LONDON, UK / ACCESS Newswire / September 29, 2025 / Orosur Mining Inc. ("Orosur" or "the Company") (TSX-V:OMI)(AIM:OMI) announces its audited results for the fiscal year ended May 31, 2025. All dollar figures are stated in thousands of US$ unless otherwise noted. ...

LONDON, UK / ACCESS Newswire / September 25, 2025 / Orosur Mining Inc. ("Orosur" or the "Company") (TSX:OMI)(AIM:OMI) announces the following: Corporate update: the Company's upsized brokered private placement to raise up to C$20 million, (the "Offering"), which was announced on September 18, 2025 is now scheduled to close on October 2, 2025. The Offering comprises the issue of up to 58,823,530 new common shares of the Company ("Common Shares"). ...

Group 1 - Orosur Mining Inc. has entered into an agreement with Red Cloud Securities Inc. to act as lead agent and bookrunner [1] - The agreement involves a syndicate of agents, including U.K. corporate brokers Turner Pope Investments Ltd. [1]

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) This section presents the company's unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including statements of operations, comprehensive loss, balance sheets, cash flows, and changes in equity, along with detailed notes on accounting policies, discontinued operations, debt, and other financial disclosures [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net loss significantly increased due to discontinued operations and a transaction breakage fee, despite a slight rise in net revenue Condensed Consolidated Statements of Operations (Three and Six Months Ended June 30, in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net revenue | $681,917 | $660,401 | $1,355,801 | $1,298,244 | | Operating (loss) income | $(39,710) | $16,922 | $(19,919) | $23,892 | | Loss from continuing operations, net of tax | $(83,822) | $(6,742) | $(87,632) | $(20,135) | | Loss from discontinued operations, net of tax | $(785,236) | $(25,171) | $(806,408) | $(33,664) | | Net loss | $(869,058) | $(31,913) | $(894,040) | $(53,799) | | Basic loss per common share (Net loss) | $(11.30) | $(0.42) | $(11.60) | $(0.70) | - The significant increase in net loss for both periods was primarily driven by a substantial loss from discontinued operations and an **$80 million transaction breakage fee**[11](index=11&type=chunk)[63](index=63&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Comprehensive loss substantially increased, driven by higher net loss, partially offset by positive currency translation adjustments Condensed Consolidated Statements of Comprehensive Loss (Three and Six Months Ended June 30, in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(869,058) | $(31,913) | $(894,040) | $(53,799) | | Currency translation adjustments | $14,773 | $(5,302) | $20,730 | $(18,568) | | Total other comprehensive income (loss), net of tax | $13,992 | $(5,307) | $19,125 | $(16,926) | | Comprehensive loss | $(855,066) | $(37,220) | $(874,915) | $(70,725) | - Comprehensive loss significantly increased for both periods, primarily reflecting the higher net loss, partially offset by positive currency translation adjustments in 2025[13](index=13&type=chunk) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased while liabilities increased, leading to a shift from positive equity to a deficit position Condensed Consolidated Balance Sheets (as of June 30, 2025 and December 31, 2024, in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total current assets | $2,298,513 | $2,021,017 | | Total assets | $4,154,545 | $4,656,156 | | Total current liabilities | $2,674,523 | $1,852,052 | | Total liabilities | $4,435,555 | $4,069,792 | | Total (deficit) equity | $(281,010) | $586,364 | - Total assets decreased, driven by the reclassification of noncurrent assets held for sale to current assets held for sale, while total liabilities increased, resulting in a shift from positive equity to a **deficit**[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow significantly declined due to net loss, goodwill impairment, and a loss on classification to held for sale Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30, in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Cash provided by operating activities | $2,544 | $63,187 | | Cash used for investing activities | $(101,117) | $(37,040) | | Cash provided by (used for) financing activities | $124,477 | $(24,920) | | Net increase in cash, cash equivalents and restricted cash | $27,705 | $545 | - Operating cash flow significantly decreased in 2025, impacted by the net loss, **goodwill impairment charge of $106.4 million**, and a **loss on classification to held for sale of $649.1 million**[18](index=18&type=chunk) [Condensed Consolidated Statements of Changes in Equity (Deficit)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity%20(Deficit)) Total equity transitioned from a positive balance to a significant deficit, primarily due to the period's substantial net loss Condensed Consolidated Statements of Changes in Equity (Deficit) (as of June 30, 2025, in thousands) | Metric | December 31, 2024 | March 31, 2025 | June 30, 2025 | | :-------------------- | :---------------- | :------------- | :------------ | | Total Equity (Deficit) | $586,364 | $570,979 | $(281,010) | - The company's total equity shifted from a positive balance to a significant deficit by June 30, 2025, primarily due to the substantial net loss incurred during the period[19](index=19&type=chunk) - Shares repurchased and retired totaled **826 thousand** for **$6.7 million** during the six months ended June 30, 2025[19](index=19&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's accounting policies, significant financial events, and segment information [Note 1—Summary of Significant Accounting Policies](index=10&type=section&id=Note%201%E2%80%94Summary%20of%20Significant%20Accounting%20Policies) This note details the company's accounting principles, including the reclassification of the P&HS segment as discontinued operations, correction of a prior period accounting error, and policies for revenue recognition, goodwill, and intangible assets - The P&HS segment has been classified as discontinued operations and held for sale as of June 30, 2025, with its financial results excluded from continuing operations[25](index=25&type=chunk) - A prior period accounting error related to over accrual of accounts payable was corrected, increasing retained earnings and total equity by **$21 million** as of December 31, 2023[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) - An **$80 million cash payment** was incurred for the termination of the Rotech Healthcare Holdings Inc. acquisition during the three and six months ended June 30, 2025[63](index=63&type=chunk) [Note 2—Significant Concentration Risks](index=20&type=section&id=Note%202%E2%80%94Significant%20Concentration%20Risks) The company has significant revenue concentration with its two largest commercial payors and government programs, and supplier concentration with three key suppliers Revenue and Supplier Concentration (Six Months Ended June 30, 2025) | Category | Percentage of Net Revenue/Purchases | | :------- | :---------------------------------- | | Two largest commercial payors | 24% and 14% of net revenue | | Medicare and state Medicaid programs | ~19% of net revenue | | Three largest suppliers | ~46% of patient service equipment and supplies purchases | [Note 3—Discontinued Operations and Assets Held-for-Sale](index=20&type=section&id=Note%203%E2%80%94Discontinued%20Operations%20and%20Assets%20Held-for-Sale) The P&HS segment was classified as discontinued operations and held for sale as of June 30, 2025, leading to a $649 million loss on classification and a full impairment of its $106 million goodwill - The P&HS segment was classified as discontinued operations and assets held for sale as of June 30, 2025[66](index=66&type=chunk)[68](index=68&type=chunk) - A **loss of $649 million** was recognized in connection with the classification of assets and liabilities as held-for-sale, based on estimated fair value less costs to sell[70](index=70&type=chunk) - The remaining P&HS goodwill balance of **$106 million** was fully impaired as of June 30, 2025[70](index=70&type=chunk) Financial Results of Discontinued Operations (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :-------------------- | :------------ | :------------ | | Net revenue | $3,937,974 | $3,985,442 | | Loss from discontinued operations, net of taxes | $(806,408) | $(33,664) | [Note 