What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-03 compared with 2025-08-04 · 84 added, 74 removed, 189 unchanged (46% of the section changed)

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Nimbl, our next-generation pneumatic compression platform, received 510(k) clearance in June 2024 and was commercially launched for upper extremity lymphedema in October 2024 and was commercially launched for lower extremity lymphedema in February 2025.

Sales and rentals of our lymphedema products represented 83% and 87% of our revenue in the six months ended June 30, 2025 and 2024, respectively.

Sales and rentals of our lymphedema products represented 84% and 88% of our revenue in the nine months ended September 30, 2025 and 2024, respectively.

On September 8, 2021, we acquired the assets of the AffloVest airway clearance product line.

AffloVest is a portable, wearable vest that provides airway clearance to treat patients with chronic respiratory conditions such as bronchiectasis or conditions resulting from neuromuscular disorders.

For the six months ended June 30, 2025 and 2024, sales of AffloVest represented 17% and 13% of our revenue, respectively.

To support the growth of our business, we continue to invest in our commercial infrastructure, consisting of a lymphedema and respiratory sales force, marketing team including clinical education programs, patient education team, reimbursement capabilities and clinical expertise.

For the nine months ended September 30, 2025 and 2024, sales of AffloVest represented 16% and 12% of our revenue, respectively.

education team, reimbursement capabilities and clinical expertise.

We market our lymphedema products using a direct-to-patient and -clinician model.

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We employ a small group of respiratory specialists, who educate DME representatives, provide product demonstrations for targeted clinicians and support technical questions related to the AffloVest.

As of June 30, 2025, we employed 161 account managers and 132 specialists for our lymphedema products and a team of 19 specialists supporting our airway clearance products.

This compares to 161 account managers and 103 specialists for our lymphedema products and a team of 19 specialists supporting our airway clearance products as of June 30, 2024.

As of September 30, 2025, we employed 167 account managers and 162 specialists for our lymphedema products and a team of 19 specialists supporting our airway clearance products.

This compares to 167 account managers and 103 specialists for our lymphedema products and a team of 19 specialists supporting our airway clearance products as of September 30, 2024.

We invest in our reimbursement function to improve operational efficiencies and enhance individual payer expertise, while continuing our strategic focus of payer development.

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Flexitouch Plus and Nimbl devices include Bluetooth technology, which is viewable using Kylee.

For the three months ended June 30, 2025, we generated revenue of $78.9 million and had net income of $3.2 million, compared to revenue of $73.2 million and net income of $4.3 million for the three months ended June 30, 2024.

For the six months ended June 30, 2025, we generated revenue of $140.2 million and had net income of $0.2 million, compared to revenue of $134.3 million and net income of $2.1 million for the six months ended June 30, 2024.

For the three months ended September 30, 2025, we generated revenue of $85.8 million and had net income of $8.2 million, compared to revenue of $73.1 million and net income of $5.2 million for the three months ended September 30, 2024.

For the nine months ended September 30, 2025, we generated revenue of $225.9 million and had net income of $8.5 million, compared to revenue of $207.4 million and net income of $7.2 million for the nine months ended September 30, 2024.

Our primary sources of capital since our initial public offering in 2016 have been from operating income, bank financing and our public offering in February 2023.

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Results of Operations

Comparison of the Three and Six Months Ended June 30, 2025 and 2024

Comparison of the Three and Nine Months Ended September 30, 2025 and 2024

The following table presents our results of operations for the periods indicated:

Three Months Ended

September 30,

(In thousands)

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Income tax expense

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

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Total operating expenses

Income (loss) from operations

Income from operations

Interest income

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Income tax expense

Revenue increased $5.7 million, or 8%, to $78.9 million in the three months ended June 30, 2025, compared to $73.2 million in the three months ended June 30, 2024.

The increase in total revenue was attributable to an increase of $4.4 million, or 52%, in sales of the airway clearance product line and an increase of $1.3 million, or 2%, in sales and rentals of the lymphedema product line in the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

Revenue increased $5.9 million, or 4%, to $140.2 million in the six months ended June 30, 2025, compared to $134.3 million in the six months ended June 30, 2024.

