What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-03 compared with 2026-05-05 · 154 added, 75 removed, 299 unchanged (43% of the section changed)

70 unchanged sentences

Our services include respiratory disease management (through the rental of various HME devices), neuromuscular care, in-home sleep testing and sleep apnea treatment, oxygen therapy, the sale of associated supplies, women’s health products and services, and healthcare staffing services.

We derive a significant portion of our revenue through the rental of non-invasive and invasive ventilators which represented 46.9% and 54.4% of our revenue for the three months ended March 31, 2026 and 2025, respectively.

We derive a significant portion of our revenue through the rental of non-invasive and invasive ventilators which represented 46.6% and 53.6% of our revenue for the three months ended June 30, 2026 and 2025, respectively, and 46.8% and 54.0% for the six months ended June 30, 2026 and 2025, respectively.

We combine the benefits of home ventilation support with licensed Respiratory Therapists ("RTs") to drive improved patient outcomes and reduce costly hospital readmissions.

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We expect to expand our workforce of licensed clinical practitioners, including RTs, to support our growth and ensure the high service model is maintained in the home.

As of March 31, 2026, we employed 403 licensed RTs, representing approximately 29% of our company-wide employee count.

As of June 30, 2026, we employed 417 licensed RTs, representing approximately 29% of our company-wide employee count.

Beyond fulfilling our internal staffing needs, we also provide healthcare staffing and recruitment services, offering tailored workforce solutions to external healthcare institutions and partners seeking qualified clinical professionals.

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A significant contributing factor to the industry's growth is the rising incidence of chronic diseases.

Factors such as increasing obesity rates, consequences of past

smoking prevalence, under-diagnosis of certain health conditions, and higher diagnosis rates for chronic diseases collectively shape the industry.

Factors such as increasing obesity rates, consequences of past smoking prevalence, under-diagnosis of certain health conditions, and higher diagnosis rates for chronic diseases collectively shape the industry.

There is a notable shift towards home-based treatment for these conditions.

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The proposals are intended to modernize the program by refining payment methodologies, contract award processes, and supplier oversight.

Although the final scope and timing of these reforms remain subject to CMS rulemaking, providers with greater scale, infrastructure, and compliance capabilities are generally positioned to compete more effectively under a restructured Competitive Bidding Program.

Although the final scope and timing of these reforms remain subject to CMS rulemaking, providers with greater scale, infrastructure, and compliance capabilities are generally positioned to

compete more effectively under a restructured Competitive Bidding Program.

Larger operators may benefit from economies of scale that support service obligations, enable pricing flexibility, and enhance administrative efficiency relative to smaller suppliers.

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(Tabular amounts expressed in thousands of U.S.

Dollars, except vent patients)

For the quarter ended March 31,

2026 December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024

Dollars, except operational information)

For the quarter ended June 30,

2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024

Financial Information:

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Cash and Cash Equivalents (As of) $ 10,680 $ 9,762 $ 13,501 $ 11,123 $ 20,016 $ 10,160 $ 17,540 $ 11,347

$ 9,762 $ 13,501 $ 11,123 $ 20,016 $ 10,160 $ 17,540 $ 11,347 $ 8,807

Total Assets (As of) $ 204,224 $ 197,361 $ 199,154 $ 202,360 $ 184,603 $ 178,079 $ 177,069 $ 169,526

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Results of Operations

Comparison of the Three Months Ended March 31, 2026 and 2025:

The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

Comparison of the Three Months Ended June 30, 2026 and 2025:

The following table summarizes our results of operations for the three months ended June 30, 2026 and 2025:

Three Months Ended June 30,

2026 % of Total Revenue 2025 % of Total Revenue $

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Loss (gain) on disposal of property and equipment 598 0.8 % (636) (1.0) % 1,234 (194.0) %

356 0.5 % (2,368) (4.0) % 2,724 (115.0) %

Other income, net (67) (0.1) % (72) (0.1) % 5 (6.9) %

(35) — % (75) (0.1) % 40 (53.3) %

Income from operations 4,461 5.7 % 5,095 8.1 % (634) (12.4) %

Non-operating income and expenses

Loss from investments 162 0.2 % — — % 162 NM

Interest expense, net

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Provision for income taxes

1,151 1.5 % 1,713 2.7 % (562) (32.8) %

Net income 2,900 3.7 % 3,250 5.2 % (350) (10.8) %

Net income attributable to noncontrolling interest 136 0.2 % 93 0.2 % 43 46.2 %

Net income attributable to Viemed Healthcare, Inc.