4—Patient Service Equipment and Other Fixed Assets, Net](index=26&type=section&id=Note%204%E2%80%94Patient%20Service%20Equipment%20and%20Other%20Fixed%20Assets,%20Net) Patient service equipment and other fixed assets, net, increased to $259,301k at June 30, 2025, primarily due to an increase in patient service equipment Patient Service Equipment and Other Fixed Assets, Net (in thousands) | Asset Category | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :---------------- | | Patient service equipment, gross | $411,769 | $388,445 | | Patient service equipment and other fixed assets, net | $259,301 | $249,283 | [Note 5—Goodwill and Intangible Assets, Net](index=26&type=section&id=Note%205%E2%80%94Goodwill%20and%20Intangible%20Assets,%20Net) Goodwill remained at $1.2 billion, while intangible assets, net, decreased due to amortization and a modified useful life for an asset following a contract termination - Goodwill was **$1.2 billion** (net of **$307 million** accumulated impairment) at June 30, 2025 and December 31, 2024[80](index=80&type=chunk) Intangible Assets, Net (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----- | :------------ | :---------------- | | Intangible assets, net | $194,924 | $210,056 | - Amortization expense for intangible assets was **$15 million** for the six months ended June 30, 2025, down from **$24 million** in the prior year[80](index=80&type=chunk) - The remaining useful life for an intangible asset was modified due to a commercial Payor contract termination[81](index=81&type=chunk) [Note 6—Leases](index=27&type=section&id=Note%206%E2%80%94Leases) Total lease cost decreased for the six months ended June 30, 2025, with a slight reduction in operating lease assets and liabilities, and a shorter weighted average remaining lease term Lease Costs and Balances (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :----------------------------- | :----------------------------- | | Total lease cost | $41,170 | $45,477 | | Operating lease assets (June 30, 2025) | $120,188 | $126,928 (Dec 31, 2024) | | Total operating lease liabilities (June 30, 2025) | $124,686 | $130,683 (Dec 31, 2024) | - The weighted average remaining lease term for operating leases decreased to **3.6 years** from **3.9 years**[84](index=84&type=chunk) - The weighted average discount rate for operating leases increased to **6.5%** from **6.3%**[84](index=84&type=chunk) [Note 7—Exit and Realignment Charges, Net](index=29&type=section&id=Note%207%E2%80%94Exit%20and%20Realignment%20Charges,%20Net) Exit and realignment charges, net, decreased significantly for the six months ended June 30, 2025, primarily due to lower professional fees for strategic initiatives and wind-down costs for Fusion5 Exit and Realignment Charges, Net (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :----------------------------- | :----------------------------- | | Exit and realignment charges, net | $16,166 | $23,547 | - Charges for 2025 primarily included **$8.1 million** in professional fees for strategic initiatives and **$6.8 million** related to Fusion5 wind-down costs[86](index=86&type=chunk) - Accrued exit and realignment costs decreased to **$1.7 million** at June 30, 2025, from **$6.7 million** at December 31, 2024[87](index=87&type=chunk) [Note 8—Debt](index=30&type=section&id=Note%208%E2%80%94Debt) Total debt increased to $1.98 billion at June 30, 2025, driven by increased Revolving Credit Facility borrowings, with a significant portion of debt reclassified to current maturities due to anticipated repayment from the P&HS segment sale Total Debt (Carrying Amount, in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----- | :------------ | :---------------- | | Total debt | $1,977,745 | $1,841,259 | | Current portion of long-term debt | $383,000 | $42,866 | - Outstanding borrowings on the Revolving Credit Agreement were **$135 million** at June 30, 2025, compared to undrawn at December 31, 2024[94](index=94&type=chunk) - The company was in compliance with all debt covenants at June 30, 2025[95](index=95&type=chunk) - Current maturities include **$383 million** in debt anticipated to be repaid within the next twelve months from expected P&HS segment sale proceeds[97](index=97&type=chunk) [Note 9—Share-Based Compensation](index=33&type=section&id=Note%209%E2%80%94Share-Based%20Compensation) Share-based compensation expense increased to $9.3 million for the six months ended June 30, 2025, with approximately 1.7 million common shares available for issuance under the Plan Share-Based Compensation Expense (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :----------------------------- | :----------------------------- | | Share-based compensation expense | $9,300 | $8,400 | - Approximately **1.7 million common shares** were available for issuance under the Plan at June 30, 2025[98](index=98&type=chunk) - Unrecognized compensation cost for nonvested RSAs was **$32 million** (expected over 2.2 years) and for nonvested PSAs was **$12 million** (primarily in 2025-2027)[100](index=100&type=chunk) [Note 10—Derivatives](index=34&type=section&id=Note%2010%E2%80%94Derivatives) The company uses interest rate swaps as cash flow hedges to manage interest rate risk, with a notional amount of $250 million outstanding at June 30, 2025 - Interest rate swaps are used as cash flow hedges to mitigate the risk of increases in benchmark rates on term loans[104](index=104&type=chunk) Interest Rate Swaps (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----- | :------------ | :---------------- | | Notional Amount | $250,000 | $300,000 | | Derivative Assets (Fair Value) | $2,752 | $6,113 | - A **loss of $1.3 million** was recognized in Other Comprehensive Income (Loss) for interest rate swaps for the six months ended June 30, 2025[107](index=107&type=chunk) [Note 11—Income Taxes](index=35&type=section&id=Note%2011%E2%80%94Income%20Taxes) The effective tax rate decreased significantly to 3.0% for the six months ended June 30, 2025, primarily due to the tax treatment of the $80 million transaction breakage fee, leading to an increase in unrecognized tax benefits Income Tax Benefit and Effective Tax Rate (Six Months Ended June 30) | Metric | 2025 | 2024 | | :----- | :------------ | :------------ | | Income tax benefit | $(2,715) | $(8,671) | | Effective tax rate | 3.0% | 30.1% | - The change in effective tax rate was primarily due to the tax treatment associated with the **$80 million Rotech transaction breakage fee**[109](index=109&type=chunk) - The liability for unrecognized tax benefits increased to **$53 million** at June 30, 2025, from **$36 million** at December 31, 2024, largely due to the Rotech transaction breakage fee[110](index=110&type=chunk) - The company owed **$37 million**, including **$10 million** in interest, as of June 30, 2025, related to a final IRS assessment for 2015-2018 tax years[112](index=112&type=chunk) [Note 12—Net Loss per Common Share](index=37&type=section&id=Note%2012%E2%80%94Net%20Loss%20per%20Common%20Share) Basic and diluted net loss per common share significantly increased to $(11.60) for the six months ended June 30, 2025, primarily driven by the substantial loss from discontinued operations Net Loss per Common Share (Six Months Ended June 30) | Metric | 2025 | 2024 | | :----- | :------------ | :------------ | | Basic loss per common share (Net loss) | $(11.60) | $(0.70) | | Diluted loss per common share (Net loss) | $(11.60) | $(0.70) | - Loss from discontinued operations contributed **$(10.46)** to the basic loss per common share for the six months ended June 30, 2025[114](index=114&type=chunk) - Approximately **2.2 million share-based awards** were excluded from diluted EPS calculation as their effect would be anti-dilutive[116](index=116&type=chunk) [Note 13—Shareholders Equity](index=39&type=section&id=Note%2013%E2%80%94Shareholders%20Equity) The Board authorized a $100 million share repurchase program, under which the company repurchased approximately 0.8 million shares for $6.6 million during the six months ended June 30, 2025 - A share repurchase program of up to **$100 million** was authorized by the Board of Directors on February 26, 2025, over the next 24 months[117](index=117&type=chunk) - Approximately **0.8 million shares** of common stock were repurchased and retired for an aggregate of **$6.6 million** during the six months ended June 30, 2025[118](index=118&type=chunk) [Note 14—Accumulated Other Comprehensive (Loss) Income](index=39&type=section&id=Note%2014%E2%80%94Accumulated%20Other%20Comprehensive%20(Loss)%20Income) Accumulated