The increase in total revenue was attributable to an increase of $6.3 million, or 37%, in sales of the airway clearance product line in the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

The increase was partially offset by a decrease of $0.5 million, or 0.4%, in sales and rentals of the lymphedema product line in the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

The increase in the airway clearance product line revenue in the three and six months ended June 30, 2025, was primarily attributable to increased placements of AffloVest among our DME partners.

The increase in the lymphedema product line revenue in the three months ended June 30, 2025 was primarily attributable to an increase in headcount and productivity of our field sales team.

The decrease in the lymphedema product line revenue in the six months ended June 30, 2025 was primarily attributable to disruption in the early phases of our implementation of a new customer relationship management system and delayed hiring due to a salesforce rebalance and optimization plan.

The following table summarizes our revenue by product line for the three and six months ended June 30, 2025 and 2024, both in dollars and percentage of total revenue:

Revenue increased $12.7 million, or 17%, to $85.8 million in the three months ended September 30, 2025, compared to $73.1 million in the three months ended September 30, 2024.

The increase in total revenue was attributable to an increase of $7.1 million, or 11%, in sales and rentals of the lymphedema product line and an increase of $5.6 million, or 71%, in sales of the airway clearance product line in the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Revenue increased $18.5 million, or 9%, to $225.9 million in the nine months ended September 30, 2025, compared to $207.4 million in the nine months ended September 30, 2024.

The increase in total revenue was attributable to an increase of $11.9 million, or 47%, in sales of the airway clearance product line and an increase of $6.6 million, or 4%, in sales and rentals of the lymphedema product line in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

The increase in the airway clearance product line revenue in the three and nine months ended September 30, 2025, was primarily attributable to increased placements of AffloVest among our DME partners.

The increase in the lymphedema product line revenue in the three and nine months ended September 30, 2025 was primarily attributable to operational execution and meaningful progress across business transformation, product innovation and market leadership initiatives.

The following table summarizes our revenue by product line for the three and nine months ended September 30, 2025 and 2024, both in dollars and percentage of total revenue:

Three Months Ended

September 30,

(In thousands)

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Airway clearance products

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

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Cost of Revenue and Gross Margin

Cost of revenue increased $1.0 million, or 5%, to $20.1 million in the three months ended June 30, 2025, compared to $19.1 million in the three months ended June 30, 2024.

The increase in cost of revenue was primarily attributable to the increase in revenue.

Cost of revenue decreased $0.7 million, or 2%, to $36.0 million in the six months ended June 30, 2025, compared to $36.7 million in the six months ended June 30, 2024.

The decrease in cost of revenue was primarily attributable to lower manufacturing and warranty costs.

Gross margin was 75% and 74% in the three months ended June 30, 2025 and 2024, respectively, and 75% and 73% in the six months ended June 30, 2025 and 2024, respectively.

Cost of revenue increased $2.4 million, or 13%, to $20.8 million in the three months ended September 30, 2025, compared to $18.3 million in the three months ended September 30, 2024.

Cost of revenue increased $1.7 million, or 3%, to $56.8 million in the nine months ended September 30, 2025, compared to $55.1 million in the nine months ended September 30, 2024.

The increase in cost of revenue for both the three- and nine- month periods was primarily attributable to the increase in revenue.

Gross margin was 76% and 75% in the three months ended September 30, 2025 and 2024, respectively, and 75% and 73% in the nine months ended September 30, 2025 and 2024, respectively.

Sales and Marketing Expenses

Sales and marketing expenses increased $1.4 million, or 5%, to $30.0 million in the three months ended June 30, 2025, compared to $28.6 million in the three months ended June 30, 2024.

The increase was primarily attributable to a $1.4 million increase in personnel-related compensation expenses and a $0.4 million increase in expenses related to meetings and seminars, partially offset by a $0.1 million decrease in expenses for

professional services, a $0.1 million decrease in travel and entertainment expenses, a $0.1 million decrease in general office and printing expenses and a $0.1 million decrease in expenses related to educational grants.

Sales and marketing expenses increased $1.6 million, or 3%, to $57.6 million in the six months ended June 30, 2025, compared to $56.0 million in the six months ended June 30, 2024.

The increase was primarily attributable to a $1.0 million increase in personnel-related compensation expenses, a $0.6 million increase in travel and entertainment expenses and a $0.3 increase in expenses related to meetings and seminars, partially offset by a $0.2 million decrease in expenses for a new product launch and a $0.1 million decrease in expenses related to general office and printing.

Sales and marketing expenses increased $3.0 million, or 11%, to $29.8 million in the three months ended September 30, 2025, compared to $26.8 million in the three months ended September 30, 2024.

The increase was primarily attributable to a $2.3 million increase in personnel-related compensation expenses, a $0.3 million increase in travel and entertainment expenses, a $0.2 million increase in expenses for demo units,

a $0.1 million increase in expenses related to meetings and seminars and a $0.1 million increase in general office and printing expenses.

Sales and marketing expenses increased $4.6 million, or 6%, to $87.4 million in the nine months ended September 30, 2025, compared to $82.8 million in the nine months ended September 30, 2024.

The increase was primarily attributable to a $3.2 million increase in personnel-related compensation expenses, a $0.9 million increase in travel and entertainment expenses, a $0.4 increase in expenses related to meetings and seminars, and a $0.1 million increase in expenses related to educational grants.

Research and Development Expenses

Research and development (“R&D”) expenses decreased $0.2 million, or 10%, to $2.0 million in the three months ended June 30, 2025, compared to $2.2 million in the three months ended June 30, 2024.

Research and development (“R&D”) expenses decreased $0.2 million, or 9%, to $2.2 million in the three months ended September 30, 2025, compared to $2.4 million in the three months ended September 30, 2024.

The decrease was primarily attributable to a $0.2 million decrease in clinical study related expenses and a $0.1 million decrease in personnel-related compensation expenses, partially offset by a $0.1 million increase in IT-related expenses.

R&D expenses decreased $0.6 million, or 14%, to $3.8 million in the six months ended June 30, 2025, compared to $4.4 million in the six months ended June 30, 2024.

R&D expenses decreased $0.8 million, or 12%, to $6.0 million in the nine months ended September 30, 2025, compared to $6.8 million in the nine months ended September 30, 2024.

The decrease was primarily attributable to a $0.8 million decrease in clinical study related expenses and a $0.3 million decrease in personnel-related compensation expenses, partially offset by a $0.3 million increase in IT-related expenses.

Reimbursement, General and Administrative Expenses

Reimbursement, general and administrative expenses increased $5.3 million, or 31%, to $22.0 million in the three months ended June 30, 2025, compared to $16.8 million in the three months ended June 30, 2024.

This increase was primarily attributable to a $2.9 million increase in personnel-related compensation expenses, a $1.1 million increase in IT-related expenses, and a $1.3 million increase in occupancy costs, depreciation expense and professional fees.

Reimbursement, general and administrative expenses increased $9.0 million, or 27%, to $42.0 million in the six months ended June 30, 2025, compared to $33.0 million in the six months ended June 30, 2024.

Reimbursement, general and administrative expenses increased $3.3 million, or 18%, to $21.4 million in the three months ended September 30, 2025, compared to $18.1 million in the three months ended September 30, 2024.

This increase was primarily attributable to a $2.8 million increase in personnel-related compensation expenses and a $0.6 million increase in IT-related expenses, partially offset by a $0.1 million decrease in occupancy costs, depreciation expense and professional fees.

Reimbursement, general and administrative expenses increased $12.3 million, or 24%, to $63.5 million in the nine months ended September 30, 2025, compared to $51.2 million in the nine months ended September 30, 2024.

This increase was primarily attributable to a $8.1 million increase in personnel-related compensation expenses, a $2.7 million increase in IT-related expenses, and a $1.5 million increase in occupancy costs, depreciation expense and professional fees.

Intangible Asset Amortization

Intangible asset amortization remained consistent at $0.6 million for each of the three months ended June 30, 2025 and 2024.

Intangible asset amortization remained consistent at $1.3 million for each of the six months ended June 30, 2025 and 2024.

Intangible asset amortization remained consistent at $0.6 million for each of the three months ended September 30, 2025 and 2024.

Intangible asset amortization was $1.8 and $1.9 million for the nine months ended September 30, 2025 and 2024, respectively.

Interest Income and Interest Expense

Interest income increased $0.1 million, or 13%, to $0.9 million in the three months ended June 30, 2025, compared to $0.8 million in the three months ended June 30, 2024, primarily due to a higher cash balance in an Institutional Insured Liquid Deposit demand account.

Interest expense decreased $0.1 million, or 22%, to $0.4 million in the three months ended June 30, 2025, compared to $0.5 million in the three months ended June 30, 2024, primarily due to the decrease in the outstanding balance of our term loan.

Interest income increased $0.3 million, or 19%, to $1.7 million in the six months ended June 30, 2025, compared to $1.5 million in the six months ended June 30, 2024, primarily due to a higher cash balance in an Institutional Insured Liquid Deposit demand account.

Interest expense decreased $0.3 million, or 24%, to $0.8

million in the six months ended June 30, 2025, compared to $1.1 million in the six months ended June 30, 2024, primarily due to the decrease in the outstanding balance of our term loan.

We recorded an income tax expense of $1.3 million and $1.8 million for the three months ended June 30, 2025 and 2024, respectively.

The primary driver of the change in our effective tax rate was attributable to the Company recording less expense related to stock-based compensation discrete items when compared to the prior year period.

We recorded an income tax expense of $0.2 million and $1.2 million for the six months ended June 30, 2025 and 2024, respectively.

Interest income decreased $0.3 million, or 31%, to $0.7 million in the three months ended September 30, 2025, compared to $1.0 million in the three months ended September 30, 2024, primarily due to a lower cash balance in an Institutional Insured Liquid Deposit demand account due to the repayment of debt.

Interest expense decreased $0.3 million, or 63%, to $0.2 million in the three months ended September 30, 2025, compared to $0.5 million in the three months ended September 30, 2024, primarily due to the repayment of debt.

Interest income decreased $25,000, or 1%, to $2.4 million in the nine months ended September 30, 2025, compared to $2.4 million in the nine months ended September 30, 2024.

Interest expense decreased $0.6 million, or 36%, to $1.0 million in the nine months ended September 30, 2025, compared to $1.6 million in

the nine months ended September 30, 2024, primarily due to the decrease in the outstanding balance and repayment of our term loan.

We recorded an income tax expense of $3.2 million and $2.1 million for the three months ended September 30, 2025 and 2024, respectively.

The effective tax rate for the three months ended September 30, 2025 was an expense of 28.2%, compared to an expense of 28.7% for the three months ended September 30, 2024.

We recorded an income tax expense of $3.4 million and $3.3 million for the nine months ended September 30, 2025 and 2024, respectively.

The effective tax rate for the nine months ended September 30, 2025 was an expense of 28.9%, compared to an expense of 31.0% for the nine months ended September 30, 2024.

The primary drivers of the change in the Company’s effective tax rate were attributable to a lower discrete expense in the current year period as compared to true-ups recognized in the prior year period and rate changes in the current year period compared to prior year period.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted.

Key income tax-related provisions of the OBBBA include the repeal of mandatory capitalization of research and development expenditures under Internal Revenue Code (IRC) Section 174 (reinstating full expensing beginning in 2025), extension of bonus depreciation, and revisions to international tax regimes.

We are evaluating the financial implications of the OBBBA and will begin reflecting its effects in the third quarter of 2025.

We currently expect the OBBBA to have a minimal impact on our effective tax rate and to favorably impact the timing of cash taxes.

Based on our estimates and assumptions, we currently expect that, after taking into account the anticipated impacts of the OBBBA, our full-year 2025 cash tax benefit will be approximately $4.6 million.

We have evaluated the financial implications of the OBBBA and have reflected its effects in the three months ended September 30, 2025.

The OBBBA is expected to have no impact on our effective tax rate and a favorable impact on the timing of cash taxes.

We currently expect our full-year 2025 cash tax benefit will be approximately $4.5 million.

Liquidity and Capital Resources

On June 30, 2025, our principal sources of liquidity were cash of $ 81.5 million and net accounts receivable of $ 33.1 million.

