Bioventus Inc.
For the period ended Mar 28, 2026. Filed May 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 28, 2026 · Filed May 6, 2026
BVS$10.61-0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-27; filed 2025-11-04.
0001665988-25-000026
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-28; filed 2026-05-06.
0001665988-26-000027
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 127 previous paragraphs and 96 current paragraphs.
54 unchanged; 23 reworded; 19 added; 49 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 23 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
On March 27, 2026, the Company made a discretionary principal prepayment of $22.0 million on the 2025 Term Loan to reduce the amount of its long-term debt, driven by strong operating cash flows. The reduction in long-term debt lowered interest payments and borrowing costs and improved the Company’s financial metrics.
Current report
(b)Restructuring costs primarily resulted from severance associated with the elimination of several positions and the consolidation of certain administrative functions and roles.
Current report
(f)Other items during the three months ended March 28, 2026 primarily consisted of individually immaterial items that are not indicative of the Company’s ongoing operating performance.
Current report
Net sales for the period increased $5.9 million, or 5.4%, compared to the prior year period. Net sales from Pain Treatments increased $3.5 million driven by favorable rebates compared to the prior year period. As previously disclosed, during the third quarter of 2025, a large private insurance payer informed us that it had implemented changes to its claims data management and billing systems, which the Company estimated could result in significantly higher rebate volumes for our HA viscosupplement products than previously estimated or experienced. During the first quarter of 2026, we received the first deferred rebate billings processed under the payer’s updated billing methodology. The rebate claims reflected in these billings were at the low end of our estimated range of possible outcomes. Based on this information, we reduced accrued rebates to this contract by $4.2 million during the first quarter of 2026. This increase was partially offset by a 1.7% decline in HA volume.
Current report
Net sales from Surgical Solutions increased $1.7 million due to volume growth in BGS. The $0.8 million increase in Restorative Therapies was attributable to a higher net average selling price (“ASP”) for our EXOGEN Bone Stimulation System.
Current report
Net sales increased $2.3 million, or 17.1%, compared to the prior year period, primarily due to volume growth in Ultrasonics and Pain Treatments, driven by Durolane.
Current report
Gross profit increased $6.5 million, or 8.6%, compared to the prior year period, driven by revenue growth across all of our businesses, favorable rebates, and a $0.4 million refund related to certain vendor tariffs. The resulting gross margin increase of 2.2% was primarily attributable to: (i) a 0.7% benefit from favorable rebates; (ii) a 0.5% increase from lower depreciation and amortization expense; and (iii) a 0.4% benefit from vendor tariffs. The remainder was attributable to favorable foreign currency movements and other items.
Current report
Gross profit increased $1.2 million, or 16.0% compared to the prior year period, primarily due to revenue growth in all businesses. Gross margin decreased slightly by 0.6% due to one-time costs for servicing and repairs.
Current report
Selling, general and administrative expenses increased by $4.8 million, or 6.6%, compared to the prior year period, primarily due to: (i) a $3.1 million increase in compensation-related costs driven by higher wages, bonuses and commissions; and (ii) a $0.8 million increase in stock-based compensation. The remainder of the increase was attributable to various miscellaneous items.
Current report
Restructuring Costs
Current report
Restructuring costs incurred during the first quarter of 2026 primarily related to severance costs associated with a restructuring plan initiated in 2025 that focused on the elimination of several positions to optimize our organizational structure.
Current report
Loss on Disposals
Current report
The loss on disposals during the three months ended March 29, 2025 related to the sale of the Advanced Rehabilitation Business.
Current report
Adjusted EBITDA increased $4.1 million, or 24.0%, compared to the prior year period, primarily due to higher gross profit driven by increased sales, favorable rebates, and favorable foreign currency movements. These improvements were partially offset by higher compensation-related costs.
Current report
Adjusted EBITDA increased $0.6 million, or 28.6%, compared to the prior year period, primarily due to higher gross profit driven by increased sales, partially offset with higher compensation-related costs.
