What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-04-02 compared with 2025-01-08 · 108 added, 89 removed, 149 unchanged (57% of the section changed)

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The restructuring activities associated with the modified Plan are still expected to be completed in the third quarter of fiscal year 2026.

The modified Plan is still expected to generate $15.0 million in annual cost savings in fiscal year 2027.

The modified Plan is still expected to generate $15.0 million in annual cost savings starting in fiscal year 2027.

On July 16, 2024, the Board of Directors approved a share repurchase program (the "Repurchase Program") under which they authorized the Company the option to repurchase up to $15.0 million of its outstanding common stock.

The timing and amount of any share repurchases under the authorization will be determined by management within certain parameters and based on market conditions and other considerations.

There were no share repurchases during the third quarter of fiscal year 2025.

During the first quarter of fiscal year 2025, the Company repurchased 72,141 shares of common stock in the open market at an aggregate cost of $0.5 million under the Repurchase Program.

During the second quarter of fiscal year 2025, the Company repurchased 171,706 shares of common stock in the open market at an aggregate cost of $1.1 million under the Repurchase Program.

As of November 30, 2024, $13.3 million remained available for repurchase under the Repurchase Program.

As of February 28, 2025, $13.3 million remained available for repurchase under the Repurchase Program.

On December 24, 2024, the Company entered into an agreement to sell the manufacturing facilities in Queensbury, NY and Glens Falls, NY for a purchase price of $5.5 million and $1.2 million, respectively, and net proceeds of $5.2 million and $1.1 million, respectively.

The Company simultaneously entered into lease agreements with future lease payments of $4.6 million over seven years for the Queensbury, NY facility and $0.4 million over three years for the Glens Falls, NY facility.

In evaluating the operating performance of our business, management focuses on company-wide and segment revenue and gross margin and company-wide operating income, earnings per share and cash flow from operations.

A summary of these key financial metrics for the three and six months ended November 30, 2024 compared to the three and six months ended November 30, 2023 are as follows:

Three months ended November 30, 2024:

A summary of these key financial metrics for the three and nine months ended February 28, 2025 compared to the three and nine months ended February 29, 2024 are as follows:

Three months ended February 28, 2025:

• Revenue decreased by 4.2% to $72.0 million

• Med Tech growth of 24.4% and Med Device decrease of 23.1%

• Med Tech growth of 21.3% and Med Device declined by 17.6%

• Gross profit increased 630 bps to 54.0%

2 unchanged sentences

• Loss per share decreased by $4.56 to $0.11

Six months ended November 30, 2024:

Nine months ended February 28, 2025:

• Revenue decreased by 8.8% to $212.3 million

• Med Tech growth of 17.9% and Med Device declined by 22.1%

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• Gross profit increased 450 bps to 54.4%

• Med Tech gross profit remained consistent at 63.5% and Med Device gross profit increased 310 bps to 48.0%

• Net income decreased by $40.4 million to $23.5 million

• Med Tech gross profit increased 40 bps to 63.2% and Med Device gross profit increased 430 bps to 47.8%

• Net loss decreased by $143.0 million to $27.9 million

• Loss per share decreased by $3.58 to $0.68

• Cash used in operations decreased by $4.2 million to $28.9 million

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For the three and six months ended November 30, 2024, the decrease in revenue is partially due to the sale of the PICCs, Midline, dialysis and BioSentry businesses, along with the discontinuation of the RadioFrequency Ablation and Syntrax product lines, the total of which impacted sales by $12.4 million and $24.3 million compared to the same periods in the prior year, respectively.

Our Med Tech revenue, comprised of Auryon, the thrombus management platform and NanoKnife, grew 24.4% in the second quarter of fiscal year 2025.

Our Med Device revenue declined by 23.1% in the second quarter of fiscal year 2025 driven mainly by the sale of the PICCs, Midlines, dialysis and BioSentry businesses along with the discontinuation of the RadioFrequency Ablation product lines.

