ICU MEDICAL INC/DE

Previous wording

In recent years, we have experienced, and may continue to experience, significant impacts to our business as a result of global economic challenges, resulting from, among other events, health pandemics and geopolitical conflicts which have resulted in fluctuating inflation rates, especially with respect to increased cost and shortages of raw materials, supply chain disruptions, higher interest rates, volatility on foreign currency exchange rates, and freight costs driven by higher fuel prices.

Current wording

In recent years, we have experienced, and may continue to experience, significant impacts to our business as a result of global economic challenges, resulting from, among other events, health pandemics and geopolitical conflicts which have resulted in fluctuating inflation rates, especially with respect to increased cost and shortages of raw materials, supply chain disruptions, higher interest rates, volatility in foreign currency exchange rates, and freight costs driven by higher fuel prices.

Previous wording

In February 2026, the Supreme Court ruled that the U.S. Administration lacks the authority to impose tariffs under the International Emergency Economic Powers Act ("IEEPA"); the U.S. Court of International Trade subsequently ruled that companies are entitled to seek refunds for tariffs already paid under that Act. We are currently evaluating the impact of these developments, including the potential for recovery which could be material. However, the ultimate outcome, timing and amount of any such potential recoveries remain uncertain. Accordingly, no amounts have been recognized during the first quarter of 2026. In response to the Supreme Court Ruling, the Administration formally repealed the tariffs imposed under IEEPA while immediately implementing new broader tariff measures under Section 122 of the Trade Act of 1974. Any new tariffs, increases to existing tariff levels, or changes to currently available exemptions could increase the cost of products we import into the U.S. and adversely affect our business, financial condition and results of operations.

Current wording

In February 2026, the Supreme Court ruled that the U.S. Administration lacked the authority to impose tariffs under the International Emergency Economic Powers Act ("IEEPA"); the U.S. Court of International Trade subsequently ruled that companies are entitled to seek refunds for tariffs previously paid under that Act. We account for potential tariff refunds under the gain contingency model, recognizing recoveries in the period in which the contingency is resolved and realization is assured; during the second quarter of 2026, $18.9 million of tariff refunds were recognized in cost of goods sold and $0.7 million of related interest income was recognized in interest expense, net. The ultimate outcome, timing and amount of any additional potential refunds remain uncertain. In response to the Supreme Court ruling, the Administration formally repealed the tariffs imposed under IEEPA while immediately implementing new broader tariff measures under Section 122 of the Trade Act of 1974. The Section 122 tariffs expired on July 24, 2026 and the Administration subsequently announced new tariffs under Section 301 of the Trade Act of 1974, including tariffs ranging from 10% to 12.5% on imports from certain countries. In addition, the U.S. Department of Commerce continues to evaluate imports of medical consumables and equipment under a Section 232 national security investigation, which could result in additional tariffs and/or changes to currently available exemptions such as the United States-Mexico-Canada Agreement if the imports are determined to pose a national security risk. The applicability, duration, and resulting impact of these tariff measures, including ongoing legal challenges and potential changes to tariff levels or exemptions, remain uncertain. Any new tariffs, increases to existing tariff levels, or changes to currently available exemptions could increase the cost of products we import into the U.S. and adversely affect our business, financial condition and results of operations.

Previous wording

Based on current geopolitical conditions we expect foreign currency rates, freight costs, oil prices, interest rates, and general inflation to remain subject to volatility in the market. For example, the conflict in Iran has and could continue to significantly disrupt the global oil and gas supply-demand balance, increase commodity price volatility and heighten uncertainty in regional operating conditions. Disruptions to transportation routes and higher logistics could affect our operating results, liquidity, and cash flows, particularly if conditions persist or escalate. While the situation remains fluid, adverse impacts can continue in future periods. We will continue to monitor developments and assess potential impacts on our business and financial position.

Current wording

Based on current geopolitical conditions we expect foreign currency exchange rates, freight costs, oil prices, interest rates, and general inflation to remain subject to volatility in the market. For example, the conflict involving Iran has and could continue to significantly disrupt the global oil and fuel supply-demand balance, increase commodity price volatility and heighten uncertainty in regional operating conditions. Higher fuel prices along with disruptions to transportation routes are expected to result in higher logistics costs and affect our operating results, liquidity, and cash flows, particularly if conditions persist or escalate. In addition, because resin is a primary petroleum-based raw material for our products, sustained increases in crude oil prices directly impact our manufacturing costs. While the situation remains fluid, adverse impacts could continue in future periods. We will continue to monitor developments and assess potential impacts on our business and financial position.

Previous wording

On April 24, 2025, pursuant to a purchase agreement (the "Agreement") with Otsuka Pharmaceutical Factory America, Inc. a Delaware corporation ("OPF") (described in Note 4: Disposal of Business to our accompanying condensed consolidated financial statements), we completed the formation of ICU Medical Pearl LLC (n/k/a Otsuka ICU Medical LLC (the "joint venture")) and transferred the assets, liabilities and operations that comprise our IV Solutions product line to the joint venture. At the closing of the transaction on May 1, 2025, under the Agreement, we sold a 60% interest in the joint venture to OPF. The total sales price, inclusive of our final purchase price adjustments, was $211.2 million, of which we used $200.0 million of the proceeds from the sale to pay down a portion of our outstanding Term Loan A (as defined below) long-term debt during the second quarter of 2025.

Current wording

At the closing of the transaction on May 1, 2025, under the Agreement, we sold a 60% interest in the joint venture to OPF. The total sales price, inclusive of our final purchase price adjustments, was $211.2 million, of which we used $200.0 million of the proceeds from the sale to pay down a portion of our outstanding Term Loan A (as defined below) long-term debt during the second quarter of 2025.

Previous wording

We present income statement data in Part I, Item 1. "Financial Statements." The following table shows, for the three months ended March 31, 2026 and 2025, the percentages of each income statement caption in relation to total revenue:

Current wording

We present income statement data in Part I, Item 1. "Financial Statements." The following table shows, for the three and six months ended June 30, 2026 and 2025, the percentages of each income statement caption in relation to total revenue:

Previous wording

There are no significant seasonal aspects to our business. We can experience fluctuations in net sales as a result of variations in the ordering patterns of our largest customers, which may be driven more by production scheduling and customer inventory levels, and less by seasonality. Our expenses often do not fluctuate in the same manner as net sales, which may cause fluctuations in operating income that are disproportionate to fluctuations in our revenue.

Current wording

There are no significant seasonal aspects to our business. We can experience fluctuations in net sales as a result of variations in the ordering patterns of our largest customers, which may be driven more by production scheduling and customer inventory levels, and less by seasonality. Our expenses often do not fluctuate in the same manner as net sales, which may cause fluctuations in operating income that are disproportionate to fluctuations in our revenue. In addition, the results of our joint venture may be affected by seasonal factors, including planned facility shutdowns, which may result in lower earnings from the joint venture during the second half of the year.

Previous wording

Consumables revenue increased for the three months ended March 31, 2026, as compared to the same period in the prior year, primarily due to new customer installations and increased demand for our Infusion Consumables and Oncology product lines.

Current wording

Consumables revenue increased for the three and six months ended June 30, 2026, as compared to the same periods in the prior year. Price increases contributed approximately 1% to growth, for both the three and six months ended June 30, 2026, with the remaining revenue increase driven by higher sales volumes for our Infusion Consumables and Oncology product lines of approximately $9 million and $17 million for the three and six months ended June 30, 2026, respectively.

Previous wording

Infusion Systems revenue increased for the three months ended March 31, 2026, as compared to the same period in the prior year, primarily due to increased sales of LVP hardware.

Current wording

Infusion Systems revenue increased for the three and six months ended June 30, 2026, as compared to the same periods in the prior year, primarily driven by approximately $26 million and $33 million, respectively, in increased sales volumes of LVP hardware.

Previous wording

Vital Care revenue decreased for the three months ended March 31, 2026, as compared to the same period in the prior year, primarily due to the sale of our IV Solutions business on May 1, 2025 (see Note 4: Disposal of Business to our accompanying condensed consolidated financial statements) as well as lower sales of our Pain Management and Critical Care products.

Current wording

Vital Care revenue decreased for the three and six months ended June 30, 2026, as compared to the same periods in the prior year, primarily due to the sale of our IV Solutions business on May 1, 2025 (see Note 4: Disposal of Business to our accompanying condensed consolidated financial statements), which reduced revenue by approximately $32 million and $127 million, respectively. The remaining decrease of approximately $3 million and $8 million, respectively, was primarily due to lower sales volumes of Pain Management and Temperature Management products.

Previous wording

SG&A expenses decreased for the three months ended March 31, 2026, as compared to the same period in the prior year, primarily due to a decrease of $1.9 million in dealer fees and $1.1 million in loss contract amortization, which when combined with other smaller category decreases, were mostly offset by an increase of $1.7 million in stock based compensation. Dealer fees decreased primarily due to the timing of end customer sales. Loss contract amortization decreased due to the release of an unfavorable contract liability related to the sale of the IV Solutions business in the second quarter of 2025. Stock based compensation increased due to a change in the probability of meeting certain financial targets related to a performance equity award and due to the adoption of a retirement policy.

Current wording

SG&A expenses decreased for the six months ended June 30, 2026, as compared to the same period in the prior year, primarily due to a decrease of $2.4 million in dealer fees, $1.9 million in IT expenses, $1.8 million in facilities expenses, $1.5 million in loss contract amortization, combined with other smaller category decreases, were primarily offset by an increase of $1.6 million in compensation costs. Dealer fees decreased primarily due to the timing of end customer sales. IT expenses decreased primarily due to lower computer maintenance costs and lower outsourced data processing costs as a result of integration synergies. Facilities expenses decreased primarily due to a decrease in rent expense as a result of the expiration and exit of certain facility leases and due to lower operating lease expense driven by a lower amortization base following ROU asset impairments. Loss contract amortization decreased due to the release of an unfavorable contract liability related to the sale of the IV Solutions business in the second quarter of 2025. Compensation increased due to an increase in cash incentive compensation and employee benefits.

Previous wording

R&D expenses decreased for the three months ended March 31, 2026, as compared to the same period in the prior year, primarily related to lower employment expense that support ongoing R&D projects. R&D expenses for both periods presented generally included increased compensation and benefit expenses, consulting fees, production supplies, samples, travel costs, utilities and other miscellaneous administrative costs incurred in our ongoing R&D projects.

Current wording

R&D expenses slightly increased for the three months ended June 30, 2026, as compared to the same period in the prior year, primarily related to higher employment expense that support ongoing R&D projects. R&D expenses decreased for the six months ended June 30, 2026, as compared to the same period in the prior year, primarily related to organizational synergies and project reprioritization. R&D expenses for both periods presented generally include compensation and benefit expenses, consulting fees, production supplies, samples, travel costs, utilities and other miscellaneous administrative costs incurred in our ongoing R&D projects.

Previous wording

Restructuring, strategic transaction and integration expenses were $16.8 million and $16.7 million for the three months ended March 31, 2026 and 2025, respectively.

Current wording

Restructuring, strategic transaction and integration expenses were $21.3 million and $38.1 million for the three and six months ended June 30, 2026, respectively, as compared to $16.2 million and $32.9 million for the three and six months ended June 30, 2025, respectively.

Previous wording

Restructuring charges were $6.9 million and $6.8 million for the three months ended March 31, 2026 and 2025, respectively, and were primarily related to facility closure costs and severance costs. As of March 31, 2026, we expect to pay the majority of our outstanding restructuring charges during the next twelve months.

Current wording

Restructuring charges were $13.0 million and $19.9 million for the three and six months ended June 30, 2026, respectively, as compared to $8.2 million and $15.0 million for the three and six months ended June 30, 2025, respectively. The restructuring costs for the three and six months ended June 30, 2026 were primarily related to facility closure costs and severance costs, which included $5.8 million of non-cash impairment charges related to operating lease right-of-use assets and property, plant and equipment. The restructuring costs for the three and six months ended June 30, 2025 were primarily related to facility closure costs and severance costs. As of June 30, 2026, we expect to pay the majority of our outstanding restructuring charges during the next twelve months. We expect restructuring costs to decrease during the remainder of 2026.

Previous wording

Strategic transaction and integration expenses were $9.9 million and $9.9 million for the three months ended March 31, 2026 and 2025, respectively. The strategic transaction and integration expenses during the three months ended March 31, 2026 and 2025 were primarily related to ongoing consulting expenses, employee costs incurred to integrate our Smiths Medical business acquired in 2022. For the three months ended March 31, 2025, transaction costs also included expenses related to the sale of 60% of our IV solutions business that was completed during the second quarter of 2025.

