Business Context and Reporting Period
Company: Accendra Health, Inc. (formerly Owens & Minor, Inc.)
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Quarter and six months ended June 30, 2026
Business Overview: A leading nationwide provider of products, technology, and services supporting health beyond the hospital. Following the sale of its Products & Healthcare Services (P&HS) business on December 31, 2025, the Company now operates as a single reporting segment focused on continuing operations.
Key Financial Metrics
| Metric | Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 |
|---|---|---|
| Net Revenue | $613.2 million | $1,241.0 million |
| Operating Loss | $(35.2) million | $(18.0) million |
| Net Loss (Continuing Ops) | $(89.1) million | $(95.5) million |
| Loss Per Share (Basic/Diluted) | $(1.16) | $(1.25) |
| Adjusted EBITDA (Non-GAAP) | $60.1 million | $118.5 million |
| Free Cash Flow (Non-GAAP) | $(25.1) million | $(27.1) million |
| Cash and Cash Equivalents | $7.7 million | $7.7 million |
| Total Debt (Carrying Amount) | $1.72 billion | $1.72 billion |
| Revolving Credit Availability | $271 million | $271 million |
Material Changes vs. Prior Period
- Revenue Decline: Net revenue decreased 10.1% ($68.7 million) for the quarter and 8.5% ($114.8 million) for the six months compared to the prior year. This was primarily driven by an $81 million (quarter) and $123 million (six months) decrease in revenue due to the termination of contracts with a major commercial payor, impacting Sleep Therapy and Home Respiratory Therapy segments.
- Expense Reductions: Selling, General, and Administrative (SG&A) expenses decreased by $24.3 million (quarter) and $31.4 million (six months) due to revenue declines and cost savings from the payor contract termination.
- One-Time Charges:
- Exit and Realignment: Increased significantly to $25.8 million for the quarter (vs. $2.5 million prior year) due to separation costs from the P&HS sale and a $0.6 million loss on equipment sales. However, for the six months, this line item was lower ($2.2 million vs. $16.2 million) due to a $51 million gain on equipment sales offsetting costs.
- Debt Restructuring: A $17.3 million loss on modification and extinguishment of debt was recorded in the current period related to the "Balance Sheet Optimization Transaction." This contrasts with the prior year, which included an $80 million transaction breakage fee for a terminated acquisition.
- Liquidity: Cash and cash equivalents dropped from $282.0 million at year-end 2025 to $7.7 million at June 30, 2026, a decrease of $274.3 million, driven by operating losses, debt restructuring costs, and tax payments.
Guidance, Outlook, and Risks
Management Commentary:
- Debt Optimization: In June 2026, the Company completed a Balance Sheet Optimization Transaction, exchanging unsecured notes for new 9.000% Senior Secured Notes (2032) and 9.750% Senior Secured Notes (2033). This resulted in higher interest rates but secured status and extended maturities.
- Payor Transition: The Company is transitioning off services for the terminated commercial payor contract, with transitions completed in the first half of 2026. Management expects to replace Transition Services Agreement (TSA) activities with internal capabilities throughout the remainder of 2026.
- Outlook: No specific forward-looking financial guidance was provided in the text. Management expects cash generated from operations, the Amended Receivables Sale Program, and the Revolving Credit Agreement to be sufficient to fund working capital and debt obligations.
Risks and Contingencies:
- Liquidity Risk: Cash balances are critically low ($7.7 million) relative to operating needs and debt service obligations.
- Debt Covenants: The Company must maintain leverage and interest coverage ratios. While compliant as of June 30, 2026, the higher interest rates from the new debt structure increase fixed costs.
- Tax Matters: An ongoing IRS audit regarding transfer pricing for 2015-2022 tax years remains partially unresolved, with approximately $16 million owed as of June 30, 2026.
- Separation Costs: The Company is obligated to reimburse the P&HS purchaser for up to $65 million in separation costs, with $35 million incurred to date.
Investor Verification Checklist
- Cash Runway: Verify the sufficiency of the $7.7 million cash balance against upcoming debt service payments and operating cash burn rates.
- Debt Structure: Confirm the impact of the new 9.0% and 9.75% secured notes on future interest expense and covenant compliance.
- Payor Diversification: Assess the Company's progress in replacing the lost revenue from the terminated commercial payor contract (approx. 3% of H1 2026 revenue).
- Receivables Program: Review the status of the Amended Receivables Sale Program ($150 million capacity) as a key liquidity source.
- Tax Liability: Monitor the resolution of the IRS transfer pricing audit and the timing of the remaining $16 million payment.