For the three and nine months ended February 28, 2025, the decrease in revenue is due to the divestiture of the PICCs, Midline, dialysis and BioSentry businesses, along with the discontinuation of the RadioFrequency Ablation and Syntrax product lines, the total of which impacted sales by $9.2 million and $33.5 million compared to the three and nine months ended February 29, 2024, respectively.

Our Med Tech revenue, comprised of Auryon, the thrombus management platform and NanoKnife, grew 21.3% in the third quarter of fiscal year 2025.

Our Med Device revenue declined by 17.6% in the third quarter of fiscal year 2025 driven mainly by the divestiture of the PICCs, Midlines, dialysis and BioSentry businesses along with the discontinuation of the RadioFrequency Ablation product lines.

Results of Operations

For the three months ended November 30, 2024, the Company reported net loss of $10.7 million, or diluted loss per share of $0.26, on net sales of $72.8 million, compared with a net loss of $29.0 million, or diluted loss per share of $0.72, on net sales of $79.1 million during the same quarter of the prior year.

For the six months ended November 30, 2024, the Company reported net loss of $23.5 million, or diluted loss per share of $0.58, on net sales of $140.3 million, compared with a net income of $16.8 million, or diluted earnings per share of $0.42, on net sales of $157.8 million during the same quarter of the prior year.

For the three months ended February 28, 2025, the Company reported net loss of $4.4 million, or diluted loss per share of $0.11, on net sales of $72.0 million, compared with a net loss of $187.7 million, or diluted loss per share of $4.67, on net sales of $75.2 million during the same quarter of the prior year.

For the nine months ended February 28, 2025, the Company reported net loss of $27.9 million, or diluted loss per share of $0.68, on net sales of $212.3 million, compared with a net loss of $170.9 million, or diluted loss per share of $4.26, on net sales of $232.9 million during the same quarter of the prior year.

Net sales - Net sales are derived from the sale of products and related freight charges, less discounts, rebates and returns.

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2024 Nov 30, 2023 $ Change Nov 30, 2024 Nov 30, 2023 $ Change

Three Months Ended Nine Months Ended

(in thousands) Feb 28, 2025 Feb 29, 2024 $ Change Feb 28, 2025 Feb 29, 2024 $ Change

Med Tech $ 31,341 $ 25,844 $ 5,497 $ 90,863 $ 77,068 $ 13,795

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Total $ 72,004 $ 75,182 $ (3,178) $ 212,340 $ 232,934 $ (20,594)

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2024 Nov 30, 2023 $ Change Nov 30, 2024 Nov 30, 2023 $ Change

Three Months Ended Nine Months Ended

(in thousands) Feb 28, 2025 Feb 29, 2024 $ Change Feb 28, 2025 Feb 29, 2024 $ Change

United States $ 61,340 $ 62,342 $ (1,002) $ 183,499 $ 190,743 $ (7,244)

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Total $ 72,004 $ 75,182 $ (3,178) $ 212,340 $ 232,934 $ (20,594)

For the three months ended November 30, 2024, net sales decreased $6.2 million to $72.8 million compared to the same period in the prior year.

For the six months ended November 30, 2024, net sales decreased $17.4 million to $140.3 million compared to the same period in the prior year.

At November 30, 2024, the Company had a sales order backlog of $0.7 million.

The Med Tec h segment net sales increased $6.2 million and $8.3 million fo r the three and six months ended November 30, 2024 compared to the same period in the prior year, respectively.

For the three months ended February 28, 2025, net sales decreased $3.2 million to $72.0 million compared to the three months ended February 29, 2024.

For the nine months ended February 28, 2025, net sales decreased $20.6 million to $212.3 million compared to the nine months ended February 29, 2024.

At February 28, 2025, the Company had a sales order backlog of $0.5 million.

The Med Tec h segment net sales increased $5.5 million and $13.8 million fo r the three and nine months ended February 28, 2025 compared to the three and nine months ended February 29, 2024, respectively.

