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Item 2. Management’s Discussion and Analysis

2026-07-30 compared with 2026-04-30 · 141 added, 69 removed, 108 unchanged (66% of the section changed)

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Our future financial condition and results of operations, as well as any forward-looking statements, are subject to inherent risks and uncertainties that may adversely impact our operations and financial results.

These risks and uncertainties are discussed in Part I, Item 1A “Risk Factors” in the 2025 Annual Report on Form 10-K.

These risks and uncertainties are discussed in Part I, Item 1A “Risk Factors” in the 2025 Annual Report on Form 10-K and in Part II, Item 1A “Risk Factors” in this report and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026.

We are a leading manufacturer and marketer of proprietary medical devices used in interventional, diagnostic and therapeutic procedures, particularly in cardiology, radiology, oncology, critical care and endoscopy.

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Our therapeutic product category includes product platforms such as cardiac therapies, oncology, renal therapies, vascular intervention, OEM products and endoscopy.

For the three-month period ended March 31, 2026, we reported sales of $381.9 million, an increase of $26.5 million or 7% compared to sales for the three-month period ended March 31, 2025 of $355.4 million.

Foreign currency fluctuations (net of hedging) increased our net sales by $7.9 million for the three-month period ended March 31, 2026, assuming applicable foreign exchange rates in effect during the comparable prior-year periods.

Gross profit as a percentage of sales remained at 48.4% for the three-month period ended March 31, 2026 compared to 48.4% for the three-month period ended March 31, 2025.

Net income for the three-month period ended March 31, 2026 was $41.0 million, or $0.68 per share, compared to net income of $30.1 million, or $0.49 per share, for the three-month period ended March 31, 2025.

For the three-month period ended June 30, 2026, we reported sales of $418.8 million, an increase of $36.4 million or 10% compared to sales for the three-month period ended June 30, 2025 of $382.5 million.

For the six-month period ended June 30, 2026, we reported sales of $800.7 million, an increase of $62.9 million or 9% compared to sales for the six-month period ended June 30, 2025 of $737.8 million.

Foreign currency fluctuations (net of hedging) increased our net sales by $3.0 million and $10.9 million for the three and six-month periods ended June 30, 2026, respectively, assuming applicable foreign exchange rates in effect during the comparable prior-year periods.

Gross profit as a percentage of sales increased to 51.4% for the three-month period ended June 30, 2026 compared to 48.2% for the three-month period ended June 30, 2025.

Gross profit as a percentage of sales increased to 50.0% for the six-month period ended June 30, 2026 compared to 48.3% for the six-month period ended June 30, 2025.

Net income for the three-month period ended June 30, 2026 was $38.8 million, or $0.65 per share, compared to net income of $32.6 million, or $0.54 per share, for the three-month period ended June 30, 2025.

Net income for the six-month period ended June 30, 2026 was $79.8 million, or $1.33 per share, compared to net income of $62.7 million, or $1.03 per share, for the six-month period ended June 30, 2025.

Recent Developments and Trends

In addition to the trends identified in the 2025 Annual Report on Form 10-K under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Overview,” our business in 2026 has been impacted, and we believe will continue to be impacted, by the following recent developments and trends:

● Our revenue results during the three-month period ended March 31, 2026 were driven primarily by demand in both our domestic and international regions.

● As of March 31, 2026, we had cash, cash equivalents, and restricted cash of $490.2 million and net available borrowing capacity under our Amended Fourth A&R Credit Agreement of approximately $697 million.

● Our revenue results during the three-month period ended June 30, 2026 were driven primarily by demand in both our domestic and international regions.

● On April 1, 2026, we completed the acquisition of View Point, which included the OneMark® Detection Imaging System and OneMark Tissue Markers used in the diagnosis and localization of breast and soft tissue tumors.

● As of June 30, 2026, we had cash, cash equivalents, and restricted cash of $450.9 million and net available borrowing capacity under our Amended Fourth A&R Credit Agreement of $697 million.

● On February 20, 2026, the U.S.

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The Company is the importer of record for certain raw materials and products that were previously subject to such tariffs under IEEPA.

Significant uncertainty remains regarding how and when any amounts may be recovered.

We are evaluating the ruling and potential actions available to us.

