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 on a continuing operations basis unless otherwise noted. 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, (the Company, we, us, or our) is a leading provider of integrated equipment, supplies, and related services supporting home-based care in the United States . As discussed within Note 1 in the Notes to Consolidated Financial Statements, our business activities comprise a single operating and reporting segment.
Net loss from continuing operations per common share was ($1.09) for the three months ended June 30, 2025 as compared to ($0.09) for the three months ended June 30, 2024. Our financial results for the three months ended June 30, 2025 as compared to the prior year were impacted by the transaction breakage fee of $80 million, transaction financing fees, net of $18 million, and an increase in acquisition-related costs of $2.7 million partially offset by a decrease in intangible amortization of $2.5 million due to certain intangible assets that were fully amortized in 2024 and an increase in net revenue.
Net loss from continuing operations per common share was ($1.14) for the six months ended June 30, 2025 as compared to ($0.26) for the six months ended June 30, 2024. Our financial results for the six months ended June 30, 2025 as compared to prior year were impacted by the transaction breakage fee of $80 million, transaction financing fees, net of $18 million, and an increase in acquisition-related costs of $19 million related to the terminated acquisition of Rotech, partially offset by a decrease in intangible amortization of $9.2 million due to certain intangible assets that were fully amortized in 2024 and an increase in net revenue.
Refer to “Results of Operations” for further detail of quantitative and qualitative drivers of our results.
Contemplated Sale of Products & Healthcare Services Segment
On February 28, 2025, we announced that we are actively engaged in discussions regarding the contemplated sale of our Products & Healthcare Services (P&HS) segment. We are in the final stages of our process for the divestiture and have concluded the P&HS segment has met the accounting requirements to be classified as discontinued operations and held for sale as of June 30, 2025. During this process we remain committed to serving our P&HS segment customers. In accordance with GAAP, the financial position and results of operations of the P&HS segment are presented as discontinued operations and assets held for sale and, as such, have been excluded from continuing operations for all periods presented. All discussion, unless otherwise noted, reflects the continuing operations of Owens & Minor, Inc. See Note 3 in the Notes to Condensed Consolidated Financial Statements for additional information regarding discontinued operations and assets held for sale.
Termination of Acquisition of Rotech
As previously disclosed, on July 22, 2024, we entered into an Agreement and Plan of Merger (the Merger Agreement) pursuant to which we agreed to acquire Rotech subject to the terms and conditions within the Merger Agreement. On June 3, 2025, the Company, Rotech and Merger Sub mutually agreed to terminate the Merger Agreement and entered into a mutual termination agreement (the Termination Agreement). In accordance with the terms of the Termination Agreement, we incurred and made a cash payment to Rotech of $80 million during the three and six months ended June 30, 2025.
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Notice of Contract Termination with a Commercial Payor
A commercial Payor, with which we have multiple separately managed contracts, recently notified us that it intends to terminate certain of our contracts with them. As a result of this notice of termination, we expect net neutral impacts to our financial results through the end of 2025, as the transitions of agreements and services are expected to start late in the fourth quarter of 2025. While such transitions of agreements and services are expected to continue throughout the first half of 2026, the specific timing of when these agreements will wind down is highly dependent on the Payor’s successor provider’s ability to successfully transition customers among other factors. The agreements expected to be terminated reflected approximately $160 million or 12% of our net revenue, and nearly all of our $121 million capitation revenue, for the six months ended June 30, 2025.
Results of Operations
Net revenue.
Three Months Ended
June 30,
Change
(Dollars in thousands)
2025
2024
$
%
Diabetes
$
191,056
$
194,361
$
(3,305)
(1.7)
%
Sleep therapy
181,622
170,237
11,385
6.7
%
Home respiratory therapy
109,526
109,687
(161)
(0.1)
%
Ostomy
51,893
47,059
4,834
10.3
%
Wound care
46,822
47,156
(334)
(0.7)
%
Urology
28,696
25,645
3,051
11.9
%
Other
72,302
66,256
6,046
9.1
%
Net revenue
$
681,917
$
660,401
$
21,516
3.3
%
Six Months Ended
June 30,
Change
(Dollars in thousands)
2025
2024
$
%
Diabetes
$
378,416
$
374,351
$
4,065
1.1
%
Sleep therapy
363,481
342,274
21,207
6.2
%
Home respiratory therapy
218,132
218,495
(363)
(0.2)
%
Ostomy
101,392
91,626
9,766
10.7
%
Wound care
93,468
90,393
3,075
3.4
%
Urology
56,839
50,634
6,205
12.3
%
Other
144,073
130,471
13,602
10.4
%
Net revenue
$
1,355,801
$
1,298,244
$
57,557
4.4
%
The increase in net revenue for the three and six months ended June 30, 2025 was driven by sales growth in several product categories, including sleep therapy, ostomy and urology. The growth in these categories includes the benefits from certain successful sales activities. In addition, improved collection rates contributed to revenue growth. Diabetes revenue growth has been hindered by market shifts of diabetes business into the pharmacy channel. Furthermore, in order to not disrupt our customers critical needs during supplier disruptions, we modified our customer ordering quantities and our delivery frequency for diabetes supplies during the three months ended June 30, 2025. Absent this headwind, our revenue growth rate for the three months ended June 30, 2025 would have been approximately 4% as compared to the comparable prior period.