$ 2,764 3.5 % $ 3,157 5.0 % $ (393) (12.4) %

The following table summarizes our revenue for the three months ended June 30, 2026 and 2025:

Three Months Ended June 30,

2026 % of Total Revenue 2025 % of Total Revenue $

Revenue from rentals

Ventilator rentals, non-invasive and invasive $ 36,411 46.6 % $ 33,819 53.6 % $ 2,592 7.7 %

Other home medical equipment rentals 16,408 21.0 % 13,823 21.9 % 2,585 18.7 %

Revenue from sales and services

Equipment and supply sales 18,971 24.3 % 9,514 15.1 % 9,457 99.4 %

Service revenues 6,307 8.1 % 5,900 9.4 % 407 6.9 %

Total revenue

$ 78,097 100.0 % $ 63,056 100.0 % $ 15,041 23.9 %

For the three months ended June 30, 2026, total revenue was $78.1 million, an increase of $15.0 million, or 23.9%, compared to the three months ended June 30, 2025.

The increase was driven by growth across our rental, equipment and supply sales, and service revenue categories, including continued expansion of our ventilator, sleep, resupply, and women’s health offerings and the inclusion of revenue from the Lehan operations acquired on July 1, 2025.

Revenue from non-invasive and invasive ventilator rentals increased by $2.6 million, or 7.7%, to $36.4 million for the three months ended June 30, 2026.

The increase was primarily attributable to higher average patient volumes, reflecting continued demand for home non-invasive ventilation services and growth in our ventilator patient census.

Rental revenue from other home medical equipment increased by $2.6 million, or 18.7%, to $16.4 million for the three months ended June 30, 2026.

The increase was driven primarily by growth in PAP therapy and airway-clearance services, as well as rental revenue associated with women’s health products and Lehan operations.

Equipment and supply sales increased by $9.5 million, or 99.4%, to $19.0 million, for the three months ended June 30, 2026.

The increase was primarily attributable to the inclusion and continued expansion of women’s health product sales, including breast pumps and related supplies, and higher PAP resupply volumes resulting from growth in our sleep therapy patient base.

Service revenues, which consist primarily of revenue from our healthcare staffing operations and in-home sleep testing services, increased by $0.4 million, or 6.9%, to $6.3 million for the three months ended June 30, 2026.

Ventilator rentals remained our largest individual source of revenue.

However, the continued growth of PAP therapy and resupply, women’s health, oxygen therapy, and other home medical equipment offerings resulted in a more diversified revenue mix during the 2026 period.

Cost of revenue and gross profit

For the three months ended June 30, 2026, cost of revenue totaled $33.0 million, an increase of $6.7 million, or 25.5%, from the comparable period in 2025.

The increase was primarily attributable to the costs associated with higher patient and sales volumes and the inclusion of the Lehan operations.

Gross profit margin decreased to 57.7% for the three months ended June 30, 2026, compared to 58.3% for the three months ended June 30, 2025.

The decrease in gross profit margin primarily reflected a shift in revenue mix, as revenue from sales and services typically generates lower gross margins but carries lower capital expenditure requirements than revenue from rentals.

For the three months ended June 30, 2026, revenue from sales and services represented 32.4% of total revenue, compared to 24.4% in the comparable period in 2025.

Selling, general and administrative expense

Selling, general, and administrative expenses as a percentage of revenue was 47.5% for the three months ended June 30, 2026 compared to 45.7% for the three months ended June 30, 2025.

Selling, general and administrative expenses totaled $37.1 million for the three months ended June 30, 2026, an increase of $8.3 million (or 28.9%) from the comparable period in 2025.

The increase in selling, general and administrative expense was primarily attributable to expenses incurred to support the continued growth of the business, including the addition of the Lehan operations, which were acquired on July 1, 2025 and therefore not included in the prior-year quarter.

