Item 2. Management’s Discussion and Analysis
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis describes results of operations and material changes in the financial condition of Owens & Minor, Inc. and its subsidiaries since December 31, 2024. Trends of a material nature are discussed to the extent known and considered relevant. This discussion should be read in conjunction with the consolidated financial statements, related notes thereto, and management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2024.
Overview
Owens & Minor, Inc., along with its subsidiaries, (we, us, or our) is a global healthcare solutions company. Our business has two distinct segments: Products & Healthcare Services (P&HS) and Patient Direct. The Products & Healthcare Services segment includes our U.S. distribution division (Medical Distribution), including outsourced logistics and value-added services, and our Global Products division which manufactures and sources medical surgical products through our production and kitting operations. The Patient Direct segment includes our home healthcare divisions.
Net (loss) per share was $(0.32) for the three months ended March 31, 2025 as compared to net (loss) per share of $(0.29) for the three months ended March 31, 2024. Our financial results for the three months ended March 31, 2025 as compared to the prior year period were impacted by acquisition-related charges of $16 million related to the planned acquisition of Rotech Healthcare Holdings Inc. (Rotech), a $3.9 million increase in exit and realignment charges, net, partially offset by a decrease in intangible amortization of $6.5 million.
Net (loss) per share was unfavorably impacted as compared to the prior year by foreign currency translation in the amount of $(0.03) for the three months ended March 31, 2025.
Products & Healthcare Services segment operating income was $1.2 million for the three months ended March 31, 2025, compared to $11 million for the three months ended March 31, 2024. This decrease was primarily driven by a $17 million decrease in net revenue, partially offset by a reduction in teammate benefit costs of $10 million. Patient Direct segment operating income was $60 million for the three months ended March 31, 2025, compared to $46 million for the three months ended March 31, 2024. This segment’s results reflect revenue growth of 5.7% and a reduction in teammate benefits costs of $5.9 million.
Refer to ‘Results of Operations’ for further detail of quantitative and qualitative drivers of our results.
Potential Sale of Products & Healthcare Services Segment
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.
Planned Acquisition of Rotech
On July 22, 2024, we entered into an agreement and plan of merger to acquire Rotech for $1.36 billion in cash (the Acquisition). 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 Acquisition 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 financing in place and expect to use a combination of cash and incremental borrowings to fund the purchase price. The Company and Rotech have entered into a timing agreement with the Federal Trade Commission (FTC) under which the FTC will have until June 10, 2025 to complete its review of the transaction.
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Results of Operations
Net revenue.
Three Months Ended
March 31,
Change
(Dollars in thousands)
2025
2024
$
%
Products & Healthcare Services
$
1,958,164
$
1,974,837
$
(16,673)
(0.8)
%
Patient Direct
673,884
637,843
36,041
5.7
%
Net revenue
$
2,632,048
$
2,612,680
$
19,368
0.7
%
Net revenue for the three months ended March 31, 2025, was negatively impacted by approximately $41 million as a result of one less sales day during the period compared to the same period in 2024. The Products & Healthcare Services net revenue decrease was primarily driven by one less sales day along with a decline in our Global Products division due to competitive pricing pressures, including glo ve pricing . The increase in our Patient Direct segment net revenue for the three months ended March 31, 2025 was driven primarily by growth across a number of product categories, including diabetes and sleep supplies.
Foreign currency translation had an unfavorable impact on net revenue of $1.7 million for the three months ended March 31, 2025 as compared to the prior year period.
Cost of goods sold.
Three Months Ended
March 31,
Change
(Dollars in thousands)
2025
2024
$
%
Cost of goods sold
$
2,106,035
$
2,077,151
$
28,884
1.4
%
The increase in cost of goods sold for the three months ended March 31, 2025 reflects the increased cost associated with net revenue growth of 0.7% and a rise in commodity input costs, partially offset by cost avoidance associated with certain procurement activities.
Foreign currency translation had an unfavorable impact on cost of goods sold of $1.6 million for the three months ended March 31, 2025 as compared to the prior year period.
Gross profit.
