# AVANOS MEDICAL, INC. (AVNS) Informational only - not investment advice. CIK: 0001606498 SIC: 3842 Orthopedic, Prosthetic & Surgical Appliances & Supplies SIC breadcrumb: [Manufacturing](/division/D/) > [SIC Major Group 38](/major-group/38/) > [SIC 3842 Orthopedic, Prosthetic & Surgical Appliances & Supplies](/industry/3842/) Latest 10-K filed: 2026-02-24 SEC page: https://www.sec.gov/edgar/browse/?CIK=1606498 Filing source: https://www.sec.gov/Archives/edgar/data/1606498/000160649826000004/avns-20251231.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 701200000 | USD | 2025 | 2026-02-24 | | Net income | -72900000 | USD | 2025 | 2026-02-24 | | Assets | 1073700000 | USD | 2025 | 2026-02-24 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-24. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001606498.json. Derived margins are computed from the extracted annual SEC facts. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | 566,200,000 | 611,600,000 | 652,300,000 | 697,600,000 | 714,800,000 | 587,000,000 | 684,100,000 | 673,300,000 | 687,800,000 | 701,200,000 | | Net income | 39,800,000 | 79,300,000 | 57,500,000 | -45,900,000 | -29,000,000 | 6,300,000 | 50,500,000 | -61,800,000 | -392,100,000 | -72,900,000 | | Operating income | -107,100,000 | -43,100,000 | 500,000 | -55,700,000 | -48,500,000 | -39,000,000 | 35,500,000 | 4,200,000 | -396,200,000 | -61,600,000 | | Gross profit | 297,200,000 | 336,900,000 | 390,900,000 | 402,200,000 | 370,900,000 | 299,200,000 | 394,200,000 | 379,700,000 | 381,300,000 | 353,900,000 | | Diluted EPS | 0.85 | 1.69 | 1.22 | -0.96 | -0.61 | 0.13 | 1.07 | -1.32 | -8.53 | -1.57 | | Assets | 2,071,800,000 | 2,195,900,000 | 1,833,400,000 | 1,799,600,000 | 1,672,800,000 | 1,603,600,000 | 1,786,900,000 | 1,692,400,000 | 1,154,200,000 | 1,073,700,000 | | Liabilities | 969,300,000 | 980,500,000 | 536,200,000 | 534,400,000 | 416,300,000 | 333,000,000 | 495,700,000 | 456,100,000 | 325,700,000 | 295,500,000 | | Stockholders' equity | 1,102,500,000 | 1,215,400,000 | 1,297,200,000 | 1,272,600,000 | 1,262,100,000 | 1,270,600,000 | 1,291,200,000 | 1,236,300,000 | 828,500,000 | 778,200,000 | | Cash and cash equivalents | 113,700,000 | 219,700,000 | 384,500,000 | 205,300,000 | 111,500,000 | 118,500,000 | 127,700,000 | 87,700,000 | 107,700,000 | 89,800,000 | | Net margin | 7.03% | 12.97% | 8.81% | -6.58% | -4.06% | 1.07% | 7.38% | -9.18% | -57.01% | -10.40% | | Operating margin | -18.92% | -7.05% | 0.08% | -7.98% | -6.79% | -6.64% | 5.19% | 0.62% | -57.60% | -8.78% | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001606498.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q2 | 2022-06-30 | | | 0.24 | reported discrete quarter | | 2022-Q3 | 2022-06-30 | | | 0.26 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | -0.01 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 169,400,000 | -68,100,000 | -1.46 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 171,300,000 | -3,700,000 | -0.08 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 173,300,000 | 10,500,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 166,100,000 | -900,000 | -0.02 | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 171,700,000 | 1,800,000 | 0.04 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 170,400,000 | 4,300,000 | 0.09 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 179,600,000 | -397,300,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 167,500,000 | 6,600,000 | 0.14 | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 175,000,000 | -76,800,000 | -1.66 | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 177,800,000 | -1,400,000 | -0.03 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 180,900,000 | -1,300,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 182,200,000 | 5,100,000 | 0.11 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1606498/000160649826000063/avns-20260331.htm Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high Filing date: 2026-05-05 Report date: 2026-03-31 Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations Introduction Avanos is a medical technology company focused on delivering clinically superior medical device solutions that help patients get back to the things that matter. We are committed to addressing some of today’s most important healthcare needs, including providing a vital lifeline for nutrition to patients from hospital to home, and reducing the use of opioids while helping patients move from surgery to recovery. We develop, manufacture and market our recognized brands globally and hold leading market positions in multiple categories across our portfolio. This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide investors with an understanding of our recent performance, and should be read in conjunction with the condensed consolidated financial statements contained in Item 1, “Financial Statements” in this Form 10-Q and our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “Form 10-K”). This MD&A contains forward-looking statements. Refer to “Information Concerning Forward-Looking Statements” at the beginning of this Form 10-Q for an explanation of these types of statements. The following will be discussed and analyzed: •Pending Merger; •Restructuring Activities; •Business Acquisition; •Risks Related to Tariffs; •Results of Operations and Related Information; •Liquidity and Capital Resources; and •Critical Accounting Policies and Use of Estimates. Pending Merger On April 13, 2026, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, A-AV Holdco I, Inc., a Delaware corporation (“Parent”), and A-AV MergerSub, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”). Upon the terms and conditions set forth in the Merger Agreement, Merger Subsidiary will be merged with and into Avanos (the “Merger”), with Avanos surviving the Merger as a wholly-owned subsidiary of Parent. Parent and Merger Sub are affiliates of American Industrial Partners (“AIP”), an operationally oriented industrials investor. At the effective time of the Merger, each issued and outstanding share of our common stock (other than certain excluded shares and shares held by stockholders who properly exercise appraisal rights) will be cancelled and converted into the right to receive $25.00 per share in cash, without interest. In addition, at or immediately prior to the effective time, our outstanding equity awards, including stock options and restricted stock units, will be cancelled and converted into the right to receive cash payments based on the Merger consideration, subject to the terms of the Merger Agreement. A copy of the Merger Agreement is attached as Exhibit 2.1 to our Current Report on Form 8-K dated April 14, 2026. The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement. See Note 14, “Subsequent Event” in Item 1 of this Form 10-Q for further details regarding the pending Merger. Restructuring Activities Post-RH Divestiture Plan During 2024, following the sale of our Respiratory Health business to SunMed Group Holdings in October 2023 (the “RH Divestiture”), we initiated restructuring activities aimed at aligning our organizational structure, our manufacturing and distribution activities, and our operational footprint with our remaining business (the “Plan”). In the first six months of 2025, the Plan was expanded to accommodate additional manufacturing and operational initiatives. In the fourth quarter of 2025, the assessment of our organization performed in conjunction with the appointment of our new Chief Executive Officer in April 2025 was completed and the Plan was expanded to align our organizational structure with our business needs. As a result, we expect to incur up to $10.0 million of incremental expenses consisting primarily of employee 23 Table of Contents severance and benefits. We anticipate annualized savings from these initiatives to be between $15.0 million and $20.0 million. The initiatives associated with the expansion of the Plan are expected to run through 2026. In the three months ended March 31, 2026, we incurred $1.8 million of costs related to the Plan, compared to $3.1 million in the three months ended March 31, 2025. These costs were included in “Cost of products sold” and “Selling and general expenses” in the accompanying condensed consolidated income statements. Business Acquisition On September 11, 2025 we entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Nexus Merger Sub, LLC, a newly formed wholly owned subsidiary of the Company (“Merger Sub”), Nexus Medical, LLC, a Kansas limited liability company (“Nexus”), and Edward Kuklenski, as representative of Nexus’ members. The transaction contemplated by the Merger Agreement (the “Merger”) closed concurrently with the execution of the Merger Agreement. Pursuant to the Merger Agreement, Nexus merged with and into Merger Sub, with Nexus surviving the merger as a wholly owned subsidiary of the Company (the “Nexus Acquisition”). The total purchase price payable by the Company in the Merger was $27.0 million (subject to certain working capital and other adjustments), with up to an additional $20.0 million payable in contingent cash consideration based on the increase in net sales of certain Nexus products during the first three years following the acquisition. The purchase price was funded by available cash on hand. Nexus is a leading manufacturer of anti-reflux needleless connectors. Its proprietary TKO® anti-reflux needleless connector technology, designed to support safer, more consistent nutrition and medication delivery in high-acuity settings, including Neonatal and Pediatric Intensive Care Units (NICUs and PICUs). We expect the acquisition of Nexus will enhance our Specialty Nutrition Systems (“SNS”) portfolio of products. See Note 3, “Business Acquisition” in Item 1 of this Form 10-Q for further details regarding the Nexus acquisition. Risks Related to Tariffs The tariffs imposed to date, and the imposition of new and increased U.S. tariffs and retaliatory trade measures by other countries pose significant risks to our global operations, particularly given our reliance on manufacturing facilities in Mexico and Canada, and on raw materials and components sourced from foreign suppliers, including suppliers in China and Mexico. In addition, we distribute and sell our products globally. The tariffs imposed to date have increased the cost of the products and components we import and may disrupt our established supply chains. Additional tariffs have been threatened by the U.S. administration. We have taken action to mitigate the impact of tariffs, including through cost containment measures, pricing actions where appropriate, supply chain adjustments and reliance on international agreements that allow for reduced or duty-free importation of products. However, tariff rates continue to fluctuate and the rates that may ultimately be in effect for the near and long term are uncertain. Our inability to offset increased costs of, or a drop in demand for, our products as a result of tariffs could materially negatively affect our financial performance. See Part I, Item 1A, “Risk Factors” in our most recent Form 10-K for the year ended December 31, 2025 for a more detailed description of the risks related to the imposition of new and retaliatory tariffs. 24 Table of Contents Results of Operations and Related Information Use of Non-GAAP Measures In this section, we present “Adjusted operating income,” which is a profitability measure that is not calculated in accordance with accounting principles generally accepted in the United States (“GAAP”) and is therefore referred to as a non-GAAP financial measure. We provide this non-GAAP measure because we use it to measure our operational performance and provide greater insight into our ongoing business operations. This measure is not intended to be, and should not be, considered separately from, or an alternative to, the most directly comparable GAAP financial measures. A reconciliation of the non-GAAP measure to the most directly comparable GAAP financial measures is provided below under “Adjusted operating profit.” Net Sales Our net sales are summarized in the following table for the three months ended March 31, 2026 and 2025 (in millions): Three Months Ended March 31, 2026 2025 Change Specialty Nutrition Systems: Enteral feeding $ 84.6  $ 74.5  13.6  % Neonate solutions 39.4  26.6  48.1  % Total Specialty Nutrition Systems 124.0  101.1  22.7  % Pain Management and Recovery: Surgical pain and recovery 21.8  24.5  (11.0) % Radiofrequency ablation 34.5  31.7  8.8  % Total Pain Management and Recovery 56.3  56.2  0.2  % Segment Net Sales 180.3  157.3  14.6  % Corporate and Other 1.9  10.2  (81.4) % Total Net Sales $ 182.2  $ 167.5  8.8  % Net Sales - Percentage Change: Total Volume Pricing/Mix Currency Other(a) Specialty Nutrition Systems 22.7  % 19.0  % 1.4  % 2.8  % (0.5) % Pain Management and Recovery 0.2  % 3.2  % 0.1  % 1.0  % (4.1) % Corporate and Other (81.4) % (81.4) % —  % —  % —  % ___________________________________________________________________________ (a)Other includes the effects of our withdrawal from certain revenue streams that did not meet our return criteria and rounding. Segment and Product Category Descriptions Specialty Nutrition Systems, or SNS, is a portfolio of products including: •Enteral feeding, which includes products such as our MIC-KEY enteral feeding tubes and Corpak patient feeding solutions; and •Neonate solutions, which includes NeoMed neonatal and pediatric feeding solutions and Nexus’ TKO® anti-reflux needleless connectors. Pain Management and Recovery, or PM&R, is a portfolio of products including: •Surgical pain and recovery products such as ON-Q and ambIT surgical pain pumps and Game Ready cold and compression therapy systems; and •Radiofrequency Ablation (“RFA”) solutions, which provide minimally invasive pain relief therapies, such as our COOLIEF pain therapy and our Trident and ESENTEC RFA products used to treat chronic pain conditions. 25 Table of Contents Net Sales by Segment - First Three Months of 2026 Compared to the First Three Months of 2025 Specialty Nutrition Systems For the three months ended March 31, 2026, SNS net sales were $124.0 million, an increase of 22.7% compared to the prior year period. Volume growth was 19.0%, primarily driven by continued strong demand across both our enteral feeding and neonate solutions. Pain Management and Recovery For the three months ended March 31, 2026, PM&R net sales were $56.3 million. Overall net sales growth was relatively flat compared to the prior year period. RFA solutions net sales grew 8.8%, while surgical pain and recovery net sales decreased by 11.0%, primarily driven by lower volume. Net Sales by Geographic Region Net sales by region is presented in the table below (in millions): Three Months Ended March 31, 2026 2025 % Change North America $ 137.1  $ 130.8  4.8  % Europe, Middle East and Africa 30.6  23.7  29.1  Asia Pacific and Latin America 14.5  13.0  11.5  Total net sales $ 182.2  $ 167.5  8.8  % Cost of Products Sold (in millions): Three Months Ended March 31, 2026 2025 Specialty Nutrition Systems $ 57.4  $ 43.4  Pain Management and Recovery 26.5  24.9  Segment Cost of Products Sold(a) 83.9  68.3  Corporate and Other 4.1  9.4  Total Cost of Products Sold $ 88.0  $ 77.7  _______________________________ [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Introduction Avanos is a medical technology company focused on delivering clinically superior medical device solutions that help patients get back to the things that matter. We are committed to addressing some of today’s most important healthcare needs, including providing a vital lifeline for nutrition to patients from hospital to home, and reducing the use of opioids while helping patients move from surgery to recovery. We develop, manufacture and market our recognized brands globally and hold leading market positions in multiple categories across our portfolio. This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide investors with an understanding of our recent performance, financial condition and prospects and should be read in conjunction with the consolidated financial statements contained in Item 8, “Financial Statements and Supplementary Data” in this Annual Report on Form 10-K. The following will be discussed and analyzed: •Goodwill and Intangibles Impairment; •Restructuring Activities; •Business Acquisitions; •Sales of Assets; •Discontinued Operations; •Risks Related to Tariffs •Results of Operations and Related Information; •Liquidity and Capital Resources; •Critical Accounting Policies and Use of Estimates; and •Legal Matters. Goodwill and Intangibles Impairment In the second quarter of 2025, our market capitalization decreased to the extent that we determined that it was more likely than not that the fair value of one of our two reporting units was below its carrying value. Accordingly, we completed an interim goodwill impairment test as of June 30, 2025, using a combination of income and market approaches to determine the fair value of the reporting units. Consequently, we concluded that the fair value of the Pain Management and Recovery (“PM&R”) reporting unit was below its carrying value. As a result, we recorded a $77.0 million impairment to goodwill, which is included in “Goodwill and intangibles impairment” in the accompanying consolidated income statements. In our most recent goodwill impairment test on July 1, 2025, we determined that the fair value of our reporting units equaled or exceeded the net carrying amount of our reporting units. In the fourth quarter of 2024, we assessed the recoverability of a certain asset group which resulted in an impairment loss of $100.2 million. This impairment loss is included in “Goodwill and intangibles impairment” in the accompanying consolidated income statements. A roll-forward of our intangible assets is presented in Note 6, “Supplemental Balance Sheet Information”. In the fourth quarter of 2024, we determined it was more likely than not that the fair value of our medical devices reporting unit may be below its carrying value. Accordingly, we completed an interim goodwill impairment test as of December 1, 2024, and recorded a $336.5 million impairment to goodwill, which is included in “Goodwill and intangibles impairment” in the accompanying consolidated income statements. Restructuring Activities In January 2023, we initiated the Transformation Process, a three-year restructuring initiative pursuant to which we have: (i) combined our Chronic Care and Pain Management franchises into a single commercial organization focused on the SNS and PM&R product categories; (ii) rationalized our product portfolio, including certain low-margin, low-growth product categories, through targeted divestitures (such as the RH Divestiture and the sale of our HA assets); (iii) undertaken additional cost management activities aimed at enhancing the Company’s operating profitability; and (iv) pursued efficient capital allocation strategies, including through acquisitions that meet the Company’s strategic and financial criteria (such as the Nexus Acquisition and the Diros Acquisition). The initial restructuring activities in the Transformation Process related primarily to organizational design and the implementation of business process efficiencies. These initial restructuring activities and related costs were substantially 23 Table of Contents complete at the end of 2024. The accompanying consolidated income statement for the year ended December 31, 2024 includes a net benefit of $0.8 million due to a gain on lease modification for our Alpharetta headquarters. Costs incurred in connection with the Transformation Process are in “Cost of products sold,” “Research and development,” “Selling and general expenses” and “Other expense, net”. During 2024, following the RH Divestiture, we initiated the final phase of the Transformation Process, which is aimed at aligning our organizational structure, our manufacturing and distribution activities, and our operational footprint with our remaining business (the “Plan”). In the first six months of 2025, the Plan was expanded to accommodate additional manufacturing and operational initiatives. In the fourth quarter of 2025, the assessment of our organization performed in conjunction with the appointment of our new Chief Executive Officer was completed and the Plan was expanded to align our organizational structure with our business needs. As a result, we expect to incur up to $10.0 million of incremental expenses consisting primarily of employee severance and benefits. We anticipate annualized savings from these initiatives to be between $15.0 million and $20.0 million. The initiatives associated with the expansion of the Plan are expected to run through 2026. In the year ended December 31, 2025, we incurred $32.4 million of costs related to the Plan, compared to $8.9 million in the year ended December 31, 2024. These costs are included in “Cost of products sold” and “Selling and general expenses” in the accompanying consolidated income statements. Business Acquisitions On September 11, 2025, we entered into the Nexus Acquisition pursuant to which Nexus, a privately held medical device company, became a wholly owned subsidiary of the Company. The total purchase price paid by the Company in the Nexus Acquisition was $27.0 million (subject to certain working capital and other adjustments), with up to an additional $20.0 million payable in contingent cash consideration based on the increase in net sales of certain Nexus product during the first three years following the acquisition. The purchase price in the Nexus Acquisition was funded by available cash on hand. On July 24, 2023, we closed our acquisition of Diros, a leading manufacturer of innovative RFA products used to treat chronic pain conditions. The purchase price was approximately $53.0 million, consisting of $2.5 million cash paid upon entry into the definitive agreement and $50.5 million in cash at closing less working capital and other adjustments, with up to an additional $7.0 million payable in contingent cash consideration based on achievement of certain performance objectives defined in the purchase agreement. The purchase price for the Diros Acquisition was funded by proceeds from our Revolving Credit Facility. Sales of Assets On July 31, 2025, we sold substantially all the assets associated with our HA product line to CMM, a privately held company. In the fourth quarter of 2025, we sold the assets associated with our Game Ready rental business. These transactions align with our ongoing transformation initiative, which is focused on advancing our strategic SNS and PM&R segments. Discontinued Operations On October 2, 2023, we closed the sale of our Respiratory Health (“RH”) business to SunMed Group Holdings, LLC (“Buyer”) (the “RH Divestiture”). The total purchase price for our RH business was $110.0 million in cash, subject to certain adjustments based on the indebtedness and inventory transferred to Buyer at the closing and the chargebacks assumed by Buyer but that would otherwise have been payable by the Company and its subsidiaries on or after October 2, 2023 to distributors of the Company’s RH products located in the United States. In conjunction with the RH Divestiture, we and Buyer entered into various transition services agreements pursuant to which we, Buyer and each company’s respective affiliates provide to each other various transitional services, including, but not limited to, product manufacturing and distribution, facilities, order fulfillment, invoicing, quality assurance, regulatory support, audit support and other services. The remaining limited support services being performed will terminate no later than three years following the closing. Finally, as a result of the RH Divestiture, the results of operations from our RH business are reported as “Loss from discontinued operations, net of tax” in the condensed consolidated income statements. We did not have Net sales from discontinued operations for the year ended December 31, 2025. Net sales from discontinued operations were $54.6 million and $100.9 million in the years ended December 31, 2024 and 2023, respectively. Risks Related to Tariffs The tariffs imposed to date, and the imposition of new and increased U.S. tariffs and retaliatory trade measures by other countries pose significant risks to our global operations, particularly given our reliance on manufacturing facilities in Mexico and Canada, and on raw materials and components sourced from foreign suppliers, including suppliers in China and Mexico. In addition, we distribute and sell our products globally. The tariffs imposed to date have increased the cost of the products and components we import and may disrupt our established supply chains. Additional tariffs have been threatened by the U.S. 24 Table of Contents administration. We have taken action to mitigate the impact of tariffs, including through cost containment measures, pricing actions where appropriate, supply chain adjustments and reliance on international agreements that allow for reduced or duty-free importation of products. However, tariff rates continue to fluctuate and the rates that may ultimately be in effect for the near and long term are uncertain. Our inability to offset increased costs of, or a drop in demand for, our products as a result of tariffs could materially negatively affect our financial performance. See Part I, Item 1A, “Risk Factors” for a more detailed description of the risks related to the imposition of new and retaliatory tariffs. Results of Operations and Related Information Use of Non-GAAP Measures In this section, we present “Adjusted Operating Profit (Loss),” which is a profitability measure that is not calculated in accordance with accounting principles generally accepted in the United States (“GAAP”), is referred to as a non-GAAP financial measure. We provide this non-GAAP measure because we use it to measure our operational performance and provide greater insight into our ongoing business operations. This measure is not intended to be, and should not be, considered separately from, or an alternative to, the most directly comparable GAAP financial measures. A reconciliation of the non-GAAP measure to the most directly comparable GAAP financial measures is provided under “Adjusted Operating Profit (Loss).” Net Sales Our net sales are summarized in the following table for the years ended December 31, 2025, 2024 and 2023 (in millions): Year Ended December 31, 2025 2024 Change 2023 Change Specialty Nutrition Systems: Enteral feeding $ 314.7  $ 289.7  8.6  % $ 283.3  2.3  % Neonate solutions 118.2  106.7  10.8  % 88.3  20.8  % Total Specialty Nutrition Systems 432.9  396.4  9.2  % 371.6  6.7  % Pain Management and Recovery: Surgical pain and recovery 98.8  108.0  (8.5) % 117.5  (8.1) % Radiofrequency ablation 139.0  126.2  10.1  % 109.8  14.9  % Total Pain Management and Recovery 237.8  234.2  1.5  % 227.3  3.0  % Segment Net Sales 670.7  630.6  6.4  % 598.9  5.3  % Corporate and Other 30.5  57.2  (46.7) % 74.4  (23.1) % Total Net Sales $ 701.2  $ 687.8  1.9  % $ 673.3  2.2  % Net Sales - percentage change 2025 vs. 2024 Total Volume(a) Pricing/Mix Currency Other(b) Specialty Nutrition Systems 9.2  % 9.0  % 0.4  % 0.5  % (0.7) % Pain Management and Recovery 1.5  % 1.9  % 0.3  % 0.2  % (0.9) % Corporate and Other (46.7) % (7.0) % (9.5) % —  % (30.2) % Net Sales - percentage change 2024 vs. 2023 Specialty Nutrition Systems 6.7  % 6.3  % 0.2  % 0.2  % —  % Pain Management and Recovery 3.0  % 3.0  % 0.1  % (0.1) % —  % Corporate and Other (23.1) % (1.7) % (21.4) % —  % —  % ______________________________ (a)Volume includes incremental sales from acquisitions. (b)Other includes the effects of our withdrawal from certain revenue streams that did not meet our return criteria and rounding. 25 Table of Contents Segment and Product Category Descriptions Specialty Nutrition Systems, or SNS is a portfolio of products including: •Enteral feeding, which includes products such as our MIC-KEY enteral feeding tubes and Corpak patient feeding solutions; and •Neonate solutions, which includes NeoMed neonatal and pediatric feeding solutions and Nexus’ TKO anti-reflux needleless connectors. Pain Management and Recovery, or PM&R, is a portfolio of products including: •Surgical pain and recovery products such as ON-Q and ambIT surgical pain pumps and Game Ready cold and compression therapy systems; and •Radiofrequency Ablation (“RFA”) solutions, which provide minimally invasive pain relief therapies, such as our COOLIEF pain therapy and our Trident and ESENTEC RFA products used to treat chronic pain conditions. Net Sales by Segment - 2025 Compared to 2024 Specialty Nutrition Systems For the year ended December 31, 2025, SNS net sales were $432.9 million, an increase of 9% compared to the prior year, primarily due to demand for both our enteral feeding and neonate solutions. In enteral feeding, demand for long-term feeding solutions remained strong while our short-term feeding growth was driven by continued adoption of our US CORTRAK standard of care offerings. Neonate solutions continued to experience above-market growth and was strengthened by sales of our recently-acquired Nexus TKO offerings. Pain Management and Recovery For the year ended December 31, 2025, PM&R net sales were $237.8 million, an increase of 2% compared to the prior year. RFA solutions net sales grew 10.1% as a result of an increase in RFA generator sales, which resulted in higher RFA procedures. Surgical pain and recovery net sales was 8.5% lower due to lower volume and the effects