Financial Data and Key Metrics Changes - The company's revenue for Q1 2025 was $2.6 billion, up just under 1% as reported, but up 2.3% on a same-day basis compared to the prior year [16] - Adjusted net income for the quarter was $18 million or $0.23 per share, representing about 20% growth compared to $15 million or $0.19 per share last year [21] - Adjusted EBITDA grew 5% to $122 million versus $116 million reported during Q1 2024 [21] Business Line Data and Key Metrics Changes - Patient Direct revenue was $674 million, growing by 6% compared to Q1 2024, with a same-day growth of 7.3% [16] - The Products and Healthcare Services segment reported a decline of 0.8%, while on a same sales day basis, it grew 0.7% compared to the first quarter last year [18] - Operating income in the Patient Direct segment grew by 31%, contributing to a total operating income of $61 million, an improvement of about 7% versus Q1 2024 [20] Market Data and Key Metrics Changes - The company experienced continued growth in oxygen therapy, which began in Q4 2024, and expects growth throughout 2025 [17] - The Medical Distribution division saw good same-store sales, but lower glove prices and international sales offset this growth [18] Company Strategy and Development Direction - The company is actively engaged in discussions regarding the potential sale of its Products and Healthcare Services segment while continuing to run this segment with commitment [10] - Investments in revenue cycle management have led to record collection rates in Q1, with plans to extend these learnings to other divisions [9] - The company is implementing price increases in response to tariffs, effective in early June, while ensuring high-quality product delivery [13][14] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed guidance for the year, expecting improving results in each subsequent quarter, with at least 70% of earnings and cash flow generated in the second half of the year [24] - The company remains bullish on the outlook for earnings and cash flow for the remainder of 2025 [25] Other Important Information - The anticipated annual exposure of current tariffs on products is estimated to be in the range of $100 million to $150 million [13] - The company has opened new state-of-the-art distribution centers to enhance efficiency and service [11] Q&A Session Summary Question: Can you discuss the discussions with customers regarding tariffs? - Management indicated that they are working with customers to identify alternatives and have increased inventory to mitigate tariff impacts [26][29] Question: What is the impact of foreign exchange on the business? - Management noted that while there was volatility in the dollar, they are comfortable with the guidance for the rest of the year regarding FX [31][33] Question: What is the split of tariff exposure between segments? - The majority of tariff exposure is in the Products and Healthcare Services segment, with very little exposure in the Patient Direct segment [40] Question: How is the RoTEK acquisition being accounted for in guidance? - The debt from the RoTEK acquisition will not appear on the balance sheet until the deal closes, and guidance will be updated accordingly [47][49] Question: What is the expected free cash flow for the year? - Management confirmed that they still expect to generate good free cash flow and use it to pay down debt [52]

Financial Data and Key Metrics Changes - The company's revenue for Q1 2025 was $2.6 billion, up just under 1% as reported, but up 2.3% on a same-day basis compared to the prior year [15] - Adjusted net income for the quarter was $18 million or $0.23 per share, representing about 20% growth compared to $15 million or $0.19 per share last year [19] - Adjusted EBITDA grew 5% to $122 million versus $116 million reported during Q1 2024 [19] Business Line Data and Key Metrics Changes - Patient Direct segment revenue was $674 million, growing by 6% compared to Q1 2024, with a same-day growth of 7.3% [15] - The Products and Healthcare Services segment reported a decline of 0.8%, while on a same sales day basis, it grew 0.7% compared to the first quarter last year [16] - Operating income for the Patient Direct segment grew by 31%, resulting in a 173 basis point expansion [6] Market Data and Key Metrics Changes - The Medical Distribution division saw continued growth in same-store sales, but lower glove prices and international sales offset this growth [16] - The company experienced a significant increase in proprietary product sales running through its distribution channel, a key strategic initiative [16] Company Strategy and Development Direction - The company is actively engaged in discussions regarding the potential sale of its Products and Healthcare Services segment while continuing to run this segment with commitment [9] - Investments in revenue cycle management have led to record collection rates in Q1, with plans to extend these learnings to other divisions [8] - The company is implementing price increases in response to tariffs, effective in early June, while ensuring high-quality product delivery [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's performance and reaffirmed guidance for the year, expecting improving results in each subsequent quarter [22] - The anticipated annual exposure of current tariffs on products is estimated to be between $100 million to $150 million, primarily affecting the Products and Healthcare Services segment [12][27] - Management noted that the first quarter typically marks the payment of incentive compensation, impacting cash flow, but expects significant improvement in cash flow for the remainder of the year [20] Other Important Information - The company opened new state-of-the-art distribution centers in Morgantown, West Virginia, and Sioux Falls, South Dakota, to enhance its distribution network [10] - The company is awaiting a final decision from regulators regarding the planned acquisition of RoTEK, expecting to close in the first half of 2025 [8] Q&A Session Summary Question: Can you discuss the discussions with customers regarding tariffs? - Management indicated that the tariff exposure is estimated between $100 million to $150 million, primarily from China and Thailand, and emphasized the need to work collaboratively with customers to address pricing adjustments [27][28] Question: How should we think about the FX impact progressing through the year? - Management noted that while there was volatility in the dollar, particularly in March, the situation has calmed, and they are comfortable with the guidance for the rest of the year regarding FX [31][32] Question: What is the split between the tariff exposure in the PNHS and PD segments? - Management clarified that virtually all tariff exposure is in the Products and Healthcare Services segment, with minimal exposure in the Patient Direct segment [40] Question: How is the RoTEK financing accounted for in guidance? - Management explained that none of the debt will appear on the balance sheet until the deal closes, and they will update guidance accordingly [47] Question: What happens if customers refuse price increases due to tariffs? - Management stated that they cannot sell products at a loss and will work with customers to find alternative products that are lower in cost [61][64]