Three Months Ended
March 31,
Change
(Dollars in thousands)
2025
2024
$
%
Gross profit
$
526,013
$
535,529
$
(9,516)
(1.8)
%
As a % of net revenue
19.98
%
20.50
%
The changes in gross profit for the three months ended March 31, 2025 were driven by the same factors impacting net revenue and cost of goods sold.
Foreign currency translation had an unfavorable impact on gross profit of $3.3 million for the three months ended March 31, 2025 as compared to the prior year period.
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Operating expenses.
Three Months Ended
March 31,
Change
(Dollars in thousands)
2025
2024
$
%
Distribution, selling and administrative expenses
$
462,352
$
477,613
$
(15,261)
(3.2)
%
As a % of net revenue
17.57
%
18.28
%
Acquisition-related charges and intangible amortization
$
29,674
$
20,313
$
9,361
46.1
%
Exit and realignment charges, net
$
31,226
$
27,356
$
3,870
14.1
%
Other operating expense, net
$
2,637
$
551
$
2,086
378.6
%
The decrease in Distribution, selling and administrative expenses (DS&A) expenses for the three months ended March 31, 2025 was driven primarily by a reduction in teammate benefits costs of $16 million and expense savings from operating efficiencies, partially offset by inflationary expense increases.
Foreign currency translation had a favorable impact on DS&A of $0.4 million for the three months ended March 31, 2025 as compared to the prior year period.
Acquisition-related charges were $16 million for the three months ended March 31, 2025 and consisted of costs related to the planned acquisition of Rotech, which related primarily to legal and professional fees. We incurred no acquisition related charges for the three months ended March 31, 2024. Intangible amortization was $14 million for the three months ended March 31, 2025 and $20 million for the three months ended March 31, 2024 relating primarily to intangible assets acquired in the Apria, Halyard, and Byram acquisitions. The decrease was due to certain intangible assets that were fully amortized in 2024.
Exit and realignment charges, net were $31 million for the three months ended March 31, 2025. These charges primarily related to (1) kitting and manufacturing initiatives of $10 million (2) professional fees associated with the potential sale of our P&HS segment of $7.1 million, (3) an accounts receivable provision of $6.8 million associated with Fusion 5, which is no longer part of our core operations (4) $5.7 million in professional fees associated with Patient Direct strategic initiatives and (5) $1.5 million of other charges. Exit and realignment charges, net were $27 million for the three months ended March 31, 2024. These charges primarily related to (1) the 2023-2024 Operating Model Realignment Program of $33 million, including professional fees, severance, and other costs to streamline functions and processes and (2) costs related to IT strategic initiatives such as converting certain divisions to common IT systems of $1.2 million partially offset by (3) a $7.4 million gain on the sale of our corporate headquarters.
The change in other operating expense, net for the three months ended March 31, 2025 as compared to the prior year reflects an unfavorable change of $1.1 million in foreign currency transaction gains and losses, net of derivative adjustments, as compared to the prior year.
Interest expense, net.
Three Months Ended
March 31,
Change
(Dollars in thousands)
2025
2024
$
%
Interest expense, net
$
33,959
$
35,655
$
(1,696)
(4.8)
%
Effective interest rate
6.94
%
7.13
%
Interest expense, net for the three months ended March 31, 2025 decreased due to lower average outstanding borrowings of $169 million and a decrease in the effective interest rate of 19 basis points as compared to the three months ended March 31, 2024, partially offset by a decrease in interest income. See Note 5 of Notes to Condensed Consolidated Financial Statements.
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Other expense, net.
Three Months Ended
March 31,
Change
(Dollars in thousands)
2025
2024
$
%
Other expense, net
$
1,239
$
1,153
$
86
7.5
%
Other expense, net for the three months ended March 31, 2025 and 2024 includes interest cost and net actuarial losses related to our retirement plans.
Income taxes.
Three Months Ended
March 31,
Change
(Dollars in thousands)
2025
2024
$
%
Income tax benefit
$
(10,092)
$
(5,226)
$
(4,866)
(93.1)
%
Effective tax rate
28.8
%
19.3
%
The change in the effective tax rate for the three months ended March 31, 2025 compared to the same period in 2024 resulted primarily from changes in results of operations in the jurisdictions in which we operate and changes in forecasted results reflected in the tax rates.