Current wording

Strategic transaction and integration expenses were $8.3 million and $18.2 million for the three and six months ended June 30, 2026, respectively, as compared to $8.0 million and $17.9 million for the three and six months ended June 30, 2025, respectively. The strategic transaction and integration expenses during the three and six months ended June 30, 2026 and 2025 were primarily related to ongoing consulting expenses, employee costs and costs from certain facility consolidations incurred to integrate our Smiths Medical business acquired in 2022. For the three and six months ended June 30, 2025, transaction costs also included expenses related to the sale of 60% of our IV solutions business that was completed during the second quarter of 2025.

Previous wording

Interest expense, net for the three months ended March 31, 2026 and 2025 primarily included the contractual interest incurred on borrowings under the Credit Agreement, as defined below, the per annum commitment fee charged on the available amount of the revolving credit facility contained in the Credit Agreement, the amortization of debt issuance costs incurred in connection with entering into the Credit Agreement (see Note 18: Long-Term Debt in our accompanying condensed consolidated financial statements), the impact of the interest rate swaps, and interest income. Additionally, interest expense for the three months ended March 31, 2026 includes the interest accretion on an unfavorable contract loss provision.

Current wording

Interest expense, net for the three and six months ended June 30, 2026 and 2025 primarily included the contractual interest incurred on borrowings under the Credit Agreement, as defined below, the per annum commitment fee charged on the available amount of the revolving credit facility contained in the Credit Agreement, the amortization of debt issuance costs incurred in connection with entering into the Credit Agreement (see Note 18: Long-Term Debt in our accompanying condensed consolidated financial statements), the impact of the interest rate swaps, and interest income. Additionally, interest expense includes the interest accretion on an unfavorable contract loss provision beginning in the second quarter of 2025.

Previous wording

The interest expense component decreased for the three months ended March 31, 2026, as compared to the respective prior year period, primarily due to lower obligation principal balances primarily resulting from the $200.0 million paydown of our Term Loan A in May 2025 using proceeds from the sale of a 60% interest of our IV Solutions business.

Current wording

The interest expense component decreased for the three and six months ended June 30, 2026, as compared to the respective prior year periods, primarily due to lower obligation principal balances resulting from principal prepayments including the $200.0 million paydown of our Term Loan A in May 2025 using proceeds from the sale of a 60% interest of our IV Solutions business.

Previous wording

The following table presents other expense, net (in thousands):

Current wording

The following table presents other (expense) income, net (in thousands):

Previous wording

For the three months ended March 31, 2025, the foreign exchange losses were primarily related to the strengthening of the U.S. dollar relative to certain foreign currencies, most notably including the British Pound in the first quarter of 2025.

Current wording

For the three and six months ended June 30, 2026, the foreign exchange losses were primarily related to the strengthening of the U.S. dollar relative to certain foreign currencies, including the Euro. For the three and six months ended, June 30, 2025, the foreign exchange gains were primarily related to the weakening of the U.S. dollar relative to certain foreign currencies, most notably including the British Pound in the second quarter of 2025.

Previous wording

For the three months ended March 31, 2026 and 2025, income taxes were accrued at an estimated effective tax rate of 873% and (42)%, respectively.

Current wording

For the three and six months ended June 30, 2026, income taxes were accrued at an estimated effective tax rate of 31% and (144)%, respectively, as compared to 3% and 25% for the three and six months ended June 30, 2025, respectively.

Previous wording

The effective tax rate for the three months ended March 31, 2026 differs from the federal statutory rate of 21% principally because of the effect of the mix of U.S. and foreign incomes, section 162(m) excess compensation, federal and state valuation allowance, FDII, and tax credits. Additionally, the effective tax rate for the three months ended March 31, 2026 included a tax benefit of $29.2 million related to unrecognized tax benefits released as a result of the expiration of statute of limitations.

Current wording

The effective tax rate for the three and six months ended June 30, 2026 differs from the federal statutory rate of 21% principally because of the effect of the mix of U.S. and foreign incomes, section 162(m) excess compensation, federal and state valuation allowance, FDII, and tax credits. Additionally, the effective tax rate for the three and six months ended June 30, 2026 included a tax benefit of $0.9 million and $30.1 million, respectively, related to unrecognized tax benefits released as a result of the expiration of statute of limitations.