Current report
Future Cash Requirements
Current report
Net cash inflows from operating activities increased by $28.3 million compared to the prior year period, primarily due to higher cash collections on net sales, lower interest payments resulting from reduced debt levels and favorable interest rates, favorable timing of payments, and a decrease in bonus payments, partially offset by higher compensation‑related costs.
Current report
Net cash outflows from investing activities decreased by $0.3 million compared to the prior year period, due to lower capital expenditures. Capital expenditures in both periods primarily related to information technology investments.
Current report
Net cash outflows from financing activities totaled $23.1 million for the three months ended March 28, 2026, primarily due to a $22.0 million discretionary prepayment of long‑term debt. Net cash inflows from financing activities totaled $0.9 million for the three months ended March 29, 2025, driven by $10.0 million of net borrowings under our previous revolving credit facility, largely offset by a $9.0 million payment of contingent consideration related to a prior acquisition.
Removed paragraphs (49)
Previous report
2025 Credit Agreement
Previous report
The 2025 Credit Agreement is expected to provide $2.0 million of annual interest expense savings, increased liquidity and extended debt maturity to July 2030. On August 1, 2025, we entered into two interest rate swaps totaling $150.0 million to hedge the interest rate risk associated with our floating-rate SOFR-based borrowings under the 2025 Credit Agreement.
Previous report
XCELL PRP System
Previous report
In August 2025, we fully launched the XCELL PRP System in the Orthopedic and Sports Medicine specialties across the U.S. market. The XCELL PRP System is designed to deliver customization, precision and efficiency with high platelet count in a single 10-minute process, allowing providers to select between leukocyte-rich and leukocyte-poor options with flexible dosing to meet individual patient and procedural needs.
Previous report
Peripheral Nerve Stimulation
Previous report
In July 2025, we received FDA 510(k) clearances for both TalisMann and StimTrial, expanding our innovative growth portfolio of PNS solutions for chronic pain management. These clearances mark an important step forward and represent a substantial growth opportunity as we look to expand in the PNS market. With TalisMann and StimTrial now FDA-cleared, we offer a comprehensive PNS portfolio that empowers physicians to potentially treat a broader spectrum of patients—from initial assessment to long-term therapy—with greater confidence and flexibility. This development also reinforces our commitment to delivering non-opioid, minimally invasive therapies designed to address real-world clinical needs.
Previous report
TalisMann combines our patented electric field conduction technology with an integrated pulse generator to potentially reach deeper, larger nerves. This combination is designed to provide long-term relief from chronic nerve pain for patients, potentially increasing the number of patients who respond to neuromodulation therapy. From a physician's perspective, the increase in power allows for easier lead placement and potentially broadens addressable nerves. StimTrial provides physicians the ability to evaluate patient response to PNS therapy, which we expect will facilitate physician adoption and payer reimbursement where trial assessments are required. We began a limited commercial release of both TalisMann and StimTrial in select U.S. markets during the third quarter, with a broader rollout planned for early 2026.
Previous report
Advanced Rehabilitation Business
Previous report
On December 31, 2024, we completed the sale of certain products within our Advanced Rehabilitation Business, including the L100, L300 Go, L360, H200, Vector Gait & Safety System and Bioness Integrated Therapy System (collectively, the “Advanced Rehabilitation Business”). This divestiture reflects our strategic decision to focus on core business areas and streamline operations. The Advanced Rehabilitation Business was considered non-core and required additional research and development investment to achieve its next stage of growth. We received $24.7 million of cash proceeds at closing, net of transactional fees, which were subject to a post-closing adjustment for net working capital. We paid $0.7 million in the second quarter of 2025 to settle the adjustment for net working capital. The net proceeds were used to pay $20.0 million in long-term debt obligations on December 31, 2024. We may also receive an aggregate of $20.0 million in potential earn-out payments based on the achievement of certain revenue and financial performance thresholds related to the Advanced Rehabilitation Business during the fiscal years ending December 31, 2025 and 2026.
Previous report
(b)Includes acquisition and integration costs related to completed acquisitions and changes in fair value of contingent consideration.
Previous report
(d)Costs incurred were the result of contract terminations.
Previous report
(f)Debt refinancing in 2025 related to certain third-party fees associated with our 2025 Credit Agreement. Activity in 2024 is attributable to advisory fees and debt amendment related costs related to our 2019 Credit and Guaranty Agreement, as amended.
Previous report
(g)Losses incurred due to the refinancing of long-term debt.
Previous report
(i)Represents a non-cash impairment charge for intangible assets solely attributable to our Advanced Rehabilitation Business in 2024 due to our decision to divest the business.
Previous report
(j)Other items include charges associated with strategic initiatives, such as potential acquisitions or divestitures, as well as costs related to a transformative project aimed at redesigning the Company’s systems and information processing infrastructure.
Previous report
For the three and nine months ended September 28, 2024, other items primarily consisted of strategic transaction expenses of $1.6 million and $3.9 million, respectively, primarily related to the divestiture of the Advanced Rehabilitation Business. The nine months ended September 28, 2024 also included transformative project costs of $1.3 million.
Previous report
Net sales for the period increased $0.4 million, or 0.3%, compared to the prior year period. Net sales from Pain Treatments increased $3.7 million due to volume growth. Net sales from Surgical Solutions increased $3.8 million, primarily due to volume growth in BGS and Ultrasonics. Net sales from Restorative Therapies decreased $7.1 million due to a decline of $8.7 million in net sales associated with the divestiture of Advanced Rehabilitation Business. This decline was partially offset by a $1.6 million increase in net sales for our EXOGEN Bone Stimulation System.
Previous report
Net sales decreased compared to the prior year period, primarily due to the divestiture of the Advanced Rehabilitation Business, which contributed $2.1 million in net sales during the three months ended September 28, 2024. The decline resulting from this divestiture was partially offset by increased net sales for our EXOGEN Bone Stimulation System, Pain Treatments and Surgical Solutions products.
Previous report
Net sales for the period decreased $9.0 million, or 2.4%, compared to the prior year period. Net sales from Pain Treatments increased $5.0 million, driven by volume growth in Durolane. This increase was partially offset with a decline in volume for certain products, in part due to inventory reductions by certain distributors following elevated purchases at the end of 2024. Net sales from Surgical Solutions increased $10.3 million due to volume growth in BGS and Ultrasonics. The $24.3 million decline in net sales from Restorative Therapies was driven by the divestiture of the Advanced Rehabilitation Business, which contributed $28.8 million in net sales during the prior year. This decrease was partially offset by a $4.5 million increase in our net sales for our EXOGEN Bone Stimulation System.
Previous report
Net sales decreased compared to the prior year period primarily due to the divestiture of the Advanced Rehabilitation Business, which contributed $5.7 million in net sales during the prior year. This decline was partially offset by volume growth in Pain Treatments and Surgical Solutions.
Previous report
Gross profit increased $1.7 million, or 2.1%, compared to the prior year period, primarily driven by volume growth in BGS, Durolane and our EXOGEN Bone Stimulation System. The increase was partially offset by a $5.2 million reduction resulting from the divestiture of the Advanced Rehabilitation Business. Gross margin improved 1.1% compared to the prior year period, driven by a favorable product mix. These improvements were partially offset with freight and tariff costs.
Previous report
Gross profit decreased $1.0 million, or 10.7%, compared to the prior year period. The decline was due to a $1.4 million reduction resulting from the divestiture of the Advanced Rehabilitation Business. This was partially offset by growth in BGS and our EXOGEN Bone Stimulation System. Gross margin declined 4.0% reflecting unfavorable product and country mix.
Previous report
U.S.
