmed to NIOSH that the particle filtration issue was isolated to the identified lots.

On April 12, 2023, the U.S.

Food and Drug Administration (FDA) recommended that consumers, health care providers, and facilities not use the two models (model numbers 46827 and 46727) of O&M Halyard surgical N95 respirators due to concerns about fluid resistance performance.

In addition, the FDA also recommended against using certain of our surgical, procedure and pediatric face masks when fluid resistance is required.

On or about that date, we voluntarily stopped the sale in the U.S.

of the above-referenced surgical N95 respirators and similar models pending our investigation of the performance issues identified by the FDA and NIOSH.

Regulatory bodies in other non-U.S.

markets where we sell our facial protection products have inquired about the relevance of the FDA notification to products sold in their countries.

The FDA updated its recommendation on April 21, 2023, to permit use of the model No.

46727 of Halyard N95 respirators when fluid resistance is not required.

These items are included in our Products & Healthcare Services segment.

On September 29, 2023, the FDA updated its previous recommendation to consumers, health care providers and facilities regarding the above-referenced models of O&M Halyard surgical N95 respirators based on extensive testing and performance data provided by O&M Halyard.

Specifically, the FDA stated that both O&M Halyard respirator models could be used according to the product labeling for respiratory and fluid barrier protection to the wearer (excluding the one lot of products that O&M Halyard voluntarily recalled on August 9, 2023).

Following the FDA’s update, we published a user notice on our website announcing the resumption of sales and shipments of O&M Halyard surgical N95 respirators, noting that the data provided to the FDA and NIOSH demonstrated that our products provide the levels of particle filtration and fluid resistance for which they are rated.

NIOSH reviewed and concurred with the facts set forth in our user notice published on September 29, 2023.

While the FDA recommendation did not materially affect our results of operations for 2023, there is a risk that these matters and any other safety concerns could have a material adverse effect on our results of operations, financial condition, or cash flows, including as a result of a significant volume of customer product returns and/or recall of products, implementation of corrective action plans, and/or other costly remedial actions in the U.S.

and elsewhere.

In addition, these matters could potentially have other negative impacts including:

government investigations and enforcement actions by the FDA or other U.S.

or international regulators or governmental entities;

the suspension or revocation of the authority to produce, distribute or sell products, and other sanctions;

losses due to patient claims, including product liability claims and lawsuits;

and customer claims related to their direct costs arising from supply disruption.

Other Litigation

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, cybersecurity and other matters.

We maintain insurance coverage for cybersecurity, employment, product liability, workers’ compensation and other

personal injury litigation matters, subject to policy limits, applicable deductibles and insurer solvency.

Co mmitments include $ 48 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, as well as $ 23 million of legally binding lease payments for the Sioux Falls, South Dakota integrated service center lease signed, but not yet commenced.

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 U.S.

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 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.

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

From time to time, we establish estimated liabilities based upon periodic assessment of the potential outcomes of pending matters.

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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, along with other adjustments, that, either as a result of their nature or size, would not be expected to occur as part of our normal business operations on a regular basis.

The CODM for both of our segments is the President, Chief Executive Officer & Director.

The CODM uses segment income to evaluate the performance of our segments, determine incentive compensation, and engage in financial and operational planning, including the allocation of labor, financial and capital resources.

Segment income excludes acquisition-related charges and intangible amortization, exit and realignment charges, net, and goodwill impairment charges, along with other adjustments, that, either as a result of their nature or size, 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:

Years Ended December 31,

Year Ended December 31, 2024

Products & Healthcare Services

Patient Direct

Consolidated net revenue

Operating income:

Cost of goods sold

Distribution, selling and administrative expenses

Other operating expense (income), net

Segment income

Acquisition-related charges and intangible amortization

Exit and realignment charges, net

Goodwill impairment charge

Litigation and related charges (1)