Previous wording

The Company regularly assesses the realizability of deferred tax assets and records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. In assessing the realizability of our deferred tax assets, we weigh all available positive and negative evidence. This evidence includes, but is not limited to, historical earnings, scheduled reversal of taxable temporary differences, tax planning strategies and projected future taxable income. Due to the weight of objectively verifiable negative evidence, the Company recorded a change to the valuation allowance against certain U.S. federal and state deferred tax assets, resulting in a $4.2 million tax benefit during the three months ended March 31, 2026. The significant piece of objectively verifiable negative evidence evaluated was the recent U.S. cumulative losses. The Company's ability to use our deferred tax assets depends on the amount of taxable income in future periods.

Current wording

The Company regularly assesses the realizability of deferred tax assets and records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. In assessing the realizability of our deferred tax assets, we weigh all available positive and negative evidence. This evidence includes, but is not limited to, historical earnings, scheduled reversal of taxable temporary differences, tax planning strategies and projected future taxable income. Due to the weight of objectively verifiable negative evidence, the Company recorded a change to the valuation allowance against certain U.S. federal and state deferred tax assets, resulting in a $1.5 million tax expense and $2.7 million tax benefit during the three and six months ended June 30, 2026, respectively. The significant piece of objectively verifiable negative evidence evaluated was the recent U.S. cumulative losses. The Company's ability to use our deferred tax assets depends on the amount of taxable income in future periods.

Previous wording

The Company recorded an increase in valuation allowance of $6.4 million tax expense against certain U.S. federal and state deferred tax assets during the three months ended March 31, 2025. The significant piece of objectively verifiable negative evidence evaluated was the recent U.S. cumulative losses.

Current wording

The Company recorded a change to the valuation allowance against certain U.S. federal and state deferred tax assets, resulting in a $2.7 million tax benefit and $3.7 million tax expense during the three and six months ended June 30, 2025, respectively.

Previous wording

For the three months ended March 31, 2026, we recorded equity in losses of unconsolidated affiliates of $(0.6) million related to our 40% proportionate share of the losses of the joint venture (see Note 4: Disposal of Business to our accompanying condensed consolidated financial statements).

Current wording

For the three and six months ended June 30, 2026, we recorded equity in earnings of unconsolidated affiliates of $3.0 million and $2.4 million, respectively, as compared to equity in earnings of unconsolidated affiliates of $2.8 million for each of the three and six months ended June 30, 2025, related to our 40% proportionate share of the joint venture's financial results (see Note 4: Disposal of Business to our accompanying condensed consolidated financial statements). The joint venture's earnings are typically lower in the second half of the year due to seasonality and planned facility shutdowns.

Previous wording

Funds generated from operations are held in cash and cash equivalents. During the three months ended March 31, 2026, our cash and cash equivalents decreased by $19.7 million from $308.0 million at December 31, 2025 to $288.3 million at March 31, 2026. This decrease was in part due to $38.8 million of tax withholding payments made during the first quarter of 2026 to settle employee equity award vests. These payments represent the value of the shares withheld by the Company to satisfy employee tax obligations, which effectively reduced the total number of shares issued upon vesting and minimized shareholder dilution.

Current wording

Funds generated from operations are held in cash and cash equivalents. During the six months ended June 30, 2026, our cash and cash equivalents decreased by $9.7 million from $308.0 million at December 31, 2025 to $298.3 million at June 30, 2026. This decrease was due to principal payments in 2026, including a $45.3 million prepayment on our Term Loan B during the second quarter of 2026 and $38.9 million of tax withholding payments made during 2026 to settle employee equity award vests. Tax withholding payments are typically highest during the first quarter due to the timing of employee equity vesting activity. These payments represent the value of the shares withheld by the Company to satisfy employee tax obligations, which effectively reduced the total number of shares issued upon vesting and minimized shareholder dilution.

Previous wording

As discussed in Note 18: Long-Term Debt to our accompanying condensed consolidated financial statements, on October 31, 2025 (the "Closing Date"), we entered into an Amendment No. 2 to our Credit Agreement (the "Amendment"), whereby we refinanced our Term Loan A and our Revolving Credit Facility under our existing Credit Agreement dated as of January 6, 2022 (as amended by Amendment No. 1, dated as of October 5, 2022, the "Existing Credit Agreement" and as further amended by the Amendment, the "Amended Credit Agreement"). The Amended Credit Agreement includes new credit facilities (the "New Credit Facilities") that consists of a $750.0 million senior secured term loan A and a new $500.0 million revolving credit facility (the "New Revolving Facility"). The outstanding aggregate principal amount of the term loans is $1.3 billion as of March 31, 2026, which includes the Term Loan A that will mature in October 2030 and the Term Loan B that will mature in January 2029. There are no outstanding borrowings under the New Revolving Facility as of March 31, 2026.