Adjusted EBITDA
We use Adjusted EBITDA, a financial measure that is not in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, to analyze our financial results. In general, non-GAAP measures exclude items and charges that (i) management does not believe reflect our core business and relate more to strategic, multi-year corporate activities; or (ii) relate to activities or actions that may have occurred over multiple or in prior periods without predictable trends.
We believe Adjusted EBITDA is useful to investors as a supplemental metric to assist readers in assessing our financial performance and in comparing our performance to that of our competitors. However, this non-GAAP measure may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.
Adjusted EBITDA should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and financial results calculated in accordance with GAAP and this reconciliation to those financial statements set forth below should be carefully evaluated.
The following table presents the reconciliation of net loss to Adjusted EBITDA for the three months ended March 31, 2025 and 2024:
Three Months Ended March 31,
2025
2024
Net loss, as reported (GAAP)
$
(24,982)
$
(21,886)
Income tax benefit
(10,092)
(5,226)
Interest expense, net
33,959
35,655
Acquisition-related charges and intangible amortization (1)
29,674
20,313
Exit and realignment charges, net (2)
31,226
27,356
Other depreciation and amortization (3)
46,168
48,014
Stock compensation (4)
6,598
6,176
LIFO charges (5)
8,610
5,438
Litigation and related charges (6)
270
—
Other (7)
424
430
Adjusted EBITDA (non-GAAP)
$
121,855
$
116,270
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(1) Acquisition-related charges consist primarily of one-time costs related to the planned acquisition of Rotech, which consisted primarily of legal and professional fees. For the three months ended March 31, 2025, we incurred $16 million of acquisition-related costs. We incurred no acquisition related charges for the three months ended March 31, 2024. Acquisition-related charges and intangible amortization also include amortization of intangible assets established during acquisition method of accounting for business combinations. Acquisition-related charges consist primarily of one-time costs related to acquisitions, including transaction costs necessary to consummate acquisitions, such as advisory fees and legal fees, director and officer tail insurance expense, as well as transition costs, such as severance and retention bonuses, IT integration costs and professional fees. These amounts are highly dependent on the size and frequency of acquisitions and are being excluded to allow for a more consistent comparison with forecasted, current and historical results.
(2) Exit and realignment charges, net were $31 million for the three months ended March 31, 2025. These charges primarily related to (1) kitting and manufacturing initiatives of $10 million (2) professional fees associated with the potential sale of our P&HS segment of $7.1 million, (3) an accounts receivable provision of $6.8 million associated with Fusion 5, which is no longer part of our core operations (4) $5.7 million in professional fees associated with Patient Direct strategic initiatives and (5) $1.5 million of other charges. Exit and realignment charges, net were $27 million for the three months ended March 31, 2024. These charges primarily related to (1) the 2023-2024 Operating Model Realignment Program of $33 million, including professional fees, severance, and other costs to streamline functions and processes and (2) costs related to IT strategic initiatives such as converting certain divisions to common IT systems of $1.2 million partially offset by (3) a $7.4 million gain on the sale of our corporate headquarters. These costs are not normal recurring, cash operating expenses necessary for the Company to operate its business on an ongoing basis.
(3) Other depreciation and amortization relates to property and equipment and capitalized computer software, excluding such amounts captured within exit and realignment charges, net or acquisition-related charges.
(4) Stock compensation include share-based compensation expense related to our share-based compensation plans, excluding such amounts captured within exit and realignment charges, net or acquisition-related charges.
(5) LIFO charges include non-cash adjustments to merchandise inventories valued at the lower of cost or market, with the approximate cost determined by the last-in, first-out (LIFO) method for distribution inventories in the U.S. within our P&HS segment.
(6) Litigation and related charges includes settlement costs and related charges of legal matters within our Patient Direct segment. These costs do not occur in the ordinary course of our business and are inherently unpredictable in timing and amount.
(7) For the three months ended March 31, 2025 and 2024, other includes interest costs and net actuarial losses related to our frozen noncontributory, unfunded retirement plan for certain retirees in the U.S.
Financial Condition, Liquidity and Capital Resources
Financial condition . We monitor operating working capital through days sales outstanding (DSO) and merchandise inventory days. We estimate a hypothetical increase (decrease) in DSO of one day would result in a decrease (increase) in our cash balances, an increase (decrease) in borrowings against our Revolving Credit Agreement, or a combination thereof of approximately $29 million.