other comprehensive loss improved to $(30,219)k at June 30, 2025, from $(49,344)k at December 31, 2024, primarily due to positive currency translation adjustments Accumulated Other Comprehensive (Loss) Income (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----- | :------------ | :---------------- | | Accumulated other comprehensive (loss) income | $(30,219) | $(49,344) | - Currency translation adjustments contributed **$20.7 million** in income for the six months ended June 30, 2025, compared to a **loss of $18.6 million** in the prior year[120](index=120&type=chunk) [Note 15—Commitments, Contingent Liabilities, and Legal Proceedings](index=42&type=section&id=Note%2015%E2%80%94Commitments,%20Contingent%20Liabilities,%20and%20Legal%20Proceedings) The company terminated the Rotech Merger Agreement with an $80 million cash payment and maintains sufficient accruals for various ordinary legal claims - The Merger Agreement with Rotech was terminated on June 3, 2025, resulting in an **$80 million cash payment**[122](index=122&type=chunk) - Accruals for currently pending legal matters considered probable of loss are deemed sufficient[125](index=125&type=chunk) [Note 16—Segment Information](index=42&type=section&id=Note%2016%E2%80%94Segment%20Information) Following the reclassification of the P&HS segment as discontinued operations, the company now operates as a single operating and reporting segment - The company's business activities now comprise a single operating and reporting segment, with net income (loss) from continuing operations as the primary profitability measure[126](index=126&type=chunk) [Note 17—Recent Accounting Pronouncements](index=42&type=section&id=Note%2017%E2%80%94Recent%20Accounting%20Pronouncements) The company is assessing the impact of new ASUs on income tax and expense disclosures, expecting only disclosure impacts without affecting financial results or cash flows - ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures) are expected to impact only disclosures, with no effect on results of operations, financial condition, or cash flows[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of the company's financial performance, including the impact of the P&HS segment sale, Rotech acquisition termination, and a commercial payor contract termination, detailing changes in revenue, costs, operating and non-operating expenses, income taxes, and liquidity, highlighting key drivers and future outlook [Overview](index=44&type=section&id=Overview) The company, now a single segment, experienced significant financial impacts from a transaction breakage fee and financing fees related to a terminated acquisition - The company is a leading provider of integrated equipment, supplies, and services for home-based care in the US, now operating as a single segment[131](index=131&type=chunk) Net Loss from Continuing Operations per Common Share | Period | 2025 | 2024 | | :----- | :------------ | :------------ | | Three months ended June 30 | $(1.09) | $(0.09) | | Six months ended June 30 | $(1.14) | $(0.26) | - Financial results were significantly impacted by an **$80 million transaction breakage fee** and **$18 million in transaction financing fees** related to the terminated Rotech acquisition[132](index=132&type=chunk)[133](index=133&type=chunk) [Contemplated Sale of Products & Healthcare Services Segment](index=44&type=section&id=Contemplated%20Sale%20of%20Products%20%26%20Healthcare%20Services%20Segment) The company is nearing the sale of its P&HS segment, which has been reclassified as discontinued operations and held for sale - The company is in the final stages of discussions for the contemplated sale of its P&HS segment, which has been classified as discontinued operations and held for sale as of June 30, 2025[135](index=135&type=chunk) [Termination of Acquisition of Rotech](index=44&type=section&id=Termination%20of%20Acquisition%20of%20Rotech) The Rotech acquisition merger agreement was mutually terminated, resulting in an $80 million cash payment - The Merger Agreement to acquire Rotech was mutually terminated on June 3, 2025, resulting in an **$80 million cash payment** to Rotech[136](index=136&type=chunk) [Notice of Contract Termination with a Commercial Payor](index=46&type=section&id=Notice%20of%20Contract%20Termination%20with%20a%20Commercial%20Payor) A commercial payor's contract termination, affecting 12% of net revenue, is expected to have a net neutral financial impact through 2025 - A commercial Payor intends to terminate certain contracts, which represented approximately **$160 million** or **12% of net revenue** and nearly all capitation revenue for the six months ended June 30, 2025[137](index=137&type=chunk) - Net neutral financial impacts are expected through the end of 2025, with transitions of agreements and services anticipated to start late in Q4 2025 and continue through H1 2026[137](index=137&type=chunk) [Results of Operations](index=46&type=section&id=Results%20of%20Operations) This section analyzes the company's revenue, cost of revenue, operating expenses, non-operating expenses, income taxes, and Adjusted EBITDA [Net revenue](index=46&type=section&id=Net%20revenue) Net revenue increased by 3.3% for Q2 2025 and 4.4% for YTD 2025, driven by growth in sleep therapy, ostomy, and urology, despite headwinds in diabetes revenue Net Revenue by Product Category (in thousands) | Product Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Diabetes | $191,056 | $194,361 | $378,416 | $374,351 | | Sleep therapy | $181,622 | $170,237 | $363,481 | $342,274 | | Ostomy | $51,893 | $47,059 | $101,392 | $91,626 | | Urology | $28,696 | $25,645 | $56,839 | $50,634 | | Net revenue | $681,917 | $660,401 | $1,355,801 | $1,298,244 | - The increase in net revenue was driven by sales growth in **sleep therapy (+6.7% Q2, +6.2% YTD)**, **ostomy (+10.3% Q2, +10.7% YTD)**, and **urology (+11.9% Q2, +12.3% YTD)**[138](index=138&type=chunk)[139](index=139&type=chunk) - Diabetes revenue growth was hindered by market shifts into the pharmacy channel and modified customer ordering quantities due to supplier disruptions[139](index=139&type=chunk) [Cost of net revenue](index=46&type=section&id=Cost%20of%20net%20revenue) Cost of net revenue increased by 3.8% for Q2 2025 and 4.3% for YTD 2025, reflecting the higher costs associated with increased sales volume Cost of Net Revenue (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost of products sold | $319,517 | $305,496 | $636,906 | $603,864 | | Cost of net revenue | $357,315 | $344,372 | $711,957 | $682,623 | - The increase in cost of net revenue was primarily due to the increased cost of products sold, reflecting higher sales volume[142](index=142&type=chunk) [Operating expenses](index=48&type=section&id=Operating%20expenses) Operating expenses were significantly impacted by an $80 million transaction breakage fee, SG&A expenses decreased due to efficiencies, while acquisition-related charges increased and exit and realignment charges decreased Operating Expenses (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Selling, general and administrative expenses | $267,853 | $269,919 | $530,223 | $540,132 | | Transaction breakage fee | $80,000 | — | $80,000 | — | | Acquisition-related charges and intangible amortization | $13,918 | $13,761 | $37,374 | $28,050 | | Exit and realignment charges, net | $2,541 | $15,427 | $16,166 | $23,547 | - SG&A expenses decreased due to operating efficiencies in revenue cycle and IT, and lower benefit costs, partially offset by inflationary increases[143](index=143&type=chunk) - Acquisition-related charges increased due to costs for the terminated Rotech acquisition, while intangible amortization decreased as certain assets were fully amortized in 2024[145](index=145&type=chunk) [Non-operating expenses](index=50&type=section&id=Non-operating%20expenses) Non-operating expenses included $18.3 million in transaction financing fees related to the terminated Rotech acquisition, while interest expense remained relatively stable Non-Operating Expenses (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Interest expense, net | $26,009 | $25,588 | $50,223 | $50,997 | | Transaction financing fees, net | $18,288 | — | $18,288 | — | - Transaction financing fees, net, of **$18.3 million** were incurred for debt financing associated with the terminated Rotech acquisition[148](index=148&type=chunk) - Interest expense, net, for the six months ended June 30, 2025, decreased