of certain revenue streams we strategically decided not to pursue in 2025. Net Sales by Segment - 2024 Compared to 2023 Specialty Nutrition Systems For the year ended December 31, 2024, SNS net sales were $396.4 million, an increase of 7% compared to 2023, primarily due to strong volume across the SNS portfolio, particularly in neonate solutions. Pain Management and Recovery For the year ended December 31, 2024, PM&R net sales were $234.2 million, an increase of 3% compared to the prior period, primarily due to higher volume in RFA partially offset by lower volume in Surgical Pain and Recovery, primarily from the effects of withdrawing selected products from certain international markets. Net Sales by Geographic Region Net sales by region is presented in the table below (in millions): Year Ended December 31, 2025 2024 Change 2023 Change North America $ 543.9  $ 545.0  (0.2) % $ 537.9  1.3  % Europe, Middle East and Africa 102.8  94.8  8.4  84.1  12.7  Asia Pacific and Latin America 54.5  48.0  13.5  51.3  (6.4) Total Net Sales $ 701.2  $ 687.8  1.9  % $ 673.3  2.2  % 26 Table of Contents Cost of Products Sold (in millions): Year Ended December 31, 2025 2024 2023 Specialty Nutrition Systems $ 198.4  $ 166.7  $ 155.8  Pain Management and Recovery 104.4  99.5  99.5  Segment Cost of Products Sold(a) 302.8  266.2  255.3  Corporate and Other 44.5  40.3  38.3  Total Cost of Products Sold $ 347.3  $ 306.5  $ 293.6  __________________________________________________ (a) Segment Cost of Products Sold includes the “Cost of goods sold” and “Distribution” line items in “Segment Information” in Note 5 to the consolidated financial statements, and $14.5 million, $11.6 million and $13.8 million of depreciation and amortization expense in the years ended December 31, 2025, 2024 and 2023, respectively. Cost of products sold increased to $347.3 million from $306.5 million during the year ended December 31, 2025, primarily driven by increased tariffs and unfavorable pricing for certain product lines which were exited, along with increases in net sales across both our reportable segments. Cost of products sold increased to $306.5 million from $293.6 million during the year ended December 31, 2024, primarily driven by costs associated with our restructuring initiatives and plant separation costs associated with the RH Divestiture along with unfavorable pricing for our HA products. Research and Development (in millions): Year Ended December 31, 2025 2024 2023 Specialty Nutrition Systems $ 17.2  $ 17.3  $ 14.6  Pain Management and Recovery 5.1  7.3  9.8  Segment Research and Development(a) 22.3  24.6  24.4  Corporate and Other 1.0  1.6  2.8  Total Research and Development $ 23.3  $ 26.2  $ 27.2  __________________________________________________ (a) Segment Research and Development includes $0.7 million of depreciation and amortization in the year ended December 31, 2025, no depreciation and amortization in the year ended December 31, 2024 and $0.1 million of depreciation and amortization expense in the year ended December 31, 2023. Research and development consists primarily of compensation for personnel and expenses for product trial costs, outside laboratory and license fees, the cost of laboratory equipment and facilities and asset write-offs for equipment associated with unsuccessful product launches. Selling and General Expenses (in millions): Year Ended December 31, 2025 2024 2023 Specialty Nutrition Systems $ 134.6  $ 131.6  $ 121.3  Pain Management and Recovery 119.1  124.3  121.6  Segment Selling and General Expenses(a) 253.7  255.9  242.9  Corporate and Other 61.9  62.6  92.1  Total Selling and General Expenses 315.6  318.5  335.0  __________________________________________________ (a) Segment Selling and General Expenses includes the “Advertising, promotion and selling expenses” and “General expenses” line items in “Segment Information” in Note 5 to the consolidated financial statements and $19.8 million, $18.4 million and $17.2 million of depreciation and amortization expense in the years ended December 31, 2025, 2024 and 2023, respectively. Selling and general expenses decreased from $318.5 million in 2024 to $315.6 million in 2025, driven by savings realized from the execution on the Transformation Process and increased spending discipline. In the year ended December 31, 2024, selling and general expenses decreased from $335.0 million in 2023 to $318.5 million in 2024, driven by savings realized from our Transformation Process and disciplined spending. 27 Table of Contents Other (Income) Expense, net (in millions): Year Ended December 31, 2025 2024 2023 Specialty Nutrition Systems $ 0.1  $ —  $ —  Pain Management and Recovery 0.1  —  —  Segment Other Expense, net $ 0.2  $ —  $ —  Corporate and Other (0.6) (3.9) 13.3  Total Other Expense, net $ (0.4) $ (3.9) $ 13.3  In 2025, other income, net decreased to $0.4 million, compared to $3.9 million in 2024, due to losses on the sale of our HA assets, the sale of the Game Ready rental business and asset write-offs, partially offset by the recovery of a customer claim from 2023 and other non-operating income items. Other expense, net decreased from $13.3 million in 2023 to other income, net of $3.9 million in 2024 primarily due to litigation and legal costs of $10.0 million incurred in 2023. Operating (Loss) Income (in millions): Year Ended December 31, 2025 2024 2023 Specialty Nutrition Systems $ 82.6  $ 80.8  $ 80.2  Pain Management and Recovery 9.2  2.7  (3.7) Segment Operating Income $ 91.8  $ 83.5  $ 76.5  Corporate and Other (153.4) (479.7) (72.3) Total Operating Income $ (61.6) $ (396.2) $ 4.2  The above-described items drove segment operating income to $91.8 million in the year ended December 31, 2025, compared to $83.5 million and $76.5 million in the years ended December 31, 2024 and 2023, respectively. Goodwill impairment of $77.0 million drove consolidated operating loss to $61.6 million in the year ended December 31, 2025, compared to operating loss of $396.2 million and operating income of $4.2 million in the years ended December 31, 2024 and 2023, respectively. 28 Table of Contents Adjusted Operating Profit A reconciliation of adjusted operating profit, a non-GAAP measure, to operating (loss) profit is provided in the table below (in millions): Year Ended December 31, 2025 2024 2023 Operating profit (loss), as reported (GAAP) $ (61.6) $ (396.2) $ 4.2  Acquisition and integration-related charges 1.5  4.2  3.3  Restructuring and transformation charges —  (0.8) 28.2  Post-RH Divestiture transition charges —  3.1  —  Post-RH Divestiture restructuring 32.4  8.9  —  Divestiture related —  —  6.0  Goodwill and intangibles impairment 77.0  436.7  —  EU MDR Compliance —  6.2  3.7  Litigation and legal (1.4) —  10.0  Intangibles amortization 19.2  25.2  24.3  Adjusted Operating Profit (Loss) (non-GAAP) $ 67.1  $ 87.3  $ 79.7  The items noted in the table above are described below: On a GAAP basis, our operating loss decreased compared to the prior year primarily due to lower goodwill and intangibles impairment and higher sales volume. Items impacting operating results include the following: Acquisition and integration-related charges: We incurred $1.5 million, $4.2 million and $3.3 million of costs in connection with acquisition and integration activities for the years ended December 31, 2025, 2024 and 2023, respectively. Expenses incurred during 2025 were related to the