The change in sales for both periods was primarily driven by:

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• Increased sales of the thrombus management platform of $3.3 million and $6.8 million compared to the same period in the prior year, respectively.

This was driven by an increase in AngioVac and AlphaVac sales of $3.3 million and $3.2 million compared to the same periods in the prior year, respectively, and an increase in thrombolytic sales of $0.2 million for both periods compared to the same periods in the prior year;

• Increased NanoKnife sales of $0.3 million for the three months ended November 30, 2024, compared to the same period in the prior year, which was driven by increased disposable sales offset by decreased capital sales.

Decreased NanoKnife sales of $0.1 million for the six months ended November 30, 2024, compared to the same period in the prior year, which was driven by decreased capital sales partially offset by increased disposable sales.

The Me d Device segment net sales decreased $12.4 million and $25.7 million for the three and six months ended November 30, 2024 compared to the same period in the prior year, respectively.

The backlog, which primarily impacted sales of Core products, was $0.7 million.

This was driven by an increase in AngioVac and AlphaVac sales of $3.1 million and $6.3 million compared to the same periods in the prior year, respectively, and an increase in thrombolytic sales of $0.2 million and $0.5 million compared to the same periods in the prior year, respectively;

• Increased NanoKnife sales of $0.3 million and $0.2 million compared to the same period in the prior year, respectively, which was driven by increased disposable sales offset by decreased capital sales.

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The change in sales for the three months ended November 30, 2024 compared to the same period in the prior year, was primarily driven by:

The Me d Device segment net sales decreased $8.7 million and $34.4 million for the three and nine months ended February 28, 2025 compared to the three and nine months ended February 29, 2024, respectively.

The backlog, which primarily impacted sales of Core and Oncology products, was $0.5 million.

The change in sales for the three months ended February 28, 2025 compared to the three months ended February 29, 2024, was primarily driven by:

• Decreased sales of PICCs and Midline products of $8.6 million, which was due to the divestiture of these businesses on February 15, 2024;

• Decreased sales of RadioFrequency Ablation of $0.4 million due to the discontinuation of this product line as of February 29, 2024;

• Decreased sales of Core and Ports of $0.2 million and $0.2 million, respectively, which was partially offset by increased sales of Venous and Microwave products of $0.1 million and $0.1 million, respectively.

The change in sales for the six months ended November 30, 2024 compared to the same period in the prior year, was primarily driven by:

• Increased sales of Core and Microwave products of $0.7 million and $0.4 million, respectively, which was partially offset by decreased sales of Venous, Ports and Oncology products of $0.2 million, $0.2 million and $0.3 million, respectively.

The change in sales for the nine months ended February 28, 2025 compared to the nine months ended February 29, 2024, was primarily driven by:

• Decreased sales of PICCs and Midline products of $30.2 million, which was due to the divestiture of these businesses on February 15, 2024;

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• Decreased sales of RadioFrequency Ablation of $2.2 million due to the discontinuation of this product line as of February 29, 2024;

• Decreased sales of Microwave, Core and Oncology products of $1.4 million, $0.4 million and $0.3 million, respectively, which was partially offset by increased sales of Venous and Ports of $0.2 million and $0.2 million, respectively.

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2024 Nov 30, 2023 $ Change Nov 30, 2024 Nov 30, 2023 $ Change

• Decreased sales of Microwave and Oncology products of $1.0 million and $0.6 million, respectively, which was partially offset by increased sales of Core and Ports of $0.3 million and $0.1 million, respectively.

Three Months Ended Nine Months Ended

(in thousands) Feb 28, 2025 Feb 29, 2024 $ Change Feb 28, 2025 Feb 29, 2024 $ Change

Med Tech $ 19,588 $ 15,857 $ 3,731 $ 57,398 $ 48,400 $ 8,998

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Gross profit - Gross profit consists of net sales less the cost of goods sold, which includes the costs of materials, products purchased from third parties and sold by us, manufacturing personnel, royalties, freight, business insurance, depreciation of property and equipment and other manufacturing overhead, exclusive of intangible amortization.