due to a lower effective interest rate and average outstanding borrowings, partially offset by a decrease in interest income[147](index=147&type=chunk) [Income taxes](index=50&type=section&id=Income%20taxes) The income tax benefit decreased significantly, and the effective tax rate dropped to 3.0% for YTD 2025, primarily due to the tax treatment of the $80 million transaction breakage fee Income Tax Benefit and Effective Tax Rate | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax benefit | $(1,127) | $(2,740) | $(2,715) | $(8,671) | | Effective tax rate | 1.3% | 28.9% | 3.0% | 30.1% | - The change in tax rates was primarily driven by the tax treatment associated with the **$80 million transaction breakage fee**[150](index=150&type=chunk) [Adjusted EBITDA](index=50&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA increased for both Q2 and YTD 2025, reflecting adjustments for non-GAAP items such as the transaction breakage fee, acquisition-related charges, and exit and realignment charges Adjusted EBITDA (non-GAAP, in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Adjusted EBITDA | $96,635 | $91,080 | $192,653 | $160,300 | - Key exclusions from GAAP net loss to arrive at Adjusted EBITDA include the **$80 million transaction breakage fee**, acquisition-related charges, exit and realignment charges, and transaction financing fees[155](index=155&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=54&type=section&id=Financial%20Condition,%20Liquidity%20and%20Capital%20Resources) This section reviews the company's financial position, liquidity sources, capital expenditures, and capital structure [Financial condition](index=54&type=section&id=Financial%20condition) Cash and cash equivalents increased, while accounts receivable decreased and Days Sales Outstanding (DSO) improved, indicating better working capital management Key Financial Condition Metrics (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----- | :------------ | :---------------- | | Cash and cash equivalents | $38,258 | $27,572 | | Accounts receivable | $196,379 | $218,270 | | DSO (days) | 26.2 | 28.9 | | Inventories | $69,227 | $67,581 | | Inventory days | 17.6 | 17.2 | - A hypothetical one-day increase (decrease) in DSO would result in a **$7.5 million decrease (increase)** in cash balances or an increase (decrease) in Revolving Credit Agreement borrowings[162](index=162&type=chunk) [Liquidity and capital expenditures](index=56&type=section&id=Liquidity%20and%20capital%20expenditures) Cash provided by operating activities significantly decreased for YTD 2025, impacted by the Rotech termination payment and financing fees, while cash used for investing activities increased due to higher capital expenditures Cash Flow Summary (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | | :------- | :------------ | :------------ | | Operating activities | $2,544 | $63,187 | | Investing activities | $(101,117) | $(37,040) | | Financing activities | $124,477 | $(24,920) | - Operating cash flow in 2025 was impacted by an **$80 million Rotech termination payment**, **$18 million in transaction financing fees**, and a **$130 million benefit** from the Receivables Sale Program[165](index=165&type=chunk) - Capital expenditures increased to **$134 million** in YTD 2025 from **$95 million** in YTD 2024, primarily for patient service equipment and strategic initiatives[166](index=166&type=chunk) [Capital Resources](index=58&type=section&id=Capital%20Resources) The company's liquidity is supported by cash, the Receivables Sale Program, and the Revolving Credit Agreement, a $1.0 billion Senior Secured Notes offering for the Rotech acquisition was terminated and redeemed, and a $100 million share repurchase program is underway - Primary sources of liquidity include cash and cash equivalents, the Receivables Sale Program, and the Revolving Credit Agreement[170](index=170&type=chunk) - The Revolving Credit Agreement has a **$450 million capacity**, with **$135 million outstanding** and **$286 million available** for borrowing at June 30, 2025[172](index=172&type=chunk)[173](index=173&type=chunk) - A **$1.0 billion Senior Secured Notes offering**, initially for the Rotech acquisition, was completed but subsequently terminated and redeemed on June 10, 2025, following the merger agreement termination[175](index=175&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk) - The Board authorized a **$100 million share repurchase program**, under which approximately **0.8 million shares** were repurchased for **$6.6 million** during the six months ended June 30, 2025[179](index=179&type=chunk) [Contractual Obligations](index=60&type=section&id=Contractual%20Obligations) Material contractual obligations are referenced in the Annual Report on Form 10-K and Note 15 of this Quarterly Report - Material contractual obligations are disclosed in the Annual Report on Form 10-K for December 31, 2024, and Note 15 of this Quarterly Report[182](index=182&type=chunk) [Recent Accounting Pronouncements](index=60&type=section&id=Recent%20Accounting%20Pronouncements) Recent accounting pronouncements are detailed in the Annual Report on Form 10-K and Note 17 of this Quarterly Report - Recent accounting pronouncements are discussed in the Annual Report on Form 10-K for December 31, 2024, and Note 17 of this Quarterly Report[183](index=183&type=chunk) [Forward-looking Statements](index=60&type=section&id=Forward-looking%20Statements) Forward-looking statements are subject to known and unknown risks and uncertainties, and actual results may differ materially from projections - Forward-looking statements involve known and unknown risks and uncertainties, and actual results could differ materially from projections[184](index=184&type=chunk) - Key risks include the ability to complete the P&HS segment sale, competitive pressures, dependence on customers and suppliers, regulatory changes, and financing costs[186](index=186&type=chunk)[190](index=190&type=chunk) - The company does not undertake to update or revise any forward-looking statements, except as required by applicable law[187](index=187&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=64&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes in the company's quantitative and qualitative market risk disclosures since the Annual Report on Form 10-K for December 31, 2024 - No material changes in market risk disclosures were reported through June 30, 2025, compared to the Annual Report on Form 10-K for December 31, 2024[188](index=188&type=chunk) [Item 4. Controls and Procedures](index=64&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the period - The principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of June 30, 2025[189](index=189&type=chunk) - There was no change in internal control over financial reporting that materially affected, or is reasonably likely to materially affect, internal control over financial reporting during the period[189](index=189&type=chunk) [Part II. Other Information](index=66&type=section&id=Part%20II.%20Other%20Information) This section covers legal proceedings, risk factors, equity security sales, exhibits, and official signatures [Item 1. Legal Proceedings](index=66&type=section&id=Item%201.%20Legal%20Proceedings) No material developments in legal proceedings were reported through June 30, 2025, beyond those previously disclosed in the Annual Report on Form 10-K and Management's Discussion and Analysis - No material developments in legal proceedings were reported through June 30, 2025, other than those described in the Annual Report on Form 10-K and Management's Discussion and Analysis[191](index=191&type=chunk) [Item 1A. Risk Factors](index=66&type=section&id=Item%201A.%20Risk%20Factors) New and revised risk factors include the potential negative impact of a commercial payor contract termination, reduced reimbursement for non-invasive ventilation products by CMS, and various risks associated with the contemplated sale of the P&HS segment, such as business disruption and reduced diversification - A commercial Payor's notice of contract termination could negatively impact financial condition, as affected agreements represented approximately **12% of net revenue** for the six months ended June 30, 2025[193](index=193&type=chunk) - A June 2025 CMS determination may reduce reimbursement qualification for non-invasive ventilation products, potentially adversely affecting the business[194](index=194&type=chunk) - Risks related to the contemplated sale of the P&HS segment include potential delays, business disruptions, reduced diversification, significant costs, and the possibility of retained liabilities[195](index=195&type=chunk)[196](index=196&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk)[203](index=203&type=chunk)[204](index=204&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=70&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Board authorized a $100 million share repurchase program, under which approximately 0.8 million shares were repurchased for $6.6 million during the six months ended June 30, 2025 - The Board of Directors authorized a share repurchase program of up to **$100 million** over the next 24 months, starting February 26, 2025[205](index=205&type=chunk)[208](index=208&type=chunk) Share Repurchase Activity (in thousands, except per share data) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Approximate Dollar Value of Shares That May Yet be Purchased Under the Program | | :----- | :------------------------------- | :--------------------------- | :--------------------------------------------------------------------------- | | Year-to-date (June 30, 2025) | 826 | $8.07 | $93,360 | [Item 6. Exhibits](index=72&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the 10-Q report, including the Termination Agreement for the Rotech acquisition, CEO/CFO certifications, and XBRL-related documents - Key exhibits include the Termination Agreement for the Rotech acquisition, CEO/CFO certifications (Rule 13a-14(a) and 18 U.S.C. Section 1350), and Inline XBRL documents[211](index=211&type=chunk) [Signatures](index=73&type=section&id=Signatures) The report was signed by Edward A. Pesicka, President, Chief Executive Officer & Director, and Jonathan A. Leon, Executive Vice President & Chief Financial Officer, on August 11, 2025 - The report was signed by Edward A. Pesicka (President, CEO & Director) and Jonathan A. Leon (Executive Vice President & CFO) on August 11, 2025[213](index=213&type=chunk)

Financial Data and Key Metrics Changes - Revenue for the second quarter was $682 million, an increase of 3.3% compared to 2024, with a projected revenue for 2025 between $2.76 billion and $2.82 billion [14][22] - Adjusted EBITDA for the second quarter was $96.6 million, representing a 14.2% margin, compared to $91.1 million or 13.8% margin in 2024 [15][16] - Adjusted net income for the quarter was $20.5 million or $0.26 per share, compared to $19.3 million or $0.25 per share last year [18] Business Line Data and Key Metrics Changes - The Patient Direct business is projected to grow from approximately $450 million in annual revenue at acquisition in 2017 to between $2.76 billion and $2.82 billion in 2025 [9] - The sleep category, particularly sleep supplies, led overall growth, while diabetes supplies showed lower than planned performance [14][15] - Adjusted EBITDA for the year-to-date period was $192.7 million or 14.2% of revenue, compared to $160.3 million or 12.3% in the prior year [16] Market Data and Key Metrics Changes - Approximately 40% of American adults live with at least one chronic condition, driving demand for home-based health care [7] - The company expects to capitalize on strong sustainable tailwinds in the home-based care market due to demographic shifts and macroeconomic trends [6] Company Strategy and Development Direction - The company is in the final stages of divesting the Products and Healthcare Services segment, focusing exclusively on the higher-margin Patient Direct segment [5][6] - Future growth will be driven by disciplined growth through organic initiatives and strategic acquisitions, while also focusing on reducing stranded costs and improving profitability [10][11] - The company plans to evaluate selective acquisition opportunities that align with its strategic vision [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to lead in the evolving market, supported by favorable demographic trends [6] - The anticipated increase in stranded costs is expected as the company approaches the expected close of the divestiture [23] - Management expects limited impact from the loss of a contract with Kaiser in 2025, with the bulk of the transition occurring in 2026 [39] Other Important Information - The company reported $80 million in expenses related to the termination of the RoTEK acquisition, impacting financial results [12] - Net debt as of June 30 was $1.9 billion, an increase of $126 million since 2024, primarily due to the cash paid to terminate the RoTEK acquisition [19][20] Q&A Session Summary Question: Dynamics of the transaction and stranded costs - Management expects stranded costs to decrease by the second half of 2026 after the divestiture [25] Question: Medium-term trajectory of the diabetes business - Management noted a shift from DME to pharmacy and emphasized growth in their pharmacy capability [26][27] Question: Guidance on EBITDA and stranded costs - The expected increase in stranded costs is related to the anticipated divestiture of the PNHS business [70] Question: Impact of the one big beautiful bill on cash flow - The legislation is viewed as a net positive for the company financially, particularly regarding cash taxes [62] Question: Future acquisition considerations post-RoTEK - Future acquisitions will likely be smaller in scope, focusing on paying down debt and increasing free cash flow [66]

Financial Outlook for 2025 - Revenue is projected to be between $2.76 billion and $2.82 billion[7] - Adjusted EBITDA is expected to range from $376 million to $382 million[7] - Adjusted Net Income is forecasted to be between $81 million and $85 million[7] - Adjusted EPS is anticipated to be in the range of $1.02 to $1.07[7] Key Financial Metrics - Interest Expense is estimated to be $97 million to $100 million[7] - Gross Capital Expenditures are projected to be $205 million to $215 million[7] - Net Capital Expenditures are expected to be $135 million to $145 million[7] - The Adjusted Effective Tax Rate is projected to be between 29.5% and 30.5%[7] - Diluted Weighted Average Shares Outstanding are estimated to be approximately 80 million[7] Important Considerations - The company's outlook includes forward-looking statements subject to risks and uncertainties, as detailed in their SEC filings[2] - The presentation includes non-GAAP financial measures used by management to evaluate performance, but these should not be considered superior to GAAP measures[3, 5]

Executive Summary & Strategic Update [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Owens & Minor reported solid growth in its continuing operations, primarily the Patient Direct segment, for the second quarter of 2025, while reclassifying the Products & Healthcare Services segment as discontinued operations - The company has classified its Products & Healthcare Services segment as discontinued operations, anticipating its sale to focus on the Patient Direct business[1](index=1&type=chunk)[2](index=2&type=chunk) Second Quarter and Year-to-Date 2025 Financial Summary for Continuing Operations | Metric ($ in millions, except per share data) | 2Q25 | 2Q24 | YTD 2025 | YTD 2024 | | :--------------------------------------- | :----- | :----- | :--------- | :--------- | | Revenue | $681.9 | $660.4 | $1,355.8 | $1,298.2 | | Loss from continuing operations, net of tax, GAAP | $(83.8) | $(6.7) | $(87.6) | $(20.1) | | Adj. net income from continuing operations, Non-GAAP | $20.5 | $19.3 | $43.7 | $21.9 | | Adj. EBITDA, Non-GAAP | $96.6 | $91.1 | $192.7 | $160.3 | | Loss from continuing operations, net of tax per common share, GAAP | $(1.09) | $(0.09) | $(1.14) | $(0.26) | | Adj. net income from continuing operations per share, Non-GAAP | $0.26 | $0.25 | $0.55 | $0.28 | [Strategic Business Transformation](index=1&type=section&id=Strategic%20Business%20Transformation) The company is in the final stages of divesting its Products & Healthcare Services segment, reclassifying it as discontinued operations to transform into a pure-play Patient Direct company, with management confident in future growth - The company is divesting its Products & Healthcare Services segment, reclassifying it as discontinued operations to partner with a buyer for enhanced customer support and long-term growth[1](index=1&type=chunk)[2](index=2&type=chunk) - The company will transform into a pure-play Patient Direct business, confident in its evolving leadership within this market, benefiting from favorable demographic trends and significant scale[3](index=3&type=chunk) [2025 Continuing