Employee compensation expense increased $4.0 million, or 22.8%, primarily due to higher headcount.

Other factors contributing to the increase included approximately $0.9 million of higher phantom stock compensation primarily driven by the increase in our share price, approximately $0.6 million of higher sales compensation associated with record patient setup activity, as well as incremental technology and implementation spending and higher legal and professional costs.

The increase as a percentage of revenue reflected continued investments in technology, talent, and operating capacity, and the development of the Company’s sales organization in advance of anticipated growth.

The Company expects these investments to support future revenue growth and productivity improvements.

However, the timing and extent of any resulting improvement in selling, general and administrative expenses as a percentage of revenue will depend on the pace at which these benefits are realized.

Research and development

For the three months ended June 30, 2026, research and development expense totaled $0.5 million, a decrease of $0.3 million, or 40.5%, from $0.8 million in the comparable period in 2025.

We expect research and development costs to remain consistent throughout the remainder of 2026 as we continue to invest in technology initiatives to support our clinical operations and service delivery capabilities.

Stock-based compensation

For the three months ended June 30, 2026, stock-based compensation totaled $2.0 million, a decrease of 13.2% from the comparable period in 2025.

The decrease in stock-based compensation was primarily attributable to forfeitures recognized during the period.

Stock-based compensation continues to reflect our ongoing investment in employee retention and long-term incentive programs through the use of equity-based awards, with expense recognized over the respective vesting periods of awards granted in both the current and prior years.

Loss (gain) on disposal of property and equipment

For the three months ended June 30, 2026, loss on disposal of property and equipment totaled $0.6 million compared to a gain on disposal of property and equipment of $0.6 million for the three months ended June 30, 2025.

The gain recognized in the prior year period was primarily attributable to proceeds received from the sale of recalled ventilators back to the manufacturer in excess of their net book value.

The ventilator buyback program was substantially completed in 2025, and accordingly we do not expect additional material gains from these transactions in future periods.

We may, however, continue to recognize gains or losses from the disposal of equipment in the ordinary course of business, including losses related to damaged or destroyed equipment.

Provision for income taxes

For the three months ended June 30, 2026, the provision for income taxes was a $1.2 million expense, compared to a $1.7 million expense during the 2025 period.

Our annual estimated effective tax rate for 2026 is 30.2%.

For the three months ended June 30, 2026, net income was $2.9 million, a decrease of $0.4 million (or 10.8%) from the comparable period in 2025.

Net income represented 3.7% of revenue for the 2026 period, compared to 5.2% for the 2025 period.

The decrease was primarily attributable to the operating-expense and equipment-disposal factors described above, partially offset by increased gross profit and a lower provision for income taxes.

Comparison of the Six Months Ended June 30, 2026 and 2025:

The following table summarizes our results of operations for the six months ended June 30, 2026 and 2025:

Six Months Ended June 30,

2026 % of Total Revenue 2025 % of Total Revenue $

Revenue $ 153,511 100.0 % $ 122,185 100.0 % $ 31,326 25.6 %

Cost of revenue 65,636 42.8 % 52,175 42.7 % 13,461 25.8 %

Gross profit 87,875 57.2 % 70,010 57.3 % 17,865 25.5 %

Selling, general and administrative 71,924 46.9 % 57,228 46.8 % 14,696 25.7 %

Research and development 1,083 0.7 % 1,644 1.3 % (561) (34.1) %

Stock-based compensation 4,483 2.9 % 4,652 3.8 % (169) (3.6) %

Depreciation and amortization

776 0.5 % 701 0.7 % 75 10.7 %

Loss (gain) on disposal of property and equipment 954 0.6 % (3,004) (2.5) % 3,958 (131.8) %

Other income, net (102) (0.1) % (147) (0.1) % 45 (30.6) %

Income from operations 8,757 5.7 % 8,936 7.3 % (179) (2.0) %

Non-operating income and expenses

Loss from investments 162 0.1 % — — % 162 NM

Interest expense, net

553 0.4 % 311 0.2 % 242 77.8 %

Net income before taxes 8,042 5.2 % 8,625 7.1 % (583) (6.8) %

Provision for income taxes 2,429 1.5 % 2,665 2.2 % (236) (8.9) %

Net income 5,613 3.7 % 5,960 4.9 % (347) (5.8) %

Net income attributable to noncontrolling interest 267 0.2 % 178 0.2 % 89 50.0 %

Net income attributable to Viemed Healthcare, Inc.