Total Company gross profit decreased by $0.4 million and $3.7 million for the three and six months ended November 30, 2024 compared to the same period in the prior year, respectively.

Total Company gross profit increased by $3.0 million and decreased by $0.7 million for the three and nine months ended February 28, 2025 compared to the three and nine months ended February 29, 2024, respectively.

The change for both periods was primarily driven by:

• The sale of the PICCs, Midline, dialysis and BioSentry businesses contributed $3.6 million and $7.0 million of gross profit, respectively;

• The divestiture of the PICCs, Midline, dialysis and BioSentry businesses and abandonment of the Syntrax and RF product lines contributed $2.2 million and $9.2 million of gross profit, respectively;

• Sales volume, price and product mix, which positively impacted gross profit by $5.4 million and $12.9 million, respectively;

• Production volume, other incentives and other costs, which negatively impacted gross profit by $1.6 million and $1.7 million, respectively;

• Inflationary costs on raw materials, labor shortages and freight costs negatively impacted gross profit by $1.2 million and $2.7 million, respectively;

• Other incentives and a prior year supplier recall, which positively impacted gross profit by $1.2 million and $1.4 million, respectively;

• Production volume and other costs, which negatively impacted gross profit by $1.2 million and $2.7 million, respectively;

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• Inflationary costs on raw materials, labor shortages and freight costs, which positively impacted gross profit by $0.5 million for the three months ended February 28, 2025 and which negatively impacted gross profit by $1.0 million for the nine months ended February 28, 2025;

• Incremental depreciation and other expense on placement units of $0.7 million and $2.0 million, respectively.

The Med Tech segment gross profit increased by $4.3 million and $5.3 million for the three and six months ended November 30, 2024 compared to the same period in the prior year, respectively.

The Med Tech segment gross profit increased by $3.7 million and $9.0 million for the three and nine months ended February 28, 2025 compared to the three and nine months ended February 29, 2024, respectively.

The change for both periods was primarily driven by:

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• The abandonment of the Syntrax product line impacted gross profit by $0.1 million and $0.2 million, respectively;

• Sales volume, price and product mix, which positively impacted gross profit by $4.9 million and $12.6 million, respectively;

• Production volume, other incentives and other costs, which negatively impacted gross profit by $0.7 million and $0.4 million, respectively;

• Inflationary costs on raw materials, labor shortages and freight costs negatively impacted gross profit by $0.2 million and $0.7 million, respectively;

• Production volume, which positively impacted gross profit by $0.1 million and $0.1 million, respectively;

• Other incentives and costs, which negatively impacted gross profit by $0.7 million and $1.3 million, respectively;

• Inflationary costs on raw materials, labor shortages and freight costs negatively impacted gross profit by $0.3 million for the nine months ended February 28, 2025;

• Incremental depreciation and other expense on placement units of $0.6 million and $1.9 million, respectively.

The Med Device segment gross profit decreased by $4.7 million and $9.0 million for the three and six months ended November 30, 2024 compared to the same period in the prior year, respectively.

The Med Device segment gross profit decreased by $0.7 million and $9.7 million for the three and nine months ended February 28, 2025 compared to the three and nine months ended February 29, 2024, respectively.

The change for both periods was primarily driven by:

• The sale of the PICCs, Midline, dialysis and BioSentry businesses contributed $3.6 million and $7.0 million of gross profit, respectively;

• The divestiture of the PICCs, Midline, dialysis and BioSentry businesses and abandonment of the RF product line contributed $2.1 million and $9.1 million of gross profit, respectively;

• Price and product mix, which positively impacted gross profit by $0.9 million and $2.4 million, respectively;

• Sales volume, production volume, other incentives and other costs, which negatively impacted gross profit by $1.4 million and $2.9 million, respectively;

• Inflationary costs on raw materials, labor shortages and freight costs negatively impacted gross profit by $1.0 million and $2.0 million, respectively;

• Incremental depreciation and other expense on placement units of $0.1 million and $0.1 million, respectively.