Previous report
Gross profit decreased $5.7 million, or 2.2%, compared to the prior year period. The decline was primarily attributable to a $15.8 million reduction resulting from the divestiture of the Advanced Rehabilitation Business. This reduction was partially offset by volume growth in Surgical Solutions, Pain Treatments and our EXOGEN Bone Stimulation System. Gross margin slightly increased by 0.1% in comparison to the prior year period. This improvement was driven by a favorable product mix within both Surgical Solutions and Pain Treatments, as well as enhanced collections associated with our EXOGEN Bone Stimulation System. These gains were partially offset with freight and tariff costs, as well as shifts in channel mix.
Previous report
Gross profit decreased $0.5 million, or 1.8%, primarily due to a $3.2 million reduction resulting from the divestiture of the Advanced Rehabilitation Business. This reduction was partially offset with growth in the remaining businesses. Gross margin decreased 0.5% due to product and country mix.
Previous report
Selling, general and administrative expenses decreased by $2.8 million, or 3.5%, primarily due to a $2.6 million reduction in compensation-related costs, partially attributable to the sale of the Advanced Rehabilitation Business.
Previous report
Selling, general and administrative expenses decreased by $25.7 million, or 10.0%, primarily due to: (i) a $13.7 million reduction in shareholder litigation costs settled during 2024; (ii) a $10.6 million decrease in compensation-related costs, partially attributable to the sale of the Advanced Rehabilitation Business; and (iii) a $2.2 million decrease in stock-based compensation.
Previous report
Research and development expense decreased $0.9 million, or 23.9% due to: (i) a $0.6 million reduction in consulting expenses resulting from the completion of certain projects; and (ii) a $0.4 million decrease in compensation-related costs.
Previous report
Change in fair value of contingent consideration
Previous report
Activity from the change in fair value of contingent consideration relates to the acquisition of Bioness in 2021. Certain milestones were achieved during the fourth quarter of 2024, and as a result, we ceased revaluing the contingent consideration liability in 2025. We made contingent consideration payments of $9.0 million and $10.8 million during the first and second quarters of 2025, respectively, which fully settled the Bioness contingent consideration liability.
Previous report
Impairment of assets
Previous report
Following the decision to divest the Advanced Rehabilitation Business, we evaluated it for impairment in the second quarter of 2024. As a result, impairment losses of $2.0 million and $33.9 million were recorded for the three and nine months ended September 28, 2024, respectively, related to the net intellectual property solely attributable to the Advanced Rehabilitation Business. The losses, measured at fair value less costs to sell, were based on the purchaser’s consideration.
Previous report
(Gain) loss on disposals
Previous report
During the nine months ended September 27, 2025, we recorded a $0.3 million loss on disposal related to the sale of the Advanced Rehabilitation Business. The cumulative loss was due to post-closing working capital adjustments.
Previous report
Loss on extinguishment of debt recognized during the three and nine months ended September 27, 2025 was directly related to the refinancing of our debt obligations. The increase in other expense, net during both the three and nine months ended September 27, 2025 was due to fluctuations in foreign currency exchange rates compared to the prior year periods.
Previous report
U.S.
Previous report
Adjusted EBITDA increased $3.8 million, or 19.2%, compared to the prior year period. This increase was primarily attributable to higher gross margin and lower operating expenses. These improvements were partially offset by the impact of the Advanced Rehabilitation Business divestiture and unfavorable movements in foreign currency.
Previous report
Adjusted EBITDA decreased $0.7 million, or 18.7%, compared to the prior year period. The decline was primarily attributable to the decrease in gross profit resulting from the divestiture of the Advanced Rehabilitation Business.
Previous report
U.S.
Previous report
Adjusted EBITDA decreased $2.0 million, or 2.9%, compared to the prior year period. The decline was primarily due to lower gross profit resulting from the divestiture of the Advanced Rehabilitation Business and unfavorable movements in foreign currency. This impact was mostly offset with volume growth in the remaining businesses.
Showing the first 40 of 49 passages. Open the source sections for the rest.
Reworded paragraphs (23)
Previous wording
◦Knee Osteoarthritis (“KOA”): Our product portfolio includes a range of intra-articular, hyaluronic acid (“HA”) injections that help relieve patient discomfort and improve quality of life. In the U.S., we also distribute the XCELL Platelet-Rich Plasma (“PRP”) system, a technology that is synergistic with our existing physician call points as many surgeons using HA also use PRP.
Current wording
◦Knee Osteoarthritis (“KOA”): Our product portfolio includes a range of intra-articular, hyaluronic acid (“HA”) injections that help relieve patient discomfort and improve quality of life. In the U.S., we also distribute the XCELL Platelet-Rich Plasma (“PRP”) system, a technology that is synergistic with our existing physician call points, as many surgeons who use HA also use PRP.
Previous wording
◦Peripheral Nerve Stimulation (“PNS”): We are focused on developing a full portfolio of peripheral nerve stimulation products with solutions for acute, temporary and chronic pain.
Current wording
◦Peripheral Nerve Stimulation (“PNS”): We are focused on developing and commercializing a full portfolio of peripheral nerve stimulation products with solutions for acute, temporary and chronic pain.
Previous wording
◦Ultrasonics: Our Ultrasonics business offers precision bone resection for patients with degenerative spine conditions and spinal deformities. This portfolio also enables precision ultrasonic neuro and general surgery to address brain tumors and pathologies of the liver and other organs.
Current wording
◦Ultrasonics: Our Ultrasonics business offers precision bone resection for patients with degenerative spine conditions and spinal deformities. This portfolio also enables precision bone cutting in ultrasonic neuro and general surgery to address brain tumors and pathologies of the liver and other organs.
Previous wording
◦Fracture Care: We provide low-intensity pulse ultrasound to help patients who suffer from bone fractures that do not heal through traditional methods. We plan to expand our U.S. clinical fracture care indications to address the healing of fresh fractures, especially for high-risk patients.
Current wording
◦Fracture Care: We provide low-intensity pulse ultrasound to help patients who suffer from bone fractures that do not heal through traditional methods. We plan to expand our U.S. clinical fracture care indications to address the healing of additional fresh fractures, especially for high-risk patients.
Previous wording
(a)Includes for the three and nine months ended September 27, 2025 and September 28, 2024, respectively, depreciation and amortization of $10.0 million, $10.2 million, $30.9 million and $31.3 million in cost of sales and $1.4 million, $2.1 million, $4.4 million and $5.9 million in operating expenses presented in the consolidated condensed statements of operations and comprehensive income (loss).
Current wording
(a)Includes for the three months ended March 28, 2026 and March 29, 2025, respectively, depreciation and amortization of $10.1 million and $10.3 million in cost of sales and $1.1 million and $1.6 million in operating expenses presented in the consolidated condensed statements of operations and comprehensive income (loss).
Previous wording
(e)Includes compensation expense resulting from awards granted under our equity-based compensation plans.
Current wording
(c)Includes compensation expense resulting from awards granted under our equity-based compensation plans.
Previous wording
(c)Costs incurred as a result of certain shareholder litigation unrelated to our ongoing operations.
Current wording
(d)Costs incurred as a result of certain shareholder litigation unrelated to our ongoing operations.
Previous wording
(h)Represents the loss on the disposal of the Advanced Rehabilitation Business.
Current wording
(e)Represents the loss on the disposal of the Advanced Rehabilitation Business.
Previous wording
Other items during the nine months ended September 27, 2025 primarily consisted of $0.4 million of expenses related to the divestiture of the Advanced Rehabilitation Business, which was completed on December 31, 2024.
Current wording
Other items during the three months ended March 29, 2025 primarily consisted of $0.5 million of expenses related to the divestiture of the Advanced Rehabilitation Business, which was completed on December 31, 2024.
Previous wording
We present Adjusted EBITDA, a non-GAAP financial measure, because we believe it is a useful indicator for management to measure operating performance and for planning purposes, including the preparation of our annual operating budget and financial projections. We believe that Adjusted EBITDA is useful to our investors because it is frequently used by securities analysts, investors and other interested parties in their evaluation of the operating performance of companies in industries similar to ours. We define Adjusted EBITDA as net income (loss) from operations before depreciation and amortization, provision of income taxes and interest expense, net, adjusted for the impact of certain cash, non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include acquisition and divestiture related costs, certain shareholder litigation costs, impairments of assets, restructuring and succession charges, equity compensation expense, debt refinancing, loss on extinguishment of debt and other items. Adjusted EBITDA by segment consists of net sales and costs directly attributable to a segment, as well as an allocation of corporate overhead costs primarily based on a ratio of net sales by segment to total consolidated net sales.
Current wording
We present Adjusted EBITDA, a non-GAAP financial measure, because we believe it is a useful indicator for management to measure operating performance and for planning purposes, including the preparation of our annual operating budget and financial projections. We believe that Adjusted EBITDA is useful to our investors because it is frequently used by securities analysts, investors and other interested parties in their evaluation of the operating performance of companies in industries similar to ours. We define Adjusted EBITDA as net income (loss) before depreciation and amortization, provision of income taxes and interest expense, net, adjusted for the impact of certain cash, non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include acquisition and divestiture related costs, certain shareholder litigation costs, impairment of assets, restructuring costs, equity-based compensation expense, debt refinancing, loss on extinguishment of debt, and other items. Adjusted EBITDA by segment consists of net sales and costs directly attributable to a segment, as well as an allocation of corporate overhead costs primarily based on a ratio of net sales by segment to total consolidated net sales.
Previous wording
Non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. These measures might exclude certain normal recurring expenses. Therefore, these measures might not provide a complete understanding of the Company's performance and should be reviewed in conjunction with U.S. GAAP financial measures. Additionally, other companies might define their non-GAAP financial measures differently than we do. Investors are encouraged to review the reconciliation of the non-GAAP measure provided in this Quarterly Report on Form 10-Q, including all tables referencing Adjusted EBITDA to its most directly comparable U.S. GAAP measure.
Current wording
Non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for, or as superior to, the financial information prepared and presented in accordance with U.S. GAAP. These measures might exclude certain normal recurring expenses. Therefore, these measures might not provide a complete understanding of the Company's performance and should be reviewed in conjunction with U.S. GAAP financial measures. Additionally, other companies might define their non-GAAP financial measures differently than we do. Investors are encouraged to review the reconciliation of the non-GAAP measure provided in this Quarterly Report on Form 10-Q, including all tables referencing Adjusted EBITDA to its most directly comparable U.S. GAAP measure.
Previous wording
Research and development expense decreased by $1.6 million, or 14.7%, primarily due to: (i) a $1.1 million reduction in consulting expenses resulting from the completion of certain projects; and (ii) a $0.8 million decrease in compensation-related costs.
Current wording
Research and development expense decreased by $0.5 million, or 18.1%, compared to the prior year period, primarily due to a reduction in consulting expenses resulting from the completion of certain projects.
Previous wording
Depreciation and amortization decreased during the three and nine months ended September 27, 2025 compared to the prior year comparable periods primarily due to certain information technology assets being fully depreciated in 2025.
Current wording
Depreciation and amortization decreased during the three months ended March 28, 2026 compared to the prior year period, primarily due to certain information technology assets being fully depreciated in 2025.
Previous wording
Interest expense, net decreased during both the three and nine months ended September 27, 2025, compared to the prior year periods. This decrease was due to lower debt outstanding and a reduction in interest rates and applicable margins. The third quarter of 2025 was further impacted by our debt refinancing completed during the quarter, which contributed to the overall reduction in interest expense.