Operations Financial Outlook](index=1&type=section&id=2025%20Continuing%20Operations%20Financial%20Outlook) The company will provide its 2025 financial outlook for continuing operations during its earnings conference call on August 11, 2025, at 8:30 AM EDT - The company will provide its 2025 financial outlook for continuing operations during the earnings conference call[4](index=4&type=chunk) [Investor Conference Call for Second Quarter 2025 Financial Results](index=1&type=section&id=Investor%20Conference%20Call%20for%20Second%20Quarter%202025%20Financial%20Results) Owens & Minor will host an investor and analyst conference call on Monday, August 11, 2025, at 8:30 AM EDT, providing dial-in numbers and a webcast link - The investor conference call will be held on Monday, August 11, 2025, at 8:30 AM EDT, accessible via toll-free dial-in or webcast[5](index=5&type=chunk) Financial Performance (Continuing Operations) [Consolidated Statements of Operations (Unaudited)](index=3&type=section&id=Consolidated%20Statements%20of%20Operations%20(unaudited)) Net revenue from continuing operations increased in Q2 and H1 2025, but the company reported a significantly expanded net loss due to substantial losses from discontinued operations and a transaction termination fee [Three Months Ended June 30. 2025](index=3&type=section&id=Three%20Months%20Ended%20June%2030.%202025) In Q2 2025, net revenue from continuing operations increased, but the net loss significantly expanded due to a transaction termination fee and substantial losses from discontinued operations Key Data from Consolidated Statements of Operations for Q2 2025 | Metric (dollars in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------- | :-------------------- | :-------------------- | | Net Revenue | $681,917 | $660,401 | | Operating (Loss) Income | $(39,710) | $16,922 | | Loss from Continuing Operations, Net of Tax | $(83,822) | $(6,742) | | Loss from Discontinued Operations, Net of Tax | $(785,236) | $(25,171) | | Net Loss | $(869,058) | $(31,913) | | Transaction Termination Fee | $80,000 | - | [Six Months Ended June 30. 2025](index=4&type=section&id=Six%20Months%20Ended%20June%2030.%202025) For the first half of 2025, net revenue from continuing operations increased, but the net loss significantly expanded due to losses from discontinued operations and a transaction termination fee Key Data from Consolidated Statements of Operations for H1 2025 | Metric (dollars in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :-------------------- | :-------------------- | | Net Revenue | $1,355,801 | $1,298,244 | | Operating (Loss) Income | $(19,919) | $23,892 | | Loss from Continuing Operations, Net of Tax | $(87,632) | $(20,135) | | Loss from Discontinued Operations, Net of Tax | $(806,408) | $(33,664) | | Net Loss | $(894,040) | $(53,799) | | Transaction Termination Fee | $80,000 | - | [Condensed Consolidated Balance Sheets (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(unaudited)) As of June 30, 2025, total assets and total shareholders' equity decreased, primarily due to the reclassification of assets and liabilities of discontinued operations, resulting in a deficit in shareholders' equity Key Data from Condensed Consolidated Balance Sheets | Metric (dollars in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :------------- | | Total Assets | $4,154,545 | $4,656,156 | | Current Assets of Discontinued Operations | $1,890,638 | $1,625,354 | | Non-Current Assets of Discontinued Operations | - | $731,193 | | Total Liabilities | $4,435,555 | $4,069,792 | | Current Liabilities of Discontinued Operations | $1,460,239 | $1,080,896 | | Non-Current Liabilities of Discontinued Operations | - | $237,894 | | Total (Deficit) Equity | $(281,010) | $586,364 | - As of June 30, 2025, total assets decreased by **10.77%** from December 31, 2024, while total liabilities increased by **9.00%**, leading to a shift from positive shareholders' equity to a deficit[12](index=12&type=chunk) [Consolidated Statements of Cash Flows (Unaudited)](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)) In Q2 and H1 2025, operating cash flow significantly decreased, and investing cash outflows increased, while financing cash flow turned into a net inflow in Q2, primarily due to revolving credit facility financing [Three Months Ended June 30, 2025](index=6&type=section&id=Three%20Months%20Ended%20June%2030,%202025) In Q2 2025, cash flow from operating activities decreased to $37.6 million from $116.1 million in Q2 2024, investing cash outflows increased, and financing cash flow shifted from a net outflow to a net inflow of $31.7 million Key Data from Consolidated Statements of Cash Flows for Q2 2025 | Metric (dollars in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------- | :-------------------- | :-------------------- | | Net Loss | $(869,058) | $(31,913) | | Net Cash Provided by Operating Activities | $37,610 | $116,149 | | Net Cash Used in Investing Activities | $(52,917) | $(35,170) | | Net Cash Provided by (Used in) Financing Activities | $31,699 | $(78,240) | | Cash and Cash Equivalents, End of Period | $77,087 | $273,469 | - In Q2 2025, cash flow from operating activities decreased by **67.6%** year-over-year, primarily due to an expanded net loss and changes in inventory[13](index=13&type=chunk) [Six Months Ended June 30, 2025](index=7&type=section&id=Six%20Months%20Ended%20June%2030,%202025) For the first half of 2025, cash flow from operating activities significantly decreased to $2.5 million from $63.2 million in H1 2024, investing cash outflows substantially increased, and financing cash flow shifted from a net outflow to a net inflow of $124.5 million Key Data from Consolidated Statements of Cash Flows for H1 2025 | Metric (dollars in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :-------------------- | :-------------------- | | Net Loss | $(894,040) | $(53,799) | | Net Cash Provided by Operating Activities | $2,544 | $63,187 | | Net Cash Used in Investing Activities | $(101,117) | $(37,040) | | Net Cash Provided by (Used in) Financing Activities | $124,477 | $(24,920) | | Cash and Cash Equivalents, End of Period | $77,087 | $273,469 | - For H1 2025, cash flow from operating activities decreased by **95.9%** year-over-year, primarily due to an expanded net loss and changes in accounts receivable and inventory[15](index=15&type=chunk) [Net Loss Per Common Share (Unaudited)](index=8&type=section&id=Net%20Loss%20Per%20Common%20Share%20(unaudited)) The company reported significant net losses per common share in Q2 and H1 2025, substantially higher than the prior year, primarily due to considerable losses from discontinued operations [Three Months Ended June 30, 2025](index=8&type=section&id=Three%20Months%20Ended%20June%2030,%202025) In Q2 2025, the loss from continuing operations per share was $1.09, and the loss from discontinued operations per share was $10.21, resulting in a total net loss per share of $11.30 Net Loss Per Common Share for Q2 2025 | Metric (except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--------------------------- | :-------------------- | :-------------------- | | Loss from Continuing Operations, Net of Tax, Per Share | $(1.09) | $(0.09) | | Loss from Discontinued Operations, Net of Tax, Per Share | $(10.21) | $(0.33) | | Net Loss Per Share | $(11.30) | $(0.42) | [Six Months Ended June 30, 2025](index=9&type=section&id=Six%20Months%20Ended%20June%2030,%202025) For the first half of 2025, the loss from continuing operations per share was $1.14, and the loss from discontinued operations per share was $10.46, resulting in a total net loss per share of $11.60 Net Loss Per Common Share for H1 2025 | Metric (except per share data) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------- | :-------------------- | :-------------------- | | Loss from Continuing Operations, Net of Tax, Per Share | $(1.14) | $(0.26) | | Loss from Discontinued Operations, Net of Tax, Per Share | $(10.46) | $(0.44) | | Net Loss Per Share | $(11.60) | $(0.70) | Non-GAAP Financial Measures & Reconciliations [GAAP/Non-GAAP Reconciliations (Unaudited)](index=10&type=section&id=GAAP%2FNon-GAAP%20Reconciliations%20(unaudited)) The company provides GAAP to Non-GAAP reconciliations for adjusted operating income, net income, EPS, adjusted EBITDA, net debt, and net capital expenditures for continuing operations, excluding items not reflective of core business [Operating Income, Net Income, and EPS](index=10&type=section&id=Operating%20Income,%20Net%20Income,%20and%20EPS) Reconciliations