Because the process, timing, and amount of any recovery are uncertain, we have not recorded any potential benefit from a refund at this time.

During the second quarter of 2026, we received approximately $6.9 million in refunds related to previously paid IEEPA tariffs recognized within cost of sales.

Significant uncertainty remains regarding how and when any remaining amounts may be recovered, including the potential recovery for certain tariffs paid relating to raw materials and products for which the Company is not the importer of record.

The Company continues to monitor ongoing legal proceedings related to the scope of this refund process, which could affect the amount of any future recoveries.

RESULTS OF OPERATIONS

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Three Months Ended

Six Months Ended

Selling, general and administrative expenses

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Income before income taxes

Sales for the three-month period ended March 31, 2026 increased by 7%, or $26.5 million, compared to the corresponding period in 2025.

Listed below are the sales by product category for the three-month periods ended March 31, 2026 and 2025 (in thousands, other than percentage changes):

Sales for the three-month period ended June 30, 2026 increased by 9.5%, or $36.4 million, compared to the corresponding period in 2025.

Sales for the six-month period ended June 30, 2026 increased by 8.5%, or $62.9 million, compared to the corresponding period in 2025.

Listed below are the sales by product category and platform for the three and six-month periods ended June 30, 2026 and 2025 (in thousands, other than percentage changes):

Three Months Ended

Six Months Ended

Procedural Solutions

Vascular Intervention

Total Foundational

Cardiac Therapies

Renal Therapies

Vascular Intervention

Total Therapeutic

Foundational Sales.

Our foundational sales for the three-month period ended March 31, 2026 were $255.5 million, up 6.3% when compared to the corresponding period of 2025 of $240.4 million.

Sales for the three-month period ended March 31, 2026 were favorably affected by increased sales within our access platform, including sales of our StatSeal and WoundSeal products acquired from Biolife, and our vascular intervention platforms, partially offset by decreased sales within our OEM and procedural solutions platforms.

Our foundational sales for the three-month period ended June 30, 2026 were $281.0 million, up 7.1% when compared to the corresponding period of 2025 of $262.4 million.

Sales for the three-month period ended June 30, 2026 were favorably affected by increased sales within the following platforms:

(a) Access, which increased by $9.7 million, or 6.4%, from the corresponding period of 2025.

This increase was driven primarily by hemostasis products acquired in the Biolife Merger, as well as increased sales of our angiography and access products, partially offset by decreased sales in our drainage and intervention products.

(b) OEM, which increased by $5.1 million, or 11.8%, from the corresponding period of 2025.

This increase was driven primarily by increased sales of our access, sensors and angiography products, partially offset by decreased sales in our kits and cardiac rhythm management/electrophysiology (“CRM/EP”) products.

This increase was driven primarily by increased sales of our drainage and biopsy products.

The foregoing increase in sales for the three-month period ended June 30, 2026 was partially offset by decreased sales within our Procedural Solutions platform, which decreased by $3.8 million, or 11.9%, from the corresponding period of 2025.

This decrease was driven primarily by the sale of the DualCap® product line to Health Line , partially offset by increased sales of our trays.

Our foundational sales for the six-month period ended June 30, 2026 were $536.4 million, up 6.7% when compared to the corresponding period of 2025 of $502.8 million.

Sales for the six-month period ended June 30, 2026 were favorably affected by increased sales within the following platforms:

(a) Access, which increased by $26.4 million, or 9.2%, from the corresponding period of 2025.

(b) OEM, which increased by $1.2 million, or 1.4%, from the corresponding period of 2025.

This increase was driven primarily by increased sales of our sensors, fluid management and access products, partially offset by decreased sales in our kits, intervention and CRM/EP products.

This increase was driven primarily by increased sales of our drainage and biopsy products.

The foregoing increase in sales for the six-month period ended June 30, 2026 was partially offset by decreased sales within our Procedural Solutions platform, which decreased by $5.9 million, or 9.7%, from the corresponding period of 2025.

This decrease was driven primarily by the sale of the DualCap® product line to Health Line , partially offset by increased sales of our trays.

Therapeutic Sales .

Our therapeutic sales for the three-month period ended March 31, 2026 were $126.4 million, up 9.9% when compared to sales in the corresponding period of 2025 of $115.0 million.

Sales for the three-month period ended March 31, 2026 compared to the corresponding period in 2025 were favorably affected by increased sales within our cardiac therapies, endoscopy, vascular intervention and oncology platforms, with increases in our endoscopy sales partially attributable to the acquisition of the C2 Cryoballoon from Pentax.

Such increases were partially offset by decreased sales within our OEM and renal therapies platforms.

Our therapeutic sales for the three-month period ended June 30, 2026 were $137.9 million, up 14.8% when compared to sales in the corresponding period of 2025 of $120.1 million.

Sales for the three-month period ended June 30, 2026 were favorably affected by increased sales within the following platforms:

(a) Cardiac Therapies, which increased by $5.6 million, or 24.3%, from the corresponding period of 2025.

This increase was driven primarily by increased sales of our lead management products, Prelude SNAP and SoloPace temporary pacing system.

(b) Endoscopy, which increased by $5.2 million, or 28.5%, from the corresponding period of 2025.

This increase was driven primarily by sales attributable to the acquisition of the C2 Cryoballoon from Pentax and increased sales of the EsophyX® Z+ device .

This increase was driven primarily by increased sales of our ablation products, partially offset by decrease sales in our CRM/EP products.

(d) Oncology, which increased by $1.8 million, or 7.6%, from the corresponding period of 2025.

This increase was driven primarily by increased sales of our SCOUT radar localization products.

(e) Vascular Intervention, which increased by $2.2 million, or 6.8%, from the corresponding period of 2025.

This increase was driven primarily by increased sales of our delivery systems and embolotherapy products.

The foregoing increase in sales for the three-month period ended June 30, 2026 was partially offset by decreased sales within our renal therapies platform, which decreased by $0.1 million, or 0.8%, from the corresponding period of 2025.

This decrease was driven primarily by decreased sales of our access products.

Our therapeutic sales for the six-month period ended June 30, 2026 were $264.3 million, up 12.4% when compared to sales in the corresponding period of 2025 of $235.0 million.

Sales for the six-month period ended June 30, 2026 were favorably affected by increased sales within the following platforms:

(a) Cardiac Therapies, which increased by $12.4 million, or 28.6%, from the corresponding period of 2025.

This increase was driven primarily by increased sales of our lead management products, Prelude SNAP and SoloPace temporary pacing system.

(b) Endoscopy, which increased by $10.4 million, or 29.7%, from the corresponding period of 2025.

This increase was driven primarily by sales attributable to the acquisition of the C2 Cryoballoon from Pentax and increased sales of the EsophyX® Z+ device.

This increase was driven primarily by increased sales of our SCOUT radar localization products.

(d) Vascular Intervention, which increased by $5.7 million, or 9.0%, from the corresponding period of 2025.

This increase was driven primarily by increased sales of our delivery systems and embolotherapy products.

The foregoing increase in sales for the six-month period ended June 30, 2026 was partially offset by decreased sales within the following platforms:

(a) OEM, which decreased by $0.6 million, or 2.9%, from the corresponding period of 2025.

This decrease was driven primarily by decreased sales of our peripheral intervention and CRM/EP products, partially offset by increased sales of our ablation products.

(b) Renal Therapies, which decreased by $2.0 million, or 7.6%, from the corresponding period of 2025.

This decrease was driven primarily by decreased sales of our access products.

Geographic Sales

Listed below are sales by geography for the three-month periods ended March 31, 2026 and 2025 (in thousands, other than percentage changes):

Listed below are sales by geography for the three and six-month periods ended June 30, 2026 and 2025 (in thousands, other than percentage changes):

Three Months Ended

Six Months Ended

International

Domestic Sales.

Domestic sales for the three-month period ended March 31, 2026 were $226.5 million, or 59.3% of net sales, up 6.1% when compared to the corresponding period of 2025.

Domestic sales for the three-month period ended June 30, 2026 were $252.1 million, or 60.2% of net sales, up 11.0% when compared to the corresponding period of 2025.

Domestic sales for the six-month period ended June 30, 2026 were $478.6 million, or 59.8% of net sales, up 8.6% when compared to the corresponding period of 2025.

International Sales .

