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]