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The majority of our cash and cash equivalents are held in cash depository accounts with major banks in North America, Europe, and Asia. Changes in our working capital can vary in the normal course of business based upon the timing of inventory purchases, collections of accounts receivable and payments to suppliers.
Change
(Dollars in thousands)
March 31, 2025
December 31, 2024
$
%
Cash and cash equivalents
$
59,436
$
49,382
$
10,054
20.4
%
Accounts receivable, net
$
580,175
$
690,241
$
(110,066)
(15.9)
%
DSO (1)
19.6
23.3
Merchandise inventories
$
1,408,539
$
1,131,879
$
276,660
24.4
%
Inventory days (2)
60.2
49.2
Accounts payable
$
1,380,736
$
1,228,691
$
152,045
12.4
%
(1) Based on period end accounts receivable and net revenue for the quarters ended March 31, 2025 and December 31, 2024. Consolidated DSO reflected the impact of the reduction in accounts receivable, net of allowances, due to sales of accounts receivable under the Receivables Sale Program. Excluding the impact of the Receivables Sale Program, consolidated DSO would have been 26.4 as of March 31, 2025 and 25.7 as of December 31, 2024.
(2) Based on period end merchandise inventories and cost of goods sold for the quarters ended March 31, 2025 and December 31, 2024.
Liquidity and capital expenditures. The following table summarizes our condensed consolidated statements of cash flows for the three months ended March 31, 2025 and 2024:
Three Months Ended
March 31,
(Dollars in thousands)
2025
2024
Net cash (used for) provided by:
Operating activities
$
(35,066)
$
(52,962)
Investing activities
(48,200)
(1,870)
Financing activities
92,778
53,320
Effect of exchange rate changes
542
(618)
Net increase (decrease) in cash, cash equivalents and restricted cash
$
10,054
$
(2,130)
Cash used for operating activities in the first three months of 2025 reflected unfavorable changes in working capital including an increase in inventories ahead of the opening of two new large distribution centers as well as in anticipation of tariffs and payment of accrued teammate benefits, partially offset by an increase in accounts payable primarily related to inventory purchases, a $130 million benefit from accounts receivable sold under the Receivables Sale Program and cash provided by operating income. Cash used for operating activities in the first three months of 2024 reflected unfavorable changes in working capital and cash provided by operating income. Unfavorable working capital is typical during the first quarter of the year due to the nature of our business and the annual payment of teammate incentives.
Cash used for investing activities in the first three months of 2025 included capital expenditures of $65 million, primarily for patient service equipment and our strategic and operational efficiency initiatives associated with other fixed assets and capitalized software, offset by $17 million in proceeds from sale of patient service equipment and other fixed assets. Cash used for investing activities in the first three months of 2024 included capital expenditures of $49 million, primarily for patient service equipment, other fixed assets and capitalized software, offset by $50 million in proceeds from sales of patient service equipment and other fixed assets which included $34 million in gross proceeds related to the sale of our corporate headquarters.
Cash provided by financing activities in the first three months of 2025 included net borrowings of $98 million under our Revolving Credit Facility for the first three months of 2025. Cash provided by financing activities in the first three months of 2024 included repayments of term loans of $4.6 million. We had no borrowings under our Revolving Credit Facility for the first three months of 2024 and had net borrowings of $66 million under our amended Receivables
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Financing Agreement. Payments for taxes related to the vesting of restricted stock awards, which are included in Other, net, were $2.6 million for the first three months of 2024.
Capital resources. Our primary sources of liquidity include cash and cash equivalents, our Receivables Sale Program (as defined below), and our Revolving Credit Agreement.
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 financial institutions 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 condensed consolidated balance sheets. Total accounts receivable sold under the Receivables Sale Program and net cash proceeds were $343 million for the three months ended March 31, 2025. We collected $209 million of the sold accounts receivable for the three months ended March 31, 2025. The losses on sales of accounts receivable are recorded in other operating expense, net in the condensed consolidated statements of operations and were $2.1 million for the three months ended March 31, 2025.
The Revolving Credit Agreement provides a revolving borrowing capacity of $450 million. We have $837 million in outstanding term loans under a term loan credit agreement (the Credit Agreement). The interest rate on our Revolving Credit Agreement is based on a spread over a benchmark rate (as described in the Revolving Credit Agreement). The Revolving Credit Agreement matures in March 2027. The interest rate on the Term Loan A is based on either the Term SOFR or the Base Rate plus an Applicable Rate which varies depending on the current Debt Ratings or Total Leverage Ratio, determined as to whichever shall result in more favorable pricing to the Borrowers (each as defined in the Credit Agreement). The interest rate on the Term Loan B is based on either the Term SOFR or the Base Rate plus an Applicable Rate. The Term Loan A matures in March 2027 and the Term Loan B matures in March 2029.
At March 31, 2025 we had $98 million in outstanding borrowings on our Revolving Credit Agreement. At December 31, 2024 our Revolving Credit Agreement was undrawn. At March 31, 2025 and December 31, 2024 we had letters of credit, which reduce Revolver availability, totaling $34 million and $31 million, leaving $318 million and $419 million available for borrowing. We also had letters of credit and bank guarantees which support certain leased facilities as well as other normal business activities in the United States and Europe that were issued outside of the Revolving Credit Agreement for $3.4 million and $2.9 million as of March 31, 2025 and December 31, 2024.
The Revolving Credit Agreement, the Credit Agreement, the Receivables Sale Program, the 4.500% senior unsecured notes due in March 2029, and the 6.625% senior unsecured notes due in April 2030 contain cross-default provisions which could result in the acceleration of payments due in the event of default of any of the related agreements. The terms of the applicable credit agreements also require us to maintain ratios for leverage and interest coverage, including on a pro forma basis in the event of an acquisition or divestiture. We were in compliance with our debt covenants at March 31, 2025.
On April 4, 2025, we completed the sale of $1.0 billion aggregate principal amount of 10.000% senior secured notes due 2030 (the New Notes) in a private offering (the Offering) to persons reasonably believed to be “qualified institutional buyers” in the United States, as defined in Rule 144A under the Securities Act of 1933, as amended (the Securities Act), and to certain non-U.S. persons outside the United States in offshore transactions pursuant to Regulation S under the Securities Act. The Offering was conducted in connection with the financing of the Company’s previously announced proposed acquisition of Rotech. At the closing of the Offering, the gross proceeds were placed into a segregated escrow account where they will be held for the benefit of the holders of the New Notes pending the consummation of the proposed acquisition of Rotech .
If the Acquisition is not consummated on or prior to October 6, 2025, or upon the occurrence of certain other events, the proceeds will not be released to consummate the Acquisition and related transactions, but instead will be released for the purpose of redeeming the New Notes pursuant to a “Special Mandatory Redemption” in accordance with
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the procedures set forth in the indenture governing the New Notes. The Special Mandatory Redemption price will be a price equal to 100% of the initial issue price of the New Notes plus accrued and unpaid interest to, but excluding, the special mandatory redemption date.
We regularly evaluate market conditions, our liquidity profile and various financing alternatives to enhance our capital structure. We have from time to time, entered into, and from time to time in the future, we may enter into transactions to repay, repurchase or redeem our outstanding indebtedness (including by means of open market purchases, privately negotiated repurchases, tender or exchange offers and/or repayments or redemptions pursuant to the debt’s terms). Our ability to consummate any such transaction will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. We cannot provide any assurance as to if or when we will consummate any such transactions or the terms of any such 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. During the three months ended March 31, 2025, we repurchased in open-market transactions and retired approximately 0.2 million shares of our common stock for an aggregate $1.5 million, or an average price per share of $8.66.
We believe cash generated by operating activities, available financing sources, and borrowings under the Revolving Credit Agreement, as well as cash on hand, will be sufficient to fund our working capital needs, capital expenditures, long-term strategic growth, payments under long-term debt and lease arrangements, debt repurchases, share repurchases and other cash requirements. While we believe that we will have the ability to meet our financing needs in the foreseeable future, changes in economic conditions may impact (i) the ability of financial institutions to meet their contractual commitments to us, (ii) the ability of our customers and suppliers to meet their obligations to us or (iii) our cost of borrowing.