Cost of net revenue.
Three Months Ended
June 30,
Change
(Dollars in thousands)
2025
2024
$
%
Cost of products sold
$
319,517
$
305,496
$
14,021
4.6
%
Patient service equipment depreciation
31,883
31,621
262
0.8
%
Other costs
5,915
7,255
(1,340)
(18.5)
%
Cost of net revenue
$
357,315
$
344,372
$
12,943
3.8
%
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Six Months Ended
June 30,
Change
(Dollars in thousands)
2025
2024
$
%
Cost of products sold
$
636,906
$
603,864
$
33,042
5.5
%
Patient service equipment depreciation
63,566
64,039
(473)
(0.7)
%
Other costs
11,485
14,720
(3,235)
(22.0)
%
Cost of net revenue
$
711,957
$
682,623
$
29,334
4.3
%
The increase in cost of net revenue for the three and six months ended June 30, 2025 reflects the increased cost associated with net revenue growth of 3.3% and 4.4% primarily due to increased sales volume.
Operating expenses.
Three Months Ended
June 30,
Change
(Dollars in thousands)
2025
2024
$
%
Selling, general and administrative expenses
$
267,853
$
269,919
$
(2,066)
(0.8)
%
As a % of net revenue
39.28
%
40.87
%
Transaction breakage fee
$
80,000
$
—
$
80,000
NM
%
Acquisition-related charges and intangible amortization
$
13,918
$
13,761
$
157
1.1
%
Exit and realignment charges, net
$
2,541
$
15,427
$
(12,886)
(83.5)
%
NM - Not meaningful
Six Months Ended
June 30,
Change
(Dollars in thousands)
2025
2024
$
%
Selling, general and administrative expenses
$
530,223
$
540,132
$
(9,909)
(1.8)
%
As a % of net revenue
39.11
%
41.60
%
Transaction breakage fee
$
80,000
$
—
$
80,000
NM
%
Acquisition-related charges and intangible amortization
$
37,374
$
28,050
$
9,324
33.2
%
Exit and realignment charges, net
$
16,166
$
23,547
$
(7,381)
(31.3)
%
NM - Not meaningful
The decrease in selling, general and administrative expenses (SG&A) expenses for the three and six months ended June 30, 2025 were primarily from operating efficiencies in our revenue cycle and information technology along with lower benefit costs, partially offset by inflationary increases and the cost to service the revenue growth of $22 million and $58 million, respectively.
Transaction breakage fee represents a cash payment to Rotech of $80 million during the three and six months ended June 30, 2025 for the termination of the Rotech acquisition.
Acquisition-related charges were $6.4 million and $22 million for the three and six months ended June 30, 2025 and $3.7 million for the three and six months ended June 30, 2024 consisted of costs for the terminated acquisition of Rotech, which related primarily to legal and professional fees. Intangible amortization was $7.6 million and $15 million for the three and six months ended June 30, 2025 and $10 million and $24 million for the three and six months ended June 30, 2024 relating to intangible assets acquired in the Apria and Byram acquisitions. The decrease was due to certain intangible assets that were fully amortized in 2024.
Exit and realignment charges, net were $2.5 million and $16 million for the three and six months ended June 30, 2025. These charges primarily included professional fees associated with strategic initiatives of $1.9 million and $8.1 million. For the six months ended June 30, 2025 exit and realignment charges, net also included $6.8 million related to wind-down costs of Fusion5. Exit and realignment charges, net were $15 million and $24 million for the three and six months ended June 30, 2024. These charges primarily included professional fees associated with strategic initiatives of $12 million and $18 million.
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Non-operating expenses.