Current wording

As discussed in Note 18: Long-Term Debt to our accompanying condensed consolidated financial statements, on October 31, 2025 (the "Closing Date"), we entered into an Amendment No. 2 to our Credit Agreement (the "Amendment"), whereby we refinanced our Term Loan A and our Revolving Credit Facility under our existing Credit Agreement dated as of January 6, 2022 (as amended by Amendment No. 1, dated as of October 5, 2022, the "Existing Credit Agreement" and as further amended by the Amendment, the "Amended Credit Agreement"). The Amended Credit Agreement includes new credit facilities (the "New Credit Facilities") that consists of a $750.0 million senior secured term loan A and a new $500.0 million revolving credit facility (the "New Revolving Facility"). The outstanding aggregate principal amount of the term loans is $1.2 billion as of June 30, 2026, which includes the Term Loan A that will mature in October 2030 and the Term Loan B that will mature in January 2029. There are no outstanding borrowings under the New Revolving Facility as of June 30, 2026.

Previous wording

In January 2023, we entered into a receivables purchase agreement with Bank of the West, which was subsequently acquired by BMO Bank, N.A. ("BMO") in February 2023. The program accelerates our access to capital and may be utilized as needed. The program was not utilized during the periods presented, and there are no outstanding sold receivables as of March 31, 2026 and December 31, 2025.

Current wording

In January 2023, we entered into a receivables purchase agreement with Bank of the West, which was subsequently acquired by BMO Bank, N.A. ("BMO") in February 2023. The program accelerates our access to capital and may be utilized as needed. The program was not utilized during the periods presented, and there were no outstanding sold receivables as of June 30, 2026 and December 31, 2025.

Previous wording

As of March 31, 2026, there has been no material changes to our range of $85 million to $100 million for estimated 2026 planned capital expenditures previously disclosed in our 2025 Annual Report on Form 10-K.

Current wording

As of June 30, 2026, we now expect capital expenditures to be approximately $85 million for estimated 2026 planned capital expenditures, which is at the low end of our previously disclosed $85 million to $100 million range in our 2025 Annual Report on Form 10-K.

Previous wording

Due to principal pre-payments in 2025 we have no mandatory principal payments on our Term loan B until 2029.

Current wording

Due to a principal prepayment of $45.3 million during the second quarter of 2026 and principal prepayments in 2025, we have no mandatory principal payments on our Term Loan B until 2029.

Previous wording

Our net cash provided by operations for the three months ended March 31, 2026 was $38.9 million. The changes in operating assets and liabilities included a $20.2 million increase in accounts payable and a $6.1 million decrease in inventories. Offsetting these amounts was a $24.1 million increase in accounts receivable, a $14.3 million increase in prepaid expenses and other current assets, a $2.4 million increase in other assets, a $9.8 million decrease in accrued liabilities, and $39.5 million in net changes in income taxes, including excess tax benefits and deferred income taxes. The increase in accounts payable was due to the timing of payments. The decrease in inventory was primarily due to lower production volumes at certain sites as a result of material shortages from suppliers and delays in the inventory production as a result of plant transfers. The increase in accounts receivable was primarily due to the amount and timing of collections. The increase in prepaid expenses and other current assets was primarily due to an increase in deferred costs and prepaid income taxes. The increase in other assets was due to the purchase of spare parts. The decrease in accrued liabilities was primarily due to payout of annual bonuses offset by an increase in deferred revenue. The net changes in income taxes was a result of the timing of payments, recording of the current deferred provision, and valuation allowance.

Current wording

Our net cash provided by operations for the six months ended June 30, 2026 was $119.1 million. The changes in operating assets and liabilities included a $4.6 million decrease in inventories. Offsetting these amounts was a $7.6 million increase in accounts receivable, a $16.5 million increase in prepaid expenses and other current assets, a $2.9 million increase in other assets, a $4.9 million decrease in accounts payable, $5.9 million decrease in accrued liabilities, and $45.3 million in net changes in income taxes, including excess tax benefits and deferred income taxes. The decrease in inventory was primarily due to strong sales volume of certain products and delays in the inventory production as a result of plant transfers. The increase in accounts receivable was primarily due to the amount and timing of collections. The increase in prepaid expenses and other current assets was primarily due to an increase in deferred costs related to infusion pumps sold, prepaid income taxes, and amounts due from the joint venture. The increase in other assets was due to the purchase of spare parts. The decrease in accounts payable was due to the timing of payments. The decrease in accrued liabilities was primarily due to payout of annual bonuses and operating lease payments offset by an increase in deferred revenue. The net changes in income taxes was a result of the timing of payments, recording of the current deferred provision, and valuation allowance.