We earn a portion of our operating income in foreign jurisdictions outside the U.S. Our cash and cash equivalents held by our foreign subsidiaries subject to repatriation totaled $27 million and $22 million at March 31, 2025 and December 31, 2024. As of March 31, 2025, we are permanently reinvested in our foreign subsidiaries.
Contractual Obligations
For disclosure of material contractual obligations, see our Annual Report on Form 10-K for the year ended December 31, 2024 and Note 13 in the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q for the period ended on March 31, 2025.
Recent Accounting Pronouncements
For a discussion of recent accounting pronouncements, see our Annual Report on Form 10-K for the year ended December 31, 2024 and Note 12 in the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q for the period ended on March 31, 2025.
Forward-looking Statements
Certain statements in this discussion constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Although we believe our expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of our knowledge of our business and operations, all forward-looking statements involve risks and uncertainties and, as a result, actual results could differ materially from those projected, anticipated or implied by these statements. Such forward-looking statements involve known and unknown risks, including, but not limited to:
● our ability to successfully complete a transaction related to the potential sale of our Products & Healthcare Services segment;
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● uncertainties related to trade policy and tariffs;
● increasing competitive and pricing pressures in the marketplace;
● our ability to retain existing and attract new customers and our dependence on sales to certain customers;
● our dependence on certain vendors, suppliers and third-parties for key components, raw materials, finished goods, equipment and services;
● our ability to successfully identify, close, manage or integrate acquisitions, including Rotech;
● our ability to successfully implement our strategic initiatives;
● our ability to successfully manage our international operations, including risks associated with changes in international trade regulations, foreign currency volatility, adverse tax consequences, and other risks of operating in international markets;
● uncertainties related to, and our ability to adapt to and comply with, changes in government regulations, including healthcare, tax and product licensing laws and regulations;
● risks arising from possible violations of legal, regulatory or licensing requirements of the markets in which we operate;
● uncertainties related to general economic, regulatory and business conditions, including tariffs, and our ability to adapt to changes in product pricing and other terms of purchase by suppliers of product;
● our ability to meet the terms to qualify for supplier funding programs;
● the ability of customers and suppliers to meet financial commitments due to us;
● changes in manufacturer preferences between direct sales and wholesale distribution;
● changing trends in customer profiles and ordering patterns;
● our ability to manage operating expenses and improve operational efficiencies;
● availability of, and our ability to access, special inventory buying opportunities;
● our ability to continue to obtain financing at reasonable rates and to manage financing costs and interest rate risk, and our ability to refinance, extend or repay our substantial indebtedness;
● our ability to attract and retain talented and qualified teammates;
● recalls of any of our products, or safety risks or the discovery of serious safety issues with our products;
● changes, delays and uncertainties in the reimbursement process;
● our ability to adequately establish, maintain, protect and enforce our intellectual property and proprietary rights as well as avoid infringement, misappropriation or other violations of the intellectual property and proprietary rights of third parties;
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● our ability to engage in transactions that may be limited by the restrictive covenants in our credit facilities and existing notes;
● the risk that information systems are interrupted or damaged or fail for any extended period of time, that new information systems are not successfully implemented or integrated, or that there is a data security breach in our information systems or a third party’s information systems that impacts our business;
● risks related to public health crises or future outbreaks of health crises or other adverse public health developments such as the novel coronavirus (COVID-19) global pandemic;
● the risk of an impairment to goodwill or other long-lived assets;
● our ability to timely or adequately respond to technological advances;
● our failure to adequately insure against losses, including from substantial claims and litigation;
● our ability to meet performance targets specified by customer contracts under contractual commitments;
● our capitation arrangements may prove unprofitable if actual utilization rates exceed our assumptions;
● the outcome of outstanding and any future litigation, including product and professional liability claims;
● volatility in the price of our common stock and securities; and
● other factors detailed from time to time in the reports we file with the SEC, including those described in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024.
We undertake no obligation to update or revise any forward-looking statements, except as required by applicable law.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Certain quantitative and qualitative market risk disclosures are described in our Annual Report on Form 10-K for the year ended December 31, 2024. Through March 31, 2025, there have been no material changes in the quantitative and qualitative market risk disclosures described in such Annual Report.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.