International sales for the three-month period ended March 31, 2026 were $155.4 million, or 40.7% of net sales, up 9.6% when compared to the corresponding period in 2025 of $141.8 million.

The increase in our international sales for the three-month period ended March 31, 2026, compared to the corresponding period of 2025 included increased sales in each of our Europe, the Middle East and Africa, Rest of World and Asia Pacific regions .

Our gross profit as a percentage of sales remained at 48.4% for the three-month period ended March 31, 2026, compared to 48.4% for the three-month period ended March 31, 2025.

International sales for the three-month period ended June 30, 2026 were $166.8 million, or 39.8% of net sales, up 7.3% when compared to the corresponding period in 2025 of $155.4 million.

International sales for the six-month period ended June 30, 2026 were $322.2 million, or 40.2% of net sales, up 8.4% when compared to the corresponding period in 2025 of $297.2 million.

The increase in our international sales for the three and six-month periods ended June 30, 2026, compared to the corresponding periods of 2025 included increased sales in each of our Europe, the Middle East and Africa, Rest of World and Asia Pacific regions .

Our gross profit as a percentage of sales increased to 51.4% for the three-month period ended June 30, 2026, compared to 48.2% for the three-month period ended June 30, 2025.

Our gross profit as a percentage of sales increased to 50.0% for the six-month period ended June 30, 2026, compared to 48.3% for the six-month period ended June 30, 2025.

The increase in gross profit percentage was primarily due to an increase in sales combined with favorable changes in product mix and refunds of approximately $6.9 million relating to previously paid IEEPA tariffs.

Operating Expenses

Selling, General and Administrative Expense.

Selling, general and administrative (“SG&A”) expenses increased $10.7 million, or 10.0%, for the three-month period ended March 31, 2026 compared to the corresponding period of 2025.

As a percentage of sales, SG&A expenses were 31.0% for the three-month period ended March 31, 2026, compared to 30.2% for the corresponding period of 2025.

For the three-month period ended March 31, 2026, SG&A expenses increased compared to the corresponding period of 2025, primarily due to an increase in labor-related costs including (i) commissions associated with sales growth and (ii) headcount additions to support investment in the business and growth from acquisitions, including those in connection with the Biolife Merger.

Additional drivers of the increase were costs associated with the pending View Point Acquisition and company conferences.

Selling, general and administrative (“SG&A”) expenses increased $16.1 million, or 14.3%, for the three-month period ended June 30, 2026 compared to the corresponding period of 2025.

As a percentage of sales, SG&A expenses were 30.9% for the three-month period ended June 30, 2026, compared to 29.6% for the corresponding period of 2025.

SG&A expenses increased $26.9 million, or 12.2%, for the six-month period ended June 30, 2026 compared to the corresponding period of 2025.

As a percentage of sales, SG&A expenses were 30.9% for the six-month period ended June 30, 2026, compared to 29.9% for the corresponding period of 2025.

For the three and six-month periods ended June 30, 2026, SG&A expenses increased compared to the corresponding periods of 2025, primarily due to an increase in labor-related costs including (i) commissions associated with sales growth, (ii) headcount additions to support investment in the business and (iii) stock-based compensation.

Additional drivers of the increase were costs associated with the View Point Merger totaling $5.6 million and company conferences.

Such increases were partially offset by a decrease in contract termination costs incurred during 2025 as a result of the Biolife Merger.

Research and Development Expenses.

Research and development (“R&D”) expenses for the three-month period ended March 31, 2026 were $22.6 million, up 0.6%, when compared to R&D expenses in the corresponding period of 2025 of $22.5 million.

For the three-month period ended March 31, 2026, R&D expenses did not materially change compared to the corresponding period of 2025.

Research and development (“R&D”) expenses for the three-month period ended June 30, 2026 were $25.4 million, up 4.2%, when compared to R&D expenses in the corresponding period of 2025 of $24.4 million.

R&D expenses for the six-month period ended June 30, 2026 were $48.0 million, up 2.5%, when compared to R&D expenses in the corresponding period of 2025 of $46.8 million.

For the three and six-month periods ended June 30, 2026, R&D expenses increased compared to the corresponding periods of 2025 primarily due to annual merit-based salary increases effective in the second quarter of 2026.

Contingent Consideration (Benefit) Expense .

For the three-month period ended March 31, 2026, we recognized contingent consideration benefit from changes in the estimated fair value of our contingent consideration obligations stemming from our previously disclosed business acquisitions of $(0.2) million, compared to contingent consideration expense of $1.0 million for the three-month period ended March 31, 2025.

For the three and six-month periods ended June 30, 2026, we recognized contingent consideration expense (benefit) from changes in the estimated fair value of our contingent consideration obligations stemming from our previously disclosed business acquisitions of $0.1 million and $(0.0) million, respectively, compared to contingent consideration expense of $0.1 million and $1.2 million, respectively, for the three and six-month periods ended June 30, 2025.

Expense in each period related to changes in the probability and timing of achieving certain revenue and operational milestones, as well as expense for the passage of time.

Operating Income

Our operating income for the three-month period ended March 31, 2026 was $44.2 million, compared to operating income in the corresponding period of 2025 of $41.0 million.

The increase in operating income during the three-month period ended March 31, 2026 compared to the corresponding period of 2025 was primarily a result of increased sales ($381.9 million compared to $355.4 million), partially offset by an increase in SG&A expense.

Our operating income for the three-month period ended June 30, 2026 was $60.4 million, compared to operating income in the corresponding period of 2025 of $46.9 million.

The increase in operating income during the three-month period ended June 30, 2026 compared to the corresponding period of 2025 was primarily a result of increased sales and gross margin, partially offset by an increase in SG&A expense.

Our operating income for the six-month period ended June 30, 2026 was $104.6 million, compared to operating income in the corresponding period of 2025 of $87.9 million.

The increase in operating income during the six-month period ended June 30, 2026 compared to the corresponding period of 2025 was primarily a result of increased sales and gross margin, partially offset by an increase in SG&A expense.

Other (Income) Expense – Net

Our other (income) expense for the three months ended March 31, 2026 and 2025 was $(9.4) million and $3.1 million, respectively.

The change in other (income) expense for the three-month period ended March 31, 2026 compared to the corresponding periods of 2025 was primarily related to a gain of approximately $12.5 million associated with the sale of the DualCap® product line to Health Line in February 2026.

Our other expense for the three months ended June 30, 2026 and 2025 was $9.1 million and $3.5 million, respectively.

The change in other (income) expense for the three-month period ended June 30, 2026 compared to the corresponding period of 2025 was primarily related to a one-time charge of $5.1 million for additional interest incurred pursuant to Merit's obligation to remove restrictive legends with respect to the Convertible Notes.

Our other (income) expense for the six months ended June 30, 2026 and 2025 was $(0.3) million and $6.6 million, respectively.

The change in other (income) expense for the six-month period ended June 30, 2026 compared to the corresponding period of 2025 was primarily related to a gain of approximately $12.5 million associated with the sale of the DualCap® product line to Health Line in February 2026, partially offset by a one-time charge of $5.1 million for additional interest incurred pursuant to Merit's obligation to remove restrictive legends with respect to the Convertible Notes.

Effective Tax Rate

Our provision for income taxes for the three-month periods ended March 31, 2026 and 2025 was a tax expense of $12.6 million and $7.8 million, respectively, which resulted in an effective tax rate of 23.4% and 20.6%, respectively.

The increase in the effective income tax rate for the three-month period ended March 31, 2026, when compared to the prior-year period, was primarily due to decreased benefit from discrete items such as share-based compensation and the tax impacts of recent acquisition and divestiture activity.

The increase in income tax expense for the three-month period ended March 31, 2026, when compared to the prior-year period, was primarily due to increased pre-tax book income and rate impact items previously listed.

Our effective tax rate differs from the U.S.

statutory rate primarily due to the impact of NCTI and Subpart F inclusions, state income taxes, foreign taxes, other nondeductible permanent items and discrete items (such as share-based compensation).

Our net income for the three-month periods ended March 31, 2026 and 2025 was $41.0 million and $30.1 million, respectively.

The increase in our net income for the three-month period ended March 31, 2026 was the result of several principal factors, including increased sales and other income, partially offset by increased SG&A expenses and income tax expense.