Operating loss

Capital expenditures

Year Ended December 31, 2023

Products & Healthcare Services

Patient Direct

Cost of goods sold

Distribution, selling and administrative expenses

Other operating expense, net

Segment income

Acquisition-related charges and intangible amortization

Exit and realignment charges

Inventory valuation adjustment (1)

Consolidated operating income

Depreciation and amortization:

Exit and realignment charges, net

Operating income

Capital expenditures

Year Ended December 31, 2022

Products & Healthcare Services

Patient Direct

Consolidated depreciation and amortization

Cost of goods sold

Distribution, selling and administrative expenses

Other operating (income) expense, net

Segment income

Acquisition-related charges and intangible amortization

Exit and realignment charges, net

Inventory valuation adjustment (2)

Operating income

Capital expenditures

Years Ended December 31,

Share-based compensation:

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Consolidated share-based compensation:

Capital expenditures:

Depreciation and amortization:

Products & Healthcare Services

Patient Direct

Consolidated capital expenditures

Intangible amortization

Consolidated depreciation and amortization:

(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 unpredictable in timing and amount.

These charges are reported within Other operating (income) expense, net in our Statements of Operations for the year ended December 31, 2024.

(2) Relates to an inventory valuation adjustment in our Products & Healthcare Services segment, primarily associated with PPE inventory built up and a subsequent decline in demand as a result of the COVID-19 pandemic.

(2) Other share-based compensation expense is captured within exit and realignment charges or acquisition-related charges for the years ended December 31 2023, 2022 and 2021.

(3) Other share-based compensation expense is captured within exit and realignment charges, net or acquisition-related charges and intangible amortization for the years ended December 31, 2024, 2023 and 2022.

(4) Other depreciation and amortization expense is captured within exit and realignment charges, net for the years ended December 31, 2024 and 2023 .

December 31, 2024

December 31, 2023

Total assets:

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Consolidated total assets

Non-cash LIFO charges 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 $ 0.9 million, $ 2.4 million, and $ 5.4 million for the years ended December 31, 2024, 2023 and 2022.

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 $ 34 million, $ 36 million, and $ 22 million for the years ended December 31, 2024, 2023, and 2022.

Excess and obsolete inventory adjustments included in our Products & Healthcare Services segment were $ 12 million, $ 7.3 million and $ 17 million for the years ended December 31 2024, 2023, and 2022.

For the year ended December 31, 2022, we recorded a $ 92 million inventory valuation adjustment, primarily associated with PPE inventory built up and a subsequent decline in demand as a result of the COVID-19 pandemic that was not allocated to the Products & Healthcare Services segment due to its one time nature and size.

Excess and obsolete inventory adjustments are not material to the Patient Direct segment for the years ended December 31, 2024, 2023, and 2022.

The following tables present information by geographic area.

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Consolidated long-lived assets

Note 17—Subsequent Events

On February 28, 2025, we announced that we are actively engaged in discussions regarding the potential sale of our Products & Healthcare Services segment.

There is no set timetable for the potential sale and there can be no assurance that we will complete a transaction.

On February 26, 2025, the Owens & Minor Board of Directors authorized a share repurchase program of up to $ 100 million over the next 24 months.

Under the program, Owens & Minor 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.

Report of Independent Registered Public Accounting Firm

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Evaluation of the goodwill impairment analysis for the Global Products reporting unit

As discussed in Note 6 to the consolidated financial statements, the goodwill balance as of December 31, 2023 was $1,639 million, of which $104 million related to the Products & Healthcare Services reportable segment, all of which related to the Global Products reporting unit.

As discussed in Note 1, the Company performs goodwill impairment testing on an annual basis as of October 1, and if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

This involves estimating the fair value of the reporting units using an equally weighted combination of the income-based approach and the market-based approach.

The Company determined that the fair value of the reporting unit was in excess of the carrying amount and, therefore, did not record any goodwill impairment for this reporting unit.

We identified the evaluation of the goodwill impairment analysis for the Global Products reporting unit as a critical audit matter.

Evaluating the estimated fair value of the reporting unit involved a high degree of subjective auditor judgment due to the fact that the estimated fair value of the Global Products reporting unit exceeded its carrying amount by less than 10%, indicating a higher risk that the goodwill may be impaired.

We performed sensitivity analyses as a risk assessment procedure over assumptions used to estimate the fair value of the Global Products reporting unit and determined certain projected revenues represented a key assumption.

As a result, certain projected revenues used within the goodwill impairment analysis were challenging to evaluate as changes to those assumptions could have had a significant effect on the Company’s assessment of the impairment of goodwill for the Global Products reporting unit.

Evaluation of the goodwill impairment analyses for the Apria and Global Products reporting units

As discussed in Note 1 and 5 to the consolidated financial statements, the goodwill balance as of December 31, 2024 was $1,331 million.

Of this total, $1,228 million was related to the Patient Direct reportable segment, of which $944 million was related to the Apria reporting unit.

Additionally, $103 million was related to the Products & Healthcare Services reportable segment, all of which was related to the Global Products reporting

The Company performs goodwill impairment testing on an annual basis as of October 1, and if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

The Company performed an interim quantitative goodwill impairment test during the three months ended December 31, 2024.

This involved estimating the fair value of the reporting units using an equally weighted combination of the income-based approach and the market-based approach.

The Company concluded that the fair value of the Apria reporting unit was below its carrying amount and recorded a pre-tax impairment charge of $307 million ($305 million after-tax).

The Company determined that the fair value of the Global Products reporting unit was in excess of its carrying amount and, therefore, did not record any goodwill impairment for this reporting unit.

We identified the evaluation of the goodwill impairment analyses for the Apria and Global Products reporting units as a critical audit matter.

Subjective auditor judgment was required in evaluating certain projected revenues used in the income-based approach to estimate the fair value of the reporting units as changes to those assumptions could have had a significant effect on each reporting unit’s estimated fair value.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of internal controls related to the Company’s goodwill impairment assessment process for the Global Products reporting unit.

We evaluated the design and tested the operating effectiveness of internal controls related to the Company’s goodwill impairment assessment process for the reporting units.

This included controls related to the development of certain projected revenues.

We evaluated the Company’s forecasted revenue growth rates for the Global Products reporting unit by comparing the growth assumptions to forecasted growth rates in the Company’s budget plans and comparing the Company’s historical revenue forecasts to actual results to assess the Company’s ability to accurately forecast.

We evaluated the Company’s forecasted revenue growth rates for the reporting units by comparing the growth assumptions to forecasted growth rates in the Company’s budget plans and comparing the Company’s historical revenue forecasts to actual results to assess the Company’s ability to accurately forecast.

In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in evaluating projected revenues by comparing them to the projected revenues of a set of comparable companies and other market data.

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The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s estimate of variable consideration on certain equipment and supplies sales.

We assessed the relevance and reliability of the Company’s historical experience on net revenues recorded during the current year by selecting certain historical payments and comparing them to underlying support.

We evaluated the design and tested the operating effectiveness of internal controls over the Company’s estimate of variable consideration on equipment and supplies sales and estimated adjustments to record revenue at an amount probable of being collected for equipment rental revenues.

We assessed management’s ability to estimate by comparing previous estimates to actual results and current estimates.

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Agreement and Plan of Merger, dated as of January 7, 2022, by and among the Company, Apria and Merger Sub (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 2.01, dated January 10, 2022)

Agreement and Plan of Merger, dated as of July 22, 2024, by and among the Company, Rotech, Merger Sub and Representative (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 2.1, dated July 23, 2024)

Amended and Restated Articles of Incorporation of Owens & Minor, Inc.

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Description of Securities - filed herewith

Form of Director Restricted Stock Agreement under the 2015 Plan (incorporated herein by reference to our Quarterly Report on Form 10-Q, Exhibit 10.3, for the quarter ended March 31, 2016)*

Form of Owens & Minor, Inc.