Current wording
Interest expense, net decreased by $3.2 million during the three months ended March 28, 2026 compared to the prior year period, primarily due to lower debt outstanding and reduced interest rates and applicable margins following the completion of our debt refinancing in the third quarter of 2025. Other income, net during the three months ended March 28, 2026 was driven by foreign currency gains, compared to foreign currency losses in the prior year period.
Previous wording
Our effective tax rate was 14.2% for the three months ended September 27, 2025, primarily driven by income earned in foreign jurisdictions. The effective tax rate was 13.9% for the nine months ended September 27, 2025, driven by foreign income tax, partially offset with the release of certain reserves for uncertain tax positions. The effective tax rate for both the three and nine months ended September 28, 2024 was 11.2%, primarily due to the impairment of intangibles related to the Advanced Rehabilitation Business and taxable income in certain entities.
Current wording
Our effective tax rate was 12.6% for the three months ended March 28, 2026, primarily reflecting income earned in foreign jurisdictions. The effective tax rate of 2.8% for the three months ended March 29, 2025 was driven by the divestiture of the Advanced Rehabilitation Business and foreign income, partially offset by the release of certain reserves for uncertain tax positions.
Previous wording
Subsequent to the IPO and related transactions, we are the sole managing member of BV LLC in which we owned 80.9% and 80.6% at September 27, 2025 and December 31, 2024, respectively. We have a majority economic interest and the sole voting interest in and control the management of BV LLC. As a result, we consolidate the financial results of BV LLC and report a noncontrolling interest representing the 19.1% that is owned by the Continuing LLC Owner. Noncontrolling interest changes during the periods presented resulted from recorded income and loss activity.
Current wording
Subsequent to the IPO and related transactions, we became the sole managing member of BV LLC, holding ownership interests of 81.1% and 81.0% as of March 28, 2026 and December 31, 2025, respectively. We consolidate BV LLC’s financial statements as we have both a majority economic interest and sole voting control over BV LLC. The portion of BV LLC not owned by us—18.9% as of March 28, 2026—is reflected as a noncontrolling interest, representing the share of BV LLC owned by the Continuing LLC Owner. Period-over-period changes in noncontrolling interest reflect the allocation of net income or loss attributable to the Continuing LLC Owner.
Previous wording
The 2025 Credit Agreement is expected to provide $2.0 million of annual interest expense savings, increased liquidity and extended debt maturity to July 2030. On August 1, 2025, we entered into two interest rate swaps to mitigate the interest rate risk associated with our floating-rate SOFR-based borrowings under the 2025 Credit Agreement. Under the terms of swaps, we pay a fixed interest rate in exchange for SOFR-based variable interest throughout the life of the instruments. The interest rate swaps have a weighted average fixed interest rate of 3.60% and an aggregate notional value of $150.0 million, or 50.0% of the 2025 Term Loan.
Current wording
On August 1, 2025, we entered into two interest rate swaps to mitigate the interest rate risk associated with our floating-rate SOFR-based borrowings under the 2025 Credit Agreement. Under the terms of swaps, we pay a fixed interest rate in exchange for SOFR-based variable interest throughout the life of the instruments. The interest rate swaps have a weighted average fixed interest rate of 3.60% and an aggregate notional value of $150.0 million, or 50.0% of the 2025 Term Loan.
Previous wording
As of September 27, 2025, we had $72.8 million available on the 2025 Revolver, net of $2.2 million in outstanding LOCs. This availability, combined with our existing cash balances and expected cash flows from operations, provides us with sufficient liquidity to meet our near-term obligations and support ongoing operations.
Current wording
On March 31, 2026, we made our $3.8 million scheduled principal payment on the 2025 Term Loan. In addition, on March 27, 2026 and April 30, 2026, we elected to make discretionary prepayments of $22.0 million and $10.0 million, respectively, on the 2025 Term Loan. These prepayments were made to reduce future interest expense, and we believe the prepayments align with our capital optimization strategy and liquidity objectives. As of March 28, 2026, we had $98.4 million available on the 2025 Revolver, net of $1.6 million in outstanding LOCs. This availability, combined with our existing cash balances and expected cash flows from operations, provides us with sufficient liquidity to meet our near-term obligations and supports ongoing operations for the next twelve months.
Previous wording
Other than the above changes to debt and related obligations, there have been no material changes to our estimated future cash requirements as disclosed in Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Form 10-K.
Current wording
Other than the above changes to debt and related obligations, there have been no material changes to our estimated future cash requirements as disclosed in Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2025 10-K.
Previous wording
The 2025 Credit Agreement also contains financial covenants including a maximum consolidated total net leverage ratio of 4.00 to 1.00 for the quarter ending September 30, 2025 through the quarter ending December 31, 2025, and starting with the fiscal quarter ending March 31, 2026 and for each fiscal quarter thereafter, a maximum consolidated total net leverage ratio of 3.50 to 1.00. We may elect to increase such ratio level by 0.50 to 1.00 following certain permitted acquisitions. A minimum interest coverage ratio of 2.50 to 1.00 must also be maintained. The 2025 Revolver also includes standard provisions related to conditions of borrowing and customary events of default. We were in compliance with the financial covenants under the 2025 Credit Agreement as of September 27, 2025. We do not expect any of these covenants or restrictions to affect or limit our ability to conduct business in the ordinary course.
Current wording
The 2025 Credit Agreement also contains financial covenants including a maximum consolidated total net leverage ratio of 3.50 to 1.00. We may elect to increase such ratio level by 0.50 to 1.00 following certain permitted acquisitions. A minimum interest coverage ratio of 2.50 to 1.00 must also be maintained. The 2025 Revolver also includes standard provisions related to conditions of borrowing and customary events of default. We were in compliance with the financial covenants under the 2025 Credit Agreement as of March 28, 2026. We do not expect any of these covenants or restrictions to affect or limit our ability to conduct business in the ordinary course.
Previous wording
As of September 27, 2025, we had an outstanding balance of $25.0 million under the 2025 Revolver and $297.6 million outstanding under the 2025 Term Loan, net of original issue discount and deferred financing costs. Subsequent to September 27, 2025, we made additional repayments totaling $17,000 on the 2025 Revolver.
Current wording
On March 27, 2026, we made a discretionary prepayment of $22.0 million on the 2025 Term Loan. As of March 28, 2026, we had an outstanding balance of $272.1 million under the 2025 Term Loan, net of original issue discount and deferred financing costs.
Previous wording
For information regarding Commitments and Contingencies, refer to Item 1. Financial Information—Notes to the unaudited consolidated condensed financial statements—Note 10. Commitments and contingenciesand —Note 3. Divestituresof this Quarterly Report on Form 10-Q.
Current wording
For information regarding Commitments and Contingencies, refer to Item 1. Financial Information—Notes to the Unaudited Consolidated Condensed Financial Statements—Note 11. Commitments and Contingenciesof this Quarterly Report on Form 10-Q.
Previous wording
Cash and cash equivalents as of September 27, 2025 totaled $42.2 million, compared to $41.6 million as of December 31, 2024. The change in cash was primarily due to the following:
Current wording
Cash and cash equivalents as of March 28, 2026 totaled $35.8 million, compared to $51.2 million as of December 31, 2025. The change in cash was primarily due to the following:
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
On July 31, 2025, we entered into a new Credit Agreement (the “2025 Credit Agreement”) that provides for a $300.0 million term loan facility (the “2025 Term Loan”) and a $100.0 million revolving credit facility (the “2025 Revolver”). Proceeds from the 2025 Term Loan, borrowings of $30.0 million under the 2025 Revolver and $2.6 million of available cash were used to fully repay the outstanding balance under the 2019 Credit and Guaranty Agreement, as amended, which totaled $332.6 million at the time of repayment. We recorded a $0.3 million loss on extinguishment and incurred $0.8 million in third-party costs as a result of these refinancing transactions.