Three Months Ended
June 30,
Change
(Dollars in thousands)
2025
2024
$
%
Interest expense, net
$
26,009
$
25,588
$
421
1.6
%
Effective interest rate
7.04
%
7.09
%
Transaction financing fees, net
$
18,288
$
—
$
18,288
NM
%
Other expense, net
$
942
$
816
$
126
15.4
%
NM - Not meaningful
Six Months Ended
June 30,
Change
(Dollars in thousands)
2025
2024
$
%
Interest expense, net
$
50,223
$
50,997
$
(774)
(1.5)
%
Effective interest rate
7.02
%
7.15
%
Transaction financing fees, net
$
18,288
$
—
$
18,288
NM
%
Other expense, net
$
1,917
$
1,701
$
216
12.7
%
NM - Not meaningful
Interest expe nse, net for the three months ended June 30, 2025 increased due a reduction in interest income of $2.4 million, partially offset by lower average outstanding borrowings of $61 million and a 5 basis point decline in our effective interest rate as compared to the three months ended June 30, 2024 . Interest expense, net, for the six months ended June 30, 2025 decreased due to a decrease in the effective interest rate of 13 basis points and lower average outstanding borrowings of $113 m illion, partially offset by a decrease in interest income of $4.6 million as compared to the six months ended June 30, 2024. See Note 8 in the Notes to Condensed Consolidated Financial Statements.
Transaction financing fees, net for the three and six months ended June 30, 2025 consisted of debt financing fees associated with the terminated acquisition of Rotech, including $12 million of costs, net of income on the related cash held in escrow, on the financing issued in connection with previously expected Rotech acquisition and $6.7 million in recognition of related previously deferred debt issuance costs.
Other expense, net for the three and six months ended June 30, 2025 and 2024 includes interest cost and net actuarial losses related to our U.S. retirement plan.
Income taxes.
Three Months Ended
June 30,
Change
(Dollars in thousands)
2025
2024
$
%
Income tax benefit
$
(1,127)
$
(2,740)
$
1,613
58.9
%
Effective tax rate
1.3
%
28.9
%
Six Months Ended
June 30,
Change
(Dollars in thousands)
2025
2024
$
%
Income tax benefit
$
(2,715)
$
(8,671)
$
5,956
68.7
%
Effective tax rate
3.0
%
30.1
%
The change in these rates were primarily from changes in results of operations, including the tax treatment associated with the $80 million transaction breakage fee for the three and six months ended June 30, 2025.
Adjusted EBITDA
We use Adjusted EBITDA, a financial measure that is not in accordance with U.S. generally accepted accounting principles, or GAAP, to analyze our financial results and as one of our incentive metrics. In general, non-GAAP measures exclude items and charges that (i) management does not believe reflect the Company’s core business
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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 the Company’s performance to that of its competitors. However, this non-GAAP measure used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.
Adjusted EBITDA disclosed by the Company 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 tables present the reconciliations of loss from continuing operations, net of tax to Adjusted EBITDA for the three and six months ended June 30, 2025 and 2024:
Three Months Ended June 30,
2025
2024
Loss from continuing operations, net of tax, as reported (GAAP)
$
(83,822)
$
(6,742)
Income tax benefit
(1,127)
(2,740)
Interest expense, net
26,009
25,588
Acquisition-related charges and intangible amortization (1)
13,918
13,761
Transaction breakage fee (2)
80,000
—
Exit and realignment charges, net (3)
2,541
15,427
Transaction financing fees, net (4)
18,288
—
Litigation and related charges (5)
121
6,678
Other depreciation and amortization (7)
35,422
34,764
Stock compensation (8)
4,861
3,914
Other (6)
424
430
Adjusted EBITDA (non-GAAP)
$
96,635
$
91,080
Six Months Ended June 30,
2025
2024
Loss from continuing operations, net of tax, as reported (GAAP)
$
(87,632)
$
(20,135)
Income tax benefit
(2,715)
(8,671)
Interest expense, net
50,223
50,997
Acquisition-related charges and intangible amortization (1)
37,374
28,050
Transaction breakage fee (2)
80,000
—
Exit and realignment charges, net (3)
16,166
23,547
Transaction financing fees, net (4)
18,288
—
Litigation and related charges (5)
391
6,678
Other depreciation and amortization (7)
70,758
71,230
Stock compensation (8)
8,952
7,743
Other (6)
848
861
Adjusted EBITDA (non-GAAP)
$
192,653
$
160,300
The following items have been excluded in our non-GAAP financial measure:
(1) Acquisition-related charges and intangible amortization for the three and six months ended June 30, 2025 includes $6.4 million and $22 million of acquisition-related costs related to the terminated acquisition of Rotech, which consisted primarily of legal and professional fees. Acquisition-related charges and intangible amortization also includes amortization of intangible assets established during acquisition method of accounting for business combinations. Acquisition-related charges and intangible amortization for the three and six months ended June 30, 2024 includes $3.7
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million of acquisition-related costs related to the terminated acquisition of Rotech, which consisted primarily of legal and professional fees. Acquisition-related charges and intangible amortization also includes 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, which consist of investment banking 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) Transaction breakage fee represents a cash payment to Rotech of $80 million during the three and six months ended June 30, 2025 for the termination of the Rotech acquisition.
(3) During the three and six months ended June 30, 2025 exit and realignment charges, net were $2.5 million and $16 million and primarily included professional fees associated with strategic initiatives of $1.9 million and $8.1 million. During the six months ended June 30, 2025 exit and realignment charges, net also included $6.8 million related to wind-down costs of Fusion5. Exit and realignment charges, net were $15 million and $24 million for the three and six months ended June 30, 2024. These charges primarily included professional fees associated with strategic initiatives of $12 million and $18 million and costs related to IT strategic initiatives such as converting certain divisions to common IT systems. These costs are not normal recurring, cash operating expenses necessary for the Company to operate its business on an ongoing basis.
(4) Transaction financing fees, net includes $12 million, net of income on the related cash held in escrow, on the financing issued in connection with previously expected Rotech acquisition and $6.7 million in recognition of related previously deferred debt issuance costs.
(5) Litigation and related charges includes settlement costs and related charges of legal matters. These costs do not occur in the ordinary course of our business, are non-recurring/infrequent and are inherently unpredictable in timing and amount.
(6) For the three and six months ended June 30, 2025 and 2024, other includes interest costs and net actuarial losses related to our frozen noncontributory, unfunded retirement plan for certain retirees in the United States (U.S.).
(7) Other depreciation and amortization relates to patient service equipment and other fixed assets, excluding such amounts captured within exit and realignment charges, net or acquisition-related charges and intangible amortization.
(8) Stock compensation includes 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 and intangible amortization.
Financial Condition, Liquidity and Capital Resources
Financial condition . We monitor operating working capital through days sales outstanding (DSO) and 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 $7.5 million.
The majority of our cash and cash equivalents are held in cash depository accounts with major banks in the United States. 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.
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Change
(Dollars in thousands)
June 30, 2025
December 31, 2024
$
%
Cash and cash equivalents
$
38,258
$
27,572
$
10,686
38.8
%
Accounts receivable
$
196,379
$
218,270
$
(21,891)
(10.0)
%
DSO (1)
26.2
28.9
Inventories
$
69,227
$
67,581
$
1,646
2.4
%
Inventory days (2)
17.6
17.2
Accounts payable
$
357,037
$
359,927
$
(2,890)
(0.8)
%
(1) Based on period end accounts receivable and net revenue for the quarters ended June 30, 2025 and December 31, 2024. Excluding the impact of the Receivables Sale Program, DSO would have been 31.5 and 30.7 as of June 30, 2025 and December 31, 2024.
(2) Based on period end inventories and cost of net revenue for the quarters ended June 30, 2025 and December 31, 2024.
Liquidity and capital expenditures. The following table summarizes our condensed consolidated statements of cash flows for the six months ended June 30, 2025 and 2024:
Six Months Ended
June 30,
(Dollars in thousands)
2025
2024
Net cash provided by (used for):
Operating activities
$
2,544
$
63,187
Investing activities
(101,117)
(37,040)
Financing activities
124,477
(24,920)
Effect of exchange rate changes
1,801
(682)
Net increase in cash, cash equivalents and restricted cash
$
27,705
$
545
Cash provided by operating activities in the first six months of 2025 reflected a net loss and favorable changes in working capital, an $80 million payment for the termination of the Rotech acquisition, $18 million in transaction financing fees, net for the Rotech financing, an increase in inventory primarily related to inventory purchases within the P&HS segment and a $130 million benefit from accounts receivables sold under the Receivables Sale Program, $104 million of which relates to accounts receivables sold of the P&HS segment. Cash provided by operating activities in the first six months of 2024 reflected a net loss and favorable changes in working capital.
Cash used for investing activities in the first six months of 2025 included capital expenditures of $134 million, primarily for patient service equipment and our strategic and operational efficiency initiatives associated with other fixed assets and capitalized software, offset by $35 million in proceeds from sale of patient service equipment and other fixed assets. Cash used for investing activities in the first six months of 2024 included capital expenditures of $95 million, primarily for patient service equipment, other fixed assets and capitalized software, offset by $67 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 six months of 2025 included net borrowings of $135 million under our Revolving Credit Facility. Cash used for financing activities in the first six months of 2024 included repayments of term loans of $12 million. We had no borrowings under our Revolving Credit Facility for the first six months of 2024 and the activity under our amended Receivables Financing Agreement netted to no impact on our outstanding borrowings. Payments for taxes related to the vesting of restricted stock awards, which are included in Other, net, were $8.0 million for the first six months of 2024.
