InfuSystem Holdings, Inc

Previous wording

Our Device Solutions segment’s core service is to: (i) sell or rent new and pre-owned pole-mounted and ambulatory infusion pumps and other Durable Medical Equipment; (ii) sell treatment-related consumables; and (iii) provide biomedical recertification, maintenance and repair services for oncology practices as well as other healthcare site settings, including, home care and home infusion providers, skilled nursing and acute care facilities, pain centers and others. We purchase new and pre-owned pole-mounted and ambulatory infusion pumps from a variety of sources on a non-exclusive basis. We repair, refurbish and provide biomedical certification for the devices as needed. The pumps are then available for sale, rental or to be used within our ambulatory infusion pump management service. Our acquisition of FilAMed, a privately-held biomedical services company, on January 31, 2021 has supplemented the Company’s existing biomedical recertification, maintenance and repair services for acute care facilities and other alternate site settings, including, home care and home infusion providers, skilled nursing facilities, pain centers and others. Our acquisition of OB Healthcare, a privately-held biomedical services company, on

Current wording

Our Device Solutions segment’s core service is to: (i) sell or rent new and pre-owned pole-mounted and ambulatory infusion pumps and other Durable Medical Equipment; (ii) sell treatment-related consumables; and (iii) provide biomedical recertification, maintenance and repair services for oncology practices as well as other healthcare site settings, including, home care and home infusion providers, skilled nursing and acute care facilities, pain centers and others. We purchase new and pre-owned pole-mounted and ambulatory infusion pumps from a variety of sources on a non-exclusive basis. We repair, refurbish and provide biomedical certification for the devices as needed. The pumps are then available for sale, rental or to be used within our ambulatory infusion pump management service. Our acquisition of FilAMed in 2021, a privately-held biomedical services company, has supplemented the Company’s existing biomedical recertification, maintenance and repair services for acute care facilities and other alternate site settings, including, home care and home infusion providers, skilled nursing facilities, pain centers and others. Our acquisition of OB Healthcare in 2021, a privately-held biomedical services company, further develops and expands InfuSystem’s Device Solutions segment by adding field service capabilities and complements the Company’s purchase of FilAMed.

Previous wording

Net revenues for the quarter ended June 30, 2025 (“second quarter of 2025”) were $36.0 million, an increase of $2.3 million, or 6.8%, compared to $33.7 million for the quarter ended June 30, 2024 (“second quarter of 2024”). The increase included higher net revenues for both the Patient Services and Device Solutions segments.

Current wording

Net revenues for the quarter ended September 30, 2025 (“third quarter of 2025”) were $36.5 million, an increase of $1.2 million, or 3.3%, compared to $35.3 million for the quarter ended September 30, 2024 (“third quarter of 2024”). The increase included higher net revenues for the Patient Services segment partially offset by lower net revenues for the Device Solutions segment.

Previous wording

Patient Services net revenue of $21.5 million increased $1.3 million, or 6.3%, during the second quarter of 2025 compared to the prior year period. This increase was primarily attributable to additional treatment volume and increased third- party payer collections in Oncology and Wound Care, offset partially by lower revenue volume in Pain Management. The improved volume and collections benefited Oncology revenue by $0.7 million, or 4.0% and Wound Care by $0.8 million, or 175%. Pain Management revenue decreased by $0.2 million, or 15.4%. Pain management was lower mainly due to timing of shipments to a large customer.

Current wording

Patient Services net revenue of $22.4 million increased $1.6 million, or 7.6%, during the third quarter of 2025 compared to the prior year period. This increase was primarily attributable to additional treatment volume and increased third-party payer collections in Oncology and Wound Care, offset partially by lower revenue volume in Pain Management. The improved volume and collections benefited Oncology revenue by $0.7 million, or 3.6% and Wound Care by $1.0 million, or 115%. Pain Management revenue decreased by $0.1 million, or 4.1%. The Wound Care net revenues included first time sales of Pneumatic Compression Devices (PCDs) stemming from a new supplier relationship.

Previous wording

Gross profit for the second quarter of 2025 of $19.9 million increased by $3.2 million, or 19.2%, compared to the second quarter of 2024. This increase was due to the increase in net revenues and by a higher gross profit percentage of net revenue (“gross margin”). Gross margin was 55.2% during the second quarter of 2025 compared to 49.5% during the prior year period, an increase of 5.7%. Gross profit was higher in both the Patient Services and Devices Solutions segments whereas gross margin was lower in the Patient Services segment and higher in the Device Solutions segment.

Current wording

Gross profit for the third quarter of 2025 of $20.8 million increased by $1.8 million, or 9.3%, compared to the third quarter of 2024. This increase was due to the increase in net revenues and by a higher gross profit percentage of net revenue (“gross margin”). Gross margin was 57.1% during the third quarter of 2025 compared to 53.9% during the prior year period, an increase of 3.1%. Gross profit was higher in both the Patient Services and Devices Solutions segments. Gross margin was higher for the Device Solution segment and was lower for the Patient Services segment.

Previous wording

Patient Services gross profit was $13.8 million during the second quarter of 2025, representing an increase of $0.4 million, or 2.7%, compared to the prior year period. The increase reflected the higher net revenue offset partially by lower gross margin, which decreased from the prior year by 2.3% to 64.1%. The decrease in gross margin reflected a change in revenue mix offset partially by lower missing pump reserve expense and improved coverage of fixed costs from higher net revenue. The unfavorable revenue mix impacting gross margin was mainly related to the increase in revenue related to the higher wound care net revenue, which has a lower average gross margin than other Patient Services revenue categories.