show that adjusted operating income, adjusted net income, and adjusted EPS for continuing operations are significantly higher than GAAP reported values after excluding acquisition-related, transaction termination, exit, restructuring, litigation, and financing costs GAAP/Non-GAAP Reconciliation of Operating Income, Net Income, and EPS for Continuing Operations | Metric (dollars in thousands, except per share data) | 2Q25 | 2Q24 | H1 2025 | H1 2024 | | :----------------------------------------------- | :---------- | :---------- | :----------- | :----------- | | Reported Operating (Loss) Income (GAAP) | $(39,710) | $16,922 | $(19,919) | $23,892 | | Adjusted Operating Income (Non-GAAP) | $56,870 | $52,788 | $114,012 | $82,167 | | Reported Loss from Continuing Operations, Net of Tax (GAAP) | $(83,822) | $(6,742) | $(87,632) | $(20,135) | | Adjusted Income from Continuing Operations, Net of Tax (Non-GAAP) | $20,483 | $19,306 | $43,716 | $21,868 | | Reported Loss from Continuing Operations, Net of Tax, Per Share (GAAP) | $(1.09) | $(0.09) | $(1.14) | $(0.26) | | Adjusted Income from Continuing Operations, Net of Tax, Per Share (Non-GAAP) | $0.26 | $0.25 | $0.55 | $0.28 | [Adjusted EBITDA and Net Debt](index=11&type=section&id=Adjusted%20EBITDA%20and%20Net%20Debt) The company reported growth in adjusted EBITDA for Q2 and H1 2025, derived from multiple adjustments to loss from continuing operations, while net debt is calculated by subtracting cash and cash equivalents from total debt Reconciliation of Adjusted EBITDA and Net Debt | Metric (dollars in thousands) | 2Q25 | 2Q24 | H1 2025 | H1 2024 | | :-------------------------- | :---------- | :---------- | :----------- | :----------- | | Adjusted EBITDA (Non-GAAP) | $96,635 | $91,080 | $192,653 | $160,300 | | Metric (dollars in thousands) | June 30, 2025 | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :------------ | :------------- | | Total Debt (GAAP) | $1,977,745 | $1,938,429 | $1,841,259 | | Cash and Cash Equivalents | $(38,258) | $(29,710) | $(27,572) | | Net Debt (Non-GAAP) | $1,939,487 | $1,908,719 | $1,813,687 | [Net Capital Expenditures](index=12&type=section&id=Net%20Capital%20Expenditures) The company provides a reconciliation of net capital expenditures for continuing operations, calculated by deducting capital expenditures of discontinued operations and proceeds from the sale of patient service equipment and other fixed assets from GAAP capital expenditures Reconciliation of Net Capital Expenditures for Continuing Operations | Metric (dollars in thousands) | 2Q25 | 2Q24 | H1 2025 | H1 2024 | | :-------------------------- | :---------- | :---------- | :----------- | :----------- | | Reported Capital Expenditures (GAAP) | $69,537 | $45,800 | $134,211 | $95,208 | | Capital Expenditures from Continuing Operations | $59,171 | $42,344 | $107,293 | $84,058 | | Net Capital Expenditures from Continuing Operations (Non-GAAP) | $41,051 | $24,856 | $72,289 | $50,532 | [Use of Non-GAAP Measures](index=13&type=section&id=Use%20of%20Non-GAAP%20Measures) The company utilizes Non-GAAP financial measures for internal performance evaluation, financial planning, and incentive compensation, serving as supplementary metrics for investors, but these should not replace or supersede GAAP measures - Management uses Non-GAAP financial measures to evaluate company performance, balance sheet, conduct financial and operational planning, and determine incentive compensation[29](index=29&type=chunk) - Non-GAAP financial measures serve as supplementary indicators, assisting investors in evaluating the impact of items and events on financial and operating results, and for comparison with competitors[30](index=30&type=chunk) - Non-GAAP financial measures should not be considered substitutes for or superior to GAAP financial measures, and may differ from similarly titled measures used by other companies[31](index=31&type=chunk) Company Information & Disclosures [Safe Harbor Statement](index=1&type=section&id=Safe%20Harbor) This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995, addressing future prospects, performance, financial results, and the P&HS business sale, while cautioning investors about inherent risks and uncertainties - This press release contains forward-looking statements concerning future prospects, financial performance, the P&HS business sale, cost savings, growth, and industry trends[7](index=7&type=chunk) - Forward-looking statements involve known and unknown risks and uncertainties that could cause actual results to differ materially from expectations[7](index=7&type=chunk) - Investors should refer to the risk factors discussed in the company's 10-K, 10-Q, and 8-K reports filed with the SEC[7](index=7&type=chunk) [About Owens & Minor](index=2&type=section&id=About%20Owens%20%26%20Minor) Owens & Minor, Inc. is a Fortune 500 global healthcare solutions company providing essential products and services from hospitals to homes, operating with brands like Apria®, Byram®, and HALYARD* and employing over 20,000 people worldwide - Owens & Minor is a Fortune 500 global healthcare solutions company, providing essential products and services from hospitals to homes[8](index=8&type=chunk) - The company operates with affiliated brands such as Apria®, Byram®, and HALYARD*, employing over **20,000** people globally[8](index=8&type=chunk) [Contact Information](index=13&type=section&id=CONTACT) This section provides detailed contact information for investor relations and media inquiries, including respective email addresses - Investor contacts: Jackie Marcus or Nick Teves of Alpha IR Group (OMI@alpha-ir.com)[32](index=32&type=chunk) - Media contact: Stacy Law (media@owens-minor.com)[33](index=33&type=chunk)

Group 1 - Owens & Minor, Inc. is set to release its second-quarter earnings results on August 11, with expected earnings of 28 cents per share, a decrease from 36 cents per share in the same period last year [1] - The company anticipates quarterly revenue of $2.73 billion, an increase from $2.67 billion a year earlier [1] - Owens & Minor announced the termination of its acquisition of Rotech Healthcare on June 5 [1] Group 2 - Owens & Minor shares increased by 12.4%, closing at $7.09 on Friday [2] - Analysts have provided various ratings for Owens & Minor, with Baird maintaining a Neutral rating and raising the price target from $9 to $10 [7] - JP Morgan has an Underweight rating with a reduced price target from $14 to $10, while UBS maintains a Buy rating but has cut the price target from $25 to $13 [7]

Core Insights - The termination of the acquisition deal between Owens & Minor and Rotech Healthcare Holdings highlights the challenges in the healthcare sector regarding regulatory approvals and strategic realignment [5][12][13] Group 1: Transaction Overview - Owens & Minor announced the termination of a $1.36 billion acquisition of Rotech due to difficulties in obtaining antitrust approval from the FTC [1][4] - The acquisition was initially aimed at enhancing Owens & Minor's Patient Direct business and expanding its home healthcare product offerings [2][5] - Rotech, a leading home medical equipment supplier, reported approximately $750 million in revenue for 2023, with an EBITDA margin close to 30% [2][9] Group 2: Strategic Adjustments - Owens & Minor is refocusing its resources on the Patient Direct segment, which has shown faster growth and higher profit margins, following the failed acquisition [5][7] - The company is also exploring the sale of its "Products and Healthcare Services" segment to strengthen its balance sheet [7][12] - As of Q1 2025, Owens & Minor reported revenues of $2.6 billion, with a net loss of $21.89 million and total debt of $1.95 billion [7] Group 3: Industry Dynamics - The home medical equipment sector remains attractive due to increasing demand driven by aging populations and chronic diseases, with home treatment being a cost-effective alternative [10][11] - Major players in the healthcare industry are entering the home medical equipment market, indicating a shift towards home-based care [11] - The regulatory environment, particularly the FTC's scrutiny of mergers, poses challenges for companies seeking growth through acquisitions [13] Group 4: Lessons from Rotech's Experience - Rotech's transition from an acquirer to a potential seller illustrates the risks associated with high leverage and reliance on acquisitions for growth [8][9] - The company's operational challenges highlight the need for strong integration capabilities and cash flow management in the healthcare sector [9][12] - The case of Owens & Minor and Rotech serves as a reminder that successful growth in the healthcare industry requires not only scale but also the ability to effectively manage and integrate acquired assets [12][13]