Refer to Note 3 to the Notes to the Consolidated Financial Statements for the operating and investing cash flow information for our discontinued operations and assets held for sale .
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Capital Resources. Our primary sources of liquidity include cash and cash equivalents, Receivables Sale Program, and our Revolving Credit Agreement.
On October 18, 2024, O&M Funding LLC 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 condensed consolidated balance sheets. The accounts receivable sold under the Receivables Sale Program were primarily accounts receivable of the P&HS segment. Total accounts receivable sold and net cash proceeds under the Receivables Sale program were $496 million and $840 million during the three and six months ended June 30, 2025, approximately $397 million and $672 million of which were accounts receivable of the P&HS segment. We collected $495 million and $704 million of the sold accounts receivable for the three and six months ended June 30, 2025, approximately $396 million and $563 million of which were collections on accounts receivable of the P&HS segment. The losses on sales of accounts receivable were $3.1 million and $5.2 million for the three and six months ended June 30, 2025, $2.5 million and $4.1 million of which relate to losses recorded in other operating expense, net in the financial results from discontinued operations.
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 June 30, 2025 we had $135 million in outstanding borrowings on our Revolving Credit Agreement. At December 31, 2024 our Revolving Credit Agreement was undrawn. At June 30, 2025 and December 31, 2024 we had letters of credit, which reduce Revolver availability, totaling $29 million and $31 million, leaving $286 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 within our P&HS segment, which is classified as held-for-sale as of June 30, 2025, in the United States and Europe that were issued outside of the Revolving Credit Agreement for $3.5 million and $2.9 million as of June 30, 2025 and December 31, 2024.
The Revolving Credit Agreement, the Credit Agreement, the Receivables Sale Program, the 2029 Unsecured Notes, and the 2030 Unsecured Notes contain cross-default provisions which could result in the acceleration of payments due in the event of default of any of the related agreements. The terms of the applicable credit agreements also require us to maintain ratios for leverage and interest coverage, including on a pro forma basis in the event of an acquisition or divestiture. We were in compliance with our debt covenants at June 30, 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 proposed acquisition of Rotech. At the closing of the Offering, the gross proceeds were placed into a segregated escrow account where they were held for the benefit of the holders of the New Notes pending the consummation of the proposed acquisition of Rotech.
On June 3, 2025, the Company, Rotech and Merger Sub mutually agreed to terminate the Merger Agreement and entered into a mutual termination agreement (the Termination Agreement). On June 10, 2025 (the Redemption
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Date), the New Notes were redeemed in full at a price equal to 100% of the aggregate principal amount of the New Notes, plus accrued and unpaid interest up to, but excluding the 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, our Board of Directors authorized a share repurchase program of up to $100 million over the next 24 months. Under the program, we may repurchase shares of common stock on a discretionary basis from time to time through open market repurchases, privately negotiated transactions and 10b5-1 trading plans. During the three and six months ended June 30, 2025, we repurchased in open-market transactions and retired approximately 0.7 million and 0.8 million shares of our common stock for an aggregate of $5.1 million and $6.6 million, or an average price per share of $7.87 and $8.04.
We believe cash generated by operating activities, available financing sources, and borrowings under the Revolving Credit Agreement, cash on hand, and planned proceeds from a sale of our P&HS segment, 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. Subsequent to the contemplated sale of our P&HS segment we do not expect the Receivables Sale Program to continue in its existing form. 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. associated with the P&HS segment, which is reported under discontinued operations and assets held for sale. Our cash and cash equivalents held by our foreign subsidiaries subject to repatriation totaled $16 million and $22 million at June 30, 2025 and December 31, 2024 and is reflected in discontinued operations and assets held for sale. As of June 30, 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 15 in the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q for the period ended on June 30, 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 17 in the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q for the period ended on June 30, 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:
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● our ability to successfully complete a transaction related to the contemplated sale of our Products & Healthcare Services segment;
● 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;
● 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 the impacts of current and potential tariffs and other trade-related measures, restrictions and policies and any retaliatory counter measures, and our plans to mitigate those impacts;
● 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 and our ability to adapt to changes in product pricing and other terms of purchase by suppliers of product;
● uncertainties related to reimbursement qualification for non-invasive ventilation products
● 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;
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● 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;
● 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 as amended and supplemented by the risk factors set forth in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2025 in “Item 1A. Risk Factors” and below in “Item 1A. Risk Factors”.
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 June 30, 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.