Our provision for income taxes for the three-month periods ended June 30, 2026 and 2025 was a tax expense of $12.5 million and $10.8 million, respectively, which resulted in an effective tax rate of 24.4% and 24.9%, respectively.

Our provision for income taxes for the six-month periods ended June 30, 2026 and 2025 was a tax expense of $25.1 million and $18.6 million, respectively, which resulted in an effective tax rate of 23.9% and 22.9%, respectively.

The decrease in the effective income tax rate for the three-month period ended June 30, 2026, when compared to the prior-year period, was primarily due to increased benefit from discrete items such as deferred compensation.

The increase in the effective income tax rate for the six-month period ended June 30, 2026, when compared to the prior-year period, was primarily due to decreased benefit from discrete items such as share-based compensation and the tax impacts of recent acquisition and divestiture activity.

The increase in income tax expense for the three and six-month periods ended June 30, 2026, when compared to the prior-year periods, was primarily due to increased pre-tax book income and rate impact items previously listed.

Our net income for the three-month periods ended June 30, 2026 and 2025 was $38.8 million and $32.6 million, respectively.

The increase in our net income for the three-month period ended June 30, 2026 was the result of several principal factors, including increased sales and gross margin, partially offset by increased SG&A expenses, other expense and income tax expense.

Our net income for the six-month periods ended June 30, 2026 and 2025 was $79.8 million and $62.7 million, respectively.

The increase in our net income for the six-month period ended June 30, 2026 was the result of several principal factors, including increased sales, gross margin and other income, partially offset by increased SG&A expenses and income tax expense.

LIQUIDITY AND CAPITAL RESOURCES

Capital Commitments, Contractual Obligations and Cash Flows

As of March 31, 2026 and December 31, 2025, our current assets exceeded current liabilities by $884.9 million and $800.4 million, respectively, and we had cash, cash equivalents and restricted cash of $490.2 million and $448.5 million, respectively, of which $65.1 million and $66.0 million, respectively, were held by foreign subsidiaries.

As of June 30, 2026 and December 31, 2025, our current assets exceeded current liabilities by $847.3 million and $800.4 million, respectively, and we had cash, cash equivalents and restricted cash of $450.9 million and $448.5 million, respectively, of which $65.5 million and $66.0 million, respectively, were held by foreign subsidiaries.

We currently believe f uture repatriation of cash and other property held by our foreign subsidiaries will generally not be subject to U.S.

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In addition, cash held by our subsidiary in China is subject to local laws and regulations that require government approval for the transfer of such funds to entities located outside of China.

As of March 31, 2026, and December 31, 2025, we had cash, cash equivalents and restricted cash of $14.1 million and $20.0 million, respectively, within our subsidiary in China.

As of June 30, 2026, and December 31, 2025, we had cash, cash equivalents and restricted cash of $19.7 million and $20.0 million, respectively, within our subsidiary in China.

Cash flows provided by operating activities .

We generated cash from operating activities of $40.7 million and $40.6 million during the three-month periods ended March 31, 2026 and 2025, respectively.

We generated cash from operating activities of $110.0 million and $123.9 million during the six-month periods ended June 30, 2026 and 2025, respectively.

Significant factors affecting operating cash flows during these periods included:

● Net income was $41.0 million and $30.1 million for the three-month periods ended March 31, 2026 and 2025, respectively.

● Depreciation and amortization was $30.5 million and $29.3 million for the three-month periods ended March 31, 2026 and 2025, respectively.

The increase in depreciation and amortization for the three-month period ended March 31, 2026 was primarily associated with the amortization of developed technology and other intangible assets acquired in connection with the Biolife Merger and C2 Acquisition.

● Cash used for inventories was $22.7 million and $10.6 million for the three-month periods ended March 31, 2026 and 2025, respectively.

The increase in inventories during 2026 was principally associated with our strategy to proactively invest in our inventory balances to encourage high customer service levels, as well as to build bridge inventory for production line transfers and increases in safety stock due to vendor supply delays.

● Cash used for accrued expenses was $33.3 million and $20.7 million for the three-month periods ended March 31, 2026 and 2025, respectively, due primarily to the timing of payments made under our corporate bonus plan.