acquisition of Nexus. Expenses incurred in 2024 and 2023 were related to the acquisitions of Diros. Restructuring and transformation charges: In January 2023, we initiated the Transformation Process, a three-year restructuring initiative intended to align the Company under a single commercial organization, rationalize our product portfolio, undertake additional cost management activities to enhance the Company’s operating profitability and pursue efficient capital allocation strategies. In the year ended December 31, 2025, we incurred no expenses in connection with the Transformation Process. In the year ended December 31, 2024, we had a net benefit of $0.8 million related to the Transformation Process due to a gain on lease modification for our Alpharetta headquarters. In the year ended December 31, 2023, we incurred expenses of $28.2 million, in connection with the Transformation Process, which consisted of costs associated with program management consulting and employee retention expenses and employee severance and benefits costs. Post-RH Divestiture transition charges: In conjunction with the divestiture of our RH business, we incurred professional services fees, equipment write-offs and incremental labor charges of approximately $3.1 million for the year ended December 31, 2024. Post-RH Divestiture restructuring charges: During 2024, we initiated a post-RH divestiture restructuring plan intended to align our organizational structure and operational footprint with our remaining business (the “Plan”). In the years ended December 31, 2025 and 2024, we incurred expenses of $32.4 million and $8.9 million, respectively, related to the Plan, which primarily consisted of employee severance and benefits costs. RH Divestiture related charges: In conjunction with the divestiture of our RH business, we incurred accounting, legal and other professional fees of approximately $6.0 million for the year ended December 31, 2023. Goodwill and intangible impairments: In the second quarter of 2025, our market capitalization decreased to the extent that we determined that it was more likely than not that the fair value of one or more of our two reporting units was below its carrying value. Accordingly, we completed an interim goodwill impairment test as of June 30, 2025, using a combination of income and market approaches to determine the fair value of the reporting units. As a result, we concluded that the fair value of the PM&R reporting unit was below its carrying value and we recorded a $77.0 million noncash impairment to goodwill. In the fourth quarter of 2024, we revised our future projections downward for our HA and Intravenous infusion product lines due to lower net sales and future margin expectations. We assessed the recoverability of our HA asset group and recorded a noncash impairment loss on this asset group of $100.2 million. Additionally, we determined it was more likely than not that the 29 Table of Contents fair value of our medical devices reporting unit may be below its carrying value. Accordingly, we completed an interim goodwill impairment test as of December 1, 2024 which resulted in a $336.5 million noncash impairment to goodwill. EU MDR Compliance: The EU Medical Device Regulation (“EU MDR”) became effective in 2021 and brings significant new requirements for many of our medical devices. Incremental costs associated with EU MDR compliance are primarily related to re-certification of our products under the enhanced standards. We incurred no costs for EU MDR compliance in the year ended December 31, 2025. We incurred $6.2 million and $3.7 million of costs related to EU MDR compliance in the years ended December 31, 2024 and 2023 respectively. Litigation and legal: In the year ended December 31, 2025, we recovered $1.4 million from a settlement for a customer claim from 2023. We incurred no costs for litigation matters in the year ended December 31, 2024. In the year ended December 31, 2023,we incurred $10.0 million of costs for litigation matters. This expense was for a settlement related to a customer claim and is included in “Other expense, net”. Intangibles amortization: Intangibles amortization is related primarily to the amortization of intangibles acquired in prior business acquisitions and was $19.2 million, $25.2 million and $24.3 million, respectively, in the years ended December 31, 2025, 2024 and 2023. Our non-GAAP measures excludes certain items, as applicable, for the relevant time periods as indicated in the “Operating Profit” table above. The excluded items include: •Expenses associated with post-RH Divestiture transition and restructuring activities. •Certain acquisition and integration charges related to the acquisitions of Nexus and Diros •Expenses associated with the Transformation Process. •Expenses for accounting, legal and other professional fees associated with the divestiture of our RH business. •Goodwill and intangibles impairment. •Expenses associated with EU MDR compliance. •Expenses associated with certain litigation matters. •The amortization of intangible assets associated with prior business acquisitions. Interest Expense Interest expense was $7.8 million, $12.2 million and $15.0 million in the years ended December 31, 2025, 2024 and 2023, respectively. In the years ended December 31, 2025, 2024 and 2023, $0.7 million, $0.9 million and $0.5 million of interest was capitalized on long-term capital projects, respectively. Interest expense consists of interest accrued and amortization of debt discount and issuance costs on our long-term debt. See “Debt” in Note 10 to the consolidated financial statements in Item 8 of this Form 10-K for further discussion of our indebtedness. Provision for Income Taxes Our overall effective tax rate was (10.1)% for the year ended December 31, 2025 compared to a rate of 4.2% in 2024 and (25.3)% in 2023. See “Income Taxes” in Note 11 to the consolidated financial statements in Item 8 of this Form 10-K for further details regarding our income taxes. Liquidity and Capital Resources General Our primary sources of liquidity are cash on hand provided by operating activities and amounts available with our revolving credit facility under our existing credit agreement. Our operating cash flow has historically been sufficient to meet our working capital requirements and fund capital expenditures. We expect our operating cash flow will be sufficient to meet our working capital requirements and fund capital expenditures in the next twelve months. In addition, with our borrowing capacity, we expect to have the ability to fund capital expenditures and other investments necessary to grow our business for the foreseeable future for both our domestic and international operations. As of December 31, 2025, $52.7 million of our $89.8 million of cash and cash equivalents was held by foreign subsidiaries. We consider the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested and currently do not have plans to repatriate such earnings. See further discussion below in “Critical Accounting Policies and Use of Estimates” under “Income 30 Table of Contents Taxes.” We do not expect restrictions on repatriation of cash held outside of the United States to have a material effect on our overall liquidity, financial condition or results of operations for the foreseeable future. Cash and equivalents decreased by $17.9 million to $89.8 million as of December 31, 2025 compared to $107.7 million last year. The decrease was driven by $31.6 million of capital expenditures, $28.0 million of cash used in the acquisition of Nexus, $5.0 million of investments in non-affiliated entities, and repayments of our debt, including $25.0 million on our revolving credit facility and $9.4 million on our secured term loan. This was partially offset by $74.7 million of cash provided by operating activities and $4.0 million in proceeds from the sale of assets. Cash and equivalents increased by $20.0 million to $107.7 million as of December 31, 2024 compared to $87.7 million as of December 31, 2023. The increase was driven by $100.7 million of cash provided by operating activities and $20.0 million of proceeds from our revolving credit facility. This was partially offset by $17.8 million of capital expenditures, $11.8 million of investments in non-affiliated entities, repayments of our debt, including $45.0 million on our revolving credit facility and $8.6 million on our secured term loan, $10.0 million used to repurchase shares of our common stock and $3.8 million of contingent consideration payments. Long-Term Debt On June 24, 2022, we entered into a credit agreement (the “Credit Agreement”) with certain lenders which established credit facilities in an aggregate principal amount of $500.0 million, consisting of a five-year senior secured term loan of $125.0 million (the “Term Loan Facility”) and a five-year senior secured revolving credit facility allowing borrowings of up to $375.0 million, with a letter of credit sub-facility in an amount of $75.0 million (the “Revolving Credit Facility”). All obligations under the Credit Agreement and certain hedging agreements and cash management arrangements thereunder are: (i) guaranteed by each of the Company’s direct and indirect, existing and future, material wholly owned domestic subsidiaries (“Guarantors”) and (ii) secured by a first priority lien on substantially all the assets of the Company and the Guarantors. The Credit Agreement contains an accordion feature that allows us to incur incremental term loans under the Term Loan Facility or under new term loan facilities or to increase the amount of the commitments under the Revolving Credit Facility, including through the establishment of one or more tranches under the Revolving Credit Facility. The Credit Agreement will mature on June 24, 2027. Borrowings under the Term Loan Facility and Revolving Credit Facility bear interest at our option at either: (i) an adjusted term secured overnight financing rate (“SOFR”), plus a margin ranging between 1.50% to 2.00% per annum, depending on our consolidated total leverage ratio; (ii) an adjusted daily simple SOFR rate, plus a margin ranging between 1.50% to 2.00% per annum, depending on our consolidated total leverage ratio; or (iii) a base rate (calculated as the greatest of (a) the prime rate, (b) the NYFRB rate (being the greater of the federal funds effective rate or the overnight bank funding rate) plus 0.50%, and (c) the one month adjusted term SOFR rate plus 1.00%), plus a margin ranging between 0.50% to 1.00% per annum, depending on our consolidated total leverage ratio. The unused portion of the Revolving Credit Facility will be subject to a commitment fee ranging between 0.20% to 0.25% per annum, depending on our consolidated total leverage ratio. Unamortized debt discount and issuance costs are being amortized to interest expense over the life of the Term Loan Facility using the interest method, resulting in an effective interest rate of 5.6% as of December 31, 2025. In connection with entering into the Credit Agreement, we terminated the Amended and Restated Credit Agreement dated as of October 30, 2018 by and among the Company, the lenders thereunder and Citibank N.A., as administrative agent (as amended and supplemented, the “Prior Credit Agreement”). The Credit Agreement requires compliance with certain customary operational and financial covenants. As of December 31, 2025, we were in compliance with all of our debt covenants. For further information regarding our debt arrangements, see “Debt” in Note 10 to the consolidated financial statements in Item 8 of this Form 10-K. Share Repurchase Program On July 28, 2023, the Board of Directors approved a new one-year program under which we may repurchase up to $25.0 million of our common stock. In connection with such repurchase program, we established a pre-arranged trading plan in accordance with Rule 10b5-1 which permitted common stock to be repurchased over a twelve-month period. Under this program, during the third and fourth quarters of 2023 we repurchased $9.2 million and $5.8 million of our common stock, respectively, and during the first and second quarters of 2024 we repurchased the remaining $6.7 million and $3.3 million of our common stock, respectively. On November 1, 2024, the Board of Directors approved a new one-year program under which we were able to repurchase up to $25.0 million of our common stock. Repurchases under this program were able to be made from time to time at management’s discretion on the open market or through privately negotiated transactions in compliance with Rule 10b-18 under the Exchange Act, subject to market conditions, applicable legal requirements and other relevant factors. We established a pre-arranged 31 Table of Contents trading plan under Rule 10b5-1 of the Exchange Act in connection with this share repurchase program. This share repurchase program did not obligate us to purchase any particular amount of common stock. No purchases of our common stock were made under this plan. For further information, see “Share Repurchase Program” in Note 19 to the consolidated financial statements in Item 8 of this Form 10-K. Contractual Obligations In the normal course of business, we enter into contracts and commitments that obligate us to make payments in the future. Information regarding our obligations under lease and debt arrangements and defined benefit plans are provided in Notes 8, 10, and 12, respectively, to the consolidated financial statements contained in Item 8 of this Form 10-K. For obligations under our purchase arrangements which consist mostly of open purchase orders and other commitments, as of December 31, 2025, we have amounts due in less than one year of $79.8 million, $46.2 million in one to three years, and none thereafter. Critical Accounting Policies and Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. The critical accounting policies we used in the preparation of the consolidated and financial statements are those that are important both to the presentation of our financial condition and results of operations and require significant judgments by management with regard to estimates used. The critical judgments by management relate to distributor rebate accruals, future cash flows associated with impairment testing for goodwill and long-lived assets, loss contingencies and deferred income taxes and potential tax assessments. Use of Estimates We prepare our consolidated financial statements in accordance with GAAP, which requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting periods. Estimates are used in accounting for, among other things, certain amounts included in discontinued operations, certain amounts included in assets and liabilities held for sale, distributor rebate accruals, future cash flows associated with impairment testing for goodwill and long-lived assets, valuations of assets and liabilities acquired in business combinations, loss contingencies, and deferred income taxes and potential income tax assessments. Actual results could differ from these estimates, and the effect of the change could be material to our financial statements. Changes in these estimates are recorded when known. Revenue Recognition Sales revenue is recognized at the time of product shipment or delivery of our products to unaffiliated customers, depending on shipping terms. Accordingly, control of the products transfers to the customer in accordance with the transaction’s shipping terms. Sales revenue is recognized for the amount of considerations that we expect to be entitled to receive in exchange for our products. Sales are reported net of returns, rebates, incentives, each as described below, and freight allowed. Taxes imposed by governmental authorities on our revenue-producing activities with customers, such as sales taxes and value-added taxes, are excluded from net sales. Our contracts provide for forms of variable consideration including rebates, incentives and pricing tiers, each of which are described further in Note 1 “Accounting Policies” in Item 8 of this Form 10-K. Goodwill and Other Intangible Assets We test goodwill for impairment annually or more frequently whenever events or circumstances more likely than not indicate that the fair value of our reporting units may be below their respective carrying amounts. In conjunction with a shift from one reportable segment to two, we performed an interim goodwill impairment test as of January 1, 2025, and determined that the fair values of our reporting units exceeded the net carrying amounts at that time. In the second quarter of 2025, our market capitalization decreased to the extent that we determined that it was more likely than not that the fair value of one of our two reporting units was below its carrying value. Accordingly, we completed an interim goodwill impairment test as of June 30, 2025, using a combination of income and market approaches to determine the fair value of the reporting units. Consequently, we concluded that the fair value of our Pain Management and Recovery (“PM&R”) reporting unit was below its carrying value. As a result, we recorded a 77.0 million impairment to goodwill, which is included in “Goodwill and intangibles impairment” in the accompanying consolidated income statements. In our most recent goodwill impairment test on July 1, 2025, we determined that the fair value of our reporting units equaled or exceeded the net carrying amount of our reporting units. 32 Table of Contents In the fourth quarter of 2024, we determined it was more likely than not that the fair value of our then single medical devices reporting unit may be below its carrying value. Accordingly, we completed an interim goodwill impairment test as of December 1, 2024, and recorded a $336.5 million impairment to goodwill, which is included in “Goodwill and intangibles impairment” in the accompanying consolidated income statements. See Note 2, “Goodwill and Intangibles Impairment,” for disclosures about goodwill impairment. There can be no assurance that the assumptions and estimates made for purposes of the annual goodwill impairment test will prove to be accurate. Volatility in the equity and debt markets, or increases in interest rates, could result in a higher discount rate. Changes in sales volumes, selling prices and costs of goods sold, and increases in interest rates could cause changes in our forecasted cash flows. Unfavorable changes in any of the factors described above, as well as a decline in our stock price, could result in a goodwill impairment charge in the future. Intangible assets with finite lives are amortized over their estimated useful lives and reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Estimated useful lives range from 7 to 30 years for trademarks, 7 to 17 years for patents and acquired technologies, and 2 to 16 years for other intangible assets. An impairment loss would be indicated when estimated undiscounted future cash flows from the use of the asset are less than its carrying amount. An impairment loss would be measured as the difference between the fair value (based on discounted future cash flows) and the carrying amount of the asset. In the fourth quarter of 2024, we assessed the recoverability of a certain asset group which resulted in an impairment loss of $100.2 million. This impairment loss is included in “Goodwill and intangibles impairment” in the accompanying consolidated income statements. See Note 2, “Goodwill and Intangibles Impairment,” for disclosures about intangible asset impairment. Income Taxes We recognize tax benefits in our financial statements when our uncertain tax positions are more likely than not to be sustained upon audit. The amount we recognize is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. We recognize deferred tax assets for deductible temporary differences, operating loss carry-forwards and tax credit carry-forwards. We record valuation allowances to reduce deferred tax assets to amounts that are more likely than not to be realized. In assessing the need for a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets. The weight given to the positive and negative evidence is commensurate with the extent to which the evidence may be objectively verified. As such, it is generally difficult for positive evidence regarding projected future taxable income exclusive of reversing taxable temporary differences to outweigh objective negative evidence of recent financial reporting losses. This assessment, which is completed on a taxing jurisdiction basis, takes into account a number of types of evidence, including the nature, frequency, and severity of current and cumulative financial reporting losses, sources of future taxable income, taxable income in prior carryback year(s) and tax planning strategies. If it is determined that we would be able to realize deferred tax assets in the future in excess of our net recorded amount, an adjustment to the net deferred tax asset would increase income in the period that such determination was made. Likewise, should we determine that we would not be able to realize all or part of the net deferred tax assets in the future, an adjustment to the net deferred tax asset would decrease income in the period such determination was made. We regularly evaluate the need for valuation allowances against its deferred tax assets. As of December 31, 2025, we have accumulated undistributed earnings generated by our foreign subsidiaries. Certain earnings were previously subject to tax due to the one-time transition tax of the Tax Cuts and Jobs Act of 2017. Any additional impacts due with respect to the previously taxed earnings, if repatriated, would generally be limited to foreign withholding tax, U.S. state income tax and the tax effect of certain foreign exchange adjustments. We intend, however, to indefinitely reinvest these earnings and expect future U.S. cash generation to be sufficient to meet U.S. cash needs. At this time, the determination of deferred tax liabilities on the amount of financial reporting over tax basis is not practicable. Legal Matters A description of legal matters can be seen in “Commitments and Contingencies” in Note 15 to the consolidated financial statements in Item 8 of this Form 10-K.