Previous wording

Our net cash provided by operations for the three months ended March 31, 2025 was $51.3 million. The changes in operating assets and liabilities included a $22.4 million decrease in accounts receivable and a $32.1 million increase in accounts payable. Offsetting these amounts was a $8.2 million increase in inventories, a $8.5 million increase in prepaid expenses and other current assets, a $6.8 million increase in other assets, $36.3 million decrease in accrued liabilities, and $6.6 million in net changes in income taxes, including excess tax benefits and deferred income taxes. The decrease in accounts receivable was primarily due to the amount and timing of revenues. The increase in accounts payable was due to the timing of payments. The increase in inventory was primarily to build inventory safety stock levels. The increase in prepaid expenses and other current assets was primarily due to an increase in deferred costs related to infusion pumps sold and the payment of other miscellaneous prepaid invoices. The increase in other assets was due to the purchase of spare parts. The decrease in accrued liabilities was primarily due to payout of annual bonuses, accrued freight charges and payments of field service corrective action. The net changes in income taxes was a result of recording the current deferred provision, the timing of payments, and valuation allowance.

Current wording

Our net cash provided by operations for the six months ended June 30, 2025 was $62.5 million. The changes in operating assets and liabilities included a $16.7 million decrease in accounts receivable and a $14.4 million increase in accounts payable. Offsetting these amounts was a $29.2 million increase in inventories, a $9.2 million increase in prepaid expenses and other current assets, a $5.7 million increase in other assets, $19.8 million decrease in accrued liabilities, and $28.1 million in net changes in income taxes, including excess tax benefits and deferred income taxes. The decrease in accounts receivable was primarily due to the sale of accounts receivable as part of our accounts receivable purchase program with BMO and the amount and timing of revenues. The increase in accounts payable was due to the timing of payments. The increase in inventory was primarily to build inventory safety stock levels and the impact of the capitalization of tariffs in our accounting. The increase in prepaid expenses and other current assets was primarily due to an increase in the payment of miscellaneous prepaid invoices. The increase in other assets was due to the purchase of spare parts. The decrease in accrued liabilities was primarily due to payout of annual bonuses and operating lease payments. The net changes in income taxes was a result of the timing of payments.

Previous wording

(1)Relates to scheduled principal payments and any prepayments on the Senior Secured Credit Facilities. In March 2025, we prepaid $35.0 million on our Term Loan B. Due to pre-payments in 2025, we do not have any mandatory principal payment on our Term Loan B until 2029.

Current wording

(1)Relates to scheduled principal payments and any prepayments on the Senior Secured Credit Facilities. In March 2025, we prepaid $35.0 million on our Term Loan B. In May 2025, we used $200.0 million received from the sale of a 60% interest in our IV Solutions business to pay down a portion of our Term Loan A. In June 2026, we prepaid $45.3 million on our Term Loan B. Due to prepayments in 2025 and 2026, we do not have any mandatory principal payment on our Term Loan B until 2029.

Previous wording

(3) During the three months ended March 31, 2026, our employees surrendered 295,896 shares of our common stock from vested restricted stock unit awards as consideration for approximately $38.8 million in minimum statutory withholding obligations paid on their behalf. During the three months ended March 31, 2025, our employees surrendered 58,858 shares of our common stock from vested restricted stock unit awards as consideration for approximately $8.4 million in minimum statutory withholding obligations paid on their behalf.

Current wording

(3) During the six months ended June 30, 2026, our employees surrendered 296,524 shares of our common stock from vested restricted stock unit awards as consideration for approximately $38.9 million in minimum statutory withholding obligations paid on their behalf. During the six months ended June 30, 2025, our employees surrendered 61,066 shares of our common stock from vested restricted stock unit awards as consideration for approximately $8.7 million in minimum statutory withholding obligations paid on their behalf.