● Cash provided by (used for) other long-term obligations was $15.0 million and $(0.7) million for the three-month periods ended March 31, 2026 and 2025, respectively, due primarily to an increase in deferred revenue associated with revenue from contracts with customers under or OEM product platform in 2026.

Cash flows provided by (used in) investing activities.

Cash provided by (used in) in investing activities was $7.7 million and $(29.6) million for the three-month periods ended March 31, 2026 and 2025, respectively.

We used cash for capital expenditures of property and equipment of $16.0 million and $21.1 million in the three-month periods ended March 31, 2026 and 2025, respectively.

● Net income was $79.8 million and $62.7 million for the six-month periods ended June 30, 2026 and 2025, respectively.

● Depreciation and amortization was $61.5 million and $60.3 million for the six-month periods ended June 30, 2026 and 2025, respectively.

The increase in depreciation and amortization for the six-month period ended June 30, 2026 was primarily associated with the amortization of developed technology and other intangible assets acquired in connection with the Biolife Merger, C2 Acquisition and View Point Merger.

● Cash used for inventories was $43.6 million and $11.7 million for the six-month periods ended June 30, 2026 and 2025, respectively.

The increase in inventories during 2026 was principally associated with our strategy to proactively invest in our inventory balances to encourage high customer service levels, as well as to expand inventory balances for newly-acquired products and increases in safety stock due to vendor supply delays.

● Cash used for trade receivables was $21.3 million and $7.3 million for the six-month periods ended June 30, 2026 and 2025, respectively, due primarily to the timing of customer payments.

● Cash provided by (used for) other long-term obligations was $14.0 million and $(2.2) million for the six-month periods ended June 30, 2026 and 2025, respectively, due primarily to an increase in deferred revenue associated with revenue from contracts with customers under our OEM product platform in 2026 .

Cash flows used in investing activities.

Cash used in investing activities was $102.4 million and $173.0 million for the six-month periods ended June 30, 2026 and 2025, respectively.

We used cash for capital expenditures of property and equipment of $33.3 million and $34.8 million in the six-month periods ended June 30, 2026 and 2025, respectively.

Capital expenditures in each period were primarily related to investments in property and equipment to support development and production of our products, and include costs for the construction of a new distribution facility in South Jordan, Utah.

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We anticipate that we will spend approximately $80 to $100 million in 2026 for property and equipment.

Cash outflows for the acquisition of equity investments and issuance of notes receivable were $7.1 million for the three-month period ended March 31, 2025.

Cash outflows invested in acquisitions were $1.0 million for each of the three-month periods ended March 31, 2026 and 2025 and were related to the first and second deferred payments from our asset purchase agreement with Scholten Surgical Instruments, Inc.

Cash inflows from divestitures were $25.5 million for the three month period ended March 31, 2026 and were related to the sale of the DualCap® product line to Health Line.

Cash outflows for the acquisition of equity investments and issuance of notes receivable were $14.6 million for the six-month period ended June 30, 2025.

Cash outflows invested in acquisitions were $93.0 million and $122.6 million for the six-month periods ended June 30, 2026 and 2025 and were primarily related to the acquisitions of View Point in 2026 and Biolife in 2025.

Cash inflows from divestitures were $25.5 million for the six-month period ended June 30, 2026 and were related to the sale of the DualCap® product line to Health Line.

Cash flows (used in) provided by financing activities.

Cash (used in) provided by financing activities for the three-month periods ended March 31, 2026 and 2025 was $(6.3) million and $7.0 million, respectively.

For the three-month period ended March 31, 2026, we had cash used in financing activities of $2.1 million primarily attributable to the payment of milestone-based contingencies associated with the C2 Acquisition.

We had cash (outflows) inflows from the issuance of Common Stock of $(4.1) million and $7.0 million, net of taxes paid in exchange for common stock, for the three-month periods ended March 31, 2026 and 2025, respectively, related to the exercise of non-qualified stock options and release of time and performance-based stock awards.

As of March 31, 2026, we had outstanding borrowings of $747.5 million and had issued letter of credit guarantees of $2.9 million, with additional available borrowings of approximately $697 million under the Amended Fourth A&R Credit Agreement, based on the maximum net leverage ratio and the aggregate revolving credit commitment pursuant to the Amended Fourth A&R Credit Agreement.