Restricted Stock Agreement under the 2018 Stock Incentive Plan effective February 28, 2019 (incorporated herein by reference to our Current report on 8-K, Exhibit 10.1, dated March 1, 2019)*

Owens & Minor, Inc.

Directors’ Deferred Compensation Plan, as amended and restated effective January 1, 2005 (incorporated herein by reference to our Quarterly Report on Form 10-Q, Exhibit 10.3, for the quarter ended September 30, 2008)*

Form of Owens & Minor, Inc.

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Executive Deferred Compensation and Retirement Plan effective January 1, 2013 (incorporated herein by reference to our Quarterly Report on Form 10-Q, Exhibit 10.1, for the quarter ended March 31, 2013)*

Form of Owens & Minor, Inc.

Restricted Stock Agreement under the 2015 Stock Incentive Plan (incorporated herein by reference to our Quarterly Report on Form 10-Q, Exhibit 10.2, for the quarter ended March 31, 2016)*

Form of Owens & Minor, Inc.

Restricted Stock Unit Agreement under the Company’s 2015 Stock Incentive Plan (incorporated herein by reference to our Quarterly Report on Form 10-Q, Exhibit 10.1, for the quarter ended March 31, 2016)*

Form of Owens & Minor Director Restricted Stock Agreement under the Company’s 2018 Stock Incentive Plan (incorporated herein by reference to our Current Report on Form 8-K, Exhibit 10.1, dated May 9, 2018)*

Form of Owens & Minor Restricted Stock Agreement under the Company’s 2018 Stock Incentive Plan (incorporated herein by reference to our Current Report on Form 8-K, Exhibit 10.2, dated May 9, 2018)*

Form of Owens & Minor Restricted Stock Unit Agreement under the Company’s 2018 Stock Incentive Plan (incorporated herein by reference to our Current Report on Form 8-K, Exhibit 10.3, dated May 9, 2018)*

Form of 2016 Performance Share Award Agreement under the 2015 Stock Incentive Plan (incorporated herein by reference to our Quarterly Report on Form 10-Q, Exhibit 10.4, for the quarter ended March 31, 2016)*

Form of Owens & Minor, Inc.

2019 Performance Share Award Agreement under the 2018 Stock Incentive Plan (incorporated herein by reference to our Current report on 8-K, Exhibit 10.2, dated March 1, 2019)*

Form of Owens & Minor, Inc.

2020 Performance Share Award Agreement under the 2018 Stock Incentive Plan (incorporated herein by reference to our Current report on 8-K, Exhibit 10.2, dated May 1, 2020)*

Owens & Minor, Inc.

Officer Severance Policy dated May 7, 2018 (incorporated herein by reference to our Current Report on Form 8-K, Exhibit 10.4, dated May 9, 2018)*

Owens & Minor, Inc.

2015 Stock Incentive Plan (incorporated herein by reference to our Registration Statement on Form S-8, Registration Number 333-203826)*

Officer Severance Policy dated February 27, 2025* - filed herewith

Owens & Minor, Inc.

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and Mediq USA Holdings (incorporated herein by reference to our Quarterly Report on Form 10-Q, Exhibit 10.1, for the quarter ended March 31, 2017)

Owens & Minor, Inc.

2017 Teammate Stock Purchase Plan (incorporated by reference to Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A filed March 22, 2017 (File No.

Credit Agreement, dated as of July 27, 2017, by and among Owens & Minor Distribution, Inc., Owens & Minor Medical, Inc., Barista Acquisition I, LLC, and Barista Acquisition II, LLC, (the “Borrowers”), Owens & Minor, Inc.