Part I [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Q1 2025 saw a net loss of $25.0 million due to higher operating expenses, with total assets reaching $4.86 billion [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations (Q1 2025 vs. Q1 2024) | Financial Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Net revenue** | $2,632,048 | $2,612,680 | | **Gross profit** | $526,013 | $535,529 | | **Operating income** | $124 | $9,696 | | **Loss before income taxes** | $(35,074) | $(27,112) | | **Net loss** | $(24,982) | $(21,886) | | **Diluted net loss per share** | $(0.32) | $(0.29) | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights | Balance Sheet Item | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Total current assets** | $2,206,198 | $2,021,017 | | **Total assets** | $4,856,424 | $4,656,156 | | **Total current liabilities** | $1,960,215 | $1,852,052 | | **Long-term debt** | $1,897,515 | $1,808,047 | | **Total liabilities** | $4,285,445 | $4,069,792 | | **Total equity** | $570,979 | $586,364 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Cash Flow Summary (Q1 2025 vs. Q1 2024) | Cash Flow Activity | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Cash used for operating activities** | $(35,066) | $(52,962) | | **Cash used for investing activities** | $(48,200) | $(1,870) | | **Cash provided by financing activities** | $92,778 | $53,320 | | **Net increase (decrease) in cash** | $10,054 | $(2,130) | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail segment reporting, a $21 million retained earnings correction, and significant financing activities including the Rotech acquisition - The company operates under two segments: Products & Healthcare Services (U.S. distribution and Global Products) and Patient Direct (direct-to-patient medical supplies and home healthcare)[22](index=22&type=chunk)[75](index=75&type=chunk) - A prior period accounting error related to over-accrual of accounts payable was corrected, resulting in a **$21 million increase to retained earnings** as of the earliest balance sheet date presented[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) - The company entered into a new Receivables Sale Program with a capacity of up to **$450 million**; in Q1 2025, **$343 million** of receivables were sold under this program[32](index=32&type=chunk)[33](index=33&type=chunk) - The company entered into an agreement to acquire Rotech Healthcare Holdings Inc. for **$1.36 billion** in cash, expected to close in the first half of 2025; a termination fee of **$70 million** would be payable by the company under certain conditions[86](index=86&type=chunk) - Subsequent to the quarter end, on April 4, 2025, the company completed a private offering of **$1.0 billion** in 10.000% Senior Secured Notes due 2030 to finance the Rotech acquisition[92](index=92&type=chunk) - On February 26, 2025, the Board authorized a new share repurchase program of up to **$100 million**; in Q1 2025, **0.2 million shares** were repurchased for **$1.5 million**[90](index=90&type=chunk)[91](index=91&type=chunk) [Management's Discussion and Analysis (MD&A)](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A highlights Q1 2025 net loss due to acquisition and realignment costs, segment performance, and liquidity management [Overview and Strategic Developments](index=21&type=section&id=Overview%20and%20Strategic%20Developments) - Net loss per share was **$(0.32)** for Q1 2025, compared to **$(0.29)** in Q1 2024, impacted by **$16 million** in acquisition-related charges for the planned Rotech acquisition and a **$3.9 million** increase in exit and realignment charges[98](index=98&type=chunk) - The company announced on February 28, 2025, that it is in active discussions regarding the potential sale of its Products & Healthcare Services segment[102](index=102&type=chunk) - The company entered an agreement to acquire Rotech for **$1.36 billion** in cash, with an expected closing in the first half of 2025, pending regulatory review[103](index=103&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Net Revenue by Segment (Q1 2025 vs. Q1 2024) | Segment | Q1 2025 Net Revenue (in thousands) | Q1 2024 Net Revenue (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Products & Healthcare Services | $1,958,164 | $1,974,837 | (0.8)% | | Patient Direct | $673,884 | $637,843 | 5.7% | | **Total Net Revenue** | **$2,632,048** | **$2,612,680** | **0.7%** | - Gross profit decreased by **1.8%** to **$526.0 million** in Q1 2025, with the gross profit margin declining to **19.98%** from **20.50%** in Q1 2024[109](index=109&type=chunk) - Distribution, selling and administrative (DS&A) expenses decreased by **3.2%** to **$462.4 million**, primarily due to a **$16 million** reduction in teammate benefit costs[112](index=112&type=chunk) - Exit and realignment charges were **$31 million** in Q1 2025, related to various initiatives including kitting, potential P&HS segment sale costs, and an accounts receivable provision for the Fusion 5 business[115](index=115&type=chunk) Adjusted EBITDA Reconciliation (Non-GAAP) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Net loss, as reported (GAAP) | $(24,982) | $(21,886) | | **Adjusted EBITDA (non-GAAP)** | **$121,855** | **$116,270** | [Financial Condition, Liquidity and Capital Resources](index=25&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) - Cash used for operating activities improved to **$35.1 million** in Q1 2025 from **$53.0 million** in Q1 2024, benefiting from a **$130 million** impact from the Receivables Sale Program[131](index=131&type=chunk) - Primary sources of liquidity include cash on hand, the Receivables Sale Program (up to **$450 million**), and a Revolving Credit Agreement (**$450 million** capacity)[134](index=134&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk) - As of March 31, 2025, there were **$98 million** in outstanding borrowings on the Revolving Credit Agreement, leaving **$318 million** available[137](index=137&type=chunk)[54](index=54&type=chunk) - The company was in compliance with all debt covenants as of March 31, 2025[138](index=138&type=chunk)[55](index=55&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes occurred in market risk disclosures since the 2024 year-end report - There have been no material changes in the quantitative and qualitative market risk disclosures since the 2024 year-end report[152](index=152&type=chunk) [Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[153](index=153&type=chunk) Part II [Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) No material developments in legal proceedings occurred since the 2024 year-end report - There have been no material developments in legal proceedings since the 2024 year-end report[154](index=154&type=chunk) [Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) New risk factors include potential impacts from trade laws and uncertainties surrounding the Products & Healthcare Services segment sale - A new risk factor was added concerning significant developments in national laws or policies, such as tariffs, which could increase product costs, impact demand, and disrupt supply chains[156](index=156&type=chunk) - A new risk factor was added detailing the uncertainties and potential negative impacts of the potential sale of the Products & Healthcare Services segment[157](index=157&type=chunk) - Risks of the potential sale include failure to complete a transaction, becoming a smaller, less diversified company, not achieving expected financial benefits, and disruption to business relationships[158](index=158&type=chunk)[159](index=159&type=chunk)[161](index=161&type=chunk)[163](index=163&type=chunk) [Issuer Purchases of Equity Securities](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company initiated a new $100 million share repurchase program, repurchasing 173 thousand shares for $1.5 million in Q1 2025 Share Repurchase Activity (Q1 2025) | Period | Total Shares Purchased (thousands) | Average Price Paid Per Share | Approximate Dollar Value Remaining Under Program (thousands) | | :--- | :--- | :--- | :--- | | Feb 26-28, 2025 | — | $— | $100,000 | | Mar 1-31, 2025 | 173 | $8.66 | $98,500 | | **Total** | **173** | | |