Current wording

Patient Services gross profit was $14.5 million during the third quarter of 2025, representing an increase of $0.8 million, or 5.6%, compared to the prior year period. The increase reflected the higher net revenue offset partially by lower gross margin, which decreased from the prior year by 1.2% to 64.8%. The decrease in gross margin reflected a change in revenue mix offset partially by lower missing pump reserve expense and improved coverage of fixed costs from higher net revenue. The unfavorable revenue mix impacting gross margin was mainly related to the increase in revenue related to the higher wound care net revenue, which has a lower average gross margin than other Patient Services revenue categories.

Previous wording

Device Solutions gross profit during the second quarter of 2025 was $6.1 million, representing an increase of $2.8 million, or 88.3%, compared to the prior year. This increase was partially due to a $0.6 million error correction during the prior year which did not repeat in the current year. The remaining $2.2 million increase was due to the increase in net revenue and an increased gross margin. The Device Solutions gross margin was 41.9% during the current quarter, which was 17.9% higher than the prior year period. A portion of the increase was due to the error correction in the prior year which reduced gross margin during that period by 4.1%. The remaining 13.8% increase was due to improved procurement costs for materials, increased biomedical productivity and favorable sales mix involving higher margin products including rental revenue and sales of used medical equipment.

Current wording

Device Solutions gross profit during the third quarter of 2025 was $6.3 million, representing an increase of $1.0 million, or 18.8%, compared to the prior year. This increase was partially due to the aforementioned non-recurring $0.6 million price increase adjustment agreed to by a large customer. The remaining $0.4 million increase was due to an increased gross margin offset partially by the decrease in net revenue. The Device Solutions gross margin was 44.9% during the current quarter, which was 8.2% higher than the prior year period. This improvement was equally split between the impact of the contract asset adjustment and a combination of improved pricing on new biomedical service contracts with increased productivity and lower procurement costs on existing biomedical services contracts.

Previous wording

Selling and marketing expenses were $2.7 million for the second quarter of 2025, representing a decrease of 11.1%, compared to the prior year. Selling and marketing expenses as a percentage of net revenues decreased to 7.5% compared to 9.0% in the prior year period. This decrease reflected a reduction in sales team members and improved coverage of fixed costs from higher net revenues. The selling and marketing expenses during these periods consisted of sales personnel salaries, commissions and associated fringe benefit and payroll-related items, marketing, travel and entertainment and other miscellaneous expenses.

Current wording

Selling and marketing expenses were $2.4 million for the third quarter of 2025, representing a decrease of 14.1%, compared to the prior year. Selling and marketing expenses as a percentage of net revenues decreased to 6.5% compared to 7.8% in the prior year period. This decrease reflected a reduction in sales team members, a shift in the mix of sales favoring revenue with lower commission rates and improved coverage of fixed costs from higher net revenues. The selling and marketing expenses during these periods consisted of sales personnel salaries, commissions and associated fringe benefit and payroll-related items, marketing, travel and entertainment and other miscellaneous expenses.

Previous wording

General and administrative (“G&A”) expenses for the second quarter of 2025 were $13.1 million, an increase of $1.6 million, or 14.1%, from the second quarter of 2024. G&A expenses during these periods consisted primarily of accounting, administrative, third-party payer billing and contract services, customer service, nurses on staff, new product services, service center personnel salaries, fringe benefits and other payroll-related items, professional fees, legal fees, stock-based compensation, insurance and other miscellaneous items. The increase over the prior year included $0.6 million of expenses related to information technology and business applications upgrades in 2025 as part of a project that began in the second half of 2024. Additional expenses above 2024 levels included personnel directly related to the increased net revenue including revenue cycle personnel totaling $0.8 million and a $0.4 million higher expense accrual for short-term incentive compensation. Other increased expenses totaling $0.2 million were indirectly associated with revenue volume growth including the cost of information technology, general business expenses and included inflationary increases. These increases were partially offset by a $0.3 million reduction in stock-based compensation mainly related to the forfeiture of stock-based awards by the outgoing CEO. G&A expenses as a percentage of net revenues for the second quarter of 2025 increased to 36.5% from 34.2% for the prior year period.

Current wording

General and administrative (“G&A”) expenses for the third quarter of 2025 were $14.4 million, an increase of $1.7 million, or 12.9%, from the third quarter of 2024. G&A expenses during these periods consisted primarily of accounting, administrative, third-party payer billing and contract services, customer service, nurses on staff, new product services, service center personnel salaries, fringe benefits and other payroll-related items, professional fees, legal fees, stock-based compensation, insurance and other miscellaneous items. The increase over the prior year included an increase of $0.5 million in expenses related to information technology and business applications upgrades in 2025 as part of a project that began in the second half of 2024. Additional expenses above 2024 levels included personnel directly related to the increased net revenue including revenue cycle personnel totaling $0.6 million, a $0.1 million higher expense accrual for short-term incentive compensation and $0.1 million increase in stock-based compensation. Other increased expenses totaling $0.3 million were indirectly associated with revenue volume growth including the cost of information technology, general business expenses and included inflationary increases. G&A expenses as a percentage of net revenues for the third quarter of 2025 increased to 39.5% from 36.2% for the prior year period.

Previous wording

During the second quarter of 2025, other expense included interest expense of $0.4 million, which was $0.1 million lower than interest expense for the second quarter of 2024. Interest expense includes interest and other fees paid in relation to borrowings under the 2021 Credit Agreement partially offset by amounts received on interest rate swap derivatives. The decrease resulted from lower average outstanding debt balances during the second quarter of 2025 compared to the second quarter of 2024, partially offset by higher commitment fees on a higher unused revolving line availability.

Current wording

During the third quarter of 2025, other expense included interest expense of $0.3 million, which was $0.1 million lower than interest expense for the third quarter of 2024. Interest expense includes interest and other fees paid in relation to borrowings under the 2021 Credit Agreement partially offset by amounts received on interest rate swap derivatives. The decrease resulted from lower average outstanding debt balances during the third quarter of 2025 compared to the third quarter of 2024, partially offset by higher commitment fees on a higher unused revolving line availability.

Previous wording

During the second quarter of 2025, the Company recorded a provision for income taxes totaling $0.8 million on pre-tax income of $3.4 million, representing an effective tax rate of 25%. During the second quarter of 2024, the Company recorded a provision for income taxes of $0.6 million on a pre-tax income of $1.3 million, representing an effective tax rate of 45%. The effective tax rates for these periods differed from the U.S. statutory rate mainly due to the effects of local, state and foreign jurisdiction income taxes and certain permanent differences in expenses recognized for tax purposes, such as non-deductible meals and entertainment, management compensation and differences between expense recognized for book purposes versus tax purposes associated with equity compensation expense. The impact of permanent differences weigh heavier on the effective tax rate when pre-tax earnings are close to break even.

Current wording

During the third quarter of 2025, the Company recorded a provision for income taxes totaling $1.2 million on pre-tax income of $3.4 million, representing an effective tax rate of 34%. During the third quarter of 2024, the Company recorded a provision for income taxes of $1.0 million on a pre-tax income of $2.8 million, representing an effective tax rate of 35%. The effective tax rates for these periods differed from the U.S. statutory rate mainly due to the effects of local, state and foreign jurisdiction income taxes and certain permanent differences in expenses recognized for tax purposes, such as non-deductible meals and entertainment, management compensation and differences between expense recognized for book purposes versus tax purposes associated with equity compensation expense.

Previous wording

InfuSystem Holdings, Inc. Results of Operations for the Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024

Current wording

InfuSystem Holdings, Inc. Results of Operations for the Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024

Previous wording

The following represents the Company’s results of operations for the six months ended June 30, 2025 and 2024:

Current wording

The following represents the Company’s results of operations for the nine months ended September 30, 2025 and 2024:

Previous wording

Net revenues for the six-month period ended June 30, 2025 (“first half of 2025”) were $70.7 million, an increase of $5.0 million, or 7.6%, compared to $65.7 million for the six-month period ended June 30, 2024 (“first half of 2024”). The increase included higher net revenues for both the Patient Services and Device Solutions segments.

Current wording

Net revenues for the nine-month period ended September 30, 2025 (“nine-month period of 2025”) were $107.2 million, an increase of $6.2 million, or 6.1%, compared to $101.0 million for the nine-month period ended September 30, 2024 (“nine-month period of 2024”). The increase included higher net revenues for both the Patient Services and Device Solutions segments.

Previous wording

Patient Services net revenue of $42.3 million increased $3.5 million, or 8.9%, during the first half of 2025 compared to the same prior year period. This increase was primarily attributable to additional treatment volume and increased third-party payer collections totaling $3.7 million offset partially by $0.2 million lower revenue from sales-type leases of NPWT pumps.

Current wording

Patient Services net revenue of $64.7 million increased $5.0 million, or 8.5%, during the nine-month period of 2025 compared to the same prior year period. This increase was primarily attributable to additional treatment volume and increased third-party payer collections totaling $5.1 million offset partially by $0.2 million lower revenue from sales-type leases of NPWT pumps. The improved volume and collections benefited Oncology revenue by $3.1 million or 5.8%, and Wound Care treatment revenue by $2.3 million, or 134.9%. These increases were partially offset by lower Pain Management revenue $0.2 million, or 4.2%, which was mainly due to shipment timing to a large customer. The Wound Care net revenues included first time sales of PCDs stemming from a new supplier relationship.

Previous wording

Device Solutions net revenue of $28.4 million increased $1.6 million, or 5.8%, during the first half of 2025 compared to the same prior year period. This increase included higher rental revenue totaling $1.4 million, or 14.7% and higher medical equipment sales, which increased by $0.3 million, or 9.2%. These increases were partially offset by lower biomedical services revenue, which decreased by $0.2 million, or 2.1%. The increase in rental revenue was mainly attributable to new customers added during and since the second quarter of 2024. Higher medical equipment sales were due to rental buyouts by certain existing rental customers and sales to new customers. Lower biomedical services revenue reflected a reduction in devices under contract with GE Healthcare offset partially by additional volume with other customers.

Current wording

Device Solutions net revenue of $42.6 million increased $1.2 million, or 2.8%, during the nine-month period of 2025 compared to the same prior year period. This increase included higher rental revenue totaling $1.4 million, or 9.4%, offset partially by lower medical equipment sales, which decreased by $0.5 million, or 7.6%. Biomedical services revenue was flat but included a non-recurring $0.6 million adjustment associated with a price increase agreed to by a large customer which was also effective for services already rendered but not fully invoices based on the agreed billing structure. The increase in rental revenue was mainly attributable to new customers added during and since the second quarter of 2024. Medical equipment sales decreased due to higher than usual rental buyouts by certain existing rental customers in the prior year. Lower recurring biomedical services revenue reflected a reduction in devices under contract with GE Healthcare and lower service repair volume associated with a contract with a device manufacturer to provide a fleet wide software update. These decreases were partially offset by additional volume with other customers.

Previous wording

Gross profit of $39.0 million for the first half of 2025 increased $5.9 million, or 17.8%, from $33.1 million for the first half of 2024. This increase was due to the increase in net revenues and by a higher gross margin. Gross profit increased for both the Patient Services and Device Solutions segments. Gross margin increased to 55.2% during the first half of 2025 compared to 50.4% during the same prior year period. Gross margin was lower for the Patient Services segment and higher for the Device Solutions segment.

Current wording

Gross profit of $59.9 million for the nine-month period of 2025 increased $7.7 million, or 14.7%, from $52.2 million for the nine-month period of 2024. This increase was due to the increase in net revenues and by a higher gross margin. Gross profit increased for both the Patient Services and Device Solutions segments. Gross margin increased to 55.8% during the nine-month period of 2025 compared to 51.7% during the same prior year period. Gross profit was higher in both the Patient Services and Devices Solutions segments. Gross margin was higher for the Device Solution segment and was lower for the Patient Services segment.

Previous wording

Patient Services gross profit was $27.0 million during the first half of 2025, representing an increase of $1.3 million, or 4.9%, compared to the same prior year period. The improvement reflected increased net revenue offset partially by a lower gross margin, which decreased from the prior year by 2.4% to 63.8%. The decrease in gross margin reflected higher pump disposal expenses and unfavorable product mix favoring lower gross margin revenues. These impacts were partially offset by increased third-party payer collections and improved coverage of fixed costs from higher net revenue. The unfavorable gross margin mix was mainly related to the increase in revenue related to wound care treatment revenue, which has lower average gross margin than other Patient Services revenue categories. Pump disposal expenses, which include retirements of damaged pumps and reserves for missing pumps, increased by $0.2 million during the first half of 2025 compared to the prior year period.

Current wording

Patient Services gross profit was $41.5 million during the nine-month period of 2025, representing an increase of $2.0 million, or 5.2%, compared to the same prior year period. The improvement reflected increased net revenue offset partially by a lower gross margin, which decreased from the prior year by 2.0% to 64.1%. The decrease in gross margin reflected unfavorable product mix favoring lower gross margin revenues, offset partially by lower pump disposal expenses. The unfavorable gross margin mix was mainly related to the increase in revenue related to wound care treatments, which has lower average gross margin than other Patient Services revenue categories. Pump disposal expenses, which include retirements of damaged pumps and reserves for missing pumps, decreased by $0.1 million during the nine-month period of 2025 compared to the prior year period.

Previous wording

Device Solutions gross profit during the first half of 2025 was $12.1 million, representing an increase of $4.6 million, or 62.4%, compared to the same prior year period. The increase was partially due to a $0.6 million error correction during the prior year which did not repeat in the current year. The remaining $4.0 million improvement reflected increased net revenue and higher gross margin. The Device Solutions gross margin was 42.4% during the current period, which was 14.8% higher than the same prior year period. A portion of this increase was due to the error correction in the prior year which reduced gross margin during that period by 2.3%. The remaining 12.5% increase was attributable to improved procurement costs for materials, increased biomedical productivity and favorable product mix favoring higher gross margin revenues, such as rental revenue and sales of used equipment.

Current wording

Device Solutions gross profit during the nine-month period of 2025 was $18.4 million, representing an increase of $5.6 million, or 44.1%, compared to the same prior year period. The increase was partially due to the aforementioned non-recurring $0.6 million price increase adjustment agreed to by a large customer and to a $0.6 million error correction during the prior year which did not repeat in the current year. The remaining $4.4 million improvement reflected increased net revenue. The Device Solutions gross margin was 43.2% during the current period, which was 12.4% higher than the same prior year period. This increase was partially due to the contract asset adjustment which increased gross margin by 1.4% in the current year and the error correction in the prior year, which reduced gross margin during that period by 1.5%. The remaining 9.5% increase was attributable to improved procurement costs for materials, increased biomedical productivity and favorable product mix favoring higher gross margin revenues, such as rental revenue and sales of used equipment.

Previous wording

Selling and marketing expenses for the first half of 2025 were $5.7 million, representing a decrease of $0.7 million, or 11.4%, compared to selling and marketing expenses for the first half of 2024. Selling and marketing expenses consist of sales personnel salaries, commissions and associated fringe benefit and payroll-related items, marketing, travel and entertainment and other miscellaneous expenses. Selling and marketing expenses as a percentage of net revenues was 8.0% representing a decrease from the prior year period amount of 9.8%. This decrease reflected a reduction in sales team members and improved coverage of fixed costs from higher net revenues.

Current wording

Selling and marketing expenses for the nine-month period of 2025 were $8.1 million, representing a decrease of $1.1 million, or 12.2%, compared to selling and marketing expenses for the nine-month period of 2024. Selling and marketing expenses as a percentage of net revenues was 7.5% for the nine-month period of 2025, representing a decrease from the prior year period amount of 9.1%. This decrease reflected a reduction in sales team members, a shift in the mix of sales favoring revenue with lower commission rates and improved coverage of fixed costs from higher net revenues. Selling and marketing expenses consist of sales personnel salaries, commissions and associated fringe benefit and payroll-related items, marketing, travel and entertainment and other miscellaneous expenses.

Previous wording

G&A expenses for the first half of 2025 were $28.5 million, an increase of $3.2 million, or 12.9%, from the first half of 2024. G&A expenses during these periods consisted primarily of accounting, administrative, third-party payer billing and contract services, customer service, nurses on staff, new product services, service center personnel salaries, fringe benefits and other payroll-related items, professional fees, legal fees, stock-based compensation, insurance and other miscellaneous items. Additionally, the amount for 2025 included a one-time accrued severance expense of $1.0 million for the Company's outgoing CEO, which was substantially in accordance with his employment agreement. This amount was higher than the total of one-time expenses in 2024 which included a $0.6 million payment to a former member of the board of directors related to a Cooperation Agreement and a one-time payment to the Company's former audit firm for services related to their consent to include their prior year audit report in our 2023 annual report totaling $0.3 million. The remaining increase, net of these amounts of $3.2 million, included $1.1 million of expenses related to information technology and business applications upgrades in 2025 as part of a project that began in the second half of 2024. Additional expenses above 2024 levels included personnel directly related to the increased net revenue including revenue cycle personnel and general business expenses totaling $2.2 million and a $0.2 million increase in the company's bad debt accrual which was a benefit in the prior year but an expense amount during 2025. These increases were partially offset by a $0.3 million reduction in stock-based compensation mainly related to the forfeiture of stock-based awards by the outgoing CEO. G&A expenses as a percentage of net revenues for the first half of 2025 increased to 40.2% compared to 38.4% for the same prior year period.

Current wording

G&A expenses for the nine-month period of 2025 were $42.9 million, an increase of $4.9 million, or 12.9%, from the nine-month period of 2024. G&A expenses during these periods consisted primarily of accounting, administrative, third-party payer billing and contract services, customer service, nurses on staff, new product services, service center personnel salaries, fringe benefits and other payroll-related items, professional fees, legal fees, stock-based compensation, insurance and other miscellaneous items. Additionally, the amount for 2025 included a one-time accrued severance expense of $1.0 million for the Company's outgoing CEO, which was substantially in accordance with his employment agreement. This amount was higher than the total of one-time expenses in 2024 which included a $0.6 million payment to a former member of the board of directors related to a Cooperation Agreement and a one-time payment to the Company's former audit firm for services related to their consent to include their prior year audit report in our 2023 annual report totaling $0.3 million. The remaining increase, net of these amounts of $4.8 million, included $1.9 million of expenses related to information technology and business applications upgrades in 2025 as part of a project that began in the second half of 2024. Additional expenses above 2024 levels included personnel directly related to the increased net revenue including revenue cycle personnel and general business expenses totaling $2.8 million, a $0.5 million increase in the company’s short-term incentive plan compensation expense accrual and a $0.2 million increase in the company's bad debt reserve accrual which was a benefit in the prior year but an expense amount during 2025. These increases were partially offset by a $0.2 million reduction in stock-based compensation mainly related to the forfeiture of stock-based awards by the outgoing CEO. G&A expenses as a percentage of net revenues for the nine-month period of 2025 increased to 40.0% compared to 37.6% for the same prior year period.

Previous wording

During the first half of 2025, other income and expense included interest expense of $0.7 million, which was $0.2 million lower than interest expense for the first half of 2024. This decrease was due to a decrease in average outstanding borrowings on the 2021 Credit Agreement revolving line of credit partially offset by higher commitment fees on a higher unused revolving line availability.

Current wording

During the nine-month period of 2025, other income and expense included interest expense of $1.0 million, which was $0.4 million lower than interest expense for the nine-month period of 2024. This decrease was due to a decrease in average outstanding borrowings on the 2021 Credit Agreement revolving line of credit partially offset by higher commitment fees on a higher unused revolving line availability.

Previous wording

During the first half of 2025, the Company recorded a provision for income taxes totaling $1.4 million on pre-tax income of $3.7 million representing an effective tax rate of 37%. The pre-tax income amount included significant non-deductible expenses including the severance expense for the outgoing CEO which exceeded the annual deduction limitation for officer compensation. Non-deductible expenses also included a shortfall in the amount of stock compensation expense recognizable for tax purposes verses the amount recognized for book purposes. Together, these items impacted tax expense by $0.5 million, or 12% of pre-tax income. During the first half of 2024, the Company recorded a provision for income taxes totaling $0.4 million on a slight amount of pre-tax income. These amounts differed from the U.S. statutory amounts mainly due to the effects of local, state and foreign jurisdiction income taxes, limitations on the deductions of certain expenses including meals and entertainment expense and management compensation and differences between expense recognized for book purposes versus tax purposes associated with equity compensation expense. The impact of permanent differences weighs heavier on the effective tax rate when pre-tax earnings are close to break even.

Current wording

During the nine-month period of 2025, the Company recorded a provision for income taxes totaling $2.5 million on pre-tax income of $7.1 million representing an effective tax rate of 36%. The pre-tax income amount included significant non-deductible expenses including the severance expense for the outgoing CEO which exceeded the annual deduction limitation for officer compensation. Non-deductible expenses also included a shortfall in the amount of stock compensation expense recognizable for tax purposes verses the amount recognized for book purposes. Together, these items impacted tax expense by $0.6 million, or 9% of pre-tax income. During the nine-month period of 2024, the Company recorded a provision for income taxes totaling $1.4 million on pre-tax income of $2.8 million, representing an effective tax rate of 49%. Similar to the current year, the pre-tax income amount in 2024 included significant non-deductible expenses, which exceeded the annual deduction limitation for officer compensation. Non-deductible expenses in 2024 included a shortfall in the amount of stock compensation expense recognizable for tax purposes verses the amount recognized for book purposes. Together, these items impacted tax expense by $0.5 million, or 17% of pre-tax income. Other factors causing the effective rate during both periods to differ from the U.S. statutory amounts included the effects of local, state and foreign jurisdiction income taxes, limitations on the deductions of certain expenses including meals and entertainment expense.

Previous wording

We finance our operations and capital expenditures with cash generated from operations and borrowings under our existing credit agreement. On February 5, 2021, we and certain of our subsidiaries, as borrowers, entered into a Credit Agreement (the “2021 Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, sole bookrunner and sole lead arranger (the “Agent”), and the lenders party thereto, which replaced our then existing credit facility. On April 26, 2023, the Company entered into a First Amendment to the 2021 Credit Agreement (the “First Amendment”) with the Agent and the lenders party thereto, which amended the 2021 Credit Agreement. See Note 8 (Debt) in the notes to the accompanying unaudited condensed consolidated financial statements for additional information regarding the 2021 Credit Agreement and the First Amendment.

Current wording

We finance our operations and capital expenditures with cash generated from operations and borrowings under our existing credit agreement. On February 5, 2021, we and certain of our subsidiaries, as borrowers, entered into a Credit Agreement (the “2021 Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, sole bookrunner and sole lead arranger (the “Agent”), and the lenders party thereto, which replaced our then existing credit facility. On April 26, 2023, the Company entered into a First Amendment to the 2021 Credit Agreement (the “First Amendment”) with the Agent and the lenders party thereto, which amended the 2021 Credit Agreement. On July 15, 2025, the Company entered into a Second Amendment to the 2021 Credit Agreement (the “Second Amendment”) with the Agent and the lenders party thereto, which amended the 2021 Credit Agreement. See Note 8 (Debt) in the notes to the accompanying unaudited condensed consolidated financial statements for additional information regarding the 2021 Credit Agreement, the First Amendment and Second Amendment.

Previous wording

Our liquidity and borrowing plans are established to align with our financial and strategic planning processes and ensure we have the necessary funding to meet our operating commitments, which primarily include the purchase of medical equipment, inventory, payroll and general expenses. We also take into consideration our overall capital allocation strategy, which includes investment for future organic growth, potential acquisitions and share repurchases. We believe we have adequate sources of liquidity and funding available to meet our liquidity requirements for at least the next year from the filing date of this report, as well as for our currently anticipated long-term needs, including our long-term lease obligations discussed above in Note 14 (Leases) in the notes to the accompanying unaudited condensed consolidated financial statements. However, any projections of future earnings and cash flows are subject to substantial uncertainty, including factors such as the successful execution of our business plan and general economic conditions. We may need to access debt and equity markets in the future if unforeseen costs or opportunities arise, to meet working capital requirements, fund acquisitions or investments or repay indebtedness under the 2021 Credit Agreement. If we need to obtain new debt or equity financing in the future, the terms and availability of such financing may be impacted by economic and financial market conditions as well as our financial condition and results of operations at the time we seek additional financing.

Current wording

Our liquidity and borrowing plans are established to align with our financial and strategic planning processes and ensure we have the necessary funding to meet our operating commitments, which primarily include the purchase of medical equipment, inventory, payroll and general expenses. We also take into consideration our overall capital allocation strategy, which includes investment for future organic growth, potential acquisitions and share repurchases. We believe we have adequate sources of liquidity and funding available to meet our liquidity requirements for at least the next year from the filing date of this report, as well as for our currently anticipated long-term needs, including our long-term lease obligations discussed above in Note 14 (Leases) in the notes to the accompanying unaudited condensed consolidated financial statements. However, any projections of future earnings and cash flows are subject to substantial uncertainty, including factors such as the successful execution of our business plan and general economic conditions. We may need to access debt and equity markets in the future if unforeseen costs or opportunities arise, to meet working capital requirements, fund acquisitions or investments or repay indebtedness under the 2021 Credit Agreement, as amended. If we need to obtain new debt or equity financing in the future, the terms and availability of such financing may be impacted by economic and financial market conditions as well as our financial condition and results of operations at the time we seek additional financing.

Previous wording

The following table illustrates the net availability under the revolving credit facility (“Revolving Facility”) under the 2021 Credit Agreement, as of the applicable balance sheet date (in thousands):

Current wording

The following table illustrates the net availability under the revolving credit facility (“Revolving Facility”) under the 2021 Credit Agreement, as amended, as of the applicable balance sheet date (in thousands):

Previous wording

As of June 30, 2025, amounts outstanding under the Revolving Facility provided under the 2021 Credit Agreement, as amended, bear interest at a variable rate equal to, at the Company’s election, Adjusted Term SOFR for Term Benchmark loans or an Alternative Base Rate for ABR loans, as defined by the First Amendment, plus a spread that will vary depending upon the Company’s leverage ratio. The spread ranges from 2.00% to 3.00% for Term Benchmark Loans and 1.00% to 2.00% for base rate loans. The weighted-average Term Benchmark loan rate at June 30, 2025 was 6.41% (Adjusted Term SOFR of 4.31% plus 2.10%). The actual ABR loan rate at June 30, 2025 was 8.50% (lender’s prime rate of 7.50% plus 1.00%). As of June 30, 2025, the Company was in compliance with all debt-related covenants under the 2021 Credit Agreement, as amended.

Current wording

As of September 30, 2025, amounts outstanding under the Revolving Facility bear interest at a variable rate equal to, at the Company’s election, Adjusted Term SOFR for Term Benchmark loans or an Alternative Base Rate for ABR loans, as defined by the Second Amendment, plus a spread that will vary depending upon the Company’s leverage ratio. The spread ranges from 2.05% to 3.05% for Term Benchmark Loans and 1.05% to 2.05% for base rate loans. The weighted-average Term Benchmark loan rate at September 30, 2025 was 6.27% (Adjusted Term SOFR of 4.22% plus 2.05%). The actual ABR loan rate at September 30, 2025 was 8.30% (lender’s prime rate of 7.25% plus 1.05%). As of September 30, 2025, the Company was in compliance with all debt-related covenants under the 2021 Credit Agreement, as amended.

Previous wording

On May 16, 2024, our Board of Directors approved a stock repurchase program (the “Share Repurchase Program”) that authorizes the Company to repurchase up to $20.0 million of the Company’s outstanding common stock through June 30, 2026. The Share Repurchase Program superseded the previous authorization, which expired on June 30, 2024. Repurchases under the Share Repurchase Program are subject to market conditions, the periodic capital needs of the Company’s operating activities, and the continued satisfaction of all covenants under the Company’s existing 2021 Credit Agreement. Repurchases under the Share Repurchase Program may take place in the open market or in privately negotiated transactions and may be made under a Rule 10b5-1 plan. The Share Repurchase Program does not obligate the Company to repurchase shares and may be suspended, terminated, or modified at any time at the discretion of the Board.

Current wording

On May 16, 2024, our Board of Directors approved a stock repurchase program (the “Share Repurchase Program”) that authorizes the Company to repurchase up to $20.0 million of the Company’s outstanding common stock through June 30, 2026. The Share Repurchase Program superseded the previous authorization, which expired on June 30, 2024. Repurchases under the Share Repurchase Program are subject to market conditions, the periodic capital needs of the Company’s operating activities, and the continued satisfaction of all covenants under the 2021 Credit Agreement, as amended. Repurchases under the Share Repurchase Program may take place in the open market or in privately negotiated transactions and may be made under a Rule 10b5-1 plan. The Share Repurchase Program does not obligate the Company to repurchase shares and may be suspended, terminated, or modified at any time at the discretion of the Board. As of September 30, 2025, the Company had repurchased and retired approximately $9.7 million, or 1,360,482 shares, of the Company's outstanding common stock under the Share Repurchase Program.

Previous wording

Operating Cash Flow. Operating cash flows provided $8.8 million in cash during the first half of 2025 and $2.7 million of cash during the first half of 2024. This $6.1 million favorable difference was attributable to an increase in net income (loss) adjusted for non-cash items and a reduction in cash used to fund working capital items. During the first half of 2025 net income (loss) adjusted for non-cash items was $10.9 million, an increase of $3.7 million compared to net income (loss) adjusted for non-cash items of $7.1 million during the first half of 2024. Also during the first half of 2025 cash used to fund working capital items was $2.1 million, a decrease of $2.4 million compared to $4.4 million during first half of 2024. The increase in net income (loss) adjusted for non-cash items, was primarily attributable to higher revenue and gross profit in 2025, offset partially by increased general and administrative expenses described above. The use of cash for working capital items during the first half of 2025 included a $2.1 million increase in accounts receivable and a $2.0 million decrease in accounts payable and other liabilities net of capital items. These cash flow uses were partially offset by a $1.1 million decrease in other assets and a $0.9 million decrease in inventories. The cash used for working capital items during the first half of 2024 included a $3.3 million decrease in accounts payable and other liabilities net of capital items, a $1.2 million increase in accounts receivable and a $0.4 million increase in other current assets. These uses of cash were partially offset by a $0.9 million decrease in other assets and a $0.4 million increase in inventories.

Current wording

Operating Cash Flow. Operating cash flows provided $17.3 million in cash during the nine-month period of 2025 and $12.5 million of cash during the nine-month period of 2024. This $4.8 million improvement was attributable to an increase in net income adjusted for non-cash items and a reduction in cash used to fund working capital items. During the nine-month period of 2025 net income adjusted for non-cash items was $18.4 million, an increase of $4.5 million compared to net income (loss) adjusted for non-cash items of $13.9 million during the nine-month period of 2024. Also during the nine-month period of 2025 cash used to fund working capital items was $1.1 million, a decrease of $0.3 million compared to $1.4 million during nine-month period of 2024. The increase in net income adjusted for non-cash items, was primarily attributable to higher revenue and gross profit in 2025, offset partially by increased general and administrative expenses described above. The use of cash for working capital items during the nine-month period of 2025 included a $2.2 million increase in accounts receivable a $0.8 million increase and a $0.1 million decrease in accounts payable and other liabilities, net of capital items. These cash flow uses were partially offset by a $1.0 million decrease in other assets and a $0.9 million decrease in inventories. The cash used for working capital items during the nine-month period of 2024 included a $1.3 million increase in accounts receivable, a $1.2 million decrease in accounts payable and other liabilities, net of capital items and a $0.3 million increase in inventories. These uses of cash were partially offset by a $1.1 million decrease in other assets and a $0.4 million decrease in other current assets.

Previous wording

The increase in accounts receivable during both periods was mainly due to the sequential increase in quarterly revenue during each period. This increase was greater during the first half of 2024 when the revenue increased by a higher amount. Accounts payable and other liabilities net of capital items decreased by $2.0 million during the first half of 2025 and decreased $3.3 million during the first half of 2024, representing a $1.3 million unfavorable cash flow swing, mainly due to timing of payments to suppliers, a lower amount of fourth quarter commission accrual as of December 31, 2023 as compared to December 31, 2024 and other timing differences. The increase in inventories during 2024 reflected the higher revenue growth during that period. The increase in other assets during 2024 was due to an increase in long-term lease receivables due to equipment sales on leases during 2025. Equipment sales on leases during 2024 were minimal.

Current wording

The increase in accounts receivable during both periods was mainly due to the sequential increase in quarterly revenue during each period. This increase was greater during the nine-month period of 2024 when the revenue increased by a higher amount. Accounts payable and other liabilities net of capital items decreased by $0.1 million during the nine-month period of 2025 and decreased $1.2 million during the nine-month period of 2024, representing a $1.1 million favorable cash flow swing, mainly due to timing of payments to suppliers, a lower amount of fourth quarter commission accrual as of December 31, 2023 as compared to December 31, 2024 and other timing differences. The decrease in inventories during 2025 reflected better management of inventory levels held to support recurring revenues. Furthermore, much of the increase in net revenues during 2025 was in business lines that do not require inventory stock, such as equipment rentals, or where products are drop-shipped directly to the customer such as wound care. The decrease in other assets during 2025 was due to a decrease in long-term lease receivables due to payments on equipment leases during 2025 exceeding sales on new equipment leases.

Previous wording

Investing Cash Flow. Net cash used in investing activities was $4.3 million for the first half of 2025 compared to $7.1 million for the first half of 2024, a decrease of $2.8 million. The decrease was due to a decrease totaling $4.7 million in cash used to purchase medical equipment and other property and equipment during the first half of 2025 compared to the first half of 2024. Purchases of medical equipment were higher during 2024 compared to 2025 because a higher portion of the revenue growth in 2024 came from rental revenues that require capital equipment purchases. This decrease was partially offset by cash used in 2025 to acquire certain assets of Apollo Medical Supply (“Apollo”), a privately-held wound care service company totaling $1.4 million and a $0.5 million decrease in proceeds from sale of medical equipment, property and equipment. There were no acquisitions in 2024. The decrease in proceeds from sale of medical equipment, property and equipment reflects a lower allocation of equipment sales taken from the Company’s existing fleet versus purchased for sale in 2025 as compared to 2024.

Current wording

Investing Cash Flow. Net cash used in investing activities was $4.6 million for the nine-month period of 2025 compared to $10.0 million for the nine-month period of 2024, a decrease of $5.4 million. The decrease was due to a decrease totaling $7.0 million in cash used to purchase medical equipment and other property and equipment during the nine-month period of 2025 compared to the nine-month period of 2024. Purchases of medical equipment were higher during 2024 compared to 2025 because a higher portion of the revenue growth in 2024 came from rental revenues that require capital equipment purchases. This decrease was partially offset by cash used in 2025 to acquire certain assets of Apollo Medical Supply (“Apollo”), a privately-held wound care service company totaling $1.4 million and a $0.2 million decrease in proceeds from sale of medical equipment, property and equipment. There were no acquisitions in 2024. The decrease in proceeds from sale of medical equipment, property and equipment reflects a lower allocation of equipment sales taken from the Company’s existing fleet versus purchased for sale in 2025 as compared to 2024.

Previous wording

Financing Cash Flow. Cash flow used in financing activities during first half 2025 totaled $4.3 million, included $6.4 million in cash used to repurchase the Company's common stock and cash used to satisfy statutory withholding on employee stock-based compensation plans totaling $0.5 million. These amounts were partially offset by net revolving line of credit borrowings under the 2021 Credit Agreement totaling $2.5 million and proceeds from employee stock option exercises and employee stock purchase plan proceeds totaling $0.2 million, combined. Cash provided by financing activities during first half 2024 was $4.3 million and primarily related to net revolving line of credit borrowings under the 2021 Credit Agreement totaling $5.0 million and both $0.2 million in cash proceeds from employee stock option exercises and employee stock purchase plan proceeds, combined. These amounts were partially offset by cash used to satisfy statutory withholding on employee stock based compensation plans totaling $0.6 million and $0.3 million in cash used to repurchase the Company's common stock.

Current wording

Financing Cash Flow. Cash flow used in financing activities during nine-month period 2025 totaled $12.3 million, included $8.6 million in cash used to repurchase the Company's common stock, net revolving line of credit repayments under the 2021 Credit Agreement totaling $2.8 million, cash used to pay debt issue costs associated with an amendment to extend the maturity date of the 2021 Credit Agreement and cash used to satisfy statutory withholding on employee stock-based compensation plans totaling $1.0 million. These amounts were partially offset by proceeds from employee stock option exercises and employee stock purchase plan proceeds totaling $0.3 million. Cash used in financing activities during the nine-month period of 2024 was $2.4 million and primarily related to net revolving line of credit repayments under the 2021 Credit Agreement totaling $1.2 million, $1.0 million in cash used to repurchase the Company's common stock and cash used to satisfy statutory withholding on employee stock based compensation plans totaling $0.6 million. These amounts were partially offset by $0.4 million in cash proceeds from employee stock option exercises and employee stock purchase plan proceeds.