Our interest rate as of March 31, 2026 and December 31, 2025 was a fixed rate of 3.0% on our Convertible Notes.

Cash (used in) provided by financing activities for the six-month periods ended June 30, 2026 and 2025 was $(5.3) million and $11.3 million, respectively.

For the six-month periods ended June 30, 2026 and 2025, we had cash used in financing activities of $3.0 million and $2.6 million, respectively, primarily attributable to the payment of milestone-based contingencies associated with the C2 Acquisition in 2026 and Brightwater Medical, Inc.

We had cash (outflows) inflows from the issuance of Common Stock of $(2.4) million and $13.9 million, net of taxes paid in exchange for common stock, for the six-month periods ended June 30, 2026 and 2025, respectively, related to the exercise of non-qualified stock options and release of time and performance-based stock awards.

As of June 30, 2026, we had outstanding borrowings of $747.5 million and had issued letter of credit guarantees of $2.9 million, with additional available borrowings of approximately $697 million under the Amended Fourth A&R Credit Agreement, based on the maximum net leverage ratio and the aggregate revolving credit commitment pursuant to the Amended Fourth A&R Credit Agreement.

Our interest rate as of June 30, 2026 and December 31, 2025 was a fixed rate of 3.0% on our Convertible Notes.

We currently believe that our existing cash balances, anticipated future cash flows from operations and borrowings under our long-term debt agreements will be adequate to fund our current and currently planned future operations for the next twelve months and the foreseeable future.

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Our financial results are affected by the selection and application of accounting policies and methods.

In the three-month period ended March 31, 2026 there were no changes to the application of critical accounting policies previously disclosed in Part II, Item 7 of our 2025 Annual Report on Form 10-K.

In the six-month period ended June 30, 2026 there were no changes to the application of critical accounting policies previously disclosed in Part II, Item 7 of our 2025 Annual Report on Form 10-K.

CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

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risks and uncertainties associated with Merit’s integration of the View Point business, assets and operations into its operations and its ability to achieve anticipated financial results, product development and other anticipated benefits of the acquisition;

uncertainties as to whether Merit will achieve revenue or other financial performance consistent with its forecasts projected for the View Point acquisition;

uncertainties as to whether Merit will achieve revenue or other financial performance consistent with its forecasts projected for the View Point Merger;

risks and uncertainties associated with Merit’s executive succession and leadership transition;

risks and uncertainties regarding trade policies or related actions implemented by the United States or other countries, including existing, proposed, prospective or invalidated tariffs, duties or other measures;

risks and uncertainties associated with Merit’s integration of businesses or assets acquired from third parties, including the business and assets acquired in connection with the C2 Acquisiton in November 2025, the Biolife Merger in May 2025, and the businesses and assets acquired from Cook Medical Holdings LLC in November 2024 and from EndoGastric Solutions, Inc.

in July 2024, and Merit’s ability to achieve the anticipated operating and financial results, product development and other anticipated benefits of such acquisitions;

risks and uncertainties associated with Merit’s integration of businesses or assets acquired from third parties, including View Point in April 2026 and the business and assets acquired in connection with the C2 Acquisition in November 2025 and the Biolife Merger in May 2025, and Merit’s ability to achieve the anticipated operating and financial results, product development and other anticipated benefits of such acquisitions;

effects of the Convertible Notes on Merit’s net income and earnings per share performance;

restrictions and limitations set forth in the Convertible Notes and Indenture, which could affect Merit’s ability to operate its business as well as its liquidity;

disruptions in Merit’s supply chain, manufacturing or sterilization processes;

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government scrutiny and regulation of the medical device industry;

difficulties relating to development, testing and regulatory approval, clearance and maintenance of Merit’s products;

the safety, efficacy and

patient and physician adoption of Merit’s products;

difficulties relating to development, testing and regulatory approval, clearance and maintenance of Merit’s

the safety, efficacy and patient and physician adoption of Merit’s products;

the ability to fully enroll and the outcomes of ongoing and future clinical trials and market studies relating to Merit’s products;

litigation and other judicial proceedings affecting Merit;

litigation and other legal proceedings affecting Merit;

risks and possible effects of any failure to comply with U.S.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis