Medline Inc.

Previous wording

This Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help you understand the financial condition, results of operations, and present business of Medline and Medline Holdings (f/k/a, Mozart Holdings, LP, the predecessor of Medline). This MD&A should be read in conjunction with our consolidated financial statements and the accompanying notes in Part I, “Item 1—Financial Statements” of this Quarterly Report and in Part II, “Item 8—Financial Statements and Supplemental Data” of our 2025 Form 10-K, as well as the corresponding MD&A contained in our 2025 Form 10-K. Some of the information included in this MD&A or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, include forward-looking statements that involve risks and uncertainties. Our future results and financial condition may differ materially from those we currently anticipate. You should review the “Cautionary Note Regarding Forward-Looking Statements” section in this Quarterly Report and Part I, “Item 1A—Risk Factors” of our 2025 Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. For purposes of the MD&A, references to the “Company,” “Medline,” “we,” “us,” and “our” mean Medline Inc. and its consolidated subsidiaries.

Current wording

This Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help you understand the financial condition, results of operations, and present business of Medline and Medline Holdings (f/k/a, Mozart Holdings, LP, the predecessor of Medline). This MD&A should be read in conjunction with our consolidated financial statements and the accompanying notes in Part I, “Item 1—Financial Statements” of this Quarterly Report and in Part II, “Item 8—Financial Statements and Supplementary Data” and MD&A contained in our 2025 Form 10-K. Some of the information included in this MD&A or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, include forward-looking statements that involve risks and uncertainties. Our future results and financial condition may differ materially from those we currently anticipate. You should review the “Cautionary Note Regarding Forward-Looking Statements” section in this Quarterly Report and Part I, “Item 1A—Risk Factors” of our 2025 Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. For purposes of the MD&A, references to the “Company,” “Medline,” “we,” “us,” and “our” mean Medline Inc. and its consolidated subsidiaries.

Previous wording

•We generated net sales of $15.0 billion, net income of $0.4 billion, and Adjusted EBITDA of $1.8 billion, representing a net income margin of 2.5% and an Adjusted EBITDA Margin of 12.2%.

Current wording

•We generated net sales of $7.9 billion, net income of $0.3 billion, and Adjusted EBITDA of $1.0 billion, representing a net income margin of 4.0% and an Adjusted EBITDA Margin of 12.2%.

Previous wording

•During that period, Medline Brand segment net sales and Segment Adjusted EBITDA were $3.5 billion and $1.1 billion, respectively, which represented 46.1% of total net sales and 83.9% of Segment Adjusted EBITDA, respectively. Supply Chain Solutions segment net sales and Segment Adjusted EBITDA were $4.1 billion and $0.2 billion, respectively, which represented 53.9% of total net sales and 16.1% of Segment Adjusted EBITDA, respectively.

Current wording

•During that period, Medline Brand segment net sales and Segment Adjusted EBITDA were $3.6 billion and $1.0 billion, respectively, which represented 46.3% of total net sales and 83.7% of Segment Adjusted EBITDA, respectively. Supply Chain Solutions segment net sales and Segment Adjusted EBITDA were $4.2 billion and $0.2 billion, respectively, which represented 53.7% of total net sales and 16.3% of Segment Adjusted EBITDA, respectively.

Previous wording

For the six months ended June 27, 2026, our financial results were as follows:

Current wording

For the nine months ended September 26, 2026, our financial results were as follows:

Previous wording

•We generated net sales of $7.7 billion, net income of $0.1 billion, and Adjusted EBITDA of $1.1 billion, representing a net income margin of 1.8% and an Adjusted EBITDA Margin of 13.8%.

Current wording

•We generated net sales of $22.9 billion, net income of $0.7 billion, and Adjusted EBITDA of $2.8 billion, representing a net income margin of 3.0% and an Adjusted EBITDA Margin of 12.2%.

Previous wording

•During that period, Medline Brand segment net sales and Segment Adjusted EBITDA were $7.0 billion and $1.8 billion, respectively, which represented 46.6% of total net sales and 82.4% of Segment Adjusted EBITDA, respectively. Supply Chain Solutions segment net sales and Segment Adjusted EBITDA were $8.0 billion and $0.4 billion, respectively, which represented 53.4% of total net sales and 17.6% of Segment Adjusted EBITDA, respectively.

Current wording

•During that period, Medline Brand segment net sales and Segment Adjusted EBITDA were $10.6 billion and $2.8 billion, respectively, which represented 46.5% of total net sales and 82.8% of Segment Adjusted EBITDA, respectively. Supply Chain Solutions segment net sales and Segment Adjusted EBITDA were $12.2 billion and $0.6 billion, respectively, which represented 53.5% of total net sales and 17.2% of Segment Adjusted EBITDA, respectively.

Previous wording

During the three and six months ended June 27, 2026 our results and operations were impacted by various factors and trends, including those discussed below. For additional information regarding factors and trends that may impact our results and operations, see Part II, “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2025 Form 10-K.

Current wording

During the three and nine months ended September 26, 2026, our results and operations were impacted by various factors and trends, including those discussed below. For additional information regarding factors and trends that may impact our results and operations, see Part II, “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2025 Form 10-K.

Previous wording

The current U.S. and international political environment, including existing and potential changes to U.S. policies related to global trade and tariffs, has resulted in uncertainty surrounding the future state of the global economy. We continue to actively monitor developments in the global tariff environment and evaluate their potential impact on our business, financial condition, customers, and suppliers, as well as actions available to reduce our related financial exposure. While the global tariff environment remains unpredictable, as a global company with strategically located and owned manufacturing and a broadly diversified sourcing footprint, we believe we are well-positioned to address potential supply chain challenges. We have multiple levers at our disposal, including strategically reallocating production to other parts of the world, leveraging our new and existing supplier base, optimizing procurement and sourcing of key inputs and raw materials, optimizing our manufacturing footprint, engaging with relevant industry and policy partners, and, where needed, enacting price increases in a thoughtful and strategic way. Nevertheless, we may not be able to establish alternative sources of supply or fully mitigate the financial impact of tariffs across all products we source or manufacture. For the three and six months ended June 27, 2026, the net impact to income before taxes from tariffs and tariff developments was approximately $110 million and $230 million, respectively, before giving effect to the tariff refund recoveries and related customer repayments discussed below. The actual full year impact may vary based on the tariff rate changes, duration, scope, and effectiveness of our mitigation efforts.

Current wording

The current U.S. and international political environment, including existing and potential changes to U.S. policies related to global trade and tariffs, has resulted in uncertainty surrounding the future state of the global economy. We continue to actively monitor developments in the global tariff environment and evaluate their potential impact on our business, financial condition, customers, and suppliers, as well as actions available to reduce our related financial exposure. While the global tariff environment remains unpredictable, as a global company with strategically located and owned manufacturing and a broadly diversified sourcing footprint, we believe we are well-positioned to address potential supply chain challenges. We have multiple levers at our disposal, including strategically reallocating production to other parts of the world, leveraging our new and existing supplier base, optimizing procurement and sourcing of key inputs and raw materials, optimizing our manufacturing footprint, engaging with relevant industry and policy partners, and, where needed, enacting price increases in a thoughtful and strategic way. Nevertheless, we may not be able to establish alternative sources of supply or fully mitigate the financial impact of tariffs across all products we source or manufacture. For the three and nine months ended September 26, 2026, the net impact to income before taxes from tariffs and tariff developments was appr oximately $47 million and $277 million, respect ively, before giving effect to the tariff refund recoveries and related customer repayments discussed below. The actual full year impact may vary based on the tariff rate changes, duration, scope, and effectiveness of our mitigation efforts.

Previous wording

We expect total IEEPA refund claims, across all eligible mechanisms, to be approximately $507 million, including amounts already submitted via CAPE. As of June 27, 2026, CBP had accepted approximately $332 million in total refunds we have submitted, and actions to recover the remaining expected amounts are ongoing. We evaluate recoveries of IEEPA tariffs in accordance with applicable gain contingency guidance and recognize such recoveries when they are received or realizable. As of June 27, 2026, of the accepted claims, we had received approximately $53 million in refunds. Accordingly, we recorded a receivable of approximately $279 million within Other current assets related to the remaining accepted refund claims as of June 27, 2026. As of the date of this Quarterly Report, we received refunds for the majority of the receivable balance. Interest associated with refunded IEEPA tariffs is recognized in the period in which it is received or realizable. We expect to remit a portion of the tariff refunds to customers. As of June 27, 2026, we recorded approximately $89 million within Accrued expenses and other current liabilities for the total amount estimated to be remitted to customers in connection with total tariff refund claims expected.

Current wording

We expect total IEEPA refund claims, across all eligible mechanisms, to be approximately $507 million, including amounts already submitted via CAPE. As of September 26, 2026, CBP had accepted approximately $402 million in total refunds we have submitted, and actions to recover the remaining expected amounts are ongoing. We evaluate recoveries of IEEPA tariffs in accordance with applicable gain contingency guidance and recognize such recoveries when they are received or realizable. As of September 26, 2026, of the accepted claims, we had received approximately $399 million in refunds. Accordingly, we recorded a receivable of approximately $3 million within Other current assets related to the remaining accepted refund claims as of September 26, 2026. Interest associated with refunded IEEPA tariffs is recognized in the period in which it is received or realizable. We expect to remit a portion of the tariff refunds to customers. As of September 26, 2026, we recorded approximately $78 million within Accrued expenses and other current liabilities for the total amount estimated to be remitted to customers in connection with total tariff refund claims expected.

Previous wording

During the three and six months ended June 27, 2026, we recognized approximately $332 million as a reduction of Cost of goods sold related to tariff refunds received or accepted, approximately $89 million as a reduction of Net sales related to accrued customer repayments associated with tariff refunds, and approximately $14 million of interest income in Interest expense, net. These amounts were recorded entirely within the Medline Brand segment.

Current wording

During the three and nine months ended September 26, 2026, we recognized approximately $70 million and $402 million as a reduction of Cost of goods sold related to tariff refunds received or accepted and approximately $4 million and $18 million of interest income in Interest expense, net, respectively. During the nine months ended September 26, 2026, we recognized approximately $78 million as a reduction of Net sales related to accrued customer repayments associated with tariff refunds. During the three months ended September 26, 2026, we recognized a $11 million increase to Net Sales, reflecting a reduction in estimated customer repayments associated with tariff refunds. These amounts were recorded entirely within the Medline Brand segment.

Previous wording

On June 11, 2026, a fire destroyed our distribution center in Tracy, California. All employees were safely evacuated. We have estimated incurred losses of $336 million, which consist of $204 million related to inventory losses, $116 million related to fixed asset losses, and $16 million other expenses, for the three and six months ended June 27, 2026. These losses were recorded in Other operating expenses. As of June 27, 2026, discussions with our insurers are ongoing, and, as such, no insurance recoveries have been recorded. Following the fire, we entered into lease agreements for two distribution centers in Northern California totaling more than 1.6 million square feet, including a facility in Tracy, California for near-term occupancy and a facility in Stockton, California expected to be available for use in January 2027. These facilities are expected to help support service to healthcare providers and customers in Northern California following the fire. We may incur additional losses and costs in future periods associated with the fire and its related impacts. We expect to recognize insurance recoveries in future periods as the applicable recognition criteria are met. The timing and amount of any additional losses, costs, or insurance recoveries remain uncertain. See Note 1—Nature of Business and Significant Accounting Policies to our unaudited condensed consolidated financial statements included under Part I, “Item 1—Financial Statements” of this Quarterly Report for additional information.

Current wording

On June 11, 2026, a fire destroyed our distribution center in Tracy, California. All employees were safely evacuated. For the three and nine months ended September 26, 2026, we have estimated incurred losses of $80 million and $416 million, which consist of $1 million and $205 million related to inventory losses, $8 million and $124 million related to fixed asset losses, and $71 million and $87 million related to other expenses, respectively. In the third quarter of 2026, we have received and recognized $100 million of insurance recoveries related to the fire. The losses, net of the insurance recoveries, were recorded in Other operating expenses. We are working closely with our insurance carriers as we finalize and submit appliable claims. While we expect to recover these amounts, the ultimate amount and timing of additional recoveries is not guaranteed and will be determined as the claims process progresses. Following the fire, we entered into lease agreements for two distribution centers in Northern California totaling more than 1.6 million square feet, including a facility in Tracy, California for near-term occupancy and a facility in Stockton, California expected to be available for use in January 2027. These facilities are expected to maintain support service to healthcare providers and customers in Northern California following the fire. We may incur additional losses and costs in future periods associated with the fire and its related impacts. See Note 1—Nature of Business and Significant Accounting Policies to our unaudited condensed consolidated financial statements included under Part I, “Item 1—Financial Statements” of this Quarterly Report for additional information.

Previous wording

As of June 27, 2026, we have received three warning letters from the FDA, which have not been resolved. These warning letters relate to compliance with the Quality Management System Regulation and the current Good Manufacturing Practice (cGMP) regulations and were sent following inspections of Medline’s Northfield, Illinois facility and our manufacturing facilities in Glens Falls, New York and Waukegan, Illinois. We are working with the FDA to resolve the observations in the warning letters and FDA Forms 483 the Company has received. We have committed to taking additional remediation actions and made investments in Medline’s Quality organization, which we expect to result in increased costs in the second half of fiscal year 2026. While we believe our remediation efforts appropriately address the FDA’s observations and strengthen our Quality practices, no assurances can be given regarding further action by the FDA or that the corrective actions we have proposed and taken will be adequate. Any failure to adequately address the observations made by the FDA may result in regulatory actions initiated by the FDA with limited or no further notice, which may include the adverse consequences described in Part I, “Item 1A—Risk Factors—Risks Related to Regulation and Legal Proceedings—We are subject to extensive and complex laws and governmental regulations and any adverse regulatory action may materially adversely affect our business, results of operations, and financial condition both inside and outside the United States.” of our 2025 Form 10-K. While we currently believe these warning letters are not reasonably likely to materially adversely affect our business, results of operations, or financial condition, the outcomes of such matters are inherently unpredictable and subject to significant uncertainties, and if any of our assumptions change or prove to have been incorrect or there are any further adverse developments, our business, results of operations, and/or financial condition could be materially adversely affected.

Current wording

While we believe our remediation efforts appropriately address the FDA’s observations and strengthen our Quality practices, no assurances can be given regarding further action by the FDA or that the corrective actions we have proposed and taken will be adequate. Any failure to adequately address the observations made by the FDA may result in regulatory actions initiated by the FDA with limited or no further notice, which may include the adverse consequences described in Part I, “Item 1A—Risk Factors—Risks Related to Regulation and Legal Proceedings—We are subject to extensive and complex laws and governmental regulations and any adverse regulatory action may materially adversely affect our business, results of operations, and financial condition both inside and outside the United States.” of our 2025 Form 10-K. While we currently believe these warning letters are not reasonably likely to materially adversely affect our business, results of operations, or financial condition, the outcomes of such matters are inherently unpredictable and subject to significant uncertainties, and if any of our assumptions change or prove to have been incorrect or there are any further adverse developments, including the receipt of additional warning letters, our business, results of operations, and/or financial condition could be materially adversely affected.

Previous wording

On May 28, 2026, we completed an underwritten public offering of an aggregate of 72,554,594 shares of Class A common stock sold by a wholly owned subsidiary of Abu Dhabi Investment Authority and certain affiliates of our Sponsors (collectively, the “May 2026 Selling Stockholders”) at a public offering price of $37.00 per share, for aggregate gross proceeds of approximately $2.7 billion to the May 2026 Selling Stockholders (the “May 2026 Resale Offering”). This transaction resulted in the issuance of 29,505,565 shares of Class A common stock in connection with the exchange of Common Units by the May 2026 Selling Stockholders for the six months ended June 27, 2026. The exchange reduced the ownership of noncontrolling interest in Medline Holdings by approximately 2% and will increase the net income attributable to the Company in a proportionate amount. We did not sell any shares in this May 2026 Resale Offering and did not receive any of the proceeds from the sale of the shares of Class A common stock in this May 2026 Resale Offering. We paid the offering expenses associated with the sale of the shares by the May 2026 Selling Stockholders, net of the underwriting discounts and commissions.

Current wording

On May 28, 2026, we completed an underwritten public offering of an aggregate of 72,554,594 shares of Class A common stock sold by a wholly owned subsidiary of Abu Dhabi Investment Authority and certain affiliates of our Sponsors (collectively, the “May 2026 Selling Stockholders”) at a public offering price of $37.00 per share, for aggregate gross proceeds of approximately $2.7 billion to the May 2026 Selling Stockholders (the “May 2026 Resale Offering”). This transaction resulted in the issuance of 29,505,565 shares of Class A common stock in connection with the exchange of Common Units by the May 2026 Selling Stockholders. The exchange reduced the ownership of noncontrolling interest in Medline Holdings by approximately 2% and will increase the net income attributable to the Company in a proportionate amount. We did not sell any shares in this May 2026 Resale Offering and did not receive any of the proceeds from the sale of the shares of Class A common stock in this May 2026 Resale Offering. We paid the offering expenses associated with the sale of the shares by the May 2026 Selling Stockholders, net of the underwriting discounts and commissions.

Previous wording

On March 10, 2026, we completed an underwritten public offering of an aggregate of 86,250,000 shares of Class A common stock (including 11,250,000 shares of Class A common stock issued pursuant to the exercise in full of the underwriters’ option to purchase additional shares) sold by a wholly owned subsidiary of Abu Dhabi Investment Authority and certain affiliates of our Sponsors (collectively, the “March 2026 Selling Stockholders”) at a public offering price of $41.00 per share, for aggregate gross proceeds of approximately $3.5 billion to the Selling Stockholders (the “March 2026 Resale Offering”). This transaction resulted in the issuance of 33,963,901 shares of Class A common stock in connection with the exchange of Common Units by the March 2026 Selling Stockholders for the six months ended June 27, 2026. The exchange reduced the ownership of noncontrolling interest in Medline Holdings by approximately 3% and will increase the net income attributable to the Company in a proportionate amount. We did not sell any shares in this March 2026 Resale Offering and did not receive any of the proceeds from the sale of the shares of Class A common stock in this March 2026 Resale Offering. We paid the offering expenses associated with the sale of the shares by the March 2026 Selling Stockholders, net of the underwriting discounts and commissions.

Current wording

On March 10, 2026, we completed an underwritten public offering of an aggregate of 86,250,000 shares of Class A common stock (including 11,250,000 shares of Class A common stock issued pursuant to the exercise in full of the underwriters’ option to purchase additional shares) sold by a wholly owned subsidiary of Abu Dhabi Investment Authority and certain affiliates of our Sponsors (collectively, the “March 2026 Selling Stockholders”) at a public offering price of $41.00 per share, for aggregate gross proceeds of approximately $3.5 billion to the March 2026 Selling Stockholders (the “March 2026 Resale Offering”). This transaction resulted in the issuance of 33,963,901 shares of Class A common stock in connection with the exchange of Common Units by the March 2026 Selling Stockholders. The exchange reduced the ownership of noncontrolling interest in Medline Holdings by approximately 3% and will increase the net income attributable to the Company in a proportionate amount. We did not sell any shares in this March 2026 Resale Offering and did not receive any of the proceeds from the sale of the shares of Class A common stock in this March 2026 Resale Offering. We paid the offering expenses associated with the sale of the shares by the March 2026 Selling Stockholders, net of the underwriting discounts and commissions.

Previous wording

We incurred costs associated with public company reporting requirements during fiscal years 2026 and 2025, and we expect to continue to incur additional costs associated with operating as a public company. These costs include additional personnel, legal, consulting, regulatory, insurance, accounting, investor relations, and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act, as well as rules adopted by the SEC and national securities exchanges, requires public companies to implement specified corporate governance practices that were previously inapplicable to us as a private company. These additional rules and regulations increase our legal, regulatory, financial, and insurance compliance costs and make some activities more time-consuming and costly.

Current wording

We incurred costs associated with public company reporting requirements during fiscal year 2025 and the first nine months of fiscal year 2026, and we expect to continue to incur additional costs associated with operating as a public company. These costs include additional personnel, legal, consulting, regulatory, insurance, accounting, investor relations, and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act, as well as rules adopted by the SEC and national securities exchanges, requires public companies to implement specified corporate governance practices that were previously inapplicable to us as a private company. These additional rules and regulations increase our legal, regulatory, financial, and insurance compliance costs and make some activities more time-consuming and costly.

Previous wording

Net sales for the U.S. business for the six months ended June 27, 2026 increased $1,416 million, or 11.2%, to $14,009 million, compared to $12,593 million for the respective period in 2025, primarily due to volume growth in Prime Vendor net sales, which for the six months ended June 27, 2026 increased $1,461 million, or 16.8%, to $10,139 million, compared to $8,678 million for the respective period in 2025. The growth was partially offset by $89 million customer repayments associated with tariff refunds.

Current wording

Net sales for the U.S. business for the three months ended September 26, 2026 increased $702 million, or 10.6%, to $7,338 million, compared to $6,636 million for the respective period in 2025, primarily due to volume growth in Prime Vendor net sales, which for the three months ended September 26, 2026 increased $844 million, or 19.0%, to $5,285 million, compared to $4,441 million for the respective period in 2025.

Previous wording

Net sales for the U.S. acute care business, which includes both Prime Vendor and non-Prime Vendor customers, increased $1,244 million, or 13.4%, to $10,532 million, compared to $9,288 million for the respective period in 2025, primarily driven by volume growth, partially offset by $48 million customer repayments associated with tariff refunds. Net sales for the U.S. non-acute care business increased $172 million, or 5.2%, to $3,477 million, compared to $3,305 million for the respective period in 2025, primarily driven by volume growth, partially offset by $41 million customer repayments associated with tariff refunds.

Current wording

Net sales for the U.S. acute care business, which includes both Prime Vendor and non-Prime Vendor customers, increased $591 million, or 12.1%, to $5,471 million, compared to $4,880 million for the respective period in 2025, primarily driven by volume growth. Net sales for the U.S. non-acute care business increased $111 million, or 6.3%, to $1,867 million, compared to $1,756 million for the respective period in 2025, primarily driven by volume growth.

Previous wording

Net sales for the International business for the three months ended June 27, 2026 increased $46 million, or 9.4%, to $533 million, compared to $487 million for the respective period in 2025, primarily driven by volume growth.

Current wording

Net sales for the International business for the three months ended September 26, 2026 increased $39 million, or 8.1%, to $518 million, compared to $479 million for the respective period in 2025, primarily driven by volume growth.

Previous wording

Cost of goods sold for the three months ended June 27, 2026 increased $489 million, or 9.8%, to $5,470 million, compared to $4,981 million for the respective period in 2025, primarily driven by the growth in net sales and higher import costs due to tariffs, partially offset by tariff refunds. Gross profit as a percentage of sales increased from 27.7% for the three months ended June 28, 2025 to 28.8% for the three months ended June 27, 2026, primarily driven by net tariff refunds, partially offset by higher import costs due to tariffs.

Current wording

Cost of goods sold for the three months ended September 26, 2026 increased $691 million, or 13.2%, to $5,931 million, compared to $5,240 million for the respective period in 2025, primarily driven by the growth in net sales and increased inventory costs associated with inflation, partially offset by tariff refunds. Gross profit as a percentage of sales decreased from 26.4% for the three months ended September 27, 2025 to 24.5% for the three months ended September 26, 2026, primarily due to increased inventory costs associated with inflation and customer mix from Prime Vendors at lower margins within Supply Chain Solutions, partially offset by net tariff refunds.

Previous wording

Selling, General, and Administrative (“SG&A”) expenses for the three months ended June 27, 2026 increased $222 million, or 20.7%, to $1,295 million, compared to $1,073 million for the respective period in 2025, primarily due to $156 million of higher compensation and benefit expenses related to investments in headcount, inclusive of$15 million of one-time employee bonuses related to the IPO, which are subject to an ongoing service requirement, and $24 million related to higher distribution expense, including outbound freight. The prior year also included$13 million related to the favorable settlement of an intellectual property dispute, partially offset by$8 million of credit loss expense related to certain customer receivables, neither of which recurred in 2026.

Current wording

Selling, General, and Administrative (“SG&A”) expenses for the three months ended September 26, 2026 increased $143 million, or 12.8%, to $1,259 million, compared to $1,116 million for the respective period in 2025, primarily due to $92 million of higher compensation and benefit expenses related to investments in headcount, inclusive of $15 million of one-time employee bonuses related to the IPO, which are subject to an ongoing service requirement, and $31 million related to higher distribution expense, including outbound freight.

Previous wording

Interest expense, net for the three months ended June 27, 2026 decreased $104 million, or 46.6%, to $119 million, compared to $223 million for the respective period in 2025, primarily driven by 2025 repayment of term loan facilities with IPO proceeds and lower interest rates.

Current wording

Interest expense, net for the three months ended September 26, 2026 decreased $95 million, or 44.6%, to $118 million, compared to $213 million for the respective period in 2025, primarily driven by 2025 repayment of term loan facilities with IPO proceeds and higher interest income.

Previous wording

Provision for income taxes for the six months ended June 27, 2026 increased $106 million to $148 million, compared to $42 million for the respective period in 2025, primarily due to tax changes associated with the Reorganization, which subjected a greater portion of earnings to corporate‑level U.S. federal and state income taxes, and the additional income related to tariff refunds.

Current wording

Provision for income taxes for the three months ended September 26, 2026 increased $45 million to $68 million, compared to $23 million for the respective period in 2025, primarily due to tax changes associated with the Reorganization, which subjected a greater portion of earnings to corporate‑level U.S. federal and state income taxes.

Previous wording

Net sales for the U.S. business for the three months ended June 27, 2026 increased $753 million, or 11.8%, to $7,152 million, compared to $6,399 million for the respective period in 2025, primarily due to volume growth in Prime Vendor net sales, which for the three months ended June 27, 2026 increased $808 million, or 18.3%, to $5,226 million, compared to $4,418 million for the respective period in 2025. The growth was partially offset by $89 million customer repayments associated with tariff refunds.

Current wording

Net sales for the U.S. business for the nine months ended September 26, 2026 increased $2,118 million, or 11.0%, to $21,347 million, compared to $19,229 million for the respective period in 2025, primarily due to volume growth in Prime Vendor net sales, which for the nine months ended September 26, 2026 increased $2,305 million, or 17.6%, to $15,424 million, compared to $13,119 million for the respective period in 2025. The growth was partially offset by $78 million customer repayments associated with tariff refunds.

Previous wording

Net sales for the U.S. acute care business, which includes both Prime Vendor and non-Prime Vendor customers, increased $691 million, or 14.7%, to $5,407 million, compared to $4,716 million for the respective period in 2025, primarily driven by volume growth, partially offset by $48 million customer repayments associated with tariff refunds. Net sales for the U.S. non-acute care business increased $62 million, or 3.7%, to $1,745 million, compared to $1,683 million for the respective period in 2025, primarily driven by volume growth, partially offset by $41 million customer repayments associated with tariff refunds.

Current wording

Net sales for the U.S. acute care business, which includes both Prime Vendor and non-Prime Vendor customers, increased $1,835 million, or 13.0%, to $16,003 million, compared to $14,168 million for the respective period in 2025, primarily driven by volume growth, partially offset by $44 million customer repayments associated with tariff refunds. Net sales for the U.S. non-acute care business increased $283 million, or 5.6%, to $5,344 million, compared to $5,061 million for the respective period in 2025, primarily driven by volume growth, partially offset by $34 million customer repayments associated with tariff refunds.

Previous wording

Net sales for the International business for the six months ended June 27, 2026 increased $91 million, or 9.7%, to $1,028 million, compared to $937 million for the respective period in 2025, primarily driven by volume growth and favorable foreign currency exchange rates.

Current wording

Net sales for the International business for the nine months ended September 26, 2026 increased $130 million, or 9.2%, to $1,546 million, compared to $1,416 million for the respective period in 2025, primarily driven by volume growth and favorable foreign currency exchange rates.

Previous wording

Cost of goods sold for the six months ended June 27, 2026 increased $1,180 million, or 12.0%, to $10,981 million, compared to $9,801 million for the respective period in 2025, primarily driven by the growth in net sales and higher import costs due to tariffs, partially offset by tariff refunds. Gross profit as a percentage of sales decreased from 27.6% for the six months ended June 28, 2025 to 27.0% for the six months ended June 27, 2026, primarily driven by higher import costs due to tariffs, partially offset by net tariff refunds.

Current wording

Cost of goods sold for the nine months ended September 26, 2026 increased $1,871 million, or 12.4%, to $16,912 million, compared to $15,041 million for the respective period in 2025, primarily driven by the growth in net sales, higher import costs due to tariffs, and increased inventory costs associated with inflation, partially offset by tariff refunds. Gross profit as a percentage of sales decreased from 27.1% for the nine months ended September 27, 2025 to 26.1% for the nine months ended September 26, 2026, primarily driven by higher import costs due to tariffs, customer mix from Prime Vendors at lower margins within Supply Chain Solutions, a shift in segment mix toward Supply Chain Solutions, and increased inventory costs associated with inflation, partially offset by net tariff refunds.

Previous wording

SG&A expenses for the six months ended June 27, 2026 increased $380 million, or 17.7%, to $2,523 million, compared to $2,143 million for the respective period in 2025, primarily due to $248 million of higher compensation and benefit expenses related to investments in headcount, inclusive of $33 million of one-time employee bonuses related to the IPO, which are subject to an ongoing service requirement, and $51 million related to higher distribution expense, including outbound freight. The prior year also included $43 million related to the favorable settlement of an intellectual property dispute, partially offset by $32 million of credit loss expense related to certain customer receivables, neither of which recurred in 2026.

Current wording

SG&A expenses for the nine months ended September 26, 2026 increased $523 million, or 16.0%, to $3,782 million, compared to $3,259 million for the respective period in 2025, primarily due to $340 million of higher compensation and benefit expenses related to investments in headcount, inclusive of $48 million of one-time employee bonuses related to the IPO, which are subject to an ongoing service requirement, and $82 million related to higher distribution expense, including outbound freight. The prior year also included $43 million related to the favorable settlement of an intellectual property dispute, partially offset by $32 million of credit loss expense related to certain customer receivables, neither of which recurred in 2026.

Previous wording

Other Operating Expenses for the three months ended June 27, 2026 increased $334 million to $348 million, compared to $14 million for the respective period in 2025, primarily driven by the impact due to fire at the distribution center in Tracy, California.

Current wording

Other Operating Expenses, net for the nine months ended September 26, 2026 increased $323 million to $353 million, compared to $30 million for the respective period in 2025, primarily driven by the impact due to fire at the distribution center in Tracy, California, partially offset by the related insurance recoveries.

Previous wording

Interest expense, net for the six months ended June 27, 2026 decreased $178 million, or 41.1%, to $255 million, compared to $433 million for the respective period in 2025, primarily driven by 2025 repayment of term loan facilities with IPO proceeds and lower interest rates.

Current wording

Interest expense, net for the nine months ended September 26, 2026 decreased $273 million, or 42.3%, to $373 million, compared to $646 million for the respective period in 2025, primarily driven by 2025 repayment of term loan facilities with IPO proceeds and higher interest income.

Previous wording

Other loss, net for the three months ended June 27, 2026 increased to $42 million, whereas no material Other loss, net was recorded in the respective period in 2025. The increase was primarily due to expense associated with the debt refinancing in May 2026.

Current wording

Other loss, net for the nine months ended September 26, 2026 increased $36 million to $42 million compared to $6 million for the respective period in 2025. The increase was primarily due to expense associated with the debt refinancing in May 2026.

Previous wording

Foreign exchange gain (loss), net for the three months ended June 27, 2026 increased $61 million to a gain of $1 million, compared to a loss of $60 million for the respective period in 2025, primarily due to unfavorable foreign exchange rate movement on certain settled borrowings denominated in the Euro in 2025.

Current wording

Foreign exchange gain (loss), net improved by $103 million to a gain of $10 million for the nine months ended September 26, 2026, compared to a loss of $93 million for the respective period in 2025, primarily due to unfavorable foreign exchange rate movement on certain settled borrowings denominated in Euro in 2025.

Previous wording

Provision for income taxes for the three months ended June 27, 2026 increased $70 million to $96 million, compared to $26 million for the respective period in 2025, primarily due to the additional income related to tariff refunds and tax changes associated with the Reorganization, which subjected a greater portion of earnings to corporate‑level U.S. federal and state income taxes.

Current wording

Provision for income taxes for the nine months ended September 26, 2026 increased $151 million to $216 million, compared to $65 million for the respective period in 2025, primarily due to tax changes associated with the Reorganization, which subjected a greater portion of earnings to corporate‑level U.S. federal and state income taxes, and the additional income related to tariff refunds.

Previous wording

The following table compares business segment net sales, Segment Adjusted EBITDA, and Segment Adjusted EBITDA margin for the three and six months ended June 27, 2026 and June 28, 2025:

Current wording

The following table compares business segment net sales, Segment Adjusted EBITDA, and Segment Adjusted EBITDA margin for the three and nine months ended September 26, 2026 and September 27, 2025:

Previous wording

Medline Brand segment net sales for the three months ended June 27, 2026 increased $218 million, or 6.6%, to $3,540 million, compared to $3,322 million for the respective period in 2025. The increase was primarily driven by volume growth in Prime Vendor sales of Medline Brand products for the three months ended June 27, 2026, which increased $231 million, or 15.7%, to $1,707 million, compared to $1,476 million for the respective period in 2025, partially offset by $89 million customer repayments associated with tariff refunds.

Current wording

Medline Brand segment net sales for the three months ended September 26, 2026 increased $226 million, or 6.6%, to $3,637 million, compared to $3,411 million for the respective period in 2025. The increase was primarily driven by volume growth in Prime Vendor sales of Medline Brand products for the three months ended September 26, 2026, which increased $271 million, or 18.7%, to $1,719 million, compared to $1,448 million for the respective period in 2025.

Previous wording

Surgical Solutions net sales for the six months ended June 27, 2026 increased $238 million, or 8.1%, to $3,194 million, compared to $2,956 million for the respective period in 2025, primarily driven by volume growth in kitting and operating room products, partially offset by customer repayments associated with tariff refunds. Front Line Care net sales for the six months ended June 27, 2026 increased $152 million, or 4.9%, to $3,270 million, compared to $3,118 million for the respective period in 2025, primarily driven by volume growth, including exam gloves and personal care products, partially offset by customer repayments associated with tariff refunds. Laboratory and Diagnostics net sales for the six months ended June 27, 2026 increased $29 million, or 5.7%, to $541 million, compared to $512 million for the respective period in 2025, primarily driven by volume growth in laboratory products.

Current wording

Surgical Solutions net sales for the three months ended September 26, 2026 increased $121 million, or 7.9%, to $1,659 million, compared to $1,538 million for the respective period in 2025, primarily driven by volume growth in kitting and operating room products. Front Line Care net sales for the three months ended September 26, 2026 increased $72 million, or 4.4%, to $1,706 million, compared to $1,634 million for the respective period in 2025, primarily driven by volume growth, including exam gloves and personal care products. Laboratory and Diagnostics net sales for the three months ended September 26, 2026 increased $33 million, or 13.8%, to $272 million, compared to $239 million for the respective period in 2025, primarily driven by volume growth in laboratory products.

Previous wording

Medline Brand Segment Adjusted EBITDA for the three months ended June 27, 2026 increased $177 million, or 19.9%, to $1,067 million, compared to $890 million for the respective period in 2025, primarily driven by tariff refunds and growth in net sales, partially offset by higher import costs due to tariffs and higher compensation and benefit expense related to investments in headcount. Medline Brand Segment Adjusted EBITDA margin increased to 30.1% from 26.8%, primarily driven by tariff refunds, partially offset by higher import costs due to tariffs and higher compensation and benefit expense related to investments in headcount.

Current wording

Medline Brand Segment Adjusted EBITDA for the three months ended September 26, 2026 increased $122 million, or 14.9%, to $943 million, compared to $821 million for the respective period in 2025, primarily driven by growth in net sales and tariff refunds, partially offset by higher distribution expense and higher compensation and benefit expense related to investments in headcount. Medline Brand Segment Adjusted EBITDA margin increased to 25.9% from 24.1%, primarily driven by tariff refunds.

Previous wording

Supply Chain Solutions segment net sales for the three months ended June 27, 2026 increased $581 million, or 16.3%, to $4,145 million, compared to $3,564 million for the respective period in 2025. The increase was primarily driven by volume growth in Prime Vendor sales for the three months ended June 27, 2026, which increased $577 million, or 19.6%, to $3,519 million, compared to $2,942 million for the respective period in 2025, including implementation of new relationships and growth with existing customers.

Current wording

Supply Chain Solutions segment net sales for the three months ended September 26, 2026 increased $515 million, or 13.9%, to $4,219 million, compared to $3,704 million for the respective period in 2025. The increase was primarily driven by volume growth in Prime Vendor sales for the three months ended September 26, 2026, which increased $573 million, or 19.1%, to $3,566 million, compared to $2,993 million for the respective period in 2025, including implementation of new relationships and growth with existing customers.

Previous wording

Supply Chain Solutions Segment Adjusted EBITDA for the three months ended June 27, 2026 increased $3 million, or 1.5%, to $204 million, compared to $201 million for the respective period in 2025. Supply Chain Solutions Segment Adjusted EBITDA margin decreased to 4.9% from 5.6%, primarily due to customer mix from new Prime Vendor signings at lower margins and higher operating expenses.

Current wording

Supply Chain Solutions Segment Adjusted EBITDA for the three months ended September 26, 2026 decreased $21 million, or 10.2%, to $184 million, compared to $205 million for the respective period in 2025. Supply Chain Solutions Segment Adjusted EBITDA margin decreased to 4.4% from 5.5%, primarily due to customer mix from Prime Vendors at lower margins and higher operating expenses, partially offset by increased vendor funding.

Previous wording

Medline Brand segment net sales for the six months ended June 27, 2026 increased $419 million, or 6.4%, to $7,005 million, compared to $6,586 million for the respective period in 2025. The increase was primarily driven by volume growth in Prime Vendor sales of Medline Brand products for the six months ended June 27, 2026, which increased $383 million, or 13.1%, to $3,312 million, compared to $2,929 million for the respective period in 2025, partially offset by customer repayments associated with tariff refunds.

Current wording

Medline Brand segment net sales for the nine months ended September 26, 2026 increased $645 million, or 6.5%, to $10,642 million, compared to $9,997 million for the respective period in 2025. The increase was primarily driven by volume growth in Prime Vendor sales of Medline Brand products for the nine months ended September 26, 2026, which increased $654 million, or 14.9%, to $5,031 million, compared to $4,377 million for the respective period in 2025, partially offset by customer repayments associated with tariff refunds.

Previous wording

Surgical Solutions net sales for the three months ended June 27, 2026 increased $131 million, or 8.7%, to $1,640 million, compared to $1,509 million for the respective period in 2025, primarily driven by volume growth in kitting and operating room products, partially offset by customer repayments associated with tariff refunds. Front Line Care net sales for the three months ended June 27, 2026 increased $60 million, or 3.8%, to $1,652 million, compared to $1,592 million for the respective period in 2025, primarily driven by volume growth, including exam gloves and personal care products, partially offset by customer repayments associated with tariff refunds. Laboratory and Diagnostics net sales for the three months ended June 27, 2026 increased $27 million, or 12.2%, to $248 million, compared to $221 million for the respective period in 2025, primarily driven by volume growth in laboratory products.

Current wording

Surgical Solutions net sales for the nine months ended September 26, 2026 increased $359 million, or 8.0%, to $4,853 million, compared to $4,494 million for the respective period in 2025, primarily driven by volume growth in kitting and operating room products, partially offset by customer repayments associated with tariff refunds. Front Line Care net sales for the nine months ended September 26, 2026 increased $224 million, or 4.7%, to $4,976 million, compared to $4,752 million for the respective period in 2025, primarily driven by volume growth, including exam gloves and personal care products, partially offset by customer repayments associated with tariff refunds. Laboratory and Diagnostics net sales for the nine months ended September 26, 2026 increased $62 million, or 8.3%, to $813 million, compared to $751 million for the respective period in 2025, primarily driven by volume growth in laboratory products.