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Form of Restricted Stock Unit Award Agreement (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.2, dated February 26, 2021)*

Form of 2021 Performance Stock Unit Award Agreement (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.3, dated February 26, 2021)*

Credit Agreement, dated as of March 10, 2021, by and among Owens & Minor, Inc, and certain subsidiaries of Owens & Minor, Inc, as borrowers, Bank of America, N.A., as an administrative agent and collateral agent, and a syndicate of financial institutions, as lenders (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.1, dated March 11, 2021)

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1 to Credit Agreement, among Owens & Minor Distribution, Inc., Owens & Minor Medical, Inc., Barista Acquisition I, LLC, Barista Acquisition II, LLC, O&M Halyard, Inc., Byram Healthcare Centers, Inc., Owens & Minor, Inc., and Bank Of America (incorporated herein by reference to our Form 10-K, Exhibit 10.56, dated February 23, 2022)

Executive Separation Agreement and General Release, dated as of January 9, 2022, by and between Christopher Lowery and Owens & Minor Medical, Inc.

(incorporated herein by reference to our Form 10-K, Exhibit 10.57, dated February 23, 2022)*,**

Form of Restricted Stock Agreement (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.1, dated March 1, 2022)*

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2018 Stock Incentive Plan (incorporated herein by reference to our Quarterly Report on Form 10-Q, Exhibit 10.7, for the quarter ended March 31, 2022)*

Executive Separation Agreement and General Release, dated as of October 12, 2022, by and between Jeffrey T.

Jochims and Owens & Minor, Inc.

(incorporated herein by reference to our Form 10-Q, Exhibit 10.2, dated November 2, 2022) **

Fifth Amendment to the Receivables Financing Agreement, dated March 14, 2023 by and among O&M Funding LLC, as borrower, Owens & Minor Medical, Inc.

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Owens & Minor, Inc.

2023 Omnibus Incentive Plan (incorporated herein by reference to Annex A to Owns & Minor, Inc.’s definitive Proxy Statement filed on March 29, 2023)*

Calculation of Net (Loss) Income per Common Share.

Information related to this item is in Part II, Item 8, Notes to Consolidated Financial Statements, Note 14 - Net (Loss) Income per Common Share

2023 Omnibus Incentive Plan (incorporated herein by reference to Annex A to Owens & Minor, Inc.’s definitive Proxy Statement filed on March 29, 2023)*

Form of Performance Stock Unit Grant Notice and Performance Stock Unit Agreement (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.1, dated March 1, 2024)*

Amendment No.

1 to the Owens & Minor, Inc.

2023 Omnibus Incentive Plan (incorporated by reference to Annex A to Owens & Minor, Inc.’s definitive Proxy Statement filed on March 27, 2024)*

Executive Separation Agreement and General Release, dated June 21, 2024, by and between Alexander J.

Bruni and Owens & Minor, Inc.

(incorporated herein by reference to our Quarterly Report on Form 10-Q, Exhibit 10.1, for the quarter ended June 30, 2024)*,**

Receivables Purchase Agreement, dated as of October 18, 2024, by and among O&M Funding LLC, as Seller, the persons from time to time party hereto, as Purchasers, PNC Bank, National Association, as Administrative Agent, and PNC Capital Markets LLC, as Structuring Agent (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.1, dated October 18, 2024)

Amended and Restated Purchase and Sale Agreement, dated as of October 18, 2024, by and among various entities, as Originators, Owens & Minor Medical LLC, as Servicer, and O&M Funding LLC, as Buyer (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.2, dated October 18, 2024)

Performance Guaranty of Owens & Minor, Inc., dated as of October 18, 2024, in favor of PNC Bank National Association (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.3, dated October 18, 2024)

Form of Amended and Restated Executive Change of Control Severance Agreement* - filed herewith

Insider Trading Policy

Subsidiaries of Registrant

List of Guarantor Subsidiaries

List of Subsidiaries Pledged as Collateral

Consent of KPMG LLP, independent registered public accounting firm

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Owens & Minor, Inc.

Policy on Recoupment of Executive Incentive Compensation

Policy on Recoupment of Executive Incentive Compensation (incorporated herein by reference to our Form 10-K, Exhibit 97, dated February 20, 2024)

Inline XBRL Instance Document

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President, Chief Executive Officer & Director

/s/ Alexander J.

/s/ Jonathan A.

Johnson-Mills

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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-K

Item 9A. Controls and Procedures