$ 5,346 3.5 % $ 5,782 4.7 % $ (436) (7.5) %

The following table summarizes our revenue for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

The following table summarizes our revenue for the six months ended June 30, 2026 and 2025:

Six Months Ended June 30,

2026 % of Total Revenue 2025 % of Total Revenue $

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Other home medical equipment rentals

32,606 21.2 % 26,798 21.9 % 5,808 21.7 %

Revenue from sales and services

1 unchanged sentence

Service revenues 12,675 8.2 % 12,388 10.2 % 287 2.3 %

Total revenues

Total revenue

$ 153,511 100.0 % $ 122,185 100.0 % $ 31,326 25.6 %

For the three months ended March 31, 2026, total revenue was $75.4 million, an increase of $16.3 million, or 27.5%, compared to the three months ended March 31, 2025.

The increase reflects broad-based growth across both our rental and sales and services revenue streams, driven by continued execution of our geographic expansion strategy and the ongoing diversified growth of our product and service offerings.

Ventilator rentals, non-invasive and invasive, revenues increased by $3.2 million, or 10.0%, to $35.4 million for the three months ended March 31, 2026, reflecting higher period-over-period patient volumes attributable to sustained demand for our ventilation services.

Rental revenue from other home medical equipment increased by $3.2 million, or 25.0%, to $16.2 million.

This increase was driven by broad-based growth across our PAP therapy, oxygen therapy, and percussion vest service lines, each benefiting from an expanding patient base and the continued development of our sleep and respiratory programs, as well as the inclusion of maternal health equipment rentals from the Lehan acquisition completed on July 1, 2025.

Equipment and supply sales increased by $10.0 million, or 132.6%, to $17.5 million, for the three months ended March 31, 2026.

The increase was primarily attributable to growth in our women's health product offerings, including breast pumps and related accessories, driven largely by the inclusion of revenues from the Lehan acquisition, as well as the continued scaling of our sleep resupply program, which drove higher volumes of PAP-related supplies and equipment.

Service revenues, which primarily reflect our healthcare staffing operations, decreased by $0.1 million, or 1.9%, to $6.4 million for the three months ended March 31, 2026.

The composition of our revenue continues to evolve in a manner consistent with our long-term strategic objectives.

Ventilator rentals remain the largest contributor to total revenue;

however, PAP-related rental and resupply revenue, oxygen therapy, and maternal health offerings each represented a growing proportion of our overall revenue mix.

For the six months ended June 30, 2026, total revenue was $153.5 million, an increase of $31.3 million, or 25.6%, compared to the six months ended June 30, 2025.

Revenue from non-invasive and invasive ventilator rentals increased by $5.8 million, or 8.8%, to $71.8 million for the six months ended June 30, 2026.

The increase was primarily attributable to higher average patient volumes and continued demand for home non-invasive ventilation services.

Rental revenue from other home medical equipment increased by $5.8 million, or 21.7%, to $32.6 million for the six months ended June 30, 2026.

The increase was primarily driven by growth in PAP therapy and airway-clearance services, as well as rental revenue associated with women’s health products and Lehan operations.

Equipment and supply sales increased by $19.4 million, or 114.2%, to $36.5 million, for the six months ended June 30, 2026.

The increase was primarily attributable to the inclusion and continued expansion of women’s health product sales and higher PAP resupply volumes resulting from growth in our sleep therapy patient base.

Service revenues, which consist primarily of our healthcare staffing operations and in-home sleep testing services, increased by $0.3 million, or 2.3%, to $12.7 million for the six months ended June 30, 2026.

Ventilator rentals remained our largest individual source of revenue.

However, the growth of PAP therapy and resupply, women’s health, oxygen therapy, and other home medical equipment offerings continued to increase the diversification of our revenue mix.

Cost of revenue and gross profit

For the three months ended March 31, 2026, cost of revenue totaled $32.6 million, an increase of $6.7 million, or 26.1%, from the comparable period in 2025.

Gross profit margin improved to 56.8% for the three months ended March 31, 2026 from 56.3% for the three months ended March 31, 2025.

The margin improvement reflects disciplined cost management and the favorable operating leverage in our rental revenue base.

While the significant growth in equipment and supply sales introduced a higher proportion of direct product costs relative to rental revenue, these were more than offset by the efficiency and scale benefits realized across our broader operations.

As our sleep resupply program and other sales-oriented service lines continue to scale, we expect gross margins to gradually improve as fulfillment efficiencies are realized and the cost structure of these programs matures, though the continued diversification of our revenue mix may partially moderate the pace of that expansion.

For the six months ended June 30, 2026, cost of revenue totaled $65.6 million, an increase of $13.5 million, or 25.8%, from the comparable period in 2025.

The increase was primarily attributable to costs associated with higher patient and sales volumes and the inclusion of the Lehan operations.

Gross profit margin decreased slightly to 57.2% for the six months ended June 30, 2026, compared to 57.3% for the six months ended June 30, 2025.

The modest decrease in gross profit margin primarily reflected a shift in revenue mix, as revenue from sales and services typically generates lower gross margins but carries lower capital expenditure requirements than revenue from rentals.

For the six months ended June 30, 2026, revenue from sales and services represented 31.9% of total revenue, compared to 24.2% in the comparable period in 2025.

Selling, general and administrative expense

Selling, general and administrative expenses as a percentage of revenue improved to 46.1% for the three months ended March 31, 2026 compared to 48.1% for the three months ended March 31, 2025.

Selling, general and administrative expenses totaled $34.8 million for the three months ended March 31, 2026, an increase of $6.4 million (or 22.4%) from the comparable period in 2025.

The improvement in selling, general and administrative expenses as a percentage of revenue reflects continued operating leverage and efficiency gains as our revenue base has grown.

The overall increase in selling, general and administrative expenses as compared to the prior period is primarily attributable to additional employee-related expenses to support the Company's overall growth and the inclusion of operating expenses from the Lehan acquisition completed on July 1, 2025.

Our full-time employee count increased from 1,222 as of March 31, 2025 to 1,387 as of March 31, 2026, an increase of 14%, reflecting both organic expansion and acquired operations.

As a result, employee related costs increased by $4.5 million, or 22%, compared to the prior year period.

We expect selling, general and administrative expenses to continue to increase in absolute dollars as we invest in personnel, infrastructure, and integration activities to support our growth initiatives.

However, over time we expect these expenses to decline as a percentage of revenue as we continue to realize operating leverage from the scaling of our platform, although period-to-period fluctuations may occur based on the timing of hiring, integration efforts, and other strategic investments.

Selling, general, and administrative expenses as a percentage of revenue was 46.9% for the six months ended June 30, 2026, essentially unchanged compared to 46.8% for the six months ended June 30, 2025.

Selling, general and administrative expenses totaled $71.9 million for the six months ended June 30, 2026, an increase of $14.7 million (or 25.7%) from the comparable period in 2025.

The increase in the dollar amount of selling, general and administrative expense was primarily attributable to expenses incurred to support the continued growth of the business, including the addition of the Lehan operations, which were acquired on July 1, 2025 and therefore not included in the comparable period in 2025.

The increase also reflected higher phantom stock compensation primarily driven by the increase in our share price and incremental technology and implementation costs, partially offset by continued operating leverage as we scaled our platform.

We expect to manage selling, general and administrative expense as a percentage of revenue as our recent investments begin to contribute to revenue and productivity, although the timing and extent of any improvement will depend on the pace of that contribution.

Research and development

For the three months ended March 31, 2026, research and development expense totaled $0.6 million, a decrease of $0.2 million, or 27.4%, from $0.8 million in the comparable period in 2025.

For the six months ended June 30, 2026, research and development expense totaled $1.1 million, a decrease of $0.6 million, or 34.1%, from $1.6 million in the comparable period in 2025.

Stock-based compensation

For the three months ended March 31, 2026, stock-based compensation totaled $2.5 million, an increase of 6.1% from the comparable period in 2025.

The increase reflects our continued investment in employee retention and long-term incentive programs, including the broader integration of equity-based awards into our compensation structure.

In recent years, we have increased the use of equity-based awards as part of our overall compensation programs, and the higher expense recognized during the three months ended March 31, 2026 reflects the cumulative impact of awards granted in both the current and prior years, as those awards continue to vest over their respective service periods.

For the six months ended June 30, 2026, stock-based compensation totaled $4.5 million, a decrease of 3.6% from the comparable period in 2025.

The decrease in stock-based compensation was primarily attributable to forfeitures recognized during the period.

Loss (gain) on disposal of property and equipment

For the three months ended March 31, 2026, loss on disposal of property and equipment totaled $0.4 million compared to a gain on disposal of property and equipment of $2.4 million for the three months ended March 31, 2025.

For the six months ended June 30, 2026, loss on disposal of property and equipment totaled $1.0 million compared to a gain on disposal of property and equipment of $3.0 million for the six months ended June 30, 2025.

The gain recognized in the prior year period was primarily attributable to proceeds received from the sale of recalled ventilators back to the manufacturer in excess of their net book value.

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Provision for income taxes

For the three months ended March 31, 2026, the provision for income taxes was a $1.3 million expense, compared to a $1.0 million expense during the 2025 period.

For the six months ended June 30, 2026, the provision for income taxes was a $2.4 million expense, compared to a $2.7 million expense during the 2025 period.

Our annual estimated effective tax rate for 2026 is 30.2%.

For the three months ended March 31, 2026, net income was $2.7 million, consistent with the comparable period in 2025.

Net income as a percentage of net revenue decreased from 4.6% for the three months ended March 31, 2025 to 3.6% for the three months ended March 31, 2026.

The prior year period benefited from gains recognized from the ventilator buyback program, which did not recur in the current period, resulting in a lower net income margin despite growth in underlying operating performance.

Net income was $5.6 million for the six months ended June 30, 2026, a decrease of $0.3 million, or (5.8)%, compared to $6.0 million for the six months ended June 30, 2025.

Net income represented 3.7% of revenue for the 2026 period, compared to 4.9% for the 2025 period.

The decrease was primarily attributable to higher selling, general and administrative expense, the unfavorable change in equipment-disposal activity, partially offset by increased gross profit.

Non-GAAP Financial Measures

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The following table is a reconciliation of net income attributable to Viemed Healthcare, Inc., the most directly comparable GAAP measure, to Adjusted EBITDA, on a historical basis for the periods indicated:

For the quarter ended March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024

For the quarter ended June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024

Net income attributable to Viemed Healthcare, Inc.

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Liquidity and Capital Resources

Cash and cash equivalents at March 31, 2026 was $9.8 million, compared to $13.5 million at December 31, 2025.

Cash and cash equivalents at June 30, 2026 was $10.7 million, compared to $13.5 million at December 31, 2025.

Typically, our principal source of liquidity is the collection of our patient accounts receivable.

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Under the terms of the 2026 Share Repurchase Program, the Company may repurchase up to 1,930,131 of its common shares from time to time through open market purchases, block purchases or otherwise in accordance with applicable securities laws, including Rule 10b-18 of the Exchange Act.

During the three months ended March 31, 2026, the Company repurchased and canceled 150,000 common shares pursuant to the 2026 Share Repurchase Program.

During the six months ended June 30, 2026, the Company repurchased and canceled 680,802 common shares pursuant to the 2026 Share Repurchase Program.

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

Three Months Ended March 31,

Six Months Ended June 30,

Net Cash provided by (used in):

2 unchanged sentences

Financing activities (13,471) (2,375)

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

$ (2,821) $ 2,476

Net Cash Provided by Operating Activities

Net cash provided by operating activities during the three months ended March 31, 2026 was $8.1 million, resulting from net income of $2.7 million, increased by net income adjustments of $10.5 million and offset by an increase in non-cash working capital of $5.1 million.

Net cash provided by operating activities during the six months ended June 30, 2026 was $24.0 million, resulting from net income of $5.6 million, increased by net income adjustments of $20.9 million and partially offset by an increase in non-cash working capital of $2.5 million.

The net income adjustments primarily consisted of $15.1 million of depreciation and amortization and $4.5 million of stock-based compensation.

The primary changes in non-cash working capital were an increase in net accounts receivable of $5.6 million and a decrease in accrued liabilities of $2.6 million, partially offset by an increase in trade payables of $1.6 million and an increase in net income tax payable of $1.3 million.

Net cash provided by operating activities during the three months ended March 31, 2025 was $2.9 million, resulting from net income of $2.7 million, increased by net income adjustments of $6.6 million and offset by an increase in non-cash working capital of $6.4 million.

The primary changes in non-cash working capital were an increase in net accounts receivable of $6.6 million and an increase in prepaid expenses and other assets of $1.7 million, partially offset by an increase in trade payables of $2.1 million, an increase in net income tax payable of $2.1 million, and an increase in accrued liabilities of $1.4 million.

Net cash provided by operating activities during the six months ended June 30, 2025 was $15.1 million, resulting from net income of $6.0 million, increased by net income adjustments of $13.3 million and partially offset by an increase in non-cash working capital of $4.1 million.

The net income adjustments primarily consisted of $13.5 million of depreciation and amortization and $4.7 million of stock-based compensation, partially offset by a $3.0 million gain on disposal of property and equipment.

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Net Cash Used in Investing Activities

Net cash used in investing activities during the three months ended March 31, 2026 was $5.5 million.

Net cash used in investing activities during the six months ended June 30, 2026 was $13.3 million.

Net cash used for capital expenditures during the period consisted of $15.2 million of purchases of property and equipment, partially offset by $2.4 million of sales proceeds from the disposal of property and equipment.

Net cash used for capital expenditures represents a decrease of $3.0 million, or 36%, year over year.

Purchases of property and equipment were primarily related to medical equipment rented to our patients.

Net cash used in investing activities during the three months ended March 31, 2025 was $8.5 million, consisting of $15.5 million of purchases of property and equipment, partially offset by $7.0 million of sales proceeds from the disposal of property and equipment.

Purchases of property and equipment were primarily related to medical equipment placed with patients under our rental agreements.

Net cash used in investing activities also included a $0.6 million equity investment.

Net cash used in investing activities during the six months ended June 30, 2025 was $10.3 million, consisting of $23.6 million of purchases of property and equipment, partially offset by $13.4 million of sales proceeds from the disposal of property and equipment.

Purchases of property and equipment were primarily related to medical equipment rented to our patients.

Net cash used for capital expenditures represents an increase of $2.5 million, or 24.5%, compared to the prior-year period.

Although purchases of property and equipment decreased, the reduction was more than offset by lower proceeds from sales of property and equipment, as the prior-year period benefited from proceeds associated with the ventilator return program.

Net Cash Used in Financing Activities

Net cash used in financing activities during the three months ended March 31, 2026 was $6.3 million.

During the three months ended March 31, 2026, principal payments on the 2022 Term Loan Facility (as defined below) were $3.2 million.

In addition, the Company paid $1.4 million pursuant to share repurchase programs and canceled 268,002 common shares at a cost of $2.0 million to satisfy employee income tax withholding obligations associated with the vesting of RSUs, while proceeds from the exercise of options during the three months ended March 31, 2026 were $0.5 million.

Net cash used in financing activities during the three months ended March 31, 2025 was $1.7 million.

During the three months ended March 31, 2025, principal payments on the 2022 Term Loan Facility (as defined below) were $0.1 million.

The Company acquired and canceled 193,173 common shares at a cost of $1.6 million to satisfy employee income tax withholding associated with RSUs vesting during the three months ended March 31, 2025.

Net cash used in financing activities during the six months ended June 30, 2026 was $13.5 million.

During the six months ended June 30, 2026, principal payments on the 2022 Term Loan Facility (as defined below) were $5.4 million.

In addition, the Company paid $6.8 million pursuant to share repurchase programs and canceled 272,460 common shares at a cost of $2.0 million to satisfy employee income tax withholding obligations associated with the vesting of RSUs.

These uses of cash were partially offset by $1.1 million of proceeds from the exercise of stock options.

Net cash used in financing activities during the six months ended June 30, 2025 was $2.4 million, consisting of $1.7 million of cash paid for common shares repurchased and canceled pursuant to the 2025 Share Repurchase Program, $0.2 million in principal payments under the 2022 Senior Credit Facilities (as defined below), and $1.6 million for common shares repurchased and canceled to satisfy employee income tax withholding associated with RSUs vested during the period, partially offset by $1.4 million of proceeds from the exercise of stock options.

Senior Credit Facilities

On November 29, 2022, the Company refinanced its existing borrowings under the prior Commercial Business Loan Agreement with Hancock Whitney Bank and entered into a new credit agreement (the "2022 Senior Credit Facilities") with the lenders from time to time party thereto, and Regions Bank, as administrative agent and collateral agent, that provides for an up to $30.0 million revolving credit facility (the "2022 Revolving Credit Facility") and an up to $30.0 million delayed draw term loan facility (the "2022 Term Loan Facility"), both maturing in November 2027.

We expect to refinance or replace the facilities prior to maturity;

however, there can be no assurance that replacement financing will be available on acceptable terms.

On May 28, 2024, the Company entered into a First Amendment to the 2022 Senior Credit Facilities that extended the delayed draw term loan commitment expiration date to November 29, 2025, from its initial expiration date of May 29, 2024, and provided for other technical amendments.

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The proceeds of the 2022 Term Loan Facility and any additional term loans established in accordance with the 2022 Senior Credit Facilities may be used to finance permitted acquisitions and to pay transaction fees, costs and expenses related to such acquisitions.

Outstanding borrowings under the 2022 Term Loan Facility were $9.6 million as of March 31, 2026.

There were no outstanding borrowings under the 2022 Revolving Credit Facility as of March 31, 2026.

Outstanding borrowings under the 2022 Term Loan Facility were $7.4 million as of June 30, 2026.

There were no outstanding borrowings under the 2022 Revolving Credit Facility as of June 30, 2026.

The interest rates per annum applicable to the 2022 Senior Credit Facilities are Term SOFR plus an applicable margin, which ranges from 2.625% to 3.375%, or, at the option of the Company, a Base Rate (as defined in the 2022 Senior Credit Facilities) plus an applicable margin, which ranges from 1.625% to 2.375%.

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• Consolidated Fixed Charge Coverage Ratio ( defined generally as (a) adjusted EBITDA minus capital expenditures minus cash taxes to (b) the sum of scheduled principal payments plus cash interest expense plus restricted payments) of not less than 1.25:1.0.

The Company was in compliance with all covenants under the 2022 Senior Credit Facilities in effect at March 31, 2026.

The Company was in compliance with all covenants under the 2022 Senior Credit Facilities in effect at June 30, 2026.

Our principal uses of cash are funding the purchase of rental assets and other capital purchases, the repayment of debt, the repurchase of shares of our common stock, the funding of acquisitions, operations, and other working capital requirements.

Our contractual obligations primarily relate to the repayment of existing debt and contractual obligations for operating leases.

The following table presents our material contractual obligations and commitments to make future payments as of March 31, 2026:

The following table presents our material contractual obligations and commitments to make future payments as of June 30, 2026:

Within 12 Months Beyond 12 Months

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Lease Obligations

$ 3,637 $ 11,324

Except for the funding of potential acquisitions and investments, we anticipate that our operating cash flows will satisfy our material cash requirements for the 12 months after March 31, 2026.

Total $ 2,980 $ 10,285

Except for the funding of potential acquisitions and investments, we anticipate that our operating cash flows will satisfy our material cash requirements for the 12 months after June 30, 2026.

In addition to our operating cash flows, we may need to raise additional funds to support our contractual obligations and investing activities beyond such 12 month period, and such funding may not be available to us on acceptable terms, or at all.

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The Company maintains a 401(k) retirement plan for employees to which eligible employees can contribute a percentage of their pre-tax compensation.

Matching employer contributions to the 401(k) plan totaled $0.6 million for both the three months ended March 31, 2026 and 2025.

Matching employer contributions to the 401(k) plan totaled $0.5 million and $0.4 million for the three months ended June 30, 2026 and 2025, respectively, and $1.1 million and $0.9 million for the six months ended June 30, 2026 and 2025, respectively.

Off Balance Sheet Arrangements

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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