This compares to cash of $73.6 million and net accounts receivable of $46.4 million at June 30, 2024.

On September 30, 2025, our principal sources of liquidity were cash of $ 66.0 million and net accounts receivable of $ 37.3 million.

This compares to cash of $82.1 million and net accounts receivable of $43.2 million at September 30, 2024.

The following table summarizes our cash flows for the periods indicated:

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

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Operating Activities

Net cash provided by operating activities during the six months ended June 30, 2025 was $15.2 million, resulting from a net increase in operating assets and liabilities of $7.5 million, non-cash net income adjustments of $7.4 million, and net income of $0.2 million.

Cash provided relating to the change in operating assets and liabilities primarily consisted of a decrease in net accounts receivable of $11.9 million, a $2.6 million increase in accrued expenses and other liabilities, a $2.3 million increase in accounts payable, a decrease in inventories of $1.5 million, and a decrease in net investment in leases of $0.1 million, partially offset by a decrease in accrued payroll and related taxes of $5.2 million, an increase in prepaid expenses and other assets of $4.7 million, a decrease in income taxes payable of $0.6 million and an increase in right of use operating lease assets of $0.3 million.

The positive non-cash net income adjustments consisted primarily of $4.0 million of stock-based compensation expense, $3.4 million of depreciation and amortization, and $0.1 million of loss on disposals.

Net cash provided by operating activities during the six months ended June 30, 2024 was $14.1 million, resulting from non-cash net income adjustments of $7.3 million, a net increase in operating assets and liabilities of $4.7 million and net income of $2.1 million.

The positive non-cash net income adjustments consisted primarily of $3.9 million of stock-based compensation expense and $3.3 million of depreciation and amortization expense.

Cash provided relating to the change in operating assets and liabilities primarily consisted of a decrease in accounts receivable of $7.7 million, a decrease in inventories of $3.7 million and a $0.6 million decrease in net investments in leases, partially offset by a decrease in accrued payroll and related taxes of $4.7 million, a decrease in accounts payable of $1.6 million and a decrease in income taxes payable of $0.9 million.

Net cash provided by operating activities during the nine months ended September 30, 2025 was $25.5 million, resulting from non-cash net income adjustments of $12.5 million, net income of $8.5 million, and a net increase in operating assets and liabilities of $4.6 million.

Cash provided relating to the change in operating assets and liabilities primarily consisted of a decrease in net accounts receivable of $7.7 million, a $1.0 million increase in accrued expenses and other liabilities, a decrease in inventories of $2.6 million, a $2.1 million increase in accounts payable and a decrease in income taxes payable of $1.0 million, partially offset by a decrease in accrued payroll and related taxes of $3.2 million, an increase in prepaid expenses and other assets of $6.0 million, an increase in net investment in leases of $0.3 million and an increase in right of use operating lease assets of $0.3 million.

The positive non-cash net income adjustments consisted primarily of $5.8 million

of stock-based compensation expense, $5.0 million of depreciation and amortization, $1.6 million of deferred income taxes, and $0.1 million of loss on disposals.

Net cash provided by operating activities during the nine months ended September 30, 2024 was $24.3 million, resulting from non-cash net income adjustments of $11.0 million, net income of $7.2 million and a net increase in operating assets and liabilities of $6.1 million.

The positive non-cash net income adjustments consisted primarily of $6.0 million of stock-based compensation expense and $5.1 million of depreciation.

Cash provided relating to the change in operating assets and liabilities primarily consisted of a decrease in accounts receivable of $10.5 million, a decrease in inventories of $1.4 million and a $0.6 million increase in accounts payable, partially offset by a decrease in accrued payroll and related taxes of $3.7 million, an increase in prepaid expenses and other assets of $1.8 million, a decrease in income taxes payable of $0.8 million and a decrease in accrued expenses and other liabilities of $0.3 million.

Investing Activities

Net cash used in investing activities during the six months ended June 30, 2025, was $0.8 million, consisting of purchases of property and equipment and patent costs.

Net cash used in investing activities during the six months ended June 30, 2024, was $1.0 million, consisting of purchases of property and equipment primarily related to tenant improvements, and patent costs.

Net cash used in investing activities during the nine months ended September 30, 2025, was $2.2 million, consisting of purchases of property and equipment and patent costs.

Net cash used in investing activities during the nine months ended September 30, 2024, was $2.0 million, consisting of purchases of property and equipment primarily related to tenant improvements, and patent costs.

Financing Activities

Net cash used in financing activities during the six months ended June 30, 2025, was $27.2 million, primarily consisting of payments of $26.6 million for the repurchase of our common stock and a payment of $1.5 million made on our term loan, partially offset by $0.8 million in proceeds from the issuance of common stock under the ESPP .

Net cash used in financing activities during the six months ended June 30, 2024, was $0.5 million, primarily consisting of a $1.5 million payment made on our term loan, partially offset by $1.0 million in proceeds from the issuance of common stock under the ESPP.

Net cash used in financing activities during the nine months ended September 30, 2025, was $52.0 million, primarily consisting of payments of $26.6 million for the repurchase of our common stock and a payment of $26.3 million made on our term loan, partially offset by $0.8 million in proceeds from the issuance of common stock under the ESPP .

Net cash used in financing activities during the nine months ended September 30, 2024, was $1.2 million, primarily consisting of a $2.3 million payment made on our term loan, partially offset by $1.0 million in proceeds from the issuance of common stock under the ESPP.

Credit Agreement

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The Second Amendment modified the maximum leverage ratio, the minimum fixed charge coverage ratio and the minimum consolidated EBITDA covenants under the Credit Agreement, and added a minimum liquidity covenant, through the quarter ended June 30, 2023.

The Second Amendment also increased the applicable margin for LIBOR rate loans under the Credit Agreement during the period commencing on the date of the Second Amendment and ending on the last day of the fiscal quarter

ending June 30, 2023.

Pursuant to the Second Amendment, we made a mandatory principal prepayment of the term loan of $3.0 million on February 22, 2022.

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On November 1, 2024, we entered into a Fifth Amendment Agreement (the “Fifth Amendment”), which further amended the Credit Agreement.

The Fifth Amendment permits the Company to make payments to repurchase shares of its common stock, as long as the Company is not in default before and after giving effect to such repurchases, and as long as such repurchases do not exceed $30.0 million.

As of June 30, 2025, we had outstanding borrowings of $24.8 million under the Credit Agreement, comprised entirely of the term loan.

The principal of the term loan is required to be repaid in quarterly installments of $750,000.

The Fifth Amendment permitted the Company to make payments to repurchase shares of its common stock, subject to certain limitations.

On July 31, 2025, we entered into an Amended and Restated Credit Agreement (the “2025 Restated Credit Agreement”), which amended and restated the Credit Agreement in its entirety.

The 2025 Restated Credit Agreement, among other things, revised the applicable margin payable under the revolving credit facility under the 2025 Restated Credit Agreement from 1.75% to 2.75% and the unused line fee at a rate per annum from 0.125% to 0.250%, in each case depending on our consolidated leverage ratio.

The 2025 Restated Credit Agreement, among other things, revised the applicable margin payable based on pricing levels determined by our consolidated total leverage ratio that range from 1.75% to 2.75% under the revolving credit facility, and revised the commitment fee to a rate per annum ranging from 0.125% to 0.250% for the unused portion of the revolving credit facility, also depending on our consolidated total leverage ratio.

The 2025 Restated Credit Amendment also expanded the revolving credit facility from $25.0 million to $40.0 million and extended the maturity date of the revolving credit facility from August 1, 2026, to July 31, 2028.

The 2025 Restated Credit Agreement also eliminated the minimum consolidated EBITDA financial covenant, such that the financial covenants now consist of a maximum consolidated total leverage ratio covenant and a minimum fixed charge coverage ratio covenant.

In addition, the 2025 Restated Credit Amendment expanded the revolving credit facility from $25.0 million to $40.0 million and extended the maturity date of the revolving credit facility from August 1, 2026, to July 31, 2028.

In addition, the 2025 Restated Credit Agreement revised certain negative covenants, including the restricted payment covenant, which now permits the Company to repurchase shares of its common stock and make certain other payments, as long as the Company is not in default under the 2025 Restated Credit Agreement, has a consolidated total leverage ratio of no greater than 1.75 to 1.00, and has liquidity of not less than $30.0 million, in each case both before and after giving effect to such stock repurchases or the making of such payments.

In connection with the entry into the 2025 Restated Credit Agreement, on July 31, 2025, we paid off the full amount outstanding under the term loan, which was $24.4 million (inclusive of principal and interest), using cash on hand.

The 2025 Restated Credit Agreement removes the provisions from the Credit Agreement related to a committed term loan, such that the only term loan related provisions in the 2025 Restated Credit Agreement relate to our ability to request uncommitted incremental term loan facilities and/or an increase in the amount of the revolving loans available under the 2025 Restated Credit Agreement in an amount not to exceed $25.0 million in the aggregate, subject to the satisfaction of certain conditions.

For additional information regarding the Credit Agreement, including interest rates, fees and maturities, see Note 8 – “Credit Agreement” of the condensed consolidated financial statements contained in this report.

As of September 30, 2025, we had no outstanding borrowings under the 2025 Restated Credit Agreement.

For additional information regarding the 2025 Restated Credit Agreement, including interest rates, fees and maturities, see Note 8 – “Credit Agreement” of the condensed consolidated financial statements contained in this report.

Share Repurchase Program

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The share repurchase program was scheduled to expire on October 31, 2026.

As of June 24, 2025, we had utilized substantially all of the repurchase authorization under the program and therefore completed the share repurchase program.

In aggregate under the program, we repurchased a total of 2,338,617 shares of common stock at a total cost of $30.0 million.

The program did not obligate us to repurchase any specific number of shares and could have been suspended or discontinued at any time without prior notice.

During the six months ended June 30, 2025, we repurchased 2,143,099 shares for approximately $26.6 million.

During the nine months ended September 30, 2025, we repurchased 2,143,099 shares for approximately $26.6 million.

We used cash on hand to fund these repurchases.

As of June 24, 2025, the Company had utilized substantially all of the repurchase authorization under the program and therefore completed the share repurchase program.

In aggregate under the program, the Company repurchased a total of 2,338,617 shares of common stock at a total cost of $30.0 million.

On October 16, 2025, our Board of Directors authorized a new program to repurchase up to $25.0 million of our common stock.

Under the program, purchases may be made from time to time in the open market, in privately negotiated purchases, or both.

The timing and number of shares to be purchased will be based on the price of the Company's common stock, general business and market conditions and other investment considerations and factors.

This share repurchase program expires on November 3, 2027.

The program does not obligate the Company to repurchase any specific number of shares and may be suspended or discontinued at any time without prior notice.

Future Cash Requirements

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We believe our cash and cash flows from operations will be sufficient to meet our working capital, capital expenditure, debt repayment and related interest, and other cash requirements for at least the next twelve months.

Inflation, changing prices, and tariffs did not have a material effect on our business during the quarter ended June 30, 2025.

Inflation, changing prices, and tariffs did not have a material effect on our business during the quarter ended September 30, 2025.

However, recent changes and announcements in U.S.

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The ultimate impact of tariffs, including any related responses, are uncertain and will depend on various factors, including which tariffs are ultimately implemented, the timing of implementation, any exemptions available, whether exemptions are granted and maintained, and the amount, scope and nature of the tariffs.

We continue to analyze the potential impact of recently announced tariffs, trade actions and related effects on our business and, at this time, we estimate that the impacts on our cost of goods sold could be up to $1.5 million for the year ended December 31, 2025, of which approximately $0.7 million was incurred through June 30, 2025.

We continue to analyze the potential impact of recently announced tariffs, trade actions and related effects on our business and, at this time, we estimate that the impacts on our cost of goods sold could be up to $1.0 million for the year ended December 31, 2025, of which approximately $0.9 million was incurred through September 30, 2025.

While we continue to actively work to mitigate tariff impacts, there is no assurance that such actions will be effective.

8 unchanged sentences

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What changed 10-Q

Item 2. Management’s Discussion and Analysis