• A prior year supplier recall, which positively impacted gross profit by $1.2 million and $1.4 million, respectively;

• Sales volume, production volume and other incentives and costs, which negatively impacted gross profit by $1.1 million and $3.5 million, respectively;

• Inflationary costs on raw materials, labor shortages and freight costs positively impacted gross profit by $0.5 million for the three months ended February 28, 2025 and negatively impacted gross profit by $0.7 million for the nine months ended February 28, 2025;

• Incremental depreciation and other expense on placement units of $0.1 million for the nine months ended February 28, 2025 compared to the nine months ended February 29, 2024.

Operating Expenses and Other Income (Expense)

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2024 Nov 30, 2023 $ Change Nov 30, 2024 Nov 30, 2023 $ Change

Three Months Ended Nine Months Ended

(in thousands) Feb 28, 2025 Feb 29, 2024 $ Change Feb 28, 2025 Feb 29, 2024 $ Change

Research and development $ 6,913 $ 8,189 $ (1,276) $ 19,632 $ 24,788 $ (5,156)

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Research and development expense - Research and development (“R&D”) expense includes internal and external costs to develop new products, enhance existing products, validate new and enhanced products, and manage clinical, regulatory and medical affairs.

R&D expense decreased $2.2 million and $3.9 million for the three and six months ended November 30, 2024 compared to the same period in the prior year, respectively.

R&D expense decreased $1.3 million and $5.2 million for the three and nine months ended February 28, 2025 compared to the three and nine months ended February 29, 2024, respectively.

The change for both periods was primarily driven by:

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Sales and marketing expense - Sales and marketing (“S&M”) expense consists primarily of salaries, commissions, travel and related business expenses, attendance at medical society meetings, product promotions and marketing activities.

S&M expense increased $0.1 million and decreased $1.6 million for the three and six months ending November 30, 2024 compared to the same period in the prior year, respectively.

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S&M expense increased $0.1 million and decreased $1.5 million for the three and nine months ended February 28, 2025 compared to the three and nine months ended February 29, 2024, respectively.

The change for both periods was primarily driven by:

• Compensation and benefits expense, which decreased by $0.1 million and $2.5 million, respectively;

• Travel and other selling expenses, which increased $0.6 million and $0.3 million, respectively, and trade show expenses, which increased $0.2 million and $0.4 million, respectively.

• Trade shows, subscriptions and other marketing expenses, which increased $0.1 million and $0.9 million, respectively;

• Consulting and other selling expenses, which increased $0.1 million for both periods.

General and administrative expense - General and administrative (“G&A”) expense includes executive management, finance, information technology, human resources, business development, legal, and the administrative and professional costs associated with those activities.

G&A expense increased $1.1 million and $1.2 million for the three and six months ended November 30, 2024 compared to the same period in the prior year, respectively.

G&A expense decreased $0.1 million and increased $1.1 million for the three and nine months ended February 28, 2025 compared to the three and nine months ended February 29, 2024, respectively.

The change for both periods was primarily driven by:

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• Compensation and benefits expenses, which increased $0.7 million and $1.7 million, respectively;

• Other outside consultant spend for legal and IT, which increased $0.4 million and $1.3 million, respectively, which was partially offset by a decrease in depreciation and other corporate expenses of $1.1 million for both periods.

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2024 Nov 30, 2023 $ Change Nov 30, 2024 Nov 30, 2023 $ Change

• Outside consultant spend, which decreased $0.2 million for the three months ended February 28, 2025 and increased $1.1 million for the nine months ended February 28, 2025, compared to the three and nine months ended February 29, 2024, respectively;

• Depreciation and other corporate expenses, which decreased $0.5 million and $1.6 million, respectively.

Three Months Ended Nine Months Ended

(in thousands) Feb 28, 2025 Feb 29, 2024 $ Change Feb 28, 2025 Feb 29, 2024 $ Change

Amortization of intangibles $ 2,598 $ 3,287 $ (689) $ 7,730 $ 10,474 $ (2,744)

Goodwill impairment $ — $ 159,476 $ (159,476) $ — $ 159,476 $ (159,476)

Change in fair value of contingent consideration $ 40 $ 112 $ (72) $ 272 $ 203 $ 69

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Amortization of intangibles - Represents the amount of amortization expense that was taken on intangibles assets held by the Company.

• Amortization expense decreased $1.0 million and $2.1 million for the three and six months ended November 30, 2024 compared to the same period in the prior year, respectively, due to the intangible assets that were included in the sale of the dialysis, BioSentry, PICCs and Midlines businesses and the abandonment of the Syntrax product line.

• Amortization expense decreased $0.7 million and $2.7 million for the three and nine months ended February 28, 2025 compared to the three and nine months ended February 29, 2024, respectively, due to the intangible assets that were included in the divestiture of the dialysis, BioSentry, PICCs and Midlines businesses and the abandonment of the Syntrax product line.

Goodwill impairment - Represents the impairment charge taken on goodwill.

• The Company recorded a non-cash goodwill impairment charge of $159.5 million for the three and nine months ended February 29, 2024 as the fair value of the Med Tech reporting unit was less than its carrying value.

Change in fair value of contingent consideration - Represents changes in contingent consideration driven by changes to estimated future payments on earn-out liabilities created through acquisitions and amortization of present value discounts on long-term contingent consideration.

• The change in the fair value for the three and six months ended November 30, 2024 is related to the Eximo contingent consideration.

• The change in the fair value for the three and nine months ended February 28, 2025 is related to the Eximo contingent consideration.

Acquisition, restructuring and other items, net - Represents costs associated with mergers and acquisitions, restructuring expenses, legal costs that are related to litigation that is not in the ordinary course of business, legal settlements and other one-time items.

Acquisition, restructuring and other item s, net, decreased by $0.3 million and increased $0.8 million for the three and six months ended November 30, 2024, compared to the same period in the prior year, respectively.

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Acquisition, restructuring and other item s, net, decreased by $32.1 million and $31.3 million for the three and nine months ended February 28, 2025, compared to the three and nine months ended February 29, 2024, respectively.

The change for both periods was primarily driven by:

• Legal expense, related to litigation that is outside of the normal course of business, which decreased $5.3 million and $6.7 million, respectively;

• Mergers and acquisition expense, which increased $0.5 million for both periods;

• Plant closure expense, related to the restructuring of our manufacturing footprint which was announced on January 5, 2024, which increased $5.1 million and $8.7 million, respectively;

• Transaction services agreements that were entered into as a result of the sale of the PICCs, Midline, dialysis and BioSentry businesses.

• Legal expense, related to litigation that is outside of the normal course of business, which decreased $23.3 million and $30.0 million, respectively, was driven by the $19.3 million settlement between the Company and BD in the prior year;

• Mergers and acquisition expense, which decreased $0.1 million for the three months ended February 28, 2025 compared to the three months ended February 29, 2024 and increased $0.3 million for the nine months ended February 28, 2025 compared to the nine months ended February 29, 2024;

• Plant closure expense, related to the restructuring of our manufacturing footprint which was announced on January 5, 2024, which decreased $2.3 million for the three months ended February 28, 2025 compared to the three months ended February 29, 2024 and increased $5.7 million for the nine months ended February 28, 2025 compared to the nine months ended February 29, 2024;

• An impairment of $3.4 million on the Syntrax product technology intangible asset and an inventory write-off of $2.9 million was taken in the third quarter of fiscal year 2024 related to the abandonment of the Syntrax and RF product lines;

• Transaction services agreements that were entered into as a result of the divestiture of the PICCs, Midline, dialysis and BioSentry businesses.

The increase in the fees invoiced was $0.1 million and $0.8 million, respectively;

• Manufacturing relocation expense related to the move of certain manufacturing lines from Queensbury, New York to a third party, which decreased $0.7 million and $1.3 million, respectively.

• Manufacturing relocation expense related to the move of certain manufacturing lines from Queensbury, New York to a third party, which decreased $0.6 million for the nine months ended February 28, 2025 compared to the nine months ended February 29, 2024;

• Other expense, mainly severance associated with organizational changes, which increased $0.3 million for the nine months ended February 28, 2025 compared to the nine months ended February 29, 2024.

Other income, net - Other expenses include interest expense, foreign currency impacts and bank fees.

• Other income, net decreased by $0.3 million for the three months ended November 30, 2024, compared to the same period in the prior year, which is primarily due to decreased interest income.

Other income, net increased by $0.3 million for the six months ended November 30, 2024, compared to the same period in the prior year, which is primarily due to i ncreased interest income of $0.2 million and unrealized foreign currency fluctuations of $0.1 million.

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Other income, net increased by $5.4 million and $5.8 million , for the three and nine months ended February 28, 2025, compared to the three and nine months ended February 29, 2024, respectively.

The change for both periods was primarily driven by:

• The Company achieved the sales milestone related to divested products in the third quarter of fiscal year 2025 and recorded a receivable of $5.5 million which will be paid to the Company in the fourth quarter of fiscal year 2025;

• Unrealized foreign currency fluctuations, which increased $0.1 million and $0.3 million, respectively;

• Interest income, which decreased $0.2 million for the three months ended February 28, 2025 compared to the three months ended February 29, 2024.

Income Tax Benefit

Three Months Ended Six Months Ended

(in thousands) Nov 30, 2024 Nov 30, 2023 Nov 30, 2024 Nov 30, 2023

Three Months Ended Nine Months Ended

(in thousands) Feb 28, 2025 Feb 29, 2024 Feb 28, 2025 Feb 29, 2024

Income tax benefit (expense) $ (2) $ (12,004) $ 21 $ (6,597)

Effective tax rate including discrete items — % 6.0 % (0.1) % 3.7 %

Our effective tax rate including discrete items for the three months ended November 30, 2024 and 2023 was 1.0% and (130.2)%, respectively.

Our effective tax rate including discrete items for the six months ended November 30, 2024 and 2023 was (0.1)% and 24.3%, respectively.

Our effective tax rate including discrete items for the three months ended February 28, 2025 and February 29, 2024 was 0.0% and 6.0%, respectively.

Our effective tax rate including discrete items for the nine months ended February 28, 2025 and February 29, 2024 was (0.1)% and 3.7%, respectively.

In fiscal year 2025, the Company’s effective tax rate differs from the U.S.

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We regularly review our liquidity and anticipated capital requirements and we believe that our current cash on hand provides sufficient liquidity to meet our anticipated needs for capital for at least the next 12 months.

Our cash and cash equivalents totaled $54.1 million as of November 30, 2024, compared with $76.1 million as of May 31, 2024.

As of November 30, 2024 and May 31, 2024 the Company did not have any outstanding debt.

The fair value of contingent consideration liability as of November 30, 2024 and May 31, 2024, was $5.0 million and $4.7 million, respectively.

Our cash and cash equivalents totaled $44.8 million as of February 28, 2025, compared with $76.1 million as of May 31, 2024.

As of February 28, 2025 and May 31, 2024 the Company did not have any outstanding debt.

The fair value of contingent consideration liability as of February 28, 2025 and May 31, 2024, was $5.0 million and $4.7 million, respectively.

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The table below summarizes our cash flows:

Six Months Ended

(in thousands) Nov 30, 2024 Nov 30, 2023

Nine Months Ended

(in thousands) Feb 28, 2025 Feb 29, 2024

Cash provided by (used in):

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Net change in cash and cash equivalents $ (31,296) $ 33,831

During the six months ended November 30, 2024 and 2023, cash flows consisted of the following:

During the nine months ended February 28, 2025 and February 29, 2024, cash flows consisted of the following:

Cash used in operating activities

Six months ended November 30, 2024 and 2023:

• Net loss of $23.5 million and a net income of $16.8 million, respectively, plus the non-cash items, primarily driven by depreciation and amortization and stock based compensation, along with the changes in working capital below, contributed to cash used in operations of $15.8 million and $20.6 million, respectively, for these periods.

• For the period ended November 30, 2024, working capital was unfavorably impacted by decreased accounts payable, accrued liabilities and other liabilities of $7.5 million, along with increased in ventory and prepaid expenses of $5.3 million and $0.1 million, respectively.

This was partially offset by decreased accounts rec eivable of $0.1 million .

• For the period ended November 30, 2023, working capital was unfavorably impacted by accounts payable, accrued liabilities and other liabilities of $1.0 million, along with increased inventory and prepaid expenses of $8.8 million and $5.0 million, respectively.

This was partially offset by decreased accounts rec eivable of $0.7 million .

Nine months ended February 28, 2025 and February 29, 2024:

• Net loss of $27.9 million and $170.9 million, respectively, plus the non-cash items, primarily driven by depreciation and amortization and stock based compensation, along with the changes in working capital below, contributed to cash used in operations of $28.9 million and $33.2 million, respectively, for these periods.

• For the period ended February 28, 2025, working capital was unfavorably impacted by decreased accounts payable, accrued liabilities and other liabilities of $18.5 million, along with increased accounts receivable, in ventory and prepaid expenses of $0.4 million, $2.5 million and $9.5 million, respectively.

• For the period ended February 29, 2024, working capital was unfavorably impacted by increased inventory and prepaid expenses of $6.8 million and $7.6 million, respectively.

This was offset by decreased accounts receivable of $2.3 million and increased accounts payable, accrued liabilities and other liabilities of $16.7 million.

Cash (used in) provided by investing activities

Six months ended November 30, 2024 and 2023:

Nine months ended February 28, 2025 and February 29, 2024:

• $3.7 million and $2.0 million, respectively, of cash was used for fixed asset additions;

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• $100.0 million of cash was received for the divestiture of the dialysis and BioSentry businesses in the first quarter of fiscal year 2024;

Cash used in financing activities

Six months ended November 30, 2024 and 2023:

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• $1.7 million of cash was used for the repurchase of commons shares in the first quarter of fiscal year 2025;

• $34.5 million of cash was received for the divestiture of the PICCs and Midline businesses in the third quarter of fiscal year 2024;

• $3.3 million of cash was used for the acquisition of exclusive licenses in the third quarter of fiscal year 2024.

Cash provided by (used in) financing activities

Nine months ended February 28, 2025 and February 29, 2024:

• $6.3 million of proceeds from financing arrangements offset with $0.1 million of principal payments on the financing arrangements in the third quarter of fiscal year 2025;

• $1.7 million of cash was used for the repurchase of commons shares in the first and second quarters of fiscal year 2025;

• $50.0 million repayment of the Credit Agreement in connection with the completion of the dialysis and BioSentry divestiture in the first quarter of fiscal year 2024;

• $10.0 million of contingent consideration payments made in the first quarter of fiscal year 2024;

• $0.1 million of proceeds from stock option and ESPP activity in the first quarter of fiscal year 2024.

• $0.9 million and $0.8 million, respectively, of proceeds from stock option and ESPP activity.

On June 8, 2023 and in connection with the completion of the dialysis and BioSentry divestiture, the Company repaid all amounts outstanding under its existing Credit Agreement, and as a result, the Credit Agreement was extinguished.

2 unchanged sentences

If we seek to make acquisitions of other businesses or technologies in the future for cash, we may require external financing.

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New Accounting Pronouncements

2 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis