UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~March 3031, ~~2025~~2026


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-9810

~~Owens &~~Accendra ~~Minor~~Health, Inc.

(Exact name of Registrant as specified in its charter)

	Virginia		54-1701843
	(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

	4435 Waterfront Drive, Suite 300 Glen Allen, Virginia		23060
	(Address of principal executive offices)		(Zip Code)

	Post Office Box 27626, Richmond, Virginia		23261-7626
	(Mailing address of principal executive offices)		(Zip Code)

	Virginia		54-1701843
	(State or other jurisdiction ofincorporation or organization)		(I.R.S. EmployerIdentification No.)

	10900 Nuckols Road, Suite 400Glen Allen, Virginia		23060
	(Address of principal executive offices)		(Zip Code)

	Post Office Box 27626,Richmond, Virginia		23261-7626
	(Mailing address of principal executiveoffices)		(Zip Code)

Registrant’s telephone number, including area code (804) 277-4304

~~Registrant’s~~10900 ~~telephone~~Nuckols ~~number~~Road, ~~including~~Suite ~~area~~400, ~~code~~Glen ~~(804) 723-7000~~Allen, Virginia, 23060

(Former name, former address and former fiscal year, if changes since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $2 par value per share		~~OMI~~ACH		New York Stock Exchange

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the Company’s common stock outstanding as of March 31, 2026 was 76,583,702 shares.

The number of shares of Owens & Minor, Inc.’s common stock outstanding as of October 24, 2025 was 77,346,594 shares.

Table of Contents

~~Owens &~~Accendra ~~Minor~~Health, Inc. and Subsidiaries

Index


Part I. Financial Information		Page

Item 1.	Financial Statements	3
	Condensed Consolidated Statements of Operations—Three ~~and Nine~~ Months Ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025	3
	Condensed Consolidated Statements of Comprehensive (Loss~~) Income~~—Three ~~and Nine~~ Months Ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025	4
	Condensed Consolidated Balance Sheets—~~September~~ 30March 31, ~~2025~~2026 and December 31, ~~2024~~2025	5
	Condensed Consolidated Statements of Cash Flows—~~Nine~~Three Months Ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025	6
	Condensed Consolidated Statements of Changes in ~~Equity~~ (Deficit) Equity—Three ~~and Nine~~ Months Ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3121
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4230
Item 4.	Controls and Procedures	4230

Part II. Other Information

Item 1.	Legal Proceedings	4230
Item 1A.	Risk Factors	4230
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4531
Item 5.	Other Information	4531
Item 6.	Exhibits	4632
	Signatures	4733

Table of Contents

Part I. Financial Information

Item 1. Financial Statements

~~Owens &~~Accendra ~~Minor~~Health, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(unaudited)


	Three Months Ended				~~Nine Months Ended~~
	~~September~~March 3031,				~~September 30,~~
(in thousands, except per share data)	~~2025~~2026		~~2024~~2025		~~2025~~		~~2024~~
Net revenue	$	~~697~~627,~~264~~780	$	~~686~~673,~~846~~884	$	~~2,053,065~~	$	~~1,985,089~~
Operating costs and expenses:
Cost of net revenue		~~375~~349,~~067~~752		~~355~~354,~~075~~642		~~1,087,024~~		~~1,037,700~~
Selling, general and administrative expenses		~~265~~255,~~838~~226		~~272~~262,~~322~~370		~~796,061~~		~~812,453~~
Transaction breakage fee		—		—		80,000		—
Acquisition-related charges and intangible amortization		29,229		23,456
Acquisition-related charges and intangible amortization		29,229		14,855		66,603		42,905
Exit and realignment (income) charges, net		(23,552)		13,625
Exit and realignment charges, net		660		13,515		16,826		37,062
Total operating costs and expenses		610,655		654,093
Total operating costs and expenses		670,794		655,767		2,046,514		1,930,120
Operating income		17,125		19,791
Operating income		26,470		31,079		6,551		54,969
Interest expense, net		32,348		24,214
Interest expense, net		29,029		28,953		79,252		79,949
Other expense, net		1,023		975
Transaction financing fees, net		—		—		18,288		—
Loss from continuing operations before income taxes		(16,246)		(5,398)
Other expense, net		1,076		1,168		2,993		2,869
Income tax benefit		(9,778)		(1,588)
(Loss) income from continuing operations before income taxes		(3,635)		958		(93,982)		(27,849)
Loss from continuing operations, net of tax		(6,468)		(3,810)
Income tax provision (benefit)		1,972		(303)		(743)		(8,974)
Loss from discontinued operations, net of tax		—		(21,172)
(Loss) income from continuing operations, net of tax		(5,607)		1,261		(93,239)		(18,875)
Net loss	$	(6,468)	$	(24,982)
Loss from discontinued operations, net of tax		(144,669)		(14,031)		(951,077)		(47,695)

Net loss	$	(150,276)	$	(12,770)	$	(1,044,316)	$	(66,570)
Basic loss per common share:

Loss from continuing operations, net of tax	$	(0.08)	$	(0.05)
Basic loss per common share:
Loss from discontinued operations, net of tax		—		(0.27)
(Loss) income from continuing operations, net of tax	$	(0.07)	$	0.02	$	(1.21)	$	(0.25)
Net loss	$	(0.08)	$	(0.32)
Loss from discontinued operations, net of tax		(1.87)		(0.19)		(12.34)		(0.62)

Net loss	$	(1.94)	$	(0.17)	$	(13.55)	$	(0.87)
Diluted loss per common share:

Loss from continuing operations, net of tax	$	(0.08)	$	(0.05)
Diluted loss per common share:
Loss from discontinued operations, net of tax		—		(0.27)
(Loss) income from continuing operations, net of tax	$	(0.07)	$	0.02	$	(1.21)	$	(0.25)
Net loss	$	(0.08)	$	(0.32)
Loss from discontinued operations, net of tax		(1.87)		(0.18)		(12.34)		(0.62)
Net loss	$	(1.94)	$	(0.16)	$	(13.55)	$	(0.87)

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

~~Owens &~~Accendra ~~Minor~~Health, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive (Loss~~) Income~~

(unaudited)

Three Months Ended

~~Nine Months Ended~~

~~September~~March 3031,

~~September 30,~~

(in thousands)

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

Net loss

(~~150~~6,~~276~~468)

(1224,~~770~~982)

~~(1,044,316)~~

~~(66,570)~~

Other comprehensive income (loss), net of tax:

Currency translation adjustments

~~262~~(145)

255,~~966~~957

~~20,992~~

~~7,398~~

Change in unrecognized net periodic pension costs

~~100~~33

~~265~~795

~~983~~

~~699~~

Change in gains and losses on derivative instruments

~~(556)~~199

(41,~~905~~619)

~~(3,044)~~

~~(3,697)~~

Total other comprehensive (loss) income, net of tax

(194)

21,326

18,931

4,400

Total other comprehensive income, net of tax

5,133

Comprehensive (loss) income

(150,470)

8,556

(1,025,385)

(62,170)

Comprehensive loss

(6,381)

(19,849)

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

~~Owens &~~Accendra ~~Minor~~Health, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(unaudited)


	~~September~~March 3031,		December 31,
(in thousands, except per share data)	~~2025~~2026		~~2024~~2025
Assets
Current assets
Cash and cash equivalents	$	32336,~~837~~880	$	27281,~~572~~989
Accounts receivable, net		~~202~~103,~~731~~703		~~218~~95,~~270~~907
Inventories		63,847		67,581
Inventories, net		65,285		74,435
Other current assets		6882,~~129~~632		8295,~~240~~540
Current assets held for sale - discontinued operations		1,764,129		1,625,354
Total current assets		588,500		547,871
Total current assets		2,131,673		2,021,017
Patient service equipment and other fixed assets, net of accumulated depreciation and amortization of $180,939 and $207,595		227,732		256,161
Patient service equipment and other fixed assets, net		259,729		249,283
Operating lease assets		101,967		109,099
Operating lease assets		119,093		126,928
Goodwill		1,228,140		1,228,140
Intangible assets, net		~~165~~107,~~694~~236		~~210~~136,~~056~~465
Other assets, net		~~131~~162,~~897~~407		89174,~~539~~025
Noncurrent assets held for sale - discontinued operations		—		731,193
Total assets	$	2,415,982	$	2,451,761
Total assets	$	4,036,226	$	4,656,156
Liabilities and (deficit) equity
Liabilities and equity
Current liabilities
Current liabilities
Accounts payable	$	374,824	$	363,565
Accounts payable	$	339,728	$	359,927
Accrued payroll and related liabilities		33,403		69,426
Accrued payroll and related liabilities		45,231		73,678
Current portion of long-term debt		581,250		250,000
Current portion of long-term debt		280,000		42,866
Other current liabilities		213,627		264,084
Other current liabilities		455,203		294,685
Total current liabilities		1,203,104		947,075
Current liabilities held for sale - discontinued operations		1,345,805		1,080,896
Long-term debt, excluding current portion		1,521,941		1,799,876
Total current liabilities		2,465,967		1,852,052
Operating lease liabilities, excluding current portion		67,466		70,317
Long-term debt, excluding current portion		1,835,261		1,798,393
Other liabilities		88,236		95,471
Operating lease liabilities, excluding current portion		81,352		89,466
Total liabilities		2,880,747		2,912,739
Deferred income taxes, net		—		19,436
Commitments and contingencies
Other liabilities		83,153		72,551
(Deficit) equity
Noncurrent liabilities held for sale - discontinued operations		—		237,894
Common stock, par value $2 per share; authorized - 200,000 shares; issued and outstanding - 76,584 shares and 76,388 shares		153,167		152,777
Total liabilities		4,465,733		4,069,792
Paid-in capital		469,086		466,882
Commitments and contingencies
Accumulated deficit		(1,086,220)		(1,079,752)
Equity
Accumulated other comprehensive loss		(798)		(885)
Common stock, par value $2 per share; authorized - 200,000 shares; issued and outstanding - 77,299 shares and 77,199 shares		154,598		154,398
Total deficit		(464,765)		(460,978)
Paid-in capital		468,469		454,151
Total liabilities and (deficit) equity	$	2,415,982	$	2,451,761
(Accumulated deficit) retained earnings		(1,022,161)		27,159
Accumulated other comprehensive loss		(30,413)		(49,344)
Total (deficit) equity		(429,507)		586,364
Total liabilities and equity	$	4,036,226	$	4,656,156

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

~~Owens &~~Accendra ~~Minor~~Health, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(unaudited)


	~~Nine~~Three Months Ended ~~September~~March 3031,
(in thousands)	~~2025~~2026		~~2024~~2025
Operating activities:
Net loss	$	(16,~~044,316~~468)	$	(6624,~~570~~982)
Adjustments to reconcile net loss to cash (used for) provided by operating activities:
Loss from discontinued operations, net of tax		—		21,172
Depreciation and amortization		184,651		199,588
Adjustments to reconcile net loss to cash used for operating activities:
Goodwill impairment charge		106,389		—
Depreciation and amortization		61,742		42,902
Loss on classification to held for sale		771,640		—
Share-based compensation expense		3,090		4,421
Share-based compensation expense		17,330		19,281
Deferred income tax expense (benefit)		2,571		(4,395)
Loss on extinguishment of debt		—		311
Changes in operating lease right-of-use assets and lease liabilities		122		827
Deferred income tax benefit		(53,762)		(15,119)
Gain from sale and dispositions of patient service equipment		(55,509)		(5,353)
Changes in operating lease right-of-use assets and lease liabilities		249		7,156
Changes in operating assets and liabilities:
Gain from sale and dispositions of patient service equipment and other fixed assets		(16,385)		(37,682)
Accounts receivable, net		(7,796)		4,745
Changes in operating assets and liabilities:
Inventories, net		9,150		(6,319)
Accounts receivable, net		111,500		(60,887)
Accounts payable		8,775		16,124
Inventories		(146,351)		(132,433)
Net change in other assets and liabilities		(69,174)		(18,065)
Accounts payable		(10,680)		164,261
Other, net		3,420		401
Net change in other assets and liabilities		(98,763)		4,719
Cash used for operating activities from discontinued operations		—		(66,544)
Other, net		8,522		7,869
Cash used for operating activities		(50,077)		(35,066)
Cash (used for) provided by operating activities		(169,976)		90,494
Investing activities:
Investing activities:
Additions to patient service equipment ($41,343 and $44,484) and other fixed assets		(41,646)		(45,793)
Additions to patient service equipment and other fixed assets		(177,823)		(148,031)
Proceeds from sale of patient service equipment		96,415		16,884
Proceeds from sale of patient service equipment and other fixed assets		53,369		84,759
Additions to computer software		(844)		(2,329)
Additions to computer software		(14,217)		(8,695)
Other, net		—		(410)
Other, net		(1,910)		7,738
Cash used for investing activities from discontinued operations		—		(16,552)
Cash used for investing activities		(140,581)		(64,229)
Cash provided by (used for) investing activities		53,925		(48,200)
Financing activities:
Borrowings under amended Receivables Financing Agreement		—		1,286,400
Borrowings under Revolving Credit Facility		269,100		776,984
Repayments under amended Receivables Financing Agreement		—		(1,286,400)
Repayments under Revolving Credit Facility		(217,600)		(679,484)
Borrowings under Revolving Credit Facility		2,442,484		—
Repurchase of common stock		—		(1,503)
Repayments under Revolving Credit Facility		(2,171,784)		—
Other, net		(416)		(146)
Repayments of debt		—		(211,447)
Cash used for financing activities from discontinued operations		—		(3,073)
Repurchase of common stock		(6,656)		—
Cash provided by financing activities		51,084		92,778
Other, net		41,530		(13,060)
Effect of exchange rate changes on cash and cash equivalents		(41)		542
Cash provided by (used for) financing activities		305,574		(224,507)
Net increase in cash and cash equivalents		54,891		10,054
Effect of exchange rate changes on cash, cash equivalents and restricted cash		1,767		408
Cash and cash equivalents at beginning of period		281,989		49,382
Net decrease in cash, cash equivalents and restricted cash		(3,216)		(197,834)
Cash and cash equivalents at end of period	$	336,880	$	59,436
Cash, cash equivalents and restricted cash at beginning of period		49,382		272,924
Supplemental disclosure of cash flow information:
Cash, cash equivalents and restricted cash at end of period	$	46,166	$	75,090
Income taxes paid, net	$	20,042	$	125
Supplemental disclosure of cash flow information:
Interest paid	$	29,446	$	27,487
Income taxes paid, net	$	8,784	$	7,610
Noncash investing activity:
Interest paid	$	96,138	$	104,278
Unpaid purchases of patient service equipment and other fixed assets at end of period	$	71,997	$	81,085
Noncash investing activity:
Unpaid purchases of patient service equipment and other fixed assets at end of period	$	71,823	$	75,176

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

~~Owens &~~Accendra ~~Minor~~Health, Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in ~~Equity~~ (Deficit) Equity

(unaudited)


		Common						Accumulated
	Common	Stock				Retained		Other
	Shares	($2 par		Paid-In		Earnings		Comprehensive		Total
(in thousands, except per share data)	Outstanding	value)		Capital		(Accumulated Deficit)		Loss		~~Equity~~ (Deficit) Equity
Balance, December 31, 2025	76,388	$	152,777	$	466,882	$	(1,079,752)	$	(885)	$	(460,978)
Net loss	—		—		—		(6,468)		—		(6,468)
Other comprehensive income	—		—		—		—		87		87
Share-based compensation expense, exercises and other	196		390		2,204		—		—		2,594
Balance, March 31, 2026	76,584	$	153,167	$	469,086	$	(1,086,220)	$	(798)	$	(464,765)

Balance, December 31, 2024	77,199	$	154,398	$	454,151	$	27,159	$	(49,344)	$	586,364
Net loss	—		—		—		(24,982)		—		(24,982)
Other comprehensive income	—		—		—		—		5,133		5,133
Share-based compensation expense, exercises and other	194		387		5,580		—		—		5,967
Shares repurchased and retired	(173)		(346)		—		(1,157)		—		(1,503)
Balance, March 31, 2025	77,220	$	154,439	$	459,731	$	1,020	$	(44,211)	$	570,979
Net loss	—		—		—		(869,058)		—		(869,058)
Other comprehensive income	—		—		—		—		13,992		13,992
Share-based compensation expense, exercises and other	630		1,260		6,970		—		—		8,230
Shares repurchased and retired	(653)		(1,306)		—		(3,847)		—		(5,153)
Balance, June 30, 2025	77,197		154,393		466,701		(871,885)		(30,219)		(281,010)
Net loss	—		—		—		(150,276)		—		(150,276)
Other comprehensive loss	—		—		—		—		(194)		(194)
Share-based compensation expense, exercises and other	102		205		1,768		—		—		1,973
Balance, September 30, 2025	77,299	$	154,598	$	468,469	$	(1,022,161)	$	(30,413)	$	(429,507)

Balance, December 31, 2023	76,546	$	153,092	$	434,185	$	389,845	$	(31,818)	$	945,304
Net loss	—		—		—		(21,886)		—		(21,886)
Other comprehensive loss	—		—		—		—		(11,619)		(11,619)
Share-based compensation expense, exercises and other	(97)		(195)		4,402		—		—		4,207
Balance, March 31, 2024	76,449		152,897		438,587		367,959		(43,437)		916,006
Net income	—		—		—		(31,913)		—		(31,913)
Other comprehensive loss	—		—		—		—		(5,307)		(5,307)
Share-based compensation expense, exercises and other	599		1,199		1,855		—		—		3,054
Balance, June 30, 2024	77,048		154,096		440,442		336,046		(48,744)		881,840
Net loss	—		—		—		(12,770)		—		(12,770)
Other comprehensive income	—		—		—		—		21,326		21,326
Share-based compensation expense, exercises and other	14		27		5,307		—		—		5,334
Balance, September 30, 2024	77,062	$	154,123	$	445,749	$	323,276	$	(27,418)	$	895,730

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

~~Owens &~~Accendra ~~Minor~~Health, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(unaudited)

(in thousands, except per share data, unless otherwise indicated)

Note 1—Summary of Significant Accounting Policies

Basis of Presentation and Consolidation. The unaudited condensed consolidated financial statements include the accounts of Accendra Health, Inc. (f/k/a Owens & Minor, Inc.) and the subsidiaries it controls (collectively, the Company, we, us, or our) and contain all adjustments necessary to conform with ~~United States (~~U.S.) generally accepted accounting principles (GAAP). All significant intercompany accounts and transactions have been eliminated. ~~The~~Our results of operations for interim periods are not necessarily indicative of the results expected for the full year. In connection with the anticipated sale of our Products & Healthcare Services (P&HS) segment as detailed in the discontinued operations and assets held-for-sale section below, we determined that our continuing operations’ business activities comprise a single operating and reporting segment. This determination is in accordance with ASC No. 280, Segment Reporting.

Revision of Prior Period Consolidated Financial Statements. We revised our prior period financial statements to correct for a prior period accounting error that impacted our beginning retained earnings balance and total equity. The error, which was discovered during the first quarter of 2025, related to the over accrual of accounts payable that had accumulated over multiple years.

We assessed the materiality of the error, both quantitatively and qualitatively, in accordance with the SEC’s Staff Accounting Bulletin No. 99, and concluded that the error was not material to any of our previously reported financial statements based upon the nature of the error, including the immaterial annual quantitative impacts to prior period condensed consolidated statements of operations. Accordingly, the error was corrected through beginning retained earnings as of the earliest balance sheet date presented.

The cumulative impact of the error correction on our retained earnings and total equity as of the earliest balance sheet date presented, was an increase of $21 million. The error also resulted in a cumulative $23 million reduction to accounts payable, a $1.6 million increase to other current liabilities, and a $0.5 million increase to other liabilities as of December 31, 2023.

Reclassifications. Certain prior period amounts have been reclassified to conform to current year presentation.

Discontinued Operations and Assets Held-for-Sale. On February 28, 2025, we announced that we were actively engaged in discussions regarding the anticipated sale of our Products and Healthcare Services (P&HS) ~~segment~~business. On October 7, 2025, we, entered into an Equity Purchase Agreement, (the Purchase Agreement) by and among the Company, Dominion Healthcare Acquisition Corporation, a Delaware corporation (the Purchaser), and Dominion Healthcare Holdings, L.P., a Delaware limited partnership (Purchaser Parent) to sell the P&HS ~~segment~~business, for an aggregate of $375 million in cash, subject to certain adjustments for cash, indebtedness, net working capital and transaction expenses. WeOn ~~will~~December ~~retain~~31, a2025, 5%we ~~equity~~completed ~~interest~~the insale of the P&HS ~~segment.~~business ~~The~~pursuant ~~Purchaser will be required~~ to ~~pay~~the usPurchase aAgreement ~~termination fee under certain specified circumstances of $9.4 million or $19 million depending on~~ (the ~~stage~~P&HS ~~of regulatory approval and other criteria~~Sale). ~~The~~We ~~sale~~retained isa ~~subject~~5% toequity ~~customary~~interest ~~closing~~in ~~conditions, including~~ the ~~Hart~~P&HS ~~Scott~~business, ~~Rodino~~which ~~Act~~is ~~and~~reflected in other ~~regulatory approvals~~assets, ~~and~~net ison ~~expected~~our tocondensed ~~close~~consolidated inbalance ~~the first quarter of 2026~~sheets.

The P&HS ~~segment~~business was initially classified as discontinued operations and assets held for sale as of June 30, 2025. In accordance with GAAP, the financial position and results of operations of the P&HS ~~segment~~business are presented as discontinued operations and, as such, have been excluded from continuing operations for all periods presented. With the exception of Note 32, the Notes to the Condensed Consolidated Financial Statements reflect the continuing operations of ~~Owens~~the &Company ~~Minor, Inc.~~ unless otherwise noted. See Note 32 for additional information regarding discontinued operations and assets held for sale.

Use of Estimates. The preparation of consolidated financial statements in conformity with GAAP requires us to make assumptions and estimates that affect reported amounts and related disclosures. Significant estimates are used for, but are not limited to, variable consideration, depreciation and amortization, goodwill valuation, valuation of intangible assets and other long-lived assets, self-insurance liabilities, tax liabilities, defined benefit obligations, share-based compensation and other contingencies. Actual results may differ from these estimates.

~~Use~~Accounts ofReceivable, ~~Estimates~~Net. ~~The~~Due ~~preparation~~to the nature of ~~consolidated~~our ~~financial~~industry ~~statements~~and the reimbursement environment in ~~conformity~~which ~~with~~we ~~GAAP~~operate, ~~requires~~certain usestimates are required to ~~make~~record ~~assumptions~~net revenues and accounts receivable at their net realizable values, including estimating variable consideration. Inherent in these estimates is the risk that ~~affect~~they ~~reported~~will ~~amounts~~have to be revised or updated as additional information becomes available. Specifically, the complexity of many third-party billing arrangements, contractual terms, and ~~related~~the ~~disclosures~~uncertainty of reimbursement amounts for certain services may result in adjustments to amounts originally recorded. ~~Significant~~Such ~~estimates~~adjustments are ~~used~~typically ~~for~~identified and recorded at the point of cash application, claim amount or account review.

Included in accounts receivable were earned but unbilled receivables of $39 million as of March 31, 2026 and $30 million as of December 31, 2025. Delays, ranging from a single day to several weeks, between the date of service and billing can occur due to delays in obtaining certain required payor-specific documentation from internal and external sources. Earned but unbilled receivables are aged from date of service and are considered in our analysis of historical performance and collectability.

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~~but~~Receivables ~~are~~Sale ~~not~~Program. On ~~limited~~October 18, 2024, we entered into a Receivables Purchase Agreement (the Receivables Sale Program) with persons from time to time, ~~variable~~as ~~consideration~~Purchasers, ~~depreciation~~PNC Bank, National Association, as Administrative Agent, and ~~amortization~~PNC Capital Markets LLC, ~~goodwill~~as ~~valuation~~Structuring Agent, ~~valuation~~pursuant ofto ~~intangible~~which ~~assets~~accounts ~~and~~receivable ~~other~~with ~~long-lived~~an ~~assets~~aggregate outstanding amount not to exceed $450 million were sold, ~~estimated~~on ~~fair~~a ~~values~~limited-recourse ofbasis, to the ~~net~~Purchasers ~~assets~~in ~~acquired~~exchange for cash. Transactions under this agreement were accounted for as sales in ~~business~~accordance ~~combinations,~~with ~~self-insurance~~ASC ~~liabilities~~860, Transfers ~~tax~~and ~~liabilities~~Servicing, ~~defined~~with ~~benefit~~the ~~obligations~~sold receivables removed from our condensed consolidated balance sheets. Under the Receivables Sale Program, ~~share-based~~we ~~compensation~~provided certain servicing and ~~other~~collection ~~contingencies.~~actions ~~Actual~~on ~~results~~behalf ~~may~~of ~~differ~~the ~~from~~Purchasers; ~~these~~however, ~~estimates~~we did not maintain any beneficial interest in the accounts receivable sold.

Proceeds from the sales of accounts receivable were recorded as an increase to cash and cash equivalents and a reduction to accounts receivable, net in the condensed consolidated balance sheets. Cash received from the sales of accounts receivable is reflected in the change in accounts receivable within cash provided by operating activities in the condensed consolidated statements of cash flows. Total accounts receivable sold and net cash proceeds under the Receivables Sale Program were $343 million during the three months ended March 31, 2025, approximately $69 million of which related to continuing operations. We collected $209 million of the sold accounts receivable during the three months ended March 31, 2025, approximately $42 million of which related to continuing operations. The losses on sales of accounts receivable of continuing operations, inclusive of professional fees incurred to establish the agreement, recorded in selling, general, and administrative (SG&A) expenses in the condensed consolidated statements of operations were $0.4 million for the three months ended March 31, 2025. In connection with the amendment to the Receivables Sale Program, as described below, any uncollected accounts receivable sold were settled on December 31, 2025.

Amended Receivables Sale Program. On December 31, 2025, we entered into an Amended and Restated Receivables Purchase Agreement (the Amended Receivables Sale Program) with persons from time to time party thereto, as Purchasers, PNC Bank, as Administrative Agent, and PNC Capital Markets LLC, as Structuring Agent, pursuant to which accounts receivable are sold, on a limited-recourse basis, to the Purchasers in exchange for cash in an aggregate outstanding amount not to exceed $150 million. The Amended Receivables Sale Program amends and restates, in its entirety, the Receivables Sale Program dated as of October 18, 2024.

Transactions under this agreement are accounted for as sales in accordance with ASC 860, Transfers and Servicing, with the sold receivables removed from our condensed consolidated balance sheets. Under the Amended Receivables Sale Program, we provide certain servicing and collection actions on behalf of the Purchasers; however, we do not maintain any beneficial interest in the accounts receivable sold. The Amended Receivables Sale Program has a Scheduled Termination Date of October 18, 2027.

Total accounts receivable sold under the Amended Receivables Sale Program were $246 million during the three months ended March 31, 2026. We collected $231 million of the sold accounts receivable during the three months ended March 31, 2026. The losses on sale of accounts receivable recorded in SG&A were $1.5 million for the three months ended March 31, 2026. As of March 31, 2026 and December 31, 2025, there was a total of $148 million and $134 million of uncollected accounts receivable sold and removed from our condensed consolidated balance sheets under the Amended Receivables Sale Program.

~~Cash~~Retirement ~~and Cash Equivalents~~Plan. ~~Cash~~We ~~and~~have ~~cash~~a ~~equivalents~~frozen ~~include~~noncontributory, ~~cash~~unfunded ~~and~~retirement ~~marketable~~plan ~~securities~~for ~~with~~certain anretirees ~~original~~in ~~maturity~~the orU.S. ~~maturity at acquisition of three months or less~~(U.S. ~~Cash~~Retirement ~~and cash equivalents are stated at cost~~Plan). ~~Nearly~~As ~~all~~ of ~~our~~March ~~cash~~31, 2026 and ~~cash~~December ~~equivalents~~31, ~~are~~2025, ~~held~~the inaccumulated ~~cash~~benefit ~~depository~~obligation ~~accounts~~of ~~in major banks in~~ the U.S. ~~Cash~~Retirement ~~that~~Plan ~~has restrictions on its availability to us would be classified as restricted cash. There~~ was ~~no restricted cash as of September~~ $30~~, 2025~~ million and ~~December~~ $31~~, 2024~~ million.

~~The~~Revenue ~~following~~Recognition. ~~table~~Revenues ~~provides~~are generated through fee-for-service and capitation arrangements with large government and commercial payors (each, a ~~reconciliation~~Payor and collectively Payors) for equipment, supplies, services and other items rented and sold to patients. Revenue for sales of ~~cash~~products, including equipment and ~~cash~~supplies, ~~equivalents~~is ~~reported~~recognized ~~within~~when control of the ~~accompanying~~promised ~~condensed~~goods ~~consolidated~~is ~~balance~~transferred ~~sheets~~to customers and is presented net of applicable sales taxes. Revenue generated from equipment that ~~sum~~we rent to ~~the~~customers ~~total~~is ofprimarily ~~those~~recognized ~~same~~as ~~amounts~~earned ~~presented~~on ina straight-line basis over the ~~accompanying~~non-cancellable ~~condensed~~rental ~~consolidated~~period, ~~statements~~typically one month, and commences on delivery of ~~cash~~the ~~flows~~equipment to the customers.


	September 30, 2025		December 31, 2024
Cash and cash equivalents	$	32,837	$	27,572
Cash and cash equivalents of held for sale - discontinued operations		13,329		21,810
Total cash and cash equivalents	$	46,166	$	49,382

Book overdrafts represent the amount of outstanding checks issued in excess of related bank balances and are included in accounts payable in our condensed consolidated balance sheets, as they are similar to trade payables and are not subject to finance charges or interest. Changes in book overdrafts are classified as operating activities in our condensed consolidated statements of cash flows.

Accounts Receivable, Net. Due to the nature of our industry and the reimbursement environment in which we operate, certain estimates are required to record net revenues and accounts receivable at their net realizable values, including estimating variable consideration. Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. Specifically, the complexity of many third-party billing arrangements, contractual terms, and the uncertainty of reimbursement amounts for certain services may result in adjustments to amounts originally recorded. Such adjustments are typically identified and recorded at the point of cash application, claim amount or account review.

Included in accounts receivable were earned but unbilled receivables of $33 million as of September 30, 2025 and $30 million as of December 31, 2024. Delays, ranging from a single day to several weeks, between the date of service and billing can occur due to delays in obtaining certain required payor-specific documentation from internal and external sources. Earned but unbilled receivables are aged from date of service and are considered in our analysis of historical performance and collectability.

Inventories. Inventories, which primarily include medical supplies to be sold to customers, are determined using the first-in, first-out or weighted-average cost method at the lower of cost or net realizable value. We periodically evaluate whether inventory valuation allowance adjustments are required. In our evaluation, we review for obsolete inventory and slow-moving inventory which includes consideration of recent sales trends. We write down inventories which are considered excess and obsolete as a result of these assessments within cost of net revenue. Shifts in market trends and conditions, as well as changes in customer or payor preferences and behavior could affect the value of our inventories.

Patient Service Equipment and Other Fixed Assets, Net. Patient service equipment consists of medical equipment rented to customers, primarily on a month-to-month basis, as well as equipment that may be sold. Patient service equipment depreciation expense is classified in our condensed consolidated statements of operations within cost of net revenue for equipment rented to customers. Other fixed assets, net are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expense for financial reporting purposes is generally computed on a straight-line method over the estimated useful lives of the assets. In general, the estimated useful lives for computing depreciation are one to 10 years for patient service equipment, and up to 15 years for other fixed assets. Straight-line and

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~~accelerated~~extends ~~methods~~beyond ofone year. ~~depreciation~~These agreements are ~~used~~generally ~~for~~referred ~~income~~to ~~tax~~as ~~purposes~~capitation arrangements. ~~Normal~~Revenue ~~maintenance~~is ~~and~~recognized ~~repairs~~over the month that the members are ~~expensed~~entitled asto ~~incurred,~~healthcare ~~and~~services ~~renovations~~using ~~and~~the ~~betterments~~monthly ~~are~~contractual ~~capitalized~~rate for each covered member. WeThe ~~suspend~~actual ~~depreciation~~number ~~and~~of ~~amortization~~covered onmembers ~~assets~~may ~~that~~vary each month. Capitation payments are ~~held~~typically ~~for~~received ~~sale~~in the month members are entitled to healthcare services. Revenue for these agreements amounted to $32 million and $60 million for the three months ended March 31, 2026 and 2025.

Fee-for-service arrangement revenues are recorded only to the extent it is probable that a significant reversal will not occur in the future as amounts may include implicit price concessions under reimbursement arrangements with third-party payors, including private insurers, prepaid health plans, Medicare, Medicaid and customers. Revenue is recognized under a portfolio approach, as we expect that this approach would not differ materially from considering each contract or performance obligation separately. We use the expected value method in determining the variable consideration as part of determining the sales transaction price using historical reimbursement experience, historical sales returns, and other operating trends. Payment terms and conditions vary by contract. Sales of equipment and supplies inclusive of amounts recognized under capitation arrangements for the three months ended March 31, 2026 and 2025 were $481 million and $504 million. Rental revenues inclusive of amounts recognized under capitation arrangements for the three months ended March 31, 2026 and 2025 were $146 million and $170 million.

The following table summarizes net revenue by product category for the three months ended March 31, 2026 and 2025:


	Three Months Ended
	March 31,
	2026		2025
Diabetes	$	185,786	$	187,360
Sleep therapy		166,922		181,859
Home respiratory therapy		97,179		108,606
Ostomy		51,336		49,499
Wound care		39,402		46,646
Urology		29,790		28,143
Other		57,365		71,771
Net revenue	$	627,780	$	673,884

~~Leases.~~The Wefollowing ~~account~~table ~~for~~summarizes ~~all~~net ofrevenue ~~our~~by ~~lease~~payor ~~arrangements,~~type ~~including~~ for real estate, trucks, and patient service equipment, as operating leases. We enter into non-cancelable agreements to lease most of our office, branch and warehouse facilities with remaining terms generally ranging from one to six years. Certain building leases include renewal options which the ~~exercise~~three ofmonths isended atMarch ~~our sole discretion. We generally do not include options to renew (or terminate) in our lease term~~31, as2026 ~~part of our right-of-use assets~~ and lease liabilities, as we generally do not have leases for which we believe we are reasonably certain to exercise those options. Leases with a term of 12 months or less are not recorded on the condensed consolidated balance sheets; we recognize lease expense for these leases on a straight-line basis over the lease term. The depreciable lives of right-of-use assets are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.2025:

Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. We elected the practical expedient to not separate lease and non-lease components for our leases. Operating lease assets and liabilities are recognized at commencement date based on the present value of unpaid lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments. We use the implicit rate when readily determinable. The right-of-use assets also include adjustments for any lease payments made and lease incentives received.

Goodwill. We account for acquired businesses using the acquisition method of accounting, which requires that the assets acquired and liabilities assumed be recorded at the date of acquisition at their respective fair values. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill.

We evaluate goodwill for impairment annually, as of October 1, and if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Qualitative factors are first assessed to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If it is determined that it is more likely than not the fair value does not exceed the carrying amount, then a quantitative test is performed.

Intangible Assets, Net. Intangible assets acquired through purchases or business combinations are stated at fair value at the acquisition date and net of accumulated amortization in the condensed consolidated balance sheets. Intangible assets, consisting primarily of customer relationships, customer contracts and tradenames are amortized over their estimated useful lives. In determining the useful life of an intangible asset, we consider our historical experience in renewing or extending similar arrangements. Intangible assets are generally amortized over one to 15 years based on their pattern of economic benefit or on a straight-line basis. We suspend amortization on assets that are held for sale.

Computer Software. We develop and purchase software for internal use. Software development costs incurred during the application development stage are capitalized. Once the software has been installed and tested, and is ready for use, additional costs incurred in connection with the software are expensed as incurred. Capitalized computer software costs are amortized over the estimated useful life of the software, usually between three and 10 years. Capitalized computer software costs are included in other assets, net, in the condensed consolidated balance sheets. Unamortized software at September 30, 2025 and December 31, 2024 was $15 million and $26 million.

Long-Lived Asset Impairment Evaluation. Long-lived assets, which include patient service equipment, finite-lived intangible assets, right-of-use assets, unamortized software costs, and other fixed assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of long-lived assets may not be recoverable. We assess long-lived assets for the potential impairments by comparing the carrying value of an asset, or group of related assets, to their estimated undiscounted future cash flows.

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Self-Insurance Liabilities. We are self-insured for certain teammate healthcare, workers’ compensation and automobile liability costs; however, we maintain insurance for individual losses exceeding certain limits. Liabilities are estimated for healthcare costs using current and historical claims data. Liabilities for workers’ compensation and automobile liability claims are estimated using historical claims data and loss development factors. If the underlying facts and circumstances of existing claims change or the historical trends are not indicative of future trends, then we may be required to adjust the liability and related expense accordingly. Self-insurance liabilities are included in other current liabilities and other liabilities in the condensed consolidated balance sheets and were $27 million at September 30, 2025 and December 31, 2024.

Revenue Recognition. Revenues are primarily recognized under fee-for-service arrangements for sales of supplies, equipment and other items we sell to customers and equipment we rent to customers. Revenue for sales of products, including equipment and supplies, is recognized when control of the promised goods is transferred to customers and is presented net of applicable sales taxes. Revenue generated from equipment that we rent to customers is primarily recognized as earned on a straight-line basis over the non-cancellable rental period, typically one month, and commences on delivery of the equipment to the customers.

Fee-for-service arrangement revenues are recorded only to the extent it is probable that a significant reversal will not occur in the future as amounts may include implicit price concessions under reimbursement arrangements with third-party payors, including private insurers under both commercial and Medicare Advantage plans, prepaid health plans, Medicare, Medicaid and customers. Revenue is recognized under a portfolio approach, as we expect that this approach would not differ materially from considering each contract or performance obligation separately. We use the expected value method in determining the variable consideration as part of determining the sales transaction price using historical reimbursement experience, historical sales returns, and other operating trends. Payment terms and conditions vary by contract. Sales of equipment and supplies inclusive of amounts recognized under capitation arrangements for the three and nine months ended September 30, 2025 were $528 million and $1.5 billion and $517 million and $1.5 billion for the three and nine months ended September 30, 2024. Rental revenues inclusive of amounts recognized under capitation arrangements for the three and nine months ended September 30, 2025 were $169 million and $510 million and $170 million and $508 million for the three and nine months ended September 30, 2024.

Certain revenues are recognized under arrangements with third-party payors for which we stand ready to provide all necessary healthcare services to members for the period of the stand ready obligation which generally extends beyond one year. These agreements are generally referred to as capitation arrangements. Revenue is recognized over the month that the members are entitled to healthcare services using the monthly contractual rate for each covered member. The actual number of covered members may vary each month. Capitation payments are typically received in the month members are entitled to healthcare services. Revenue for these agreements amounted to $61 million and $182 million for the three and nine months ended September 30, 2025 and $60 million and $178 million for the three and nine months ended September 30, 2024.

The following table summarizes net revenue by product category:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024
Diabetes	$	201,372	$	202,761	$	579,788	$	577,112
Sleep therapy		185,799		177,153		549,280		519,427
Home respiratory therapy		107,256		108,968		325,388		327,463
Ostomy		53,274		50,555		154,666		142,181
Wound care		48,001		51,475		141,469		141,868
Urology		28,976		27,748		85,815		78,382
Other		72,586		68,186		216,659		198,656
Net revenue	$	697,264	$	686,846	$	2,053,065	$	1,985,089


	Three Months Ended
	March 31,
	2026		2025
Commercial payors ⁽¹⁾	$	493,206	$	543,528
Medicare		125,715		120,330
Medicaid		8,859		10,026
Net revenue	$	627,780	$	673,884

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The following table summarizes net revenue by payor type:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024
Commercial payors (1)	$	560,826	$	559,319	$	1,655,182	$	1,612,359
Medicare		126,785		117,388		368,839		342,429
Medicaid		9,653		10,139		29,044		30,301
Net revenue	$	697,264	$	686,846	$	2,053,065	$	1,985,089

⁽¹⁾ Commercial payors includes revenue from Medicare Advantage plans.

Cost of Net Revenue. Cost of net revenue includes the cost of products sold, patient service equipment depreciation expense, and other costs which are primarily personnel costs related to the set-up and utilization of equipment. Cost of product sold includes non-cash expenses primarily for equipment converted from rental to sales in the amount of $1110 million and $3512 million for the three ~~and nine~~ months ended ~~September 30~~March 31, ~~2025~~ ~~and~~2026 ~~$7.9 million~~ and ~~$23 million for the three and nine months ended September 30, 2024~~2025.


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024
Cost of product sold	$	337,649	$	317,445	$	974,554	$	921,312
Patient service equipment depreciation		31,694		31,303		95,260		95,342
Other costs		5,724		6,327		17,210		21,046
Cost of net revenue	$	375,067	$	355,075	$	1,087,024	$	1,037,700

Selling, General and Administrative (SG&A) Expenses. SG&A expenses include compensation costs, expenses for selling and administrative functions, shipping and handling costs and certain depreciation and amortization expense.

Shipping and Handling. Shipping and handling costs are included in SG&A expenses in the condensed consolidated statements of operations and include costs to store, move, and prepare products for shipment, as well as costs to deliver products to customers. Shipping and handling costs totaled $74 million and $213 million for the three and nine months ended September 30, 2025 and $68 million and $205 million for the three and nine months ended September 30, 2024.

Share-Based Compensation. We account for share-based compensation to teammates at fair value and recognize the related expense primarily in SG&A expenses over the service period for awards expected to vest. The fair value of non-vested performance shares is dependent upon our assessment of the probability of achievement of financial targets for the performance period.

Income Taxes. We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are provided if it is more likely than not that a deferred tax asset will not be realized. When we have claimed tax benefits that may be challenged by a tax authority, an estimate of the effect of these uncertain tax positions is recorded. It is our policy to provide for uncertain tax positions and related interest and penalties based upon an assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. To the extent that the tax outcome of these uncertain tax positions changes, based on our assessment, such changes in estimate may impact the income tax provision in the period in which such determination is made.

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~~Fair~~The ~~Value~~following ~~Measurements.~~table ~~Fair~~summarizes ~~value~~cost isof ~~determined~~net ~~based~~revenue onfor ~~assumptions~~the ~~that a market participant would use in pricing an asset or liability. The assumptions used are in accordance with a~~ three~~-tier~~ ~~hierarchy,~~months ~~defined~~ended byMarch ~~GAAP~~31, ~~that~~2026 draws a distinction between market participant assumptions based on (i) observable inputs such as quoted prices in active markets (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2) and ~~(iii) unobservable inputs that require the use of present value and other valuation techniques in the determination of fair value (Level 3).~~2025:

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued payroll and related liabilities reported in the condensed consolidated balance sheets approximate fair value due to the short-term nature of these instruments. The estimated fair value of our reporting unit determined during a quantitative review of goodwill utilizes unobservable inputs (Level 3).The fair value of debt is estimated based on quoted market prices or dealer quotes for the identical liability when traded as an asset in an active market (Level 1) or, if quoted market prices or dealer quotes are not available, on the borrowing rates currently available for loans with similar terms, credit ratings, and average remaining maturities (Level 2). See Note 8 for the fair value of debt. The fair value of our derivative contracts is determined based on the present value of expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Observable Level 2 inputs are used to determine the present value of expected future cash flows. See Note 10 for the fair value of derivatives.

Our acquisitions may include contingent consideration as part of the purchase price. The fair value of contingent consideration is estimated as of the acquisition date and at the end of each subsequent reporting period based on the present value of the contingent payments to be made using a weighted probability of possible payments (Level 3). Subsequent changes in fair value are recorded as adjustments to acquisition-related charges and intangible amortization within the consolidated statements of operations.

Acquisition-Related Charges and Intangible Amortization. Acquisition-related charges consist primarily of one-time costs related to the terminated acquisition of Rotech Healthcare Holdings Inc. (Rotech), which consisted primarily of legal and professional fees. For the nine months ended September 30, 2025, we incurred $22 million of acquisition-related costs. For the three and nine months ended September 30, 2024, we incurred $6.5 million and $10 million of acquisition-related costs related to the expected acquisition of Rotech Healthcare Holdings Inc. (Rotech), which consisted primarily of legal and professional fees. Acquisition-related charges and intangible amortization also include amortization of intangible assets established during acquisition method of accounting for business combinations. These amounts are highly dependent on the size and frequency of acquisitions.

Transaction Breakage Fee. As previously disclosed, on July 22, 2024, we entered into an Agreement and Plan of Merger (the Merger Agreement) pursuant to which we agreed to acquire Rotech subject to the terms and conditions within the Merger Agreement. On June 3, 2025, the Company, Rotech and Hitchcock Merger Sub Inc. (Merger Sub) mutually agreed to terminate the Merger Agreement and entered into a mutual termination agreement (the Termination Agreement). In accordance with the terms of the Termination Agreement, we incurred and made a cash payment to Rotech of $80 million during the nine months ended September 30, 2025.

Exit and Realignment Charges, Net. Exit and realignment charges, net consist of costs associated with optimizing our operations including significant changes to certain processes to increase net revenue and lower costs along with costs related to IT strategic initiatives and other strategic actions. These costs include, but are not limited to, professional fees, severance and other costs to streamline functions and processes. Costs associated with exit and realignment activities are recorded at their fair value when incurred. Liabilities are established at the cease-use date for remaining contractual obligations discounted using a credit-adjusted risk-free rate of interest. We evaluate these assumptions quarterly and adjust the liabilities accordingly. Severance benefits are generally recorded when payment is considered probable and reasonably estimable. These costs are not normal, cash operating expenses necessary for the Company to operate its business on an ongoing basis.

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Note 2—Significant Concentration Risks

During the nine months ended September 30, 2025, our two largest commercial payors represented approximately 23% and 14% of our net revenue, derived from multiple separately managed contracts. Revenue reimbursed under arrangements with Medicare and state Medicaid programs was approximately 19% of our net revenue for the nine months ended September 30, 2025. The largest commercial payor recently notified us that it intends to terminate certain of our contracts with them. The terminated agreements reflected $242 million or 12% of our net revenue, including $173 million of capitation revenue, which represents nearly all of our capitation revenue, for the nine months ended September 30, 2025.

During the nine months ended September 30, 2025, three suppliers each contributed between 10% and 25% of our patient service equipment and supplies purchases collectively accounting for approximately 48% of our total purchases.

Note 3—Discontinued Operations and Assets Held-for-Sale

On February 28, 2025, we announced that we were actively engaged in discussions regarding the anticipated sale of our P&HS segment. On October 7, 2025, we entered into the Purchase Agreement by and among the Company, the Purchaser, and Purchaser Parent to sell the P&HS segment, for an aggregate of $375 million in cash, subject to certain adjustments for cash, indebtedness, net working capital and transaction expenses. We will retain a 5% equity interest in the P&HS segment. The Purchaser will be required to pay us a termination fee under certain specified circumstances of $9.4 million or $19 million depending on the stage of regulatory approval and other criteria. The sale is subject to customary closing conditions, including the Hart Scott Rodino Act and other regulatory approvals, and is expected to close in the first quarter of 2026.

In accordance with GAAP, the financial position and results of operations of the P&HS segment are presented as discontinued operations and assets held for sale and, as such, have been excluded from continuing operations for all periods presented. The P&HS segment was initially classified as discontinued operations and assets held for sale as of June 30, 2025. Accordingly, the results of operations from our P&HS segment are reported in the accompanying condensed consolidated statements of operations as “Loss from discontinued operations, net of tax” for the three and nine months ended September 30, 2025 and 2024 and the related assets and liabilities are classified as held-for-sale as of September 30, 2025 and December 31, 2024 in the accompanying condensed consolidated balance sheets. We have allocated interest expense, net to discontinued operations as a ratio of net assets and total debt in accordance with ASC 205, Presentation of Financial Statements.

The remaining P&HS goodwill balance of $106 million was fully impaired during the second quarter of 2025. Our sale process provided a basis for the fair value of the P&HS segment, which includes the Global Products reporting unit. We recognized a loss of $123 million and $772 million during the three and nine months ended September 30, 2025 in connection with the classification of the related assets and liabilities as held-for-sale, based on the estimated fair value, less costs to sell. The fair value of the P&HS segment was determined from information received during our sale process, including the Purchase Agreement. Subsequent changes in fair value will be recorded within discontinued operations and assets held for sale.


	Three Months Ended
	March 31,
	2026			2025
Cost of product sold	$	315,392		$	317,389
Patient service equipment depreciation		28,889			31,683
Other costs		5,471			5,570
Cost of net revenue	$	349,752		$	354,642

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~~The~~Acquisition-Related ~~following~~Charges ~~table~~and ~~summarizes~~Intangible ~~the~~Amortization. Acquisition-related ~~financial~~charges ~~results~~consist primarily of ~~our~~one-time ~~discontinued~~costs ~~operations~~related ~~for~~to the ~~three~~terminated acquisition of Rotech Healthcare Holdings Inc. (Rotech), which consisted primarily of legal and ~~nine~~professional fees. For the three months ended ~~September 30~~March 31, 2026, we incurred no acquisition-related costs. For the three months ended March 31, 2025, we incurred $16 million of acquisition-related costs. Acquisition-related charges and ~~2024:~~intangible amortization also include amortization of intangible assets established during acquisition method of accounting for business combinations. These amounts are highly dependent on the size and frequency of acquisitions.


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024
Net revenue	$	2,007,078	$	2,034,279	$	5,945,052	$	6,019,721
Cost of goods sold		1,818,935		1,806,343		5,349,578		5,327,723
Gross profit		188,143		227,936		595,474		691,998
Distribution, selling, and administrative expenses		186,885		206,523		596,240		616,005
Acquisition-related charges and intangible amortization		—		6,243		12,549		18,491
Exit and realignment charges, net		25,122		15,365		57,713		48,467
Goodwill impairment charge		—		—		106,389		—
Loss on classification to held for sale		122,500		—		771,640		—
Other operating expense, net		2,217		6,680		6,923		9,806
Operating loss		(148,581)		(6,875)		(955,980)		(771)
Interest expense, net		7,636		7,601		27,828		28,158
Other expense		269		270		799		928
Loss from discontinued operations before income taxes		(156,486)		(14,746)		(984,607)		(29,857)
Income tax (benefit) provision for discontinued operations		(11,817)		(715)		(33,530)		17,838
Loss from discontinued operations, net of taxes	$	(144,669)	$	(14,031)	$	(951,077)	$	(47,695)

Fair Value. Fair value is determined based on assumptions that a market participant would use in pricing an asset or liability. The assumptions used are in accordance with a three-tier hierarchy, defined by GAAP, that draws a distinction between market participant assumptions based on (i) observable inputs such as quoted prices in active markets (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2) and (iii) unobservable inputs that require the use of present value and other valuation techniques in the determination of fair value (Level 3).

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued payroll and related liabilities reported in the condensed consolidated balance sheets approximate fair value due to the short-term nature of these instruments. When a quantitative goodwill test is performed, the estimated fair value of our reporting unit is determined with the use of unobservable inputs (Level 3).The fair value of debt is estimated based on quoted market prices or dealer quotes for the identical liability when traded as an asset in an active market (Level 1) or, if quoted market prices or dealer quotes are not available, on the borrowing rates currently available for loans with similar terms, credit ratings, and average remaining maturities (Level 2). See Note 5 for the fair value of debt. The fair value of our derivative contracts is determined based on the present value of expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Observable Level 2 inputs are used to determine the present value of expected future cash flows. See Note 6 for the fair value of derivatives.

Note 2—Discontinued Operations

15As described in Note 1, in accordance with GAAP, the financial position and results of operations of the P&HS business are presented as discontinued operations and, as such, have been excluded from continuing operations for all periods presented. The P&HS business was initially classified as discontinued operations and assets held for sale as of June 30, 2025. Accordingly, the results of operations from our P&HS business are reported in the accompanying condensed consolidated statements of operations as “loss from discontinued operations, net of tax” for the three months ended March 31, 2025. We have allocated interest expense, net to discontinued operations as a ratio of net assets and total debt in accordance with ASC 205, Presentation of Financial Statements.

On December 31, 2025, we received cash proceeds of $342 million and recorded a $20 million investment for a 5% retained equity interest, which was recorded in other assets, net on our condensed consolidated balance sheet as of December 31, 2025. Net proceeds of $324 million from the P&HS Sale, net of cash sold, reflects $342 million of cash proceeds received and $18 million of P&HS cash conveyed. The final purchase price will be determined subsequent to the completion of the sale to reflect adjustments in accordance with the Purchase Agreement, including final net working capital adjustments. As of December 31, 2025, we estimated a purchase price adjustment receivable of approximately

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~~The~~$12 ~~assets~~million ~~and~~to ~~liabilities~~$15 ofmillion, ~~the~~which ~~P&HS~~was ~~segment~~recorded ~~reflected~~within other current assets on ~~the~~our condensed consolidated balance ~~sheets~~sheet. atSubsequent ~~September 30, 2025,~~changes ~~and~~in ~~December~~fair ~~31,~~value ~~2024,~~will ~~are~~be asrecorded ~~follows:~~within discontinued operations.


	September 30,		December 31,
	2025		2024
Assets held for sale - discontinued operations
Cash and cash equivalents	$	13,329	$	21,810
Accounts receivable, net		383,581		471,971
Merchandise inventories		1,220,698		1,064,298
Intercompany receivable		160,000		—
Other current assets, net		111,808		67,275
Property and equipment, net		274,795		—
Operating lease assets		283,741		—
Intangible assets, net		76,775		—
Deferred tax assets		11,042		—
Valuation allowance on disposal group classified as held for sale		(771,640)		—
Current assets held for sale - discontinued operations		1,764,129		1,625,354
Property and equipment, net		—		260,064
Operating lease assets		—		228,699
Goodwill		—		103,140
Intangible assets, net		—		88,670
Deferred tax assets		—		6,726
Other noncurrent assets, net		—		43,894
Total assets held for sale - discontinued operations	$	1,764,129	$	2,356,547
Liabilities held for sale - discontinued operations
Accounts payable	$	868,107	$	868,764
Accrued payroll and related liabilities		36,109		77,046
Current portion of long-term debt		7,694		2,683
Other current liabilities		118,504		82,400
Operating lease liabilities, current portion		297,505		50,003
Deferred tax liabilities		17,886		—
Current liabilities held for sale - discontinued operations		1,345,805		1,080,896
Long-term debt, excluding current portion		—		9,654
Operating lease liabilities, excluding current portion		—		196,746
Other liabilities		—		28,474
Deferred tax liabilities		—		3,020
Total liabilities held for sale - discontinued operations	$	1,345,805	$	1,318,790

During the three months ended March 31, 2026, we incurred $18 million in separation costs to be reimbursed by the Company which are recorded within exit and realignment (income) charges, net on our condensed consolidated statement of operations and within accounts payable on our condensed consolidated balance sheet. We have agreed to reimburse the Purchaser and its affiliates for 80% of certain costs incurred in connection with the separation of P&HS from the Company’s retained business, subject to an aggregate cap of $65 million. We will be obligated to reimburse the Purchaser for any such costs incurred after December 31, 2025, except that such reimbursements will not need to be paid: (1) in advance of April 1, 2026; (2) for amounts in excess of $15 million prior to October 1, 2026, or (3) for amounts in excess of $55 million prior to January 1, 2027.

We and the Purchaser will provide certain transition services to the other party pursuant to a certain customary transition services agreement (TSA). Pursuant to the terms of the TSA, we have agreed that, in certain circumstances, we may be obligated to provide up to $115 million in credit support to the P&HS business. The TSA includes customary services including information technology support and is anticipated to be substantially completed within two years, with some services being completed by December 31, 2026. During the three months ended March 31, 2026, we have incurred $8.7 million in net fees for services received and for services provided under the TSA which are recorded within selling, general, and administrative expenses, net on our condensed consolidated statement of operations. During the three months ended March 31, 2026, we exited certain TSA activities and replaced them with internal capabilities. We expect to continue to exit certain TSA activities and replace with internal capabilities throughout the remainder of 2026.

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

Assets and liabilities held for sale as of September 30, 2025 are classified as current since we expect the divestiture to be completed within one year of the balance sheet date. As of December 31, 2024, the assets and liabilities held for sale are classified separately as current or noncurrent because the noncurrent assets and liabilities did not meet the criteria for current classification as of December 31, 2024. Merchandise inventories include $110 million subject to lien with an individual supplier as of September 30, 2025.


	Three Months Ended
	March 31, 2025
Net revenue	$	1,958,164
Cost of goods sold		1,751,393
Gross profit		206,771
Distribution, selling, and administrative expenses		201,241
Acquisition-related charges and intangible amortization		6,218
Exit and realignment charges, net		17,601
Other operating expense, net		1,377
Operating loss		(19,666)
Interest expense, net		9,745
Other expense		265
Loss from discontinued operations before income taxes		(29,676)
Income tax benefit for discontinued operations		(8,504)
Loss from discontinued operations, net of tax	$	(21,172)

Receivables Purchase Agreement

On March 14, 2023, we entered into the Receivables Purchase Agreement (RPA), pursuant to which accounts receivable with an aggregate outstanding amount not to exceed $200 million are sold, on a limited-recourse basis, to the Purchaser (as defined therein) in exchange for cash. We account for these transactions as sales with the sold receivables removed from our condensed consolidated balance sheets. Under the RPA, we provide certain servicing and collection actions on behalf of the Purchaser; however, we do not maintain any beneficial interest in the accounts receivable sold. The RPA is separate and distinct from the Receivables Sale Program and the amendment as described below. As a result of the amendment described below, the RPA was not utilized in the nine months ended September 30, 2025.

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Proceeds from the sale of accounts receivable are recorded as an increase to cash and cash equivalents and a reduction to current assets of discontinued operations, in the condensed consolidated balance sheets. Cash received from the sale of accounts receivable, net of payments made to the Purchaser, is reflected as cash provided by operating activities in the condensed consolidated statements of cash flows. The accounts receivable sold under the RPA were entirely accounts receivable of the P&HS segment. Total accounts receivable sold under the RPA were $542 million and $1.6 billion for the three and nine months ended September 30, 2024. During the three and nine months ended September 30, 2024, we received net cash proceeds of $538 million and $1.6 billion from the sale of accounts receivable under the RPA and collected $550 million and $1.6 billion of the sold accounts receivable. The losses on sale of accounts receivable, inclusive of professional fees incurred to establish the agreement, recorded in other operating expense, net in the financial results from discontinued operations were $3.6 million and $11 million for the three and nine months ended September 30, 2024.

Total accounts receivable sold and net cash proceeds under the Receivables Sale Program were $343 million during the three months ended March 31, 2025, approximately $274 million of which related to discontinued operations. We collected $209 million of the sold accounts receivable during the three months ended March 31, 2025, approximately $167 million of which related to discontinued operations. The losses on sales of accounts receivable of continuing operations, inclusive of professional fees incurred to establish the agreement, recorded in loss on discontinued operations, net of tax in the condensed consolidated statements of operations were $1.7 million for the three months ended March 31, 2025. As of December 31, 2025, there was no uncollected accounts receivable sold and removed from our consolidated balance sheet related to discontinued operations.

On October 18, 2024, O&M Funding LLC and Owens & Minor Medical, LLC., each a wholly-owned subsidiary of the Company, entered into a Receivables Purchase Agreement (the Receivables Sale Program) with persons from time to time, as Purchasers, PNC Bank, National Association, as Administrative Agent, and PNC Capital Markets LLC, as Structuring Agent, pursuant to which accounts receivable with an aggregate outstanding amount not to exceed $450 million are sold, on a limited-recourse basis, to the Purchasers in exchange for cash. The Receivables Sale Program amends and restates in its entirety, the Receivables Financing Agreement. Transactions under this agreement are accounted for as sales in accordance with ASC 860, Transfers and Servicing, with the sold receivables removed from our condensed consolidated balance sheets. Under the Receivables Sale Program, we provide certain servicing and collection actions on behalf of the Purchasers; however, we do not maintain any beneficial interest in the accounts receivable sold. Upon the completion of the sale of the P&HS segment the related accounts receivable will no longer be eligible for sale under the Receivables Sale Program as the program will not convey.

Proceeds from the sales of accounts receivable are recorded as an increase to cash and cash equivalents and a reduction to accounts receivable, net of allowances in the consolidated balance sheets. Cash received from the sales of accounts receivable is reflected in the change in accounts receivable within cash provided by operating activities in the consolidated statements of cash flows. The accounts receivable sold under the Receivables Sale Program were primarily accounts receivable of the P&HS segment. Total accounts receivable sold and net cash proceeds under the Receivables Sale program were $466 million and $1.3 billion during the three and nine months ended September 30, 2025, approximately $373 million and $1.0 billion of which were accounts receivable of the P&HS segment. We collected $465 million and $1.2 billion of the sold accounts receivable for the three and nine months ended September 30, 2025, approximately $372 million and $935 million of which were collections on accounts receivable of the P&HS segment. The losses on sales of accounts receivable were $3.0 million and $8.2 million for the three and nine months ended September 30, 2025, $2.4 million and $6.5 million of which relate to losses recorded in other operating expense, net in the financial results from discontinued operations.

As of September 30, 2025 and December 31, 2024, there was a total of $200 million and $70 million of uncollected accounts receivable sold and removed from our condensed consolidated balance sheets under the Receivables Sale Program, $160 million and $56 million of which relate to the assets of discontinued operations and assets held for sale. As of September 30, 2025 the $160 million of uncollected accounts receivable related to the assets of discontinued operations and assets held for sale is shown as an intercompany receivable within current assets of discontinued operations and assets held for sale with an equal amount reflected within other current liabilities in the condensed consolidated balance sheet.

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The following table provides significant non-cash operating, select operating and significant investing cash flow information for our discontinued operations and assets held for sale:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024
Operating Activities:
Loss from discontinued operations, net of tax	$	(144,669)	$	(14,031)	$	(951,077)	$	(47,695)
Significant non-cash adjustments to reconcile net loss to cash (used for) provided by operating activities:
Goodwill impairment charge		—		—		106,389		—
Loss on classification to held for sale		122,500		—		771,640		—
Depreciation and amortization		—		17,229		34,664		59,679
Share-based compensation		2,509		2,159		8,205		7,327
Changes in select operating assets and liabilities:
Accounts receivable, net		(24,023)		(4,168)		95,961		(43,211)
Inventories		3,846		2,307		(150,085)		(120,627)
Accounts payable		(137,985)		(38,154)		12,078		77,430
Investing Activities:
Capital expenditures	$	(12,272)	$	(16,167)	$	(39,190)	$	(27,317)
Proceeds from sale of corporate headquarters		—		—		—		33,500

Note 4—Patient Service Equipment and Other Fixed Assets, Net

Patient service equipment and other fixed assets, net, consists of the following:


	September 30, 2025		December 31, 2024
Patient service equipment	$	417,122	$	388,445
Building and leasehold improvements		15,881		23,955
Other fixed assets		29,713		20,628
Patient service equipment and other fixed assets, gross		462,716		433,028
Accumulated depreciation and amortization		(202,987)		(183,745)
Patient service equipment and other fixed assets, net	$	259,729	$	249,283

Note 5—Goodwill and Intangible Assets, Net

At September 30, 2025 and December 31, 2024, we had goodwill of $1.2 billion, net of accumulated goodwill impairment of $307 million.

Intangible assets, net subject to amortization, which excludes indefinite-lived intangible assets, at September 30, 2025 and December 31, 2024 were as follows:


	September 30, 2025						December 31, 2024
	Customer				Other		Customer				Other
	Relationships		Tradenames		Intangibles		Relationships		Tradenames		Intangibles
Intangible assets, gross	$	132,300	$	143,000	$	38,000	$	132,300	$	143,000	$	38,000
Accumulated amortization		(52,604)		(67,420)		(27,582)		(24,326)		(56,437)		(22,481)
Intangible assets, net	$	79,696	$	75,580	$	10,418	$	107,974	$	86,563	$	15,519
Weighted average useful life		5 years		10 years		6 years		15 years		10 years		6 years

Amortization expense for intangible assets was $29 million and $44 million for the three and nine months ended September 30, 2025 and $8.4 million and $33 million for the three and nine months ended September 30, 2024. The increase as compared to the prior year was driven by the remaining useful life for an intangible asset being modified

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~~as of June~~Note ~~30,~~3—Goodwill ~~2025~~and asIntangible aAssets, ~~result of a notice of a contract termination with a commercial Payor. The updated future intangible amortization is reflected in the table below.~~Net

AsAt ofMarch ~~September 30~~31, ~~2025,~~2026 ~~based~~and onDecember ~~the~~31, ~~current~~2025, ~~carrying~~we ~~value~~had goodwill of ~~intangible~~$1.2 ~~assets~~billion, ~~subject~~net toof ~~amortization~~accumulated ~~and~~goodwill ~~expected~~impairment ~~remaining~~of ~~useful~~$307 ~~life,~~million. ~~estimated amortization expense were as follows:~~


Year
2025 (remainder)	$	29,228
2026		68,122
2027		13,872
2028		11,953
2029		11,953
Thereafter		30,566
Total future amortization	$	165,694

Intangible assets, net subject to amortization, at March 31, 2026 and December 31, 2025 were as follows:

March 31, 2026

December 31, 2025

 

Customer

 

Other

 

Customer

 

Other

Relationships

Tradenames

Intangibles

Relationships

Tradenames

Intangibles

Intangible assets, gross

132,300

143,000

38,000

132,300

143,000

38,000

Accumulated amortization

(100,340)

(74,742)

(30,982)

(76,472)

(71,081)

(29,282)

Intangible assets, net

31,960

68,258

7,018

55,828

71,919

8,718

Weighted average useful life

7 years

10 years

6 years

6 years

10 years

6 years

~~Note~~Amortization expense for intangible assets was $29 million for the three months ended March 31, 2026 and $7.6~~—Leases~~ million for the three months ended March 31, 2025. The increase as compared to the prior year was driven by the remaining useful life for an intangible asset being modified as of June 30, 2025, as a result of a notice of a contract termination with a commercial Payor. The updated future intangible amortization is reflected in the table below.

As ~~The~~of ~~components~~March of31, ~~lease~~2026, ~~expense~~based ~~for~~on the ~~three~~current carrying value of intangible assets subject to amortization and ~~nine~~expected ~~months~~remaining ~~ended~~useful ~~September 30~~life, ~~2025~~ ~~and~~estimated ~~2024~~amortization ~~were~~expense was as follows:


			Three Months Ended September 30,
Year
	Classification		2025		2024
2026 (remainder)	$	38,893
Operating lease cost	SG&A expenses		$	14,355	$	14,152
2027		13,872
Short-term lease cost	SG&A expenses, Cost of net revenue			1,533		2,534
2028		11,953
Variable lease cost	SG&A expenses, Cost of net revenue			6,236		6,310
2029		11,953
Total lease cost			$	22,124	$	22,996
2030		11,953
Thereafter		18,612
Total future amortization	$	107,236


		Nine Months Ended September 30,
	Classification	2025		2024
Operating lease cost	SG&A expenses	$	39,818	$	41,665
Short-term lease cost	SG&A expenses, Cost of net revenue		5,071		8,040
Variable lease cost	SG&A expenses, Cost of net revenue		18,406		18,767
Total lease cost		$	63,295	$	68,472

Variable lease cost consists primarily of taxes, insurance, and common area or other maintenance costs for our leased facilities and patient service equipment which are paid as incurred.

~~Supplemental balance sheet information as of September~~Note ~~30, 2025~~4—Exit and ~~December~~Realignment 31(Income) Charges, ~~2024 was as follows:~~Net


		As of September 30,		As of December 31,
	Classification	2025		2024
Assets:
Operating lease assets	Operating lease assets	$	119,093	$	126,928
Liabilities:
Current operating leases	Other current liabilities	$	46,031	$	41,217
Noncurrent operating leases	Operating lease liabilities, excluding current portion		81,352		89,466
Total operating lease liabilities		$	127,383	$	130,683

We incur exit and realignment and other charges associated with optimizing our operations which include IT strategic initiatives and other strategic actions. These charges include professional fees, severance and other costs to streamline functions and enhance processes and separation costs. Separation costs primarily consist of professional fees including costs reimbursable to the Purchaser as described below and other wind-down costs incurred after the divestiture of the P&HS business. These costs are not normal, cash operating expenses necessary for the Company to operate its business on an ongoing basis.

Exit and realignment (income) charges, net were $(24) million and $14 million for the three months ended March 31, 2026 and 2025. These charges were primarily related to strategic operational improvements to increase net revenue and lower costs. During the three months ended March 31, 2026 exit and realignment income, net also included a $52 million gain on sales of patient service equipment in connection with the contract termination with a commercial Payor and P&HS Sale separation costs. During the three months ended March 31, 2025 exit and realignment charges, net also include a provision to accounts receivable related to our Fusion5 business which was in the process of being wound down.

As a result of the sale of our P&HS business, we have incurred $18 million in reimbursable separation costs during the three months ended March 31, 2026. We expect to incur up to $65 million in exit and realignment costs associated with reimbursement to the Purchaser for certain future separation costs incurred by the Purchaser, as described in Note 2.

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~~Other~~The ~~information~~following table summarizes the activity related to ~~leases~~exit ~~for~~and ~~the~~realignment ~~nine~~cost ~~months~~accruals, ~~ended~~which ~~September 30~~are generally classified as other current liabilities or accounts payable in our condensed consolidated balance sheets, ~~2025~~ ~~and~~through ~~2024~~March ~~was~~31, as2026 ~~follows~~and 2025:


	Nine Months Ended September 30,
	2025			2024
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	40,741		$	41,604

Right-of-use assets obtained in exchange for new operating lease liabilities	$	23,968		$	24,508

Weighted average remaining lease term (years)
Operating leases		3.2			3.7

Weighted average discount rate
Operating leases		6.7	%		6.4	%

Maturities of operating lease liabilities as of September 30, 2025 were as follows:


		Total
Accrued exit and realignment costs, December 31, 2025		$	4,644
Provision for exit and realignment activities:
P&HS Sale separation costs			21,981
Professional fees			378
IT and other strategic initiatives			1,990
Cash payments			(2,294)
Accrued exit and realignment costs, March 31, 2026		$	26,699



2025 (remainder)	$	13,444
2026		50,593
2027		36,517
2028		23,642
2029		11,813
Thereafter		5,630
Total lease payments		141,639
Less: Interest		(14,256)
Present value of lease liabilities	$	127,383


		Total
Accrued exit and realignment costs, December 31, 2024		$	6,732
Provision for exit and realignment activities:
Professional fees			6,176
IT strategic initiatives and other			304
Cash payments			(7,516)
Accrued exit and realignment costs, March 31, 2025		$	5,696

~~Note 7—Exit~~In addition to the exit and ~~Realignment~~realignment ~~Charges~~accruals in the preceding table and the $52 million gain on patient service equipment, ~~Net~~we also incurred $4.1 million of costs that were expensed as incurred during the three months ended March 31, 2026, which primarily related to P&HS Sale separation costs and $7.1 million of costs that were expensed as incurred for the three months ended March 31, 2025, which primarily related to wind-down costs of Fusion5.

Exit and realignment charges, net were $0.7 million and $17 million for the three and nine months ended September 30, 2025 and $14 million and $37 million for the three and nine months ended September 30, 2024. These charges were primarily related to strategic operational improvements to increase net revenue and lower costs as well as a provision to accounts receivable related to our Fusion5 business which is in the process of being wound down. We do not expect to incur material future costs relating to certain exit and realignment actions, which remain underway.

Note 5—Debt

Debt, net of unamortized deferred financing costs, as of March 31, 2026 and December 31, 2025 consisted of the following:

 

March 31, 2026

 

December 31, 2025

 

Carrying

 

Estimated

 

Carrying

 

Estimated

Amount

Fair Value

Amount

Fair Value

Term Loan A

325,069

313,608

324,647

321,356

Revolving Credit Facility

255,000

203,500

4.500% Senior Notes, due March 2029

475,352

285,632

475,077

327,261

Term Loan B

503,144

460,861

502,489

492,159

6.625% Senior Notes, due April 2030

544,626

262,831

544,163

348,901

Total debt

2,103,191

1,577,932

2,049,876

1,693,177

Less current maturities, including anticipated repayments

(581,250)

(250,000)

Long-term debt

1,521,941

996,682

1,799,876

1,443,177

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The following table summarizes the activity related to exit and realignment cost accruals, which are generally classified as other current liabilities in our condensed consolidated balance sheets, through September 30, 2025 and 2024:


	Total
Accrued exit and realignment costs, December 31, 2024	$	6,732
Provision for exit and realignment activities:
Professional fees		6,176
IT strategic initiatives and other		304
Cash payments		(7,516)
Accrued exit and realignment costs, March 31, 2025		5,696
Provision for exit and realignment activities:
Professional fees		1,916
IT strategic initiatives and other		192
Cash payments		(6,119)
Accrued exit and realignment costs, June 30, 2025		1,685
Provision for exit and realignment activities:
Professional fees		111
IT strategic initiatives and other		437
Cash payments		(863)
Accrued exit and realignment costs, September 30, 2025	$	1,370

Accrued exit and realignment costs, December 31, 2023	$	3,109
Provision for exit and realignment activities:
Professional fees		5,685
IT strategic initiatives and other		2,435
Cash payments		(2,463)
Accrued exit and realignment costs, March 31, 2024		8,766
Provision for exit and realignment activities:
Professional fees		12,453
IT strategic initiatives and other		2,982
Cash payments		(3,600)
Accrued exit and realignment costs, June 30, 2024		20,601
Provision for exit and realignment activities:
Professional fees		10,670
IT strategic initiatives and other		2,854
Cash payments		(16,842)
Accrued exit and realignment costs, September 30, 2024	$	17,283

On March 29, 2022, we entered into a term loan credit agreement with an administrative agent and collateral agent and a syndicate of financial institutions, as lenders (the Credit Agreement) that provides for two credit facilities: (i) a $500 million Term Loan A facility (the Term Loan A), and (ii) a $600 million Term Loan B facility (the Term Loan B). The interest rate on the Term Loan A is based on the sum of either Term SOFR or the Base Rate and an Applicable Rate which varies depending on the current Debt Ratings or Total Leverage Ratio, determined as to whichever shall result in more favorable pricing to the Borrowers (each as defined in the Credit Agreement). The interest rate on the Term Loan B is based on either the Term SOFR or the Base Rate plus an Applicable Rate. The Term Loan A will mature in March 2027 and the Term Loan B will mature in March 2029. The Term Loan A and Term Loan B have $326 million and $511 million of principal outstanding excluding unamortized deferred financing costs as of March 31, 2026.

In addition to the exit and realignment accruals in the preceding table, we also incurred $0.1 million and $7.7 million of costs that were expensed as incurred for the three and nine months ended September 30, 2025, which primarily related to wind-down costs of Fusion5.

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~~Note~~On March ~~8—Debt~~10, 2021, we issued $500 million of 4.500% senior unsecured notes due in March 2029 (the 2029 Unsecured Notes), with interest payable semi-annually. The 2029 Unsecured Notes were sold at 100% of the principal amount with an effective yield of 4.500%. The 2029 Unsecured Notes have $479 million in principal outstanding excluding unamortized deferred financing costs as of March 31, 2026.

~~Debt~~On March 29, ~~net~~2022, we issued $600 million of ~~unamortized~~6.625% ~~deferred~~senior ~~financing~~unsecured ~~costs,~~notes asdue ofin ~~September~~April ~~30, 2025~~2030 ~~and~~(the ~~December~~2030 31Unsecured Notes), ~~2024~~with ~~consisted~~interest payable semi-annually. The 2030 Unsecured Notes were sold at 100% of the ~~following:~~principal amount with an effective yield of 6.625%. The 2030 Unsecured Notes have $552 million in principal outstanding excluding unamortized deferred financing costs as of March 31, 2026.


	September 30, 2025				December 31, 2024
	Carrying		Estimated		Carrying		Estimated
	Amount		Fair Value		Amount		Fair Value
Term Loan A	$	324,224	$	329,513	$	322,957	$	327,066
Revolving Credit Facility		270,700		270,700		—		—
4.500% Senior Notes, due March 2029		474,802		385,273		473,976		427,117
Term Loan B		501,835		511,000		499,871		518,665
6.625% Senior Notes, due April 2030		543,700		455,479		542,311		518,671
Other		—		—		2,144		2,144
Total debt		2,115,261		1,951,965		1,841,259		1,793,663
Less current maturities, including anticipated repayments		(280,000)		(280,000)		(42,866)		(42,866)
Long-term debt	$	1,835,261	$	1,671,965	$	1,798,393	$	1,750,797

On March 29, 2022, we entered into a Security Agreement Supplement pursuant to which the Security and Pledge Agreement (the Security Agreement), dated March 10, 2021 was supplemented to grant collateral on behalf of the holders of the 2024 Notes, and the parties secured under the credit agreements including first priority liens and security interests in (a) all present and future shares of capital stock owned by the Grantors (as defined in the Security Agreement) in the Grantors’ present and future subsidiaries, subject to certain customary exceptions, and (b) all present and future personal property and assets of the Grantors, subject to certain exceptions.

On March 10, 2021, we issued $500 million of 4.500% senior unsecured notes due in March 2029 (the 2029 Unsecured Notes), with interest payable semi-annually. The 2029 Unsecured Notes were sold at 100% of the principal amount with an effective yield of 4.500%.

On March 29, 2022, we issued $600 million of 6.625% senior unsecured notes due in April 2030 (the 2030 Unsecured Notes), with interest payable semi-annually. The 2030 Unsecured Notes were sold at 100% of the principal amount with an effective yield of 6.625%.

The 2029 Unsecured Notes and the 2030 Unsecured Notes are subordinated to any of our secured indebtedness, including indebtedness under our credit agreements.

On March 29, 2022, we entered into an amendment to our revolving credit agreement, dated as of March 10, 2021 with an administrative agent and collateral agent and a syndicate of financial institutions, as lenders (Revolving Credit Agreement). The amendment: (i) increased the aggregate revolving credit commitments under the Revolving Credit Agreement by $150 million, to an aggregate amount of $450 million and (ii) replaced the Eurocurrency Rate with the Adjusted Term SOFR Rate (each as defined in the Revolving Credit Agreement). The Revolving Credit Agreement matures in March 2027.

At ~~September 30~~March 31, 2026 and December 31, 2025, we had $~~271~~255 million and $204 million in outstanding borrowings on our Revolving Credit Agreement. At March 31, 2026 and December 31, ~~2024~~2025, ~~our~~we had letters of credit, which reduce Revolving Credit Agreement ~~was~~availability, ~~undrawn.~~totaling At$29 ~~September~~ million and $30 million, ~~2025~~ leaving $166 million and ~~December~~$217 ~~31,~~million ~~2024,~~available wefor borrowing.

22As of March 31, 2026, the Term Loan A and the Revolving Credit Agreement are scheduled to mature within twelve months. Absent refinancing, extension, or repayment of these obligations, the Company would need additional liquidity to meet its obligations as they come due during the twelve-month period following the issuance of these financial statements. On May 11, 2026, we announced that we have received commitments from existing creditors to exchange and/or extend a substantial portion of our debt, which would extend the maturity of these obligations beyond twelve months from the balance sheet date (Balance Sheet Optimization Transaction), subject to satisfaction of certain customary conditions. Based on the signed commitments received and the actions planned and described below, management expects the Company will have sufficient liquidity to meet its obligations as they come due during the twelve-month period following the issuance of these financial statements.

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had letters of credit, which reduce Revolver availability, totaling $29 million and $31 million, leaving $150 million and $419 million available for borrowing.

The Revolving Credit Agreement, the Credit Agreement, the 2029 Unsecured Notes and the 2030 Unsecured Notes contain cross-default provisions which could result in the acceleration of payments due in the event of default of any of the related agreements. The terms of the applicable credit agreements also require us to maintain ratios for leverage and interest coverage, including on a pro forma basis in the event of an acquisition or divestiture. We were in compliance with our debt covenants at September 30, 2025.

As of September 30, 2025, future principal payments due under our debt agreements or anticipated to be repaid within twelve months, were as follows:


Year
2025 (remainder)	$	—
2026		280,000
2027		316,950
2028		—
2029		989,654
2030		552,189

We intend to amend and extend the Revolving Credit Agreement into a revolving credit facility maturing in 2030, subject to earlier maturity in December 2028 based on the amount of certain levels of future indebtedness, with aggregate commitments of up to $300 million, for which, subsequent to the balance sheet date, we received commitments from existing lenders under the Revolving Credit Agreement. We anticipate repaying the existing Revolving Credit Agreement using the proceeds from the P&HS business sale.

~~Current~~We ~~maturities~~intend atto ~~September 30, 2025~~refinance ~~represent~~the ~~$280~~Term ~~million~~Loan inA ~~debt~~through ~~anticipated~~the proceeds from the new 9.000% senior secured first lien notes due 2032 to be ~~repaid~~issued ~~within~~in connection with the Balance Sheet Optimization Transaction, for which subsequent to the balance sheet date, we received commitments from certain holders of the 2029 Unsecured Notes and 2030 Unsecured Notes, subject to satisfaction of certain customary conditions. While we have the intent and ability to refinance the Term Loan A beyond the next twelve months, inthese ~~connection~~commitments ~~with~~expire ~~expected~~within ~~net~~twelve ~~cash~~months ~~proceeds~~of ~~related~~the tobalance sheet date and therefore, the ~~Purchase~~outstanding ~~Agreement~~balance of the Term Loan A has been classified as a current liability as of March 31, 2026.

Note 9—Share-Based Compensation

We maintain a share-based compensation plan (the Plan) that is administered by the Our People & Culture Committee of the Board of Directors. The Plan allows us to award or grant to officers, directors and teammates incentive, non-qualified and deferred compensation stock options, stock appreciation rights (SARs), performance stock units and performance shares (collectively, Performance Stock Awards (PSAs)), restricted stock units and restricted stock (collectively, Restricted Stock Awards (RSAs)) and unrestricted stock. We use authorized and unissued common shares for grants of RSAs, SARs, PSAs or for stock option exercises. At September 30, 2025, approximately 2.2 million common shares were available for issuance under the Plan. We anticipate approximately 1.8 million unvested shares to be forfeited in connection with closing of the sale of the P&HS segment, which would increase the common shares available for issuance by this amount.

RSAs under the Plan generally vest over one, three or five years. PSAs under the Plan are issuable as restricted stock or common shares upon meeting performance goals and generally have a total performance and vesting period of three years. Under the 2018 Stock Incentive Plan, if outstanding equity awards are not assumed or substituted in connection with a change in control, unvested awards will vest in full upon the change in control. Under the 2023 Omnibus Incentive Plan, unless the individual award agreements provide otherwise, if the successor company assumes the awards, vesting of the award will be accelerated upon a subsequent termination of employment without cause or, if the teammate resigns for good reason, in each case, within 24 months following the change in control, with any performance-based awards deemed earned based on the target performance levels.

Share-based compensation (benefit) expense for the three and nine months ended September 30, 2025 was ($0.1) million and $9.2 million with recognized tax expense of less than $0.1 million and benefits of $2.4 million. Share-based compensation expense for the three and nine months ended September 30, 2024 was $3.5 million and $12.0 million with recognized tax benefits of $0.9 million and $3.1 million. For the three months ended September 30, 2025, we incurred a $4.0 million benefit for changes in expected performance achievement associated with our 2023, 2024, and 2025 PSAs. Unrecognized compensation cost related to nonvested RSAs, net of estimated forfeitures, was $27 million at September 30, 2025. This amount is expected to be recognized over a weighted-average period of 2.0 years, based on the maximum remaining vesting period required under the awards. Unrecognized compensation cost related to nonvested PSAs as of September 30, 2025 was $4.3 million and will be recognized primarily in 2025, 2026, and 2027 if the related performance targets are met at the current level expected.

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~~The~~In ~~following~~addition ~~table~~to ~~summarizes~~the impacts to the ~~activity~~Term Loan A and ~~value~~the ofRevolving ~~nonvested~~Credit ~~RSAs~~Agreement ~~and~~described ~~PSAs~~above, ~~for~~the Balance Sheet Optimization Transaction will include offers to exchange the ~~three~~ 2029 Unsecured Notes into a combination of new 9.000% senior secured first lien notes due 2032 and ~~nine~~new ~~months~~9.750% ~~ended~~senior ~~September 30~~secured second lien notes due 2033, ~~2025~~ ~~and~~as ~~2024:~~well as the 2030 Unsecured Notes into new 9.750% senior secured second lien notes due 2033.


	Three Months Ended
	September 30,
	2025			2024
		Weighted			Weighted
		Average			Average
		Grant-date Fair			Grant-date Fair
	Number of	Value		Number of	Value
	Shares	Per Share		Shares	Per Share
Nonvested awards at beginning of period	3,670	$	12.78	2,074	$	21.63
Granted	—		—	55		14.30
Vested	(93)		18.39	(12)		25.02
Forfeited	(53)		14.69	(101)		20.84
Nonvested awards at end of period	3,524		12.60	2,016		21.44

	Nine Months Ended
	September 30,
	2025			2024
		Weighted			Weighted
		Average			Average
		Grant-date Fair			Grant-date Fair
	Number of	Value		Number of	Value
	Shares	Per Share		Shares	Per Share
Nonvested awards at beginning of period	1,970	$	21.45	1,985	$	21.70
Granted	2,482		9.21	1,021		23.41
Vested	(652)		21.73	(671)		25.29
Forfeited	(276)		23.68	(319)		21.25
Nonvested awards at end of period	3,524		12.60	2,016		21.44

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As of March 31, 2026, future principal payments due under our debt agreements or anticipated to be repaid within twelve months, excluding the impact of the Balance Sheet Optimization Transaction described above, were as follows:

The total fair value of RSAs and PSAs vested during the three and nine months ended September 30, 2025 was $1.7 million and $14 million. The total fair value of RSAs and PSAs vested during the three and nine months ended September 30, 2024 was $0.3 million and $17 million.


Year
2026	$	255,000
2027		326,250
2028		—
2029		989,654
2030		552,189

~~Note 10—Derivatives~~Current maturities at March 31, 2026 include $255 million in debt anticipated to be repaid within the next twelve months in connection with net cash proceeds received from the P&HS business sale and $326 million in principal outstanding on the Term Loan A which matures in March 2027.

Note 6—Derivatives

We are directly and indirectly affected by changes in interest rates, which may adversely impact our financial performance and are referred to as “market risks.” When deemed appropriate, we use derivatives as a risk management tool to mitigate the potential impact of certain market risks. We do not enter into derivative financial instruments for trading purposes.

We pay interest on our Credit Agreement ~~which~~at ~~fluctuates~~rates that fluctuate based on changes in ~~our~~ benchmark interest rates. In order to mitigate the risk of increases in benchmark rates on our term loans, we entered into an interest rate swap agreement whereby we agree to exchange with the counterparty, at specified intervals, the difference between fixed and variable amounts calculated by reference to the notional amount. The interest rate swaps were designated as cash flow hedges. Cash flows related to the interest rate swap agreement are included in interest expense, net ~~within discontinued operations, refer to Note 3~~.

We determine the fair value of our interest rate swaps based on observable market-based inputs or unobservable inputs that are corroborated by market data. We do not view the fair value of our derivatives in isolation, but rather in relation to the fair values or cash flows of the underlying exposure. All derivatives are carried at fair value in our condensed consolidated balance sheets. We consider the risk of counterparty default to be minimal. We report cash flows from our hedging instruments in the same cash flow statement category as the hedged items.

24The following table summarizes the terms and fair value of our outstanding cash flow hedges as of March 31, 2026 and December 31, 2025:

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The following table summarizes the terms and fair value of our outstanding cash flow hedges as of September 30, 2025:


	March 31, 2026		December 31, 2025
	Notional				Derivative Assets			Derivative Liabilities
Notional Amount	$	200,000	$	250,000
	Amount		Maturity Date		Classification	Fair Value		Classification	Fair Value
Derivative Assets Fair Value	$	1,607	$	1,338
Interest rate swaps	$	250,000	March 2027		Other assets, net	$	2,001	Other liabilities	$	—
Derivative Liabilities Fair Value	$	—	$	—
Maturity Date		March 2027		March 2027
Classification		other current assets		other assets, net

The following table summarizes the terms and fair value of our outstanding cash flow hedges as of December 31, 2024:

Notional

Derivative Assets

Derivative Liabilities

Amount

Maturity Date

Classification

Fair Value

Classification

Fair Value

Interest rate swaps

300,000

March 2027

Other assets, net

6,113

Other liabilities

—

The notional amount of the interest rate swaps represents the amount in effect at the end of the period. Based on contractual terms, the notional amount will decrease in increments of $50 million on the last business day of March of each year until the maturity date.

The following table summarizes the effect of cash flow hedge accounting on our condensed consolidated statements of operations for the three and nine months ended September 30, 2025:


	Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss)					Total Amount of Expense Line Items Presented in the Condensed Consolidated Statement of Operations in Which the Effects are Recorded				Amount of Gain Reclassified from Accumulated Other Comprehensive Loss into Net Loss

	Three months ended September 30, 2025		Nine months ended September 30, 2025		Location of Gain Reclassified from Accumulated Other Comprehensive Loss into Income	Three months ended September 30, 2025		Nine months ended September 30, 2025		Three months ended September 30, 2025		Nine months ended September 30, 2025
Interest rate swaps	$	194	$	(1,127)	Loss from discontinued operations, net of tax	$	(144,669)	$	(951,077)	$	946	$	2,986

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The following table summarizes the effect of cash flow hedge accounting on our condensed consolidated statements of operations for the three months ended March 31, 2026 and 2025:

The amount of ineffectiveness associated with these contracts was immaterial for the period presented.


	Three Months Ended
	March 31,
	2026			2025
Amount of Gain Recognized in Other Comprehensive Income (Loss)	$	791		$	(1,078)
Location of Gain Reclassified from Accumulated Other Comprehensive Loss into Income	Interest expense, net			Interest expense, net
Total Amount of Expense Line Items Presented in the Condensed Consolidated Statements of Operations in Which the Effects are Recorded	$	32,348		$	24,214
Amount of Gain Reclassified from Accumulated Other Comprehensive Loss into Income	$	522		$	1,110

The ~~following~~amount ~~table summarizes the effect~~ of ~~cash~~ineffectiveness ~~flow~~associated ~~hedge~~with ~~accounting~~these oncontracts ~~our~~was ~~condensed~~immaterial ~~consolidated statements of operations~~ for the ~~three~~periods ~~and nine months ended September 30, 2024:~~presented.

Note 7—Income Taxes

The effective tax rate was 60.2% for the three months ended March 31, 2026, compared to 29.4% for the three months ended March 31, 2025. The change in these rates was primarily from changes in results of operations and changes in forecasted results reflected in the tax rates.

The liability for unrecognized tax benefits was $32 million and $49 million at March 31, 2026 and December 31, 2025. Included in the liability at March 31, 2026 and December 31, 2025 were no tax positions for which ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

On August 26, 2020, we received a Notice of Proposed Adjustment (NOPA) from the Internal Revenue Service (IRS) regarding our 2015 and 2016 consolidated income tax returns. On June 30, 2021, we received a NOPA from the IRS regarding our 2017 and 2018 consolidated income tax returns. Within the NOPAs, the IRS has asserted that our taxable income for the aforementioned years should be higher based on their assessment of the appropriate amount of taxable income that we should report in the U.S. in connection with our sourcing of products by our foreign subsidiaries for sale in the U.S. by our domestic subsidiaries. The transfer pricing methodology was consistently applied for all years subject to the NOPAs and 2019 into 2022, but is no longer employed.

In June 2024, the IRS and the relevant foreign taxing authority mutually agreed to proposed adjustments to our 2015 through 2018 consolidated tax returns. As a result, we remeasured the uncertain tax position for the 2015 through 2018 tax years, as well as the affected 2019 through 2022 tax years, to the amount expected to be paid upon a final agreement with the IRS. In June 2025, we received the final assessment from the IRS for the 2015 through 2018 tax years, including interest. The uncertain tax position for these years and related accrued interest have been remeasured to reflect the final amount to be paid. This matter does not impact our 2023, 2024 or future tax years. In March 2026, we paid $19 million to the IRS to settle the 2015 through 2018 audit years, inclusive of $5.8 million of accrued interest. As of March 31, 2026, the remaining amount owed associated with the transfer pricing matter was $16 million, which includes $5.2 million of interest accrued on the matter through March 31, 2026. The balance sheet classification and amount owed may be subject to change depending on the timing of a final assessment from the IRS for the 2019-2022 audit years.

On July 4, 2025, the U.S. Congress enacted budget reconciliation bill H.R. 1 referred to as the One Big Beautiful Bill (OBBB). The OBBB contains several changes to corporate taxation including modification to limitations on deductions for interest expense and accelerated fixed asset depreciation. We expect the legislation to decrease future U.S. cash taxes with no material impact to the effective tax rate.

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Note 8—Net Loss per Common Share

The following summarizes the calculation of net loss per common share attributable to common shareholders for the three months ended March 31, 2026 and 2025:


	~~Amount~~Three ofMonths ~~(Loss) Gain Recognized in Other Comprehensive Income (Loss)~~Ended					~~Total Amount of Expense Line Items Presented in the Condensed Consolidated Statement of Operations in Which the Effects are Recorded~~				~~Amount of Gain Reclassified from Accumulated Other Comprehensive Loss into Net Loss~~
	March 31,
	Three months ended September 30, 2024		Nine months ended September 30, 2024		Location of Gain Reclassified from Accumulated Other Comprehensive Loss into Income	Three months ended September 30, 2024		Nine months ended September 30, 2024		Three months ended September 30, 2024		Nine months ended September 30, 2024
(in thousands, except per share data)	2026		2025
Interest rate swaps	$	(4,872)	$	1,283	Loss from discontinued operations, net of tax	$	(14,031)	$	(47,695)	$	1,757	$	6,280
Loss from continuing operations, net of tax	$	(6,468)	$	(3,810)
Loss from discontinued operations, net of tax		—		(21,172)
Net loss	$	(6,468)	$	(24,982)

Weighted average shares outstanding - basic		76,432		77,272
Dilutive shares		—		—
Weighted average shares outstanding - diluted		76,432		77,272

Basic loss per common share:
Loss from continuing operations, net of tax	$	(0.08)	$	(0.05)
Loss from discontinued operations, net of tax		—		(0.27)
Net loss	$	(0.08)	$	(0.32)

Diluted loss per common share:
Loss from continuing operations, net of tax	$	(0.08)	$	(0.05)
Loss from discontinued operations, net of tax		—		(0.27)
Net loss	$	(0.08)	$	(0.32)

~~The~~Share-based ~~amount~~awards for the three months ended March 31, 2026 and 2025 of ~~ineffectiveness~~approximately 1.3 million ~~associated~~and ~~with~~1.8 ~~these~~million ~~contracts~~were ~~was~~excluded ~~immaterial~~from ~~for~~the calculation of diluted loss per common share as the ~~period~~effect ~~presented~~would be anti-dilutive.

Note 119—~~Income~~Shareholders’ ~~Taxes~~Equity

~~The~~On ~~effective~~February ~~tax~~26, ~~rate~~2025, ~~was~~our ~~(54.3)%~~Board ~~and~~of ~~0.8%~~Directors ~~for~~authorized ~~the~~a ~~three~~share ~~and~~repurchase ~~nine~~program ~~months~~of ~~ended~~up ~~September 30, 2025,~~to ~~compared~~$100 tomillion ~~(31.6)%~~through ~~and~~February 322027.2% ~~for~~Under the ~~three and nine months ended September 30~~program, ~~2024.~~ ~~The~~we ~~change~~may inrepurchase ~~these~~shares ~~rates were primarily from changes in results~~ of ~~continuing~~common ~~operations,~~stock ~~including~~on ~~the~~a ~~tax~~discretionary ~~treatment~~basis ~~associated~~from ~~with~~time ~~the~~to ~~$80~~time ~~million~~through ~~transaction~~open ~~breakage~~market ~~incurred during the nine months ended September 30~~repurchases, ~~2025,~~privately asnegotiated ~~well~~transactions asand ~~the impact of certain discrete tax items relative to pre~~10b5-~~tax~~1 ~~(loss)~~trading ~~income~~plans.

25During the three months ended March 31, 2026, we did not repurchase any shares. During the period from February 26, 2025 (the date the share repurchase program was authorized) through December 31, 2025, we repurchased shares in open-market transactions and retired approximately 2.0 million shares of our common stock for an aggregate of $10 million, or a weighted average price per share of $5.19.

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~~The liability for unrecognized tax benefits was $52 million and $36~~Note ~~million~~10—Accumulated atOther ~~September 30, 2025~~Comprehensive ~~and~~(Loss) December 31, 2024. Substantially all of the $16 million increase in the liability for unrecognized tax benefits was the result of the tax treatment associated with the $80 million Rotech transaction breakage fee. Included in the liability at September 30, 2025 and December 31, 2024 were no tax positions for which ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.Income

OnThe ~~August~~following ~~26,~~table ~~2020,~~shows wethe ~~received~~changes ain ~~Notice~~accumulated ofother ~~Proposed~~comprehensive ~~Adjustment~~ (~~NOPA~~loss) ~~from the Internal Revenue Service (IRS) regarding our 2015 and 2016 consolidated~~ income tax returns. On June 30, 2021, we received a NOPA from the IRS regarding our 2017 and 2018 consolidated income tax returns. Within the NOPAs, the IRS has asserted that our taxable income for the aforementioned years should be higher based on their assessment of the appropriate amount of taxable income that we should report in the U.S. in connection with our sourcing of products by ~~our~~component ~~foreign subsidiaries~~ for ~~sale in~~ the ~~U.S.~~three bymonths ~~our~~ended ~~domestic~~March ~~subsidiaries.~~31, ~~The~~2026 ~~transfer pricing methodology was consistently applied for all years subject to the NOPAs~~ and ~~2019 into 2022, but is no longer employed.~~2025:

In June 2024, the IRS and the relevant foreign taxing authority mutually agreed to proposed adjustments to our 2015 through 2018 consolidated tax returns. As a result, we remeasured the uncertain tax position for the 2015 through 2018 tax years, as well as the affected 2019 through 2022 tax years, to the amount expected to be paid upon a final agreement with the IRS. In June 2025, we received the final assessment from the IRS for the 2015 through 2018 tax years including interest. The uncertain tax position for these years and related accrued interest has been remeasured to reflect the final amount to be paid. This matter does not impact our 2023, 2024 or future tax years. As of September 30, 2025, we owed $37 million associated with the NOPA matter, which includes $11 million of interest accrued on the matter through September 30, 2025. The balance sheet classification and amount owed may be subject to change depending on the timing of a final agreement with the IRS.

On July 4, 2025, The U.S. Congress passed budget reconciliation bill H.R. 1 referred to as the One Big Beautiful Bill (OBBB). The OBBB contains several changes to corporate taxation including modification to limitations on deductions for interest expense and accelerated fixed asset depreciation. We expect the legislation to decrease future U.S. cash taxes with no material impact to the effective tax rate.

Note 12—Net (Loss) Income per Common Share

The following summarizes the calculation of net (loss) income per common share attributable to common shareholders for the three and nine months ended September 30, 2025 and 2024:


	~~Three Months Ended~~		Currency		~~Nine Months Ended~~
	~~September 30,~~Retirement		Translation		~~September 30,~~
(in thousands, except per share data)	2025		2024		2025		2024
	Plans		Adjustments		Derivatives		Total
(Loss) income from continuing operations, net of tax	$	(5,607)	$	1,261	$	(93,239)	$	(18,875)
Accumulated other comprehensive (loss) income, December 31, 2025	$	(1,876)	$	—	$	991	$	(885)
Loss from discontinued operations, net of tax		(144,669)		(14,031)		(951,077)		(47,695)
Other comprehensive income (loss) before reclassifications		43		(145)		791		689
Net loss	$	(150,276)	$	(12,770)	$	(1,044,316)	$	(66,570)
Income tax		(10)		—		(206)		(216)

Other comprehensive income (loss) before reclassifications, net of tax		33		(145)		585		473
Weighted average shares outstanding - basic		77,288		77,090		77,069		76,657
Amounts reclassified from accumulated other comprehensive income (loss)		—		—		(522)		(522)
Dilutive shares		—		1,386		—		—
Income tax		—		—		136		136
Weighted average shares outstanding - diluted		77,288		78,476		77,069		76,657
Amounts reclassified from accumulated other comprehensive income (loss), net of tax		—		—		(386)		(386)

Other comprehensive income (loss)		33		(145)		199		87
Basic loss per common share:
Accumulated other comprehensive (loss) income, three months ended March 31, 2026	$	(1,843)	$	(145)	$	1,190	$	(798)
(Loss) income from continuing operations, net of tax	$	(0.07)	$	0.02	$	(1.21)	$	(0.25)
Loss from discontinued operations, net of tax		(1.87)		(0.19)		(12.34)		(0.62)
Net loss	$	(1.94)	$	(0.17)	$	(13.55)	$	(0.87)

Diluted loss per common share:
(Loss) income from continuing operations, net of tax	$	(0.07)	$	0.02	$	(1.21)	$	(0.25)
Loss from discontinued operations, net of tax		(1.87)		(0.18)		(12.34)		(0.62)
Net loss	$	(1.94)	$	(0.16)	$	(13.55)	$	(0.87)


				Currency
	Retirement			Translation
	Plans			Adjustments			Derivatives			Total
Accumulated other comprehensive (loss) income, December 31, 2024	$	(5,770)		$	(48,099)		$	4,525		$	(49,344)
Other comprehensive income (loss) before reclassifications		953			5,957			(1,078)			5,832
Income tax		(247)			—			280			33
Other comprehensive income (loss) before reclassifications, net of tax		706			5,957			(798)			5,865
Amounts reclassified from accumulated other comprehensive income (loss)		120			—			(1,110)			(990)
Income tax		(31)			—			289			258
Amounts reclassified from accumulated other comprehensive income (loss), net of tax		89			—			(821)			(732)
Other comprehensive income (loss)		795			5,957			(1,619)			5,133
Accumulated other comprehensive (loss) income, three months ended March 31, 2025	$	(4,975)		$	(42,142)		$	2,906		$	(44,211)

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Share-based awards for the three and nine months ended September 30, 2025 of approximately 2.3 million and 2.2 million and 1.5 million shares for the nine months ended September 30, 2024 were excluded from the calculation of diluted loss per common share as the effect would be anti-dilutive. In accordance with ASC 260, dilutive shares are included in computing the diluted loss per common share from discontinued operations, net of tax and net loss per diluted common share for the three months ended September 30, 2024 even though they were anti-dilutive, as the control number (income from continuing operations, net of tax) was in an income position.

Note 13—Shareholders Equity

On February 26, 2025, our Board of Directors authorized a share repurchase program of up to $100 million and expires February 2027. Under the program, we may repurchase shares of common stock on a discretionary basis from time to time through open market repurchases, privately negotiated transactions and 10b5-1 trading plans.

During the nine months ended September 30, 2025, we repurchased in open-market transactions and retired approximately 826 thousand shares of our common stock for an aggregate of $6.6 million, or an average price per share of $8.04.

Note 14—Accumulated Other Comprehensive (Loss) Income

The following table shows the changes in accumulated other comprehensive (loss) income by component for the three and nine months ended September 30, 2025 and 2024:


			Currency
	Retirement		Translation
	Plans		Adjustments		Derivatives		Total
Accumulated other comprehensive (loss) income, June 30, 2025	$	(4,887)	$	(27,369)	$	2,037	$	(30,219)
Other comprehensive income (loss) before reclassifications		14		262		194		470
Income tax		(3)		—		(50)		(53)
Other comprehensive income (loss) before reclassifications, net of tax		11		262		144		417
Amounts reclassified from accumulated other comprehensive income (loss)		120		—		(946)		(826)
Income tax		(31)		—		246		215
Amounts reclassified from accumulated other comprehensive income (loss), net of tax		89		—		(700)		(611)
Other comprehensive income (loss)		100		262		(556)		(194)
Accumulated other comprehensive (loss) income, three months ended September 30, 2025	$	(4,787)	$	(27,107)	$	1,481	$	(30,413)

We include amounts reclassified out of accumulated other comprehensive (loss) income related to defined benefit pension plans as a component of net periodic pension cost recorded in Other expense, net.

Note 11—Segment Information

As described in Note 1, the P&HS Sale was completed on December 31, 2025, and we no longer report the P&HS business within continuing operations. The P&HS business was initially classified as discontinued operations and assets held for sale as of June 30, 2025. Our President and Chief Executive Officer is the chief operating decision maker (CODM). The CODM reviews financial information about the continuing operations business at an enterprise-wide consolidated level when allocating resources and assessing business performance. Accordingly, we have determined that our business activities comprise a single operating and reporting segment. Income (loss) from continuing operations, net of tax is the profit or loss measure used by the CODM that is most consistent with GAAP and therefore is the required measure of profitability.

2719

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			Currency
	Retirement		Translation
	Plans		Adjustments		Derivatives		Total
Accumulated other comprehensive (loss) income, June 30, 2024	$	(4,681)	$	(51,522)	$	7,459	$	(48,744)
Other comprehensive income (loss) before reclassifications		275		25,966		(4,872)		21,369
Income tax		(68)		—		1,267		1,199
Other comprehensive income (loss) before reclassifications, net of tax		207		25,966		(3,605)		22,568
Amounts reclassified from accumulated other comprehensive income (loss)		79		—		(1,757)		(1,678)
Income tax		(21)		—		457		436
Amounts reclassified from accumulated other comprehensive income (loss), net of tax		58		—		(1,300)		(1,242)
Other comprehensive income (loss)		265		25,966		(4,905)		21,326
Accumulated other comprehensive (loss) income, three months ended September 30, 2024	$	(4,416)	$	(25,556)	$	2,554	$	(27,418)

Note 12—Commitments, Contingent Liabilities, and Legal Proceedings

Refer to our Annual Report on Form 10-K for the year ended December 31, 2025 for disclosure of other material contractual obligations.

We are party to various legal claims that are ordinary and incidental to our business, including claims related to commercial disputes, employment, workers’ compensation, product liability, regulatory and other matters. We maintain insurance coverage for employment, product liability, workers’ compensation and other personal injury litigation matters, subject to policy limits, applicable deductibles and insurer solvency. We establish reserves from time to time based upon periodic assessment of the potential outcomes of pending matters.

Based on current knowledge and the advice of counsel, we believe that the accrual as of March 31, 2026 for currently pending matters considered probable of loss, is sufficient. In addition, we believe that other currently pending matters are not reasonably possible to result in a material loss, as payment of the amounts claimed is remote, the claims are immaterial, individually and in the aggregate, or the claims are expected to be adequately covered by insurance, subject to policy limits, applicable deductibles, exclusions and insurer solvency.


			Currency
	Retirement		Translation
	Plans		Adjustments		Derivatives		Total
Accumulated other comprehensive (loss) income, December 31, 2024	$	(5,770)	$	(48,099)	$	4,525	$	(49,344)
Other comprehensive income (loss) before reclassifications		966		20,992		(1,127)		20,831
Income tax		(250)		—		293		43
Other comprehensive income (loss) before reclassifications, net of tax		716		20,992		(834)		20,874
Amounts reclassified from accumulated other comprehensive income (loss)		360		—		(2,986)		(2,626)
Income tax		(93)		—		776		683
Amounts reclassified from accumulated other comprehensive income (loss), net of tax		267		—		(2,210)		(1,943)
Other comprehensive income (loss)		983		20,992		(3,044)		18,931
Accumulated other comprehensive (loss) income, nine months ended September 30, 2025	$	(4,787)	$	(27,107)	$	1,481	$	(30,413)


			Currency
	Retirement		Translation
	Plans		Adjustments		Derivatives		Total
Accumulated other comprehensive (loss) income, December 31, 2023	$	(5,115)	$	(32,954)	$	6,251	$	(31,818)
Other comprehensive income before reclassifications		694		7,398		1,283		9,375
Income tax		(173)		—		(334)		(507)
Other comprehensive income before reclassifications, net of tax		521		7,398		949		8,868
Amounts reclassified from accumulated other comprehensive income (loss)		241		—		(6,280)		(6,039)
Income tax		(63)		—		1,634		1,571
Amounts reclassified from accumulated other comprehensive income (loss), net of tax		178		—		(4,646)		(4,468)
Other comprehensive income (loss)		699		7,398		(3,697)		4,400
Accumulated other comprehensive (loss) income, nine months ended September 30, 2024	$	(4,416)	$	(25,556)	$	2,554	$	(27,418)

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Note 15—Commitments, Contingent Liabilities, and Legal Proceedings

On June 3, 2025, the Company, Rotech and Merger Sub mutually agreed to terminate the Merger Agreement and entered into the Termination Agreement. In accordance with the terms of the Termination Agreement, the Company made a cash payment to Rotech of $80 million on June 5, 2025. This payment fulfills the obligation as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.

Refer to our Annual Report on Form 10-K for the year ended December 31, 2024 for disclosure of other material contractual obligations.

We are party to various legal claims that are ordinary and incidental to our business, including ones related to commercial disputes, employment, personal injury, product liability, regulatory, workers’ compensation, and other matters. We maintain insurance coverage for employment, product liability, workers’ compensation and other personal injury litigation matters, subject to policy limits, applicable deductibles and insurer solvency. We establish reserves from time to time based upon periodic assessment of the potential outcomes of pending matters.

Based on current knowledge and the advice of counsel, we believe that the accrual as of September 30, 2025 for currently pending matters considered probable of loss, is sufficient. In addition, we believe that other currently pending matters are not reasonably possible to result in a material loss, as payment of the amounts claimed is remote, the claims are immaterial, individually and in the aggregate, or the claims are expected to be adequately covered by insurance, subject to policy limits, applicable deductibles, exclusions and insurer solvency.

Note 16—Segment Information

As described in Note 1, the P&HS segment has met the accounting requirements to be classified as discontinued operations and held for sale at September 30, 2025, and we no longer report the P&HS segment. The P&HS segment was initially classified as discontinued operations and assets held for sale as of June 30, 2025. Our President, Chief Executive Officer & Director is the chief operating decision maker (CODM). The CODM reviews financial information about the continuing operations business at an enterprise-wide consolidated level when allocating resources and assessing business performance. Accordingly, we have determined that our business activities comprise a single operating and reporting segment. Net income (loss) from continuing operations is the profit or loss measure used by the CODM that is most consistent with GAAP and therefore is the required measure of profitability.

Note 13—Recent Accounting Pronouncements

Refer to our Annual Report on Form 10-K for the year ended December 31, 2025 for disclosure of recent accounting pronouncements.

Note 14—Subsequent Events

On May 11, 2026, subsequent to March 31, 2026 but prior to the issuance of these condensed consolidated financial statements, the Company announced the Balance Sheet Optimization Transaction with commitments from existing creditors. We intend to refinance the Term Loan A through the proceeds from the issuance of new 9.000% senior secured first lien notes due 2032. We intend to amend and extend the Revolving Credit Agreement into a revolving credit facility maturing in 2030 with aggregate commitments of up to $300 million.

~~Note 17—Recent~~In ~~Accounting~~addition ~~Pronouncements~~to the impacts to the Term Loan A and the Revolving Credit Agreement described above, the Balance Sheet Optimization Transaction will include offers to exchange the 2029 Unsecured Notes into a combination of new 9.000% senior secured first lien notes due 2032 and new 9.750% senior secured second lien notes due 2033, as well as the 2030 Unsecured Notes into new 9.750% senior secured second lien notes due 2033.

In December 2023, the FASB Issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which will require additional annual income tax disclosures, including disclosure of reconciling items by jurisdiction and nature to the extent those items exceed a specified threshold. In addition, this ASU will require disclosure of income taxes paid, net of refunds received disaggregated by federal, state, and foreign and by jurisdiction if the amount is more than 5% of total income tax payments, net of refunds received. The amendments in this ASU are effective for us in annual periods beginning after December 15, 2024. The amendments in this ASU are required to be applied on a prospective basis and retrospective adoption is permitted. We expect this ASU to only impact our disclosures with no impacts to our results of operations, financial condition and cash flows.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses which will require additional disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The amendments in this ASU are effective for us in annual periods beginning after December 15, 2026. The amendments in this ASU are required to be applied on a prospective basis and retrospective adoption is permitted. We expect this ASU to only impact our disclosures with no impacts to our results of operations, financial condition and cash flows.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient permitting the

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assumption that conditions at the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current accounts receivable and current contract assets. The amendments in this ASU are effective for us in annual and interim periods beginning after December 15, 2025. We do not expect this ASU to have a material impact on our consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which will require capitalization of software costs when management has authorized and committed to funding software projects and it is probable that the project will be completed and the software will be used to perform the function intended. The amendments in this ASU are effective for us in annual periods beginning after December 15, 2027. The amendments in this ASU are required to be applied on a prospective basis and retrospective adoption is permitted. We are currently evaluating the effects of adopting this guidance on our consolidated financial statements.

Note 18—Subsequent Events

On October 7, 2025, we entered into the Purchase Agreement by and among the Company, the Purchaser, and Purchaser Parent to sell the P&HS segment, for an aggregate of $375 million in cash, subject to certain adjustments for cash, indebtedness, net working capital and transaction expenses. We will retain a 5% equity interest in the P&HS segment. The Purchaser will be required to pay us a termination fee under certain specified circumstances of $9.4 million or $19 million depending on the stage of regulatory approval and other criteria. The sale is subject to customary closing conditions, including the Hart Scott Rodino Act and other regulatory approvals, and is expected to close in the first quarter of 2026.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~The~~Sale ~~following discussion and analysis describes results~~ of ~~operations~~Products ~~and material changes in the financial condition of Owens~~ & ~~Minor, Inc.~~Healthcare ~~and~~Services its subsidiaries since December 31, 2024 on a continuing operations basis unless otherwise noted. Trends of a material nature are discussed to the extent known and considered relevant. This discussion should be read in conjunction with the consolidated financial statements, related notes thereto, and management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2024.Business

On February 28, 2025, we announced that we were actively engaged in discussions regarding the anticipated sale of our Products & Healthcare Services (P&HS) business. On October 7, 2025, we entered into an Equity Purchase Agreement (the Purchase Agreement) by and among the Company, Dominion Healthcare Acquisition Corporation, a Delaware corporation (the Purchaser), and Dominion Healthcare Holdings, L.P., a Delaware limited partnership (Purchaser Parent) to sell the P&HS business, for an aggregate of $375 million in cash, subject to certain adjustments for cash, indebtedness, net working capital and transaction expenses. On December 31, 2025, we completed the sale of the P&HS business pursuant to the Purchase Agreement. We retained a 5% equity interest in the P&HS business.

In accordance with GAAP, the financial position and results of operations of the P&HS business are presented as discontinued operations and, as such, have been excluded from continuing operations for all periods presented. With the exception of Note 2, the Notes to Condensed Consolidated Financial Statements reflect the continuing operations of Accendra Health, Inc. unless otherwise noted. See Note 2 in the Notes to Condensed Consolidated Financial Statements for additional information regarding discontinued operations.

Overview

~~Owens &~~Accendra ~~Minor~~Health, Inc., along with its subsidiaries, (collectively, the Company, we, us, or our) is a leading nationwide provider of ~~integrated equipment~~products, ~~supplies~~technology, and ~~related~~ services ~~supporting~~that ~~home-based~~supports ~~care~~health inbeyond the ~~United~~hospital ~~States~~for millions of people each year. As discussed within Note 1 in the Notes to Condensed Consolidated Financial Statements, our business activities comprise a single operating and reporting segment.

Net (loss) ~~income~~ from continuing operations per common share was ($0.0708) for the three months ended ~~September 30~~March 31, ~~2025~~2026 as compared to ($0.0205) for the three months ended ~~September 30~~March 31, ~~2024~~2025. Our financial results for the three months ended ~~September 30~~March 31, ~~2025~~2026 as compared to the ~~comparable~~ prior year ~~period~~ were impacted by anlower ~~increase~~net inrevenue ~~intangible amortization~~ of $2146 million and an increase in ~~costs~~interest ofexpense, net ~~revenue~~ of $208.1 million, partially offset by a decrease in exit and realignment ~~costs~~(income) ~~of $13 million~~charges, ~~an increase in~~ net ~~revenue~~ of $1037 million, and aan ~~decrease~~increased inincome ~~acquisition-related~~tax ~~costs~~benefit of $68.52 million.

Net loss from continuing operations per common share was ($1.21) for the nine months ended September 30, 2025 as compared to ($0.25) for the nine months ended September 30, 2024. Our financial results for the nine months ended September 30, 2025 as compared to the comparable prior year period were impacted by the transaction breakage fee of $80 million, transaction financing fees, net of $18 million, and an increase in acquisition-related costs of $12 million related to the terminated acquisition of Rotech, as well as an increase in costs of net revenue of $49 million, and an increase in intangible amortization of $12 million, partially offset by an increase in net revenue of $68 million, a decrease in exit and realignment costs of $20 million, and a decrease in selling, general and administration expenses of $16 million.

Refer to “Results of Operations” for further detail of quantitative and qualitative drivers of our results.

~~Purchase~~Balance ~~Agreement~~Sheet toOptimization ~~Sell the Products & Healthcare Services Segment~~Transaction

On ~~February~~May 2811, ~~2025~~2026, we announced that we ~~were~~have ~~actively~~received ~~engaged~~commitments infrom ~~discussions~~existing ~~regarding~~creditors ~~the~~to ~~sale~~exchange ofand/or ~~our~~extend ~~Products~~a &substantial ~~Healthcare~~portion ~~Services~~of ~~(P&HS)~~our ~~segment. On October 7~~debt, ~~2025,~~which wewould ~~entered~~extend ~~into~~ the ~~Purchase~~maturity ~~Agreement~~of bythese ~~and~~obligations ~~among~~beyond ~~the~~twelve ~~Company,~~months ~~the~~from ~~Purchaser, and Purchaser Parent to sell~~ the ~~P&HS~~balance ~~segment,~~sheet ~~for~~date an(Balance ~~aggregate~~Sheet ofOptimization ~~$375 million in cash~~Transaction), subject to ~~certain~~satisfaction ~~adjustments~~of ~~for cash, indebtedness, net working capital and transaction expenses. We will retain a 5% equity interest in the P&HS segment. The Purchaser will be required to pay us a termination fee under~~ certain ~~specified~~customary ~~circumstances of $9~~conditions.4 ~~million~~Based ~~or $19 million depending~~ on the ~~stage~~signed ofcommitments ~~regulatory~~received ~~approval~~ and ~~other criteria. The sale is subject to customary closing conditions, including~~ the ~~Hart~~actions ~~Scott~~planned ~~Rodino Act~~ and ~~other~~described ~~regulatory approvals~~below, ~~and~~management isexpects ~~expected~~the toCompany ~~close~~will inhave ~~the~~sufficient ~~first~~liquidity ~~quarter~~to ofmeet ~~2026.~~its Weobligations ~~remain~~as ~~committed~~they tocome ~~serving~~due ~~our~~during ~~P&HS~~the ~~segment~~twelve-month ~~customers~~period ~~through~~following the ~~closing~~issuance of ~~the~~these ~~sale~~financial statements.

~~The~~We ~~P&HS~~intend ~~segment~~to ~~was~~amend ~~initially~~and ~~classified~~extend asthe ~~discontinued~~Revolving ~~operations~~Credit ~~and~~Agreement ~~assets~~into ~~held~~a ~~for~~revolving ~~sale~~credit asfacility ofmaturing ~~June~~in 302030, ~~2025.~~subject Into ~~accordance~~earlier ~~with~~maturity ~~GAAP,~~in ~~the~~December ~~financial~~2028 ~~position~~based ~~and~~on ~~results~~the amount of ~~operations~~certain levels of ~~the~~future ~~P&HS~~indebtedness, ~~segment~~with ~~are~~aggregate ~~presented~~commitments asof ~~discontinued~~up ~~operations~~to ~~and~~$300 million, asfor ~~such~~which, ~~have~~subsequent ~~been~~to ~~excluded~~the ~~from~~balance ~~continuing~~sheet ~~operations~~date, ~~for~~we ~~all~~received ~~periods~~commitments ~~presented.~~from ~~See~~existing ~~Note~~lenders 3under in the ~~Notes to~~Revolving ~~Condensed~~Credit ~~Consolidated~~Agreement. ~~Financial~~We ~~Statements~~anticipate ~~for~~repaying ~~additional~~the ~~information~~existing ~~regarding~~Revolving ~~discontinued~~Credit ~~operations~~Agreement ~~and~~using ~~assets~~the ~~held~~proceeds ~~for~~from the P&HS business sale.

We intend to refinance the Term Loan A through the proceeds from the new 9.000% senior secured first lien notes due 2032 to be issued in connection with the Balance Sheet Optimization Transaction, for which subsequent to the balance sheet date, we received commitments from certain holders of the 2029 Unsecured Notes and 2030 Unsecured Notes, subject to satisfaction of certain customary conditions. While we have the intent and ability to refinance the Term Loan A beyond the next twelve months, these commitments expire within twelve months of the balance sheet date and therefore, the outstanding balance of the Term Loan A has been classified as a current liability as of March 31, 2026.

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~~Termination~~In ofaddition ~~Acquisition~~to the impacts to the Term Loan A and the Revolving Credit Agreement described above, the Balance Sheet Optimization Transaction will include offers to exchange the 2029 Unsecured Notes into a combination of ~~Rotech~~new 9.000% senior secured first lien notes due 2032 and new 9.750% senior secured second lien notes due 2033, as well as the 2030 Unsecured Notes into new 9.750% senior secured second lien notes due 2033.

AsContract previously disclosed, on July 22, 2024, we entered into an Agreement and Plan of Merger (the Merger Agreement) pursuant to which we agreed to acquire Rotech subject to the terms and conditions within the Merger Agreement. On June 3, 2025, the Company, Rotech and Merger Sub mutually agreed to terminate the Merger Agreement and entered into a mutual termination agreement (the Termination ~~Agreement). In accordance~~ with ~~the terms of the Termination Agreement, on June 5, 2025, we made~~ a ~~cash~~Commercial ~~payment~~Payor toand ~~Rotech~~Equipment ~~of $80 million.~~ Sales

~~Notice~~A commercial Payor, with which we have multiple separately managed contracts, has terminated, or is in the process of ~~Contract~~terminating, ~~Termination~~certain of our contracts with athem. ~~Commercial~~This termination resulted in minimal impacts to our operating income for the year ended December 31, 2025, as the transitions of agreements and services started late in the fourth quarter of 2025. While such transitions of agreements and services are expected to continue throughout the first half of 2026, the specific timing of when these agreements and services will wind down is highly dependent on the Payor’s successor provider’s ability to successfully transition customers among other factors. The terminated portion of this relationship reflected $37 million or 6% of our net revenue including nearly all of our capitation revenue, for the three months ended March 31, 2026. We do not anticipate material impacts to our operating income from such Payor's remaining contract terminations for periods ending beyond March 31, 2026.

A ~~commercial~~In ~~Payor,~~connection with ~~which~~this wecontract ~~have multiple separately managed contracts~~termination, ~~recently~~we ~~notified~~sold us$82 ~~that~~million ~~it intends to terminate certain~~ of ~~our~~patient ~~contracts~~service ~~with~~equipment ~~them.~~during Asthe athree ~~result~~months ofended ~~this~~March ~~notice~~31, ~~of termination~~2026, wewhich ~~expect~~resulted ~~net~~in ~~neutral~~$52 ~~impacts~~million toof ~~our~~gains ~~financial~~on ~~results~~sales ~~through the end~~ of ~~2025,~~patient asservice ~~the~~equipment ~~transitions~~within ofexit ~~agreements~~ and ~~services~~realignment ~~are~~(income) ~~expected~~charges, tonet ~~start~~on ~~late~~our incondensed ~~the~~consolidated ~~fourth~~statements ~~quarter~~ of ~~2025~~operations. ~~While~~The ~~such~~proceeds ~~transitions~~from ofthe ~~agreements~~sale ~~and services~~ are ~~expected~~reflected towithin ~~continue throughout~~ the ~~first~~proceeds ~~half~~from ofsale ~~2026, the specific timing~~ of ~~when~~patient ~~these~~service ~~contracts~~equipment ~~will~~line ~~wind~~item ~~down~~within ~~is highly dependent on~~ the ~~Payor’s~~investing ~~successor~~activities ~~provider’s~~section ~~ability to successfully transition customers among other factors. The terminated contracts reflected $242 million or 12%~~ of our ~~net~~condensed ~~revenue,~~consolidated ~~including~~statements ~~$173 million~~ of ~~capitation~~cash ~~revenue, which represents nearly all of our capitation revenue, for the nine months ended September 30, 2025~~flows.

Results of Operations

The following discussion and analysis describes results of operations and material changes in the financial condition of Accendra Health, Inc. and its subsidiaries since December 31, 2025. Trends of a material nature are discussed to the extent known and considered relevant. This discussion should be read in conjunction with the consolidated financial statements, related notes thereto, and management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2025.

Net revenue.


	Three Months Ended
	September 30,				Change
(Dollars in thousands)	2025		2024		$		%
Diabetes	$	201,372	$	202,761	$	(1,389)	(0.7)	%
Sleep therapy		185,799		177,153		8,646	4.9	%
Home respiratory therapy		107,256		108,968		(1,712)	(1.6)	%
Ostomy		53,274		50,555		2,719	5.4	%
Wound care		48,001		51,475		(3,474)	(6.7)	%
Urology		28,976		27,748		1,228	4.4	%
Other		72,586		68,186		4,400	6.5	%
Net revenue	$	697,264	$	686,846	$	10,418	1.5	%

~~Nine~~Three Months Ended

~~September~~March 3031,

Change

(Dollars in thousands)

~~2025~~2026

~~2024~~2025

Diabetes

~~579~~185,~~788~~786

~~577~~187,~~112~~360

2(1,~~676~~574)

(0.58)

Sleep therapy

~~549~~166,~~280~~922

~~519~~181,~~427~~859

29(14,~~853~~937)

5(8.72)

Home respiratory therapy

~~325~~97,~~388~~179

~~327~~108,~~463~~606

(211,~~075~~427)

(010.65)

Ostomy

~~154~~51,~~666~~336

~~142~~49,~~181~~499

121,~~485~~837

83.87

Wound care

~~141~~39,~~469~~402

~~141~~46,~~868~~646

(~~399~~7,244)

(015.35)

Urology

8529,~~815~~790

7828,~~382~~143

71,~~433~~647

9.5.9

Other

~~216~~57,~~659~~365

~~198~~71,~~656~~771

18(14,~~003~~406)

9(20.1)

Net revenue

2627,~~053,065~~780

1673,~~985,089~~884

67(46,~~976~~104)

3(6.48)

The increase in net revenue for the three and nine months ended September 30, 2025 was driven by sales growth in several product categories, including sleep therapy, ostomy and urology. The growth in these categories includes the benefits from certain successful sales activities including our Sleep Journey Initiative. Diabetes revenue growth has been hindered by market shifts of diabetes business away from our primary distribution channel.

32The decrease in net revenue for the three months ended March 31, 2026 was primarily driven by a $42 million decrease in revenue from the terminated commercial Payor contracts described above, which drove declines in several product categories, including sleep therapy and home respiratory therapy.

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Cost of net revenue.


	Three Months Ended
	~~September~~March 3031,				Change
(Dollars in thousands)	~~2025~~2026		~~2024~~2025		$		%
Cost of products sold	$	~~337~~315,~~649~~392	$	317,~~445~~389	$	20(1,~~204~~997)	6(0.46)	%
Patient service equipment depreciation		3128,~~694~~889		31,~~303~~683		~~391~~(2,794)	1(8.28)	%
Other costs		5,724		6,327		(603)	(9.5)	%
Cost of net revenue	$	375,067	$	355,075	$	19,992	5.6	%

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Other costs		5,471		5,570		(99)	(1.8)	%
Cost of net revenue	$	349,752	$	354,642	$	(4,890)	(1.4)	%
As a % of net revenue		55.7%		52.6%


	Nine Months Ended
	September 30,				Change
(Dollars in thousands)	2025		2024			$	%
Cost of products sold	$	974,554	$	921,312	$	53,242	5.8	%
Patient service equipment depreciation		95,260		95,342		(82)	(0.1)	%
Other costs		17,210		21,046		(3,836)	(18.2)	%
Cost of net revenue	$	1,087,024	$	1,037,700	$	49,324	4.8	%

The decrease in cost of net revenue for the three months ended March 31, 2026 reflects the lower cost associated with net revenue decline of 6.8%, partially offset by manufacturer price increases.

The increase in cost of net revenue for the three and nine months ended September 30, 2025 reflects the increased cost associated with sales volume growth of 3.7% and 4.1% and manufacturer prices increases.

Operating expenses.


	Three Months Ended
	~~September~~March 3031,						Change
(Dollars in thousands)	~~2025~~2026			~~2024~~2025			$		%
Selling, general and administrative expenses	$	~~265~~255,~~838~~226		$	~~272~~262,~~322~~370		$	(67,~~484~~144)	(2.47)	%
As a % of net revenue		3840.137	%		3938.659	%
Acquisition-related charges and intangible amortization	$	29,229		$	1423,~~855~~456		$	145,~~374~~773	9624.86	%
Exit and realignment charges, net	$	660		$	13,515		$	(12,855)	(95.1)	%
Exit and realignment (income) charges, net	$	(23,552)		$	13,625		$	(37,177)	(272.9)	%


	Nine Months Ended
	September 30,						Change
(Dollars in thousands)	2025			2024			$		%
Selling, general and administrative expenses	$	796,061		$	812,453		$	(16,392)	(2.0)	%
As a % of net revenue		38.77	%		40.93	%
Transaction breakage fee	$	80,000		$	—		$	80,000	NM	%
Acquisition-related charges and intangible amortization	$	66,603		$	42,905		$	23,698	55.2	%
Exit and realignment charges, net	$	16,826		$	37,062		$	(20,236)	(54.6)	%
NM - Not meaningful

The decrease in selling, general and administrative expenses (SG&A) for the three months ended March 31, 2026 was driven primarily from a reduction in net revenue of $46 million and realized personnel savings actions, partially offset by inflationary increases.

Acquisition-related charges were $16 million for the three months ended March 31, 2025 related to the terminated acquisition of Rotech, which consisted primarily of legal and professional fees. Intangible amortization was $29 million and $7.6 million for the three months ended March 31, 2026 and 2025 relating to intangible assets acquired in the Apria and Byram acquisitions. The increase as compared to the prior year was driven by the remaining useful life for an intangible asset being modified as of June 30, 2025, as a result of a notice of a contract termination with the commercial Payor described above.

~~The~~Exit ~~decrease~~and inrealignment ~~selling~~(income) charges, ~~general~~net ~~and~~was ~~administrative expenses~~ $(~~SG&A~~24) ~~expenses~~million for the three ~~and nine~~ months ended ~~September 30~~March 31, ~~2025~~2026 ~~were~~and primarily ~~from~~included a $~~4.0~~(52) million ~~benefit~~gain ~~associated~~on ~~with~~sales ~~updated~~of ~~expected~~patient ~~achievement~~service ~~for~~equipment ~~our~~in ~~performance~~connection ~~share~~with ~~awards,~~the acontract ~~reduction~~termination inwith ~~teammate~~the ~~incentive~~commercial ~~expense~~Payor ofdescribed ~~$0.8~~above, ~~million~~net ~~and~~separation ~~$10~~costs ~~million,~~incurred ~~operating~~after ~~efficiencies~~the inP&HS ~~our~~Sale ~~revenue~~of ~~cycle~~$26 million and ~~information~~charges ~~technology,~~related ~~partially~~to ~~offset~~IT byand ~~healthcare~~other ~~expense~~strategic ~~increases~~initiatives of $32.70 million. Exit and realignment (income) charges, net were $~~7.6~~14 million for the three months ended March 31, ~~inflationary~~2025. ~~increases~~These ~~and~~charges ~~the~~primarily ~~cost~~included toprofessional ~~service~~fees ~~the~~associated ~~revenue~~with ~~growth~~strategic initiatives of $106.2 million and wind-down costs of Fusion5 of $686.8 million~~, respectively~~.

Transaction breakage fee represents a cash payment to Rotech of $80 million made on June 5, 2025 for the termination of the Rotech acquisition.

Acquisition-related charges were $22 million for the nine months ended September 30, 2025, and $6.5 million and $10 million for the three and nine months ended September 30, 2024, consisting of costs for the terminated acquisition of Rotech, which related primarily to legal and professional fees. Intangible amortization was $29 million and $44 million for the three and nine months ended September 30, 2025 and $8.4 million and $33 million for the three and nine months ended September 30, 2024 relating to intangible assets acquired in the Apria and Byram acquisitions.

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The increase was due to the remaining useful life for an intangible asset being modified as of June 30, 2025 as a result of a notice of a contract termination with a commercial Payor. See Note 5 in the Notes to Condensed Consolidated Financial Statements for additional information regarding intangible amortization.

Exit and realignment charges, net were $0.7 million and $17 million for the three and nine months ended September 30, 2025. These charges included professional fees associated with strategic initiatives of $0.1 million and $8.2 million and IT strategic initiatives of $0.4 million and $0.9 million for the three and nine months ended September 30, 2025. For the nine months ended September 30, 2025 exit and realignment charges, net also included $6.8 million related to wind-down costs of Fusion5. Exit and realignment charges, net were $14 million and $37 million for the three and nine months ended September 30, 2024. These charges included professional fees associated with strategic initiatives of $11 million and $29 million and IT strategic initiatives of $2.9 million and $8.3 million for the three and nine months ended September 30, 2024.

Non-operating expenses.


	Three Months Ended
	September 30,						Change
(Dollars in thousands)	2025			2024			$		%
Interest expense, net	$	29,029		$	28,953		$	76	0.3	%
Effective interest rate		6.89	%		7.12	%
Other expense, net	$	1,076		$	1,168		$	(92)	(7.9)	%


		Three Months Ended
		March 31,						Change
(Dollars in thousands)		2026			2025			$			%
Interest expense, net		$	32,348		$	24,214		$	8,134		33.6	%
Effective interest rate			6.8	%		6.9	%
Other expense, net		$	1,023		$	975		$	48		4.9	%


	Nine Months Ended
	September 30,						Change
(Dollars in thousands)	2025			2024			$		%
Interest expense, net	$	79,252		$	79,949		$	(697)	(0.9)	%
Effective interest rate		6.97	%		7.14	%
Transaction financing fees, net	$	18,288		$	—		$	18,288	NM	%
Other expense, net	$	2,993		$	2,869		$	124	4.3	%
NM - Not meaningful

Interest expense, net for the three months ended March 31, 2026 increased compared to the prior year period during which we allocated interest expense, net to discontinued operations as a ratio of net assets and total debt in accordance with ASC 205, Presentation of Financial Statements. See Note 2 in the Notes to Condensed Consolidated Financial Statements for additional information regarding discontinued operations interest expense, net for the three months ended March 31, 2025.

Other expense, net for the three months ended March 31, 2026 and 2025 includes interest cost and net actuarial losses related to our U.S. retirement plan.

Interest expense, net for the three months ended September 30, 2025 increased due to a reduction in interest income of $1.9 million, partially offset by lower average outstanding borrowings of $48 million and a 23 basis point decline in our effective interest rate as compared to the three months ended September 30, 2024. Interest expense, net, for the nine months ended September 30, 2025 decreased due to a decrease in the effective interest rate of 17 basis points and lower average outstanding borrowings of $92 million, partially offset by a decrease in interest income of $6.6 million as compared to the nine months ended September 30, 2024. See Note 8 in the Notes to Condensed Consolidated Financial Statements.

Transaction financing fees, net for the nine months ended September 30, 2025 consisted of debt financing fees associated with the terminated acquisition of Rotech, including $12 million of costs, net of income on the related cash held in escrow, on the financing issued in connection with previously expected Rotech acquisition and $6.7 million in recognition of related previously deferred debt issuance costs.

Other expense, net for the three and nine months ended September 30, 2025 and 2024 includes interest cost and net actuarial losses related to our U.S. retirement plan.

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Income taxes.


	Three Months Ended
	September 30,						Change
(Dollars in thousands)	2025			2024			$		%
Income tax provision (benefit)	$	1,972		$	(303)		$	2,275	750.8	%
Effective tax rate		(54.3)	%		(31.6)	%


	~~Nine~~Three Months Ended
	~~September~~March 3031,						Change
(Dollars in thousands)	~~2025~~2026			~~2024~~2025			$		%
Income tax benefit	$	(~~743~~9,778)		$	(81,~~974~~588)		$	(8,~~231~~190)	91(515.7)	%
Effective tax rate		060.82	%		3229.24	%

The change in these rates ~~were~~was primarily from changes in results of operations asand ~~well~~changes asin ~~the~~forecasted ~~impact~~results ofreflected ~~certain~~in ~~discrete tax items relative to pre-tax (loss) income. The change for~~ the ~~nine months ended September 30, 2025 also includes the~~ tax ~~treatment associated with the $80 million transaction breakage fee~~rates.

~~Adjusted~~Non-GAAP ~~EBITDA~~Financial Measures

We use Adjusted EBITDA, a financial measure that is not in accordance with U.S. generally accepted accounting principles, or GAAP, to analyze our financial results and as one of our incentive metrics. In general, non-GAAP measures exclude items and charges that (i) management does not believe reflect the Company’s core business and relate more to strategic, multi-year corporate activities; or (ii) relate to activities or actions that may have occurred over multiple or in prior periods without predictable trends.

We believe Adjusted EBITDA is useful to investors as a supplemental metric to assist readers in assessing our financial performance and in comparing the Company’s performance to that of its competitors. However, this non-GAAP measure used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

Adjusted EBITDA disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and financial results calculated in accordance with GAAP and this reconciliation to those financial statements set forth below should be carefully evaluated.

The following tables present the reconciliations of (loss) income from continuing operations, net of tax to Adjusted EBITDA for the three and nine months ended September 30, 2025 and 2024:


	Three Months Ended September 30,
	2025		2024
(Loss) income from continuing operations, net of tax, as reported (GAAP)	$	(5,607)	$	1,261
Income tax provision (benefit)		1,972		(303)
Interest expense, net		29,029		28,953
Acquisition-related charges and intangible amortization (1)		29,229		14,855
Exit and realignment charges, net (3)		660		13,515
Litigation and related charges (5)		1,765		9,984
Other depreciation and amortization (7)		34,870		35,356
Stock compensation (8)		(168)		3,310
Other (6)		424		741
Adjusted EBITDA (non-GAAP)	$	92,174	$	107,672

The following financial measures, Adjusted EBITDA and Free Cash Flow (FCF), are not calculated in accordance with U.S. generally accepted accounting principles (GAAP). In general, non-GAAP measures exclude items and charges that (i) management does not believe reflect the Company’s core business and relate more to strategic, multi-year corporate activities; or (ii) relate to activities or actions that may have occurred in multiple or prior periods without predictable trends.

Management provides these non-GAAP financial measures to investors as supplemental metrics because management believes it is useful to assist readers in assessing the effects of items and events on its financial and operating results and in comparing the Company’s performance to that of its competitors. However, the non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

35The non-GAAP financial measures disclosed by the Company should not be considered substitutes for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements set forth below should be carefully evaluated.

We use Adjusted EBITDA, a financial measure that is not in accordance with GAAP, to analyze our financial results and as one of our incentive metrics and to provide an understanding of underlying operating results and trends by excluding items that are not closely related to ongoing operations. We use FCF, a financial measure that is not in accordance with GAAP, to evaluate the capacity of our operations to generate free cash flow. We utilize FCF as a performance metric.

The costs of the P&HS business that are classified as discontinued operations include only direct operating expenses. Indirect costs, such as those related to corporate and shared services previously allocated to the P&HS business, do not meet the criteria for discontinued operations and are reported within continuing operations. These costs (stranded costs) are reported within continuing operations and are included within Adjusted EBITDA.

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	Nine Months Ended September 30,
	2025		2024
Loss from continuing operations, net of tax, as reported (GAAP)	$	(93,239)	$	(18,875)
Income tax benefit		(743)		(8,974)
Interest expense, net		79,252		79,949
Acquisition-related charges and intangible amortization (1)		66,603		42,905
Transaction breakage fee (2)		80,000		—
Exit and realignment charges, net (3)		16,826		37,062
Transaction financing fees, net (4)		18,288		—
Litigation and related charges (5)		2,156		16,662
Other depreciation and amortization (7)		105,628		106,586
Stock compensation (8)		8,784		11,053
Other (6)		1,272		1,602
Adjusted EBITDA (non-GAAP)	$	284,827	$	267,970

The following tables present the reconciliations of loss from continuing operations, net of tax to Adjusted EBITDA and FCF for the three months ended March 31, 2026 and 2025:


		Three Months Ended March 31,
		2026		2025
Loss from continuing operations, net of tax, as reported (GAAP)		$	(6,468)	$	(3,810)
Income tax benefit			(9,778)		(1,588)
Interest expense, net			32,348		24,214
Acquisition-related charges and intangible amortization ⁽¹⁾			29,229		23,456
Exit and realignment (income) charges, net ⁽²⁾			(23,552)		13,625
Litigation and related charges ⁽³⁾			64		270
Other depreciation and amortization⁽⁴⁾			32,513		35,336
Stock compensation ⁽⁵⁾			3,604		4,091
Other ⁽⁶⁾			409		424
Adjusted EBITDA (non-GAAP)			58,369		96,018
Non-cash convert to sale write off expense⁽⁷⁾			10,416		11,531
Patient service equipment capital expenditures			(41,343)		(44,484)
Interest paid			(29,446)		(27,487)
Free cash flow (non-GAAP)		$	(2,004)	$	35,578

The following items have been excluded in our non-GAAP financial measure:

(1) Acquisition-related charges and intangible amortization for the ~~nine~~three months ended ~~September 30, 2025~~March ~~includes $22 million of acquisition-related costs related to the terminated acquisition of Rotech~~31, ~~which~~2025 ~~consisted primarily of legal and professional fees. Acquisition-related charges and intangible amortization for the three and nine months ended September 30, 2024~~ includes $~~6.5~~16 million ~~and $10 million~~ of acquisition-related costs related to the terminated acquisition of Rotech, which consisted primarily of legal and professional fees. Acquisition-related charges and intangible amortization also includes amortization of intangible assets established during acquisition method of accounting for business combinations. Acquisition-related charges consist primarily of one-time costs related to acquisitions, including transaction costs necessary to consummate acquisitions, which consist of investment banking advisory fees and legal fees, director and officer tail insurance expense, as well as transition costs, such as severance and retention bonuses, IT integration costs and professional fees. These amounts are highly dependent on the size and frequency of acquisitions and are being excluded to allow for a more consistent comparison with forecasted, current and historical results.

(2) ~~Transaction~~During ~~breakage~~the ~~fee~~three ~~represents~~months ended March 31, 2026 exit and realignment (income) charges, net was $(24) million and primarily included a ~~cash~~$(52) ~~payment~~million gain on sales of patient service equipment in response to ~~Rotech~~the contract termination with a commercial Payor, net separation costs incurred after the P&HS Sale of $8026 million ~~made~~and oncharges ~~June~~related 5,to ~~2025~~IT and other strategic initiatives of $2.0 million. Exit and realignment charges, net were $14 million for the ~~termination~~three months ended March 31, 2025 and primarily included professional fees associated with strategic initiatives of ~~the~~$6.2 ~~Rotech~~million ~~Acquisition~~and wind-down costs of Fusion5 of $6.8 million. These costs are not normal recurring, cash operating expenses necessary for the Company to operate its business on an ongoing basis.

(3) ~~During~~Litigation ~~the three~~ and ~~nine~~related ~~months ended September 30, 2025 exit and realignment~~ charges, ~~net~~includes ~~were~~settlement ~~$0.7~~costs ~~million~~ and ~~$17~~related ~~million. These~~ charges ~~included professional fees associated with strategic initiatives~~ of ~~$0.1~~legal ~~million and $8~~matters.2 ~~million~~These and IT strategic initiatives of $0.4 million and $0.9 million for the three and nine months ended September 30, 2025. During the nine months ended September 30, 2025 exit and realignment charges, net also included $6.8 million related to wind-down costs ofdo ~~Fusion5.~~not ~~Exit~~occur ~~and~~in ~~realignment charges, net were $14 million and $37 million for~~ the ~~three~~ordinary ~~and~~course ~~nine months ended September 30, 2024. These charges included professional fees associated with strategic initiatives~~ of ~~$11~~our ~~million~~business and ~~$29~~are ~~million~~inherently ~~and~~unpredictable ITin ~~strategic~~timing ~~initiatives of $2.9 million~~ and $8amount.3 million for the three and nine months ended September 30, 2024. These costs are not normal recurring, cash operating expenses necessary for the Company to operate its business on an ongoing basis.

(4) ~~Transaction~~Other ~~financing~~depreciation ~~fees,~~and ~~net~~amortization ~~includes~~relates ~~$12~~to ~~million,~~patient ~~net~~service ofequipment ~~income~~and onother ~~the~~fixed ~~related cash held in escrow~~assets, onexcluding ~~the~~such ~~financing~~amounts ~~issued~~captured inwithin ~~connection~~exit ~~with previously expected Rotech acquisition~~ and ~~$6.7~~realignment ~~million~~(income) incharges, ~~recognition~~net ofor acquisition-related ~~previously~~charges ~~deferred~~and ~~debt~~intangible ~~issuance costs~~amortization.

(5) ~~Litigation~~Stock ~~and~~compensation ~~related charges~~ includes ~~settlement~~share-based ~~costs~~compensation ~~and~~expense related ~~charges~~to ofour ~~certain~~share-based ~~legal~~compensation ~~matters.~~plans, ~~These~~excluding ~~costs~~such doamounts ~~not~~captured ~~occur~~within inexit ~~the~~and ~~ordinary~~realignment ~~course~~(income) ~~of our business~~charges, ~~are~~net ~~inherently~~or ~~unpredictable~~acquisition-related incharges ~~timing~~ and ~~amount~~intangible amortization.

(6) For the three ~~and nine~~ months ended ~~September 30~~March 31, ~~2025~~ 2026 and ~~2024~~2025, other includes interest costs and net actuarial losses related to our frozen noncontributory, unfunded retirement plan for certain retirees in the ~~United States (~~U.S.).

3625

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(7) ~~Other~~Non-cash ~~depreciation~~convert ~~and~~to ~~amortization~~sale ~~relates~~write tooff ~~patient~~expense ~~service~~includes non-cash charges primarily for equipment ~~and~~converted ~~other~~from ~~fixed~~rental ~~assets~~to sales, excluding such amounts captured within in exit and realignment (income) charges, net. orThis ~~acquisition~~reflects the non-~~related~~cash ~~charges~~write-off of the remaining book value of patient service equipment at the time of sale. The purchase of patient service equipment is captured within capital expenditures and ~~intangible~~is ~~amortization~~subsequently charged to our statements of operations through normal depreciation and this non-cash convert to sale write off expense. This line item does not include non-cash write off expense associated with sales of patient service equipment in connection with the contract termination with a commercial Payor, as such amounts are captured within exit and realignment (income) charges, net.

(8) Stock compensation includes share-based compensation expense related to our share-based compensation plans, excluding such amounts captured within exit and realignment charges, net or acquisition-related charges and intangible amortization. For the three and nine months ended September 30, 2025 stock compensation includes a $4.0 million benefit associated with updated expected achievement for our performance share awards.

Financial Condition, Liquidity and Capital Resources

Financial condition. We monitor operating working capital through days sales outstanding (DSO) ~~and inventory days~~. We estimate a hypothetical increase (decrease) in DSO of one day would result in a decrease (increase) in our cash balances, an increase (decrease) in borrowings against our Revolving Credit Agreement, or a combination thereof of approximately $7.60 million.

The majority of our cash and cash equivalents are held in cash depository accounts with major banks in the U.S. Changes in our working capital can vary in the normal course of business based upon the timing of capital expenditures, inventory purchases, collections of accounts receivable and payments to suppliers.


					Change
(Dollars in thousands)	~~September~~March 3031, ~~2025~~2026		December 31, ~~2024~~2025		$		%
Cash and cash equivalents	$	32336,~~837~~880	$	27281,~~572~~989	$	554,~~265~~891	19.15	%
Accounts receivable	$	202,731	$	218,270	$	(15,539)	(7.1)	%
Accounts receivable, net	$	103,703	$	95,907	$	7,796	8.1	%
DSO (1)		2614.79		2812.94
Inventories	$	63,847	$	67,581	$	(3,734)	(5.5)	%
Accounts payable	$	374,824	$	363,565	$	11,259	3.1	%
Inventory days (2)		15.7		17.2
Accounts payable	$	339,728	$	359,927	$	(20,199)	(5.6)	%

(1)Based on period end accounts receivable and net revenue for the quarters ended September 30, 2025 and December 31, 2024. Excluding the impact of the Receivables Sale Program, DSO would have been 32.0 and 30.7 as of September 30, 2025 and December 31, 2024.

(2)Based on period end inventories and cost of net revenue for the quarters ended September 30, 2025 and December 31, 2024.

Liquidity and capital expenditures. The following table summarizes our condensed consolidated statements of cash flows for the nine months ended September 30, 2025 and 2024:


	Nine Months Ended
	September 30,
(Dollars in thousands)	2025		2024
Net cash (used for) provided by:
Operating activities	$	(169,976)	$	90,494
Investing activities		(140,581)		(64,229)
Financing activities		305,574		(224,507)
Effect of exchange rate changes		1,767		408
Net decrease in cash, cash equivalents and restricted cash	$	(3,216)	$	(197,834)

(1)Based on period end accounts receivable and net revenue for the quarters ended March 31, 2026 and December 31, 2025. Excluding the impact of the Amended Receivables Sale Program, DSO would have been 36.1 and 29.8 as of March 31, 2026 and December 31, 2025.

~~Cash~~Liquidity ~~used~~and ~~for~~capital ~~operating~~expenditures. ~~activities~~The infollowing ~~the~~table ~~first~~summarizes ~~nine~~our ~~months~~condensed ofconsolidated ~~2025~~statements ~~reflected a net loss including the impact~~ of ~~the~~cash ~~$80~~flows ~~million termination fee of the Rotech acquisition, $18 million in transaction financing fees, net~~ for the ~~Rotech~~three ~~acquisition~~months ~~financing,~~ended ~~$22~~March ~~million in legal settlement payments for two litigation matters~~31, 2026 and unfavorable changes in working capital, including a $150 million increase in P&HS segment inventory, partially offset by a $130 million benefit from accounts receivables sold under the Receivables Sale Program, $104 million of which relates to accounts receivables sold of the P&HS segment. Cash provided by operating activities in the first nine months of 2024 reflected 2025:


	Three Months Ended
	March 31,
(Dollars in thousands)	2026		2025
Net cash provided by (used for):
Operating activities from continuing operations	$	(50,077)	$	31,478
Operating activities from discontinued operations		—		(66,544)
Operating activities		(50,077)		(35,066)
Investing activities from continuing operations		53,925		(31,648)
Investing activities from discontinued operations		—		(16,552)
Investing activities		53,925		(48,200)
Financing activities from continuing operations		51,084		95,851
Financing activities from discontinued operations		—		(3,073)
Financing activities		51,084		92,778
Effect of exchange rate changes		(41)		542
Net increase in cash and cash equivalents	$	54,891	$	10,054

Cash used for operating activities in the first three months of 2026 reflected a net loss and unfavorable changes in working capital, including $20 million in payments related to professional and closing costs of the P&HS Sale, a $19 million tax payment as described in Note 7 in the Notes to Condensed Consolidated Financial Statements and payments of teammate incentives. Cash used for operating activities in the first three months of 2025 reflected a net loss, unfavorable changes in working capital and cash used from discontinued operations of $67 million. Unfavorable

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~~unfavorable changes in~~ working capital, ~~including~~is atypical ~~$121~~during ~~million~~the ~~unfavorable~~first ~~change~~quarter inof the ~~P&HS~~year ~~segment~~due ~~inventory,~~to ~~partially~~the ~~offset~~nature byof aour ~~$77~~business ~~million~~and ~~favorable~~the ~~change~~annual inpayment ~~P&HS~~of ~~segment~~teammate ~~accounts payable~~incentives.

Cash used for investing activities in the first ~~nine~~three months of ~~2025~~2026 included capital expenditures of $~~192~~42 million, ~~including~~primarily ~~$144~~for ~~million of~~ patient service equipment, and our strategic and operational efficiency initiatives associated with other fixed assets and capitalized software, ~~partially~~ offset by $5396 million in proceeds from ~~the~~sales ~~regular sale~~ of patient service equipment and other fixed assets including $82 million in proceeds from sales as a result of the Payor contract termination. Cash used for investing activities in the first ~~nine~~three months of ~~2024~~2025 included capital expenditures of $~~157~~48 million, primarily for ~~the~~ patient service equipment, ~~other fixed assets~~ and ~~capitalized software, partially offset by~~ $8517 million in ~~regular~~cash ~~proceeds~~used from ~~sales~~discontinued ofoperations, ~~patient~~offset ~~service~~by ~~equipment and other fixed assets which included~~ $3417 million in ~~gross~~ proceeds ~~related~~from tosales ~~the sale~~ of ~~our~~patient ~~corporate~~service ~~headquarters, and $17 million included in the ‘other, net’ line item for settlement with Philips for returned~~ equipment.

Cash provided by financing activities in the first ~~nine~~three months of ~~2025~~2026 included net borrowings of $~~271~~52 million under our Revolving Credit Facility. Cash ~~used~~provided ~~for~~by financing activities in the first ~~nine~~three months of ~~2024~~2025 included ~~repayments~~net ofborrowings ~~debt~~ of $~~211~~98 million, including $171 million paid to redeem the 4.375% seniors notes that were due in December 2024, and $20 million of unscheduled and $20 million of scheduled repayments on term loans. We had no borrowings under our Revolving Credit Facility ~~for the first nine months of 2024 and the activity under our amended Receivables Financing Agreement netted to no impact on our outstanding borrowings~~. A bank administrative error by our agent bank on September 30, 2025 resulted in a bank overdraft of $47 million, which is reflected in Other, net. This matter was resolved the following business day. Payments for taxes related to the vesting of restricted stock awards, which are included in Other, net, were $8.1 million for the first nine months of 2024.

~~Refer~~Capital toResources. ~~Note~~Our 3primary tosources ~~the~~of ~~Notes~~liquidity toinclude ~~the~~cash ~~Condensed~~and ~~Consolidated~~cash ~~Financial~~equivalents, ~~Statements~~our ~~for~~Amended ~~the~~Receivables ~~operating~~Sale Program, and ~~investing~~our ~~cash~~Revolving ~~flow~~Credit ~~information~~Agreement. ~~for~~These funds are used to meet our ~~discontinued~~cash ~~operations~~obligations which primarily consist of debt service costs, capital expenditures including patient service equipment, inventory purchases, teammate costs, and ~~assets~~other ~~held~~operating ~~for~~and ~~sale.~~non-operating costs.

~~Capital~~On ~~Resources.~~December ~~Our~~31, ~~primary~~2025, ~~sources~~we ofentered ~~liquidity~~into ~~include~~an Amended and ~~cash~~Restated ~~and~~Receivables ~~cash~~Purchase ~~equivalents,~~Agreement (the Amended Receivables Sale Program) with persons from time to time party thereto, as Purchasers, PNC Bank, as Administrative Agent, and ~~our~~PNC ~~Revolving~~Capital ~~Credit~~Markets ~~Agreement~~LLC, as Structuring Agent, pursuant to which accounts receivable with an aggregate outstanding amount not to exceed $150 million are sold, on a limited-recourse basis, to the Purchasers in exchange for cash. Transactions under this agreement are accounted for as sales in accordance with ASC 860, Transfers and Servicing, with the sold receivables removed from our consolidated balance sheets.

OnTotal October 18, 2024, O&M Funding LLC and Owens & Minor Medical, LLC., each a wholly-owned subsidiary of the Company, entered into a Receivables Purchase Agreement (the Receivables Sale Program) with persons from time to time, as Purchasers, PNC Bank, National Association, as Administrative Agent, and PNC Capital Markets LLC, as Structuring Agent, pursuant to which accounts receivable ~~with an aggregate outstanding amount not to exceed $450 million are~~ sold, onunder ~~a limited-recourse basis, to~~ the ~~Purchasers~~Amended ~~in exchange for cash. The~~ Receivables Sale Program ~~amends~~were ~~and~~$246 million ~~restates~~during ~~in its entirety,~~ the ~~Receivables~~three ~~Financing~~months ~~Agreement.~~ended ~~Transactions~~March ~~under this agreement are accounted for as sales in accordance with ASC 860~~31, ~~Transfers and Servicing, with the sold receivables removed from our condensed consolidated balance sheets~~2026. ~~The~~ ~~accounts~~We ~~receivable~~collected ~~sold~~$231 ~~under~~million ~~the Receivables Sale Program were primarily accounts receivable~~ of the ~~P&HS~~sold ~~segment. Total~~ accounts receivable ~~sold and net cash proceeds under the Receivables Sale program were $466 million and $1.3 billion~~ during the three ~~and nine~~ months ended ~~September 30~~March 31, ~~2025,~~ ~~approximately~~2026. ~~$373~~The ~~million~~losses ~~and~~on ~~$1.0~~sale ~~billion~~ of ~~which were~~ accounts receivable ofrecorded ~~the~~in PSG&HSA ~~segment.~~were ~~We collected~~ $~~465 million and $~~1.25 ~~billion~~million ~~of the sold accounts receivable~~ for the three ~~and nine~~ months ended ~~September 30~~March 31, ~~2025,~~ ~~approximately~~2026. ~~$372~~As ~~million and $935 million~~ of ~~which~~March ~~were~~31, ~~collections~~2026 onand ~~accounts~~December ~~receivable~~31, of2025 ~~the~~there ~~P&HS~~was ~~segment.~~a ~~The~~total ~~losses on sales~~ of ~~accounts receivable were~~ $~~3.0~~148 million and $~~8.2~~134 million ~~for~~of ~~the~~uncollected ~~three~~accounts ~~and~~receivable ~~nine~~sold ~~months ended September 30, 2025, $2.4 million~~ and ~~$6.5~~removed ~~million~~from ofour ~~which~~consolidated ~~relate~~balance tosheet ~~losses~~under ~~recorded in other operating expense, net in~~ the ~~financial~~Amended ~~results~~Receivables ~~from~~Sale ~~discontinued operations~~Program.

The Revolving Credit Agreement provides a revolving borrowing capacity of $450 million. We have $837 million in outstanding term loans under a term loan credit agreement (the Credit Agreement). The interest rate on our Revolving Credit Agreement is based on a spread over a benchmark rate (as described in the Revolving Credit Agreement). The Revolving Credit Agreement matures in March 2027. The interest rate on the Term Loan A is based on either the Term SOFR or the Base Rate plus an Applicable Rate which varies depending on the current Debt Ratings or Total Leverage Ratio, determined as to whichever shall result in more favorable pricing to the Borrowers (each as defined in the Credit Agreement). The interest rate on the Term Loan B is based on either the Term SOFR or the Base Rate plus an Applicable Rate. The Term Loan A matures in March 2027 and the Term Loan B matures in March 2029.

38The Revolving Credit Agreement provides a revolving borrowing capacity of $450 million. We have $837 million in outstanding term loans under a term loan credit agreement (the Credit Agreement). The interest rate on our Revolving Credit Agreement is based on a spread over a benchmark rate (as described in the Revolving Credit Agreement). The Revolving Credit Agreement matures in March 2027.

At March 31, 2026 and December 31, 2025, we had $255 million and $204 million in outstanding borrowings on our Revolving Credit Agreement. At March 31, 2026 and December 31, 2025 we had letters of credit, which reduce Revolving Credit Agreement availability, totaling $29 million and $30 million, leaving $166 million and $217 million available for borrowing.

The interest rate on the Term Loan A is based on either the Term SOFR or the Base Rate plus an Applicable Rate which varies depending on the current Debt Ratings or Total Leverage Ratio, determined as to whichever shall result in more favorable pricing to the Borrowers (each as defined in the Credit Agreement). The interest rate on the Term Loan B is based on either the Term SOFR or the Base Rate plus an Applicable Rate. The Term Loan A matures in March 2027 and the Term Loan B matures in March 2029.

The Revolving Credit Agreement, the Credit Agreement, the Amended Receivables Sale Program, the 2029 Unsecured Notes, and the 2030 Unsecured Notes contain cross-default provisions which could result in the acceleration of payments due in the event of default of any of the related agreements. The terms of the applicable credit agreements

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Atalso ~~September 30, 2025,~~require weus ~~had~~to ~~$271~~maintain ~~million~~ratios in outstanding borrowings on our Revolving Credit Agreement. At December 31, 2024, our Revolving Credit Agreement was undrawn. At September 30, 2025 and December 31, 2024, we had letters of credit, which reduce Revolver availability, totaling $29 million and $31 million, leaving $150 million and $419 million available for ~~borrowing.~~leverage ~~We also had letters of credit~~ and ~~bank~~interest ~~guarantees which support certain leased facilities as well as other normal business activities within our P&HS segment~~coverage, ~~which~~including ison ~~classified~~a aspro ~~held-for-sale~~forma asbasis ~~of September 30, 2025,~~ in the ~~United~~event ~~States and Europe that were issued outside~~ of ~~the~~an ~~Revolving~~acquisition ~~Credit~~or ~~Agreement for $3~~divestiture.5 ~~million~~We ~~and~~were ~~$2.9~~in ~~million~~compliance aswith ofour ~~September 30, 2025~~debt ~~and~~covenants ~~December~~at March 31, ~~2024~~2026.

The Revolving Credit Agreement, the Credit Agreement, the Receivables Sale Program, the 2029 Unsecured Notes, and the 2030 Unsecured Notes contain cross-default provisions which could result in the acceleration of payments due in the event of default of any of the related agreements. The terms of the applicable credit agreements also require us to maintain ratios for leverage and interest coverage, including on a pro forma basis in the event of an acquisition or divestiture. We were in compliance with our debt covenants at September 30, 2025.

On April 4, 2025, we completed the sale of $1.0 billion aggregate principal amount of 10.000% Senior Secured Notes due 2030 (the New Notes) in a private offering (the Offering) to persons reasonably believed to be “qualified institutional buyers” in the United States, as defined in Rule 144A under the Securities Act of 1933, as amended (the Securities Act), and to certain non-U.S. persons outside the United States in offshore transactions pursuant to Regulation S under the Securities Act. The Offering was conducted in connection with the financing of the Company’s proposed acquisition of Rotech. At the closing of the Offering, the gross proceeds were placed into a segregated escrow account where they were held for the benefit of the holders of the New Notes pending the consummation of the proposed acquisition of Rotech.

On June 3, 2025, the Company, Rotech and Merger Sub mutually agreed to terminate the Merger Agreement and entered into a mutual termination agreement (the Termination Agreement). On June 10, 2025 (the Redemption Date), the New Notes were redeemed in full at a price equal to 100% of the aggregate principal amount of the New Notes, plus accrued and unpaid interest up to, but excluding the Redemption Date.

We regularly evaluate market conditions, our liquidity profile and various financing alternatives to enhance our capital structure. We have from time to time, entered into, and from time to time in the future, we may enter into transactions to repay, repurchase or redeem our outstanding indebtedness (including by means of open market purchases, privately negotiated repurchases, tender or exchange offers and/or repayments or redemptions pursuant to the debt’s terms). Our ability to consummate any such transaction will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. We cannot provide any assurance as to if or when we will consummate any such transactions or the terms of any such transaction.

On February 26, 2025, our Board of Directors authorized a share repurchase program of up to $100 million ~~and~~through ~~expires in~~ February 2027. Under the program, we may repurchase shares of common stock on a discretionary basis from time to time through open market repurchases, privately negotiated transactions and 10b5-1 trading plans. During the ~~nine~~three months ended ~~September 30~~March 31, 2026, we did not repurchase any shares. During the period from February 26, 2025 (the date the share repurchase program was authorized) through December 31, 2025, we repurchased shares in open-market transactions and retired ~~826~~approximately ~~thousand~~2.0 million shares of our common stock for an aggregate of $~~6.6~~10 million, or ana weighted average price per share of $85.0419. The timing and amount of future common stock repurchases will depend on various factors, including our capital structure, available liquidity, market conditions, regulatory considerations and opportunities for growth.

We believe cash generated by operating activities, including available cash proceeds from the Amended Receivables Sale Program, available financing sources inclusive of the Balance Sheet Optimization Transaction expected to be completed during the second quarter of 2026, and borrowings under the Revolving Credit Agreement, as well as cash on hand, ~~and planned proceeds from the sale of our P&HS segment,~~ will be sufficient to fund our working capital needs, capital expenditures, long-term strategic growth, payments under long-term debt and lease arrangements, debt repurchases, share repurchases and other cash requirements. ~~Subsequent to the sale of our P&HS segment we expect to amend the Receivables Sale Program to expand sales of our Patient Direct receivables.~~ While we believe that we will have the ability to meet our financing needs in the foreseeable future, changes in economic conditions may impact (i) the ability of financial institutions to meet their contractual commitments to us, (ii) the ability of our customers and suppliers to meet their obligations to us or (iii) our cost of borrowing.

We earn a portion of our operating income in foreign jurisdictions outside the U.S. associated with the P&HS segment, which is reported under discontinued operations and assets held for sale. Our cash and cash equivalents held by our foreign subsidiaries subject to repatriation totaled $13 million and $22 million at September 30, 2025 and December

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31, 2024 and is reflected in discontinued operations and assets held for sale. As of September 30, 2025, we are permanently reinvested in our foreign subsidiaries.

Contractual Obligations

For disclosure of material contractual obligations, see our Annual Report on Form 10-K for the year ended December 31, 2024 and Note 15 in the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q for the period ended on September 30, 2025.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, see our Annual Report on Form 10-K for the year ended December 31, ~~2024~~2025 and Note 1713 in the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q for the period ended on ~~September 30~~March 31, ~~2025~~ 2026.

Forward-looking Statements

Certain statements in this discussion constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Although we believe our expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of our knowledge of our business and operations, all forward-looking statements involve risks and uncertainties and, as a result, actual results could differ materially from those projected, anticipated or implied by these statements. Such forward-looking statements involve known and unknown risks, including, but not limited to:

● our ability to successfully ~~complete~~separate from the ~~anticipated sale of our Products~~ P&HS ~~Healthcare Services segment~~business;

●

our ability to successfully transition off of transition services timely;

●

increasing competitive and pricing pressures in the marketplace;

●

our ability to retain existing and attract new customers and our dependence on sales to certain customers;

~~● our dependence on certain vendors, suppliers and third-parties for key components, raw materials, finished goods, equipment and services;~~28

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●

our dependence on certain vendors, suppliers and third-parties;

●

our ability to successfully identify, close, manage or integrate acquisitions;

●

our ability to successfully implement our strategic initiatives;

● our ability to successfully ~~manage~~complete ~~our~~the ~~international~~Balance ~~operations,~~Sheet ~~including~~Optimization ~~risks associated with changes in international trade regulations, foreign currency volatility, adverse tax consequences, and other risks of operating in international markets~~Transaction;

● uncertainties related to the impacts of current and potential tariffs and other trade-related measures, restrictions and policies and any retaliatory counter measures, and our plans to mitigate those impacts;

●

uncertainties related to, and our ability to adapt to and comply with, changes in government regulations, including healthcare, tax and product licensing laws and regulations;

● risks arising from possible violations of legal, regulatory or licensing requirements of the markets in which we operate;

●

uncertainties related to general economic, regulatory and business conditions and our ability to adapt to changes in product pricing and other terms of purchase by suppliers of product;

40● uncertainties related to reimbursement qualification for non-invasive ventilation products;

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● uncertainties related to reimbursement qualification for non-invasive ventilation products

● our ability to meet the terms to qualify for supplier funding programs;

●

the ability of customers and suppliers to meet financial commitments due to us;

● changes in manufacturer preferences between direct sales and wholesale distribution;

●

changing trends in customer profiles and ordering patterns;

●

our ability to manage operating expenses and improve operational efficiencies;

●

availability of, and our ability to access, special inventory buying opportunities;

●

our ability to continue to obtain financing at reasonable rates and to manage financing costs and interest rate risk, and our ability to refinance, extend or repay our substantial indebtedness;

●

our ability to attract and retain talented and qualified teammates;

● recalls of any ~~of our~~ products, or safety risks or the discovery of serious safety issues with ~~our~~the products we sell;

●

changes, delays and uncertainties in the reimbursement process;

● our ability to ~~adequately~~meet ~~establish, maintain, protect and enforce our intellectual property and proprietary rights as well as avoid infringement, misappropriation or other violations of~~ the ~~intellectual~~terms ~~property~~to ~~and~~qualify ~~proprietary~~for ~~rights~~supplier ~~of third parties~~incentives;

●

our ability to avoid infringement, misappropriation or other violations of the intellectual property and proprietary rights of third parties;

●

our ability to engage in transactions that may be limited by the restrictive covenants in our credit facilities and existing notes;

● our ability to comply with environmental, health and safety regulations;

●

the risk that information systems are interrupted or damaged or fail for any extended period of time, that new information systems are not successfully implemented or integrated, or that there is a data security breach in our information systems or a third party’s information systems that impacts our business;

●

risks related to public health crises or future outbreaks of health crises or other adverse public health developments such as the novel coronavirus (COVID-19) global pandemic;

●

the risk of an impairment to goodwill or other long-lived assets;

●

our ability to timely or adequately respond to technological advances;

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●

our failure to adequately insure against losses, including from substantial claims and litigation;

●

our ability to meet performance targets specified by customer contracts under contractual commitments;

●

our capitation arrangements may prove unprofitable if actual utilization rates exceed our assumptions;

●

the outcome of outstanding and any future litigation, including product and professional liability claims;

●

volatility in the price of our common stock and securities; and

41● other factors detailed from time to time in the reports we file with the SEC, including those described in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025.

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● other factors detailed from time to time in the reports we file with the SEC, including those described in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024 as amended and supplemented by the risk factors set forth in our Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2025 and June 30, 2025 in “Item 1A. Risk Factors” and below in “Item 1A. Risk Factors”.

We undertake no obligation to update or revise any forward-looking statements, except as required by applicable law.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Certain quantitative and qualitative market risk disclosures are described in our Annual Report on Form 10-K for the year ended December 31, ~~2024~~2025. Through ~~September 30~~March 31, ~~2025~~ 2026, there have been no material changes in the quantitative and qualitative market risk disclosures described in such Annual Report.

Item 4. Controls and Procedures

We carried out an evaluation, with the participation of management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (pursuant to Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based upon that evaluation, the principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of ~~September~~March 3031, ~~2025~~2026. There was no change in our internal control over financial reporting that occurred during the period of this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II. Other Information

Item 1. Legal Proceedings

Certain legal proceedings pending against us are described in our Annual Report on Form 10-K for the year ended December 31, ~~2024~~2025. Through ~~September 30~~March 31, ~~2025~~ 2026, there have been no material developments in any legal proceedings reported in such Annual Report~~, other than as described in Management’s Discussion and Analysis of Financial Condition and Results of Operations~~.

Item 1A. Risk Factors

Certain risk factors that we believe could affect our business and prospects are described in our Annual Report on Form 10-K for the year ended December 31, ~~2024~~2025. ~~and~~Through ~~supplemented by the risk factors set forth in our Quarterly Report on Form 10-Q for the quarterly periods ended~~ March 31, ~~2025 and June 30~~2026, ~~2025. Through September 30, 2025,~~ there have been no material changes in the risk factors described in such Annual Report. ~~and Quarterly Reports, with the exception of the following added or revised risk factors:~~

The recent notice of termination from a large commercial Payor could negatively impact our financial condition, results of operations, cash flows, capital resources and liquidity.

A commercial Payor, with which we have multiple separately managed contracts, recently notified us that it intends to terminate certain of our agreements with them. As a result of this notice of termination, we expect net neutral impacts to our financial results through the end of 2025, as the transitions of agreements and services are expected to start late in the fourth quarter of 2025. While the transitions of agreements and services are expected to continue throughout the first half of 2026, the specific timing of when these contracts will wind down is highly dependent on the Payor’s successor provider’s ability to successfully transition customers among other factors. The agreements expected to be terminated reflected 12% of our net revenue for the nine months ended September 30, 2025. If we are unable to win new business to substitute this loss, effectively execute cost reduction actions, or maintain volume-based supplier

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discounts, the loss of this contractual relationship could adversely affect our business, results of operations, and financial condition.

A recent determination from the Centers for Medicare and Medicaid Services (CMS) would reduce reimbursement qualification for non-invasive ventilation products, which could negatively impact our financial condition, results of operations, cash flows, capital resources and liquidity.30

In June 2025, CMS released a final national coverage determination for non-invasive positive pressure ventilation (NIPPV) in the home for the treatment of chronic respiratory failure due to chronic obstructive pulmonary disease (COPD). This determination may make qualifying for NIPPV more difficult for new COPD patients seeking this treatment, as patients must meet a number of criteria before qualifying for coverage of an initial six-month period for respiratory assist devices and home mechanical ventilation. This CMS determination could adversely affect our business, results of operations, and financial condition.

Risks Related to the Sale of Our Products & Healthcare Services Segment

We plan to sell our P&HS segment, and there may be negative impacts on our business, financial results, and operations.

On February 28, 2025, we announced that we are actively engaged in discussions regarding the anticipated sale of our P&HS segment. On October 7, 2025, we announced that we entered into the Purchase Agreement. Unanticipated developments, including disruptions to our business due to macro-economic factors or otherwise, market conditions, the uncertainty of the financial markets, changes in the law, could delay or prevent the sale of the P&HS segment.

Following the anticipated sale of the P&HS segment, we will be a smaller, less diversified company with a single segment, Patient Direct. If we complete the sale of our P&HS segment, we may be more vulnerable to changing market conditions, which could have a material adverse effect on our business, results of operations, financial condition and cash flows. In addition, the diversification of revenue, costs, and cash flows will diminish, such that our results of operations, cash flows, working capital, effective tax rate, and financing requirements may be subject to increased volatility and our ability to fund capital expenditures and investments and service debt may be diminished. Following the anticipated sale of the P&HS segment, we may be unable to achieve the full strategic and financial benefits that we believe we may be able to achieve through the sale of our P&HS segment, or such benefits may be delayed or may never occur at all. For example, we believe the sale could provide the following benefits, among others:

● directing capital toward the higher growth and higher margin Patient Direct segment;

● applying proceeds from any such sale to repay certain of our indebtedness; and

We may not achieve these or other anticipated benefits for a variety of reasons, including, among others: (i) the possibility that the Purchase Agreement will not be completed, (ii) the possibility that we may not benefit as expected from the increased focus on our Patient Direct segment and simpler business model made possible by the sale, (iii) the risk of litigation, injunctions or other legal proceedings relating to the sale, (iv) unforeseen costs and expenses that will be incurred in connection with the sale process and (v) the sale will require significant amounts of management time and effort, which may divert management attention from operating and growing the Patient Direct segment. If we fail to achieve some or all of the benefits we expect to achieve as a result of the sale of our P&HS segment, or if such benefits are delayed, our business, results of operations, financial condition and cash flows could be materially and adversely affected.

We have already incurred expenses in connection with the exploration and negotiation of the anticipated sale of the P&HS segment and expect that the process of ultimately consummating the Purchase Agreement will be time-consuming and involve significant additional costs and expenses. Furthermore, we expect that the anticipated sale of P&HS segment will result in significant separation costs, and we are obligated to reimburse Purchaser for the first $65 million of such costs.

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Furthermore, the sale process could cause disruptions and create uncertainty surrounding our business and affect our relationships with our customers, suppliers and teammates. Although we intend to take actions to reduce any adverse effects, these uncertainties could cause customers, suppliers and others that deal with us to seek to change existing business relationships. In addition, teammate retention could be negatively impacted. If key teammates depart because of concerns relating to the uncertainty, our business could be harmed. Investor perceptions about the announcement could have a negative impact on the trading prices of our common stock or debt. Additionally, until the market has fully analyzed our valuation following the sale of the P&HS segment, the price of our common stock may fluctuate. Furthermore, the sale is expected to decrease the diversification of our revenues, costs and cash flows, our operations, cash flows, working capital, effective tax rate and financing requirements may be subject to increased volatility, and our ability to fund capital expenditures and investments, pay dividends and meet debt obligations and other liabilities may be diminished.

In connection with the anticipated sale of the P&HS segment, we will be required to provide certain transitional services which may divert management’s attention and harm our business.

In connection with the Purchase Agreement, we will be required to provide certain services to the Purchaser for a transitional period. Such transitional services arrangements may be in exchange for fees that do not fully compensate us for the cost of providing such transitional services and may also divert management’s attention and resources, away from the existing business, which could harm our business.

Certain contracts used in our business may need to be transferred or replaced in connection with the anticipated sale of the P&HS segment and failure to obtain such replacement contracts could increase our expenses or otherwise adversely affect our results of operations.

In connection with the anticipated sale of the P&HS segment, we may be required to replace certain shared contracts. It is possible that, in connection with the replacement process, some parties may seek more favorable contractual terms from us. If we are unable to obtain such replacement contracts, the loss of these contracts could increase our expenses or otherwise materially adversely affect our business, results of operations and financial condition.

The anticipated sale of certain assets associated with the P&HS segment could negatively impact our business, and retained liabilities from businesses or assets that we have sold could adversely affect our financial results.

The anticipated asset sales in connection with the P&HS segment pose risks and challenges that could negatively impact our business, including retained liabilities related to divested businesses and sold assets, obligations to indemnify buyers against contingent liabilities and potential disputes with buyers. If post-completion liabilities and obligations related to divestitures and asset sales are substantial and exceed our expectations, our financial position, results of operations and cash flows could be negatively impacted. Any divestiture or asset sale may result in a dilutive impact to our future earnings if we are unable to offset the dilutive impact from the loss of revenue and profits associated with the divestiture or sold asset, as well as significant write-offs, including those related to goodwill and other intangible assets, which could have a material adverse effect on our results of operations or financial condition.

Risks Related to Our Ability to Comply with Environmental, Health and Safety Regulations

We may be subject to environmental, health and safety regulations, personal injury and litigation, which could adversely affect our financial results.

Our sterilization process in our manufacturing facilities within the P&HS segment includes the use of ethylene oxide (EtO). Potential environmental, health and safety risks associated with exposure to EtO subject us to risk of liability claims being made against us by workers, contractors, employees of our customers and individuals who have resided or otherwise spent time within miles of our EtO sterilization facilities. If we are the subject of litigation related to use of EtO there could be a material adverse effect on our results of operations or financial condition.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On February 26, 2025, our Board of Directors authorized a share repurchase program of up to $100 million and expires in February 2027. Under the program, we may repurchase shares of common stock on a discretionary basis from time to time through open market repurchases, privately negotiated transactions and 10b5-1 trading plans.


(in thousands, except per share data)
Period	Total Number of Shares Purchased	Average Price Paid Per Share	~~Average Price Paid Per Share~~	Total Number of Shares Purchased as Part of Publicly Announced Program (1)	Approximate Dollar Value of Shares That May Yet be Purchased Under the Program (2)	~~Approximate Dollar Value of Shares That May Yet be Purchased Under the Program (2)~~
February 26-February 28, 2025	—	$	—	—	$	100,000
March 1-March 31, 2025	173	$	8.66	173	$	98,500
April 1-April 30, 2025	653	$	7.87	653	$	93,360
May 1-May 31, 2025	—	$	—	—	$	93,360
June 1-June 30, 2025	—	$	—	—	$	93,360
July 1-July 31, 2025	—	$	—	—	$	93,360
August 1-August 31, 2025	—	$	—	—	$	93,360
September 1-September 30, 2025	—	$	—	—	$	93,360
Year-to-date	826			826
October 1-October 31, 2025	—	$	—	—	$	93,360
November 1-November 30, 2025	1,129	$	3.10	1,129	$	89,860
December 1-December 31, 2025	—	$	—	—	$	89,860
January 1-January 31, 2026	—	$	—	—	$	89,860
February 1-February 28, 2026	—	$	—	—	$	89,860
March 1-March 31, 2026	—	$	—	—	$	89,860
Total (3)	1,955			1,955

(1) On February 26, 2025, our Board of Directors authorized a share repurchase program of up to $100 million. ~~and~~The program expires in February 2027. Under the program, we may repurchase shares of common stock on a discretionary basis from time to time through open market repurchases, privately negotiated transactions and 10b5-1 trading plans.

(2) During the ~~nine~~period ~~months~~from ~~ended~~February ~~September 30~~26, 2025 (the date the share repurchase program was authorized) through March 31, 2026, we repurchased shares in open-market transactions and retired approximately ~~826~~2.0 ~~thousand~~million shares of our common stock for an aggregate of $~~6.6~~10 million, or ana weighted average price per share of $85.0419.

(3)

Represents the period from February 26, 2025 (the date the share repurchase program was authorized) through March 31, 2026.

Item 5. Other Information.

During the three months ended ~~September 30~~March 31, ~~2025~~ 2026, none of our directors or officers informed us of the adoption or termination of a trading plan intended to satisfy Rule 10b5-1(c).

4531

Table of Contents

Item 6. Exhibits

(a)

Exhibits

3.1		Composite Amended and Restated Articles of Incorporation of Accendra Health, Inc. – filed herewith

10.1		~~Equity~~Form ~~Purchase Agreement, dated as~~ of ~~October~~2026 7,cash ~~2025,~~settled byPerformance ~~and~~Unit ~~among~~Award ~~the~~Agreement ~~Company~~– ~~and Purchaser (incorporated by reference to Exhibit 2.1 to the registrant’s Current Report on Form 8-K~~ filed ~~on October 7, 2025).~~herewith**

31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
10.2		Form of 2026 share settled Performance Unit Award Agreement – filed herewith**

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.INS		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.DEF		Inline XBRL Taxonomy Definition Linkbase Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.DEF		Inline XBRL Taxonomy Definition Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as iXBRL and contained in Exhibit 101)

** Management contract or compensatory plan or arrangement

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	~~Owens~~Accendra ~~& Minor~~Health, Inc.
	(Registrant)

Date: October 30, 2025	/s/ Edward A. Pesicka
Date: May 11, 2026	/s/ Edward A. Pesicka
	Edward A. Pesicka
	President, Chief Executive Officer & Director

Date: October 30, 2025	/s/ Jonathan A. Leon
Date: May 11, 2026	/s/ Jonathan A. Leon
	Jonathan A. Leon
	Executive Vice President & Chief Financial Officer

Filing Compare · ACCENDRA HEALTH INC/VA/