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ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Cautionary Note Regarding Forward-Looking Statements
In accordance with the “Safe Harbor” provisions of the Private Securities
Litigation Reform Act of 1995, we
provide the following cautionary remarks regarding important factors
that, among others, could cause future results
to differ materially from the forward-looking statements, expectations and assumptions
expressed or implied herein.
All forward-looking statements made by us are subject to risks and uncertainties
and are not guarantees of future
performance.
These forward-looking statements involve known and unknown
risks, uncertainties and other factors
that may cause our actual results, performance and achievements
or industry results to be materially different from
any future results, performance or achievements expressed or implied
by such forward-looking statements.
These
statements are generally identified by the use of such terms as “may,” “could,” “expect,” “intend,” “believe,”
“plan,” “estimate,” “forecast,” “project,” “anticipate,” “to be,” “to
make” or other comparable terms.
Factors that
could cause or contribute to such differences include, but are not limited to,
those discussed in the documents we
file with the Securities and Exchange Commission (SEC), including our Annual
Report on Form 10-K, and will be
contained in subsequent periodic filings we make with the SEC.
These documents identify in detail important risk
factors that could cause our actual performance to differ materially from current
expectations.
Risk factors and uncertainties that could cause actual results to differ materially from
current and historical results
include, but are not limited to: our dependence on third parties for
the manufacture and supply of our products and
where we manufacture products, our dependence on third parties
for raw materials or purchased components; risks
relating to the achievement of our strategic growth objectives, including
anticipated results of restructuring and
value creation initiatives; risks related to the Strategic Partnership Agreement with
KKR Hawaii Aggregator L.P.
entered into in January 2025; transitions in senior company leadership
(including, without limitation, our Chief
Executive Officer, Chief Financial Officer, and other executive officers); our ability to develop or acquire and
maintain and protect new products (particularly technology and specialty
products) and services and utilize new
technologies that achieve market acceptance with acceptable margins; transitional
challenges associated with
acquisitions and joint ventures, including the failure to achieve anticipated
synergies/benefits, as well as significant
demands on our operations, information systems, legal, regulatory, compliance, financial and human resources
functions in connection with acquisitions, dispositions and joint ventures; certain
provisions in our governing
documents that may discourage third-party acquisitions of us; adverse changes
in supplier rebates or other
purchasing incentives; risks related to the sale of corporate brand products;
risks related to activist investors;
security risks associated with our information systems and technology
products and services, such as cyberattacks
or other privacy or data security breaches (including the October 2023 incident);
effects of a highly competitive
(including, without limitation, competition from third-party online commerce sites)
and consolidating market;
political, economic and regulatory influences on the health care
industry; risks from expansion of customer
purchasing power and multi-tiered costing structures; increases in shipping costs
for our products or other service
issues with our third-party shippers, and increases in fuel and energy costs; changes
in laws and policies governing
manufacturing, development and investment in territories and countries
where we do business; general global and
domestic macro-economic and political conditions, including inflation,
deflation, recession, unemployment (and
corresponding increase in under-insured populations), consumer confidence,
sovereign debt levels, fluctuations in
energy pricing and the value of the U.S. dollar as compared to foreign currencies
and changes to other economic
indicators; failure to comply with existing and future regulatory
requirements, including relating to health care;
risks associated with the EU Medical Device Regulation; failure to comply with
laws and regulations relating to
health care fraud or other laws and regulations; failure to comply with
laws and regulations relating to the
collection, storage and processing of sensitive personal information or standards
in electronic health records or
transmissions; changes in tax legislation, changes in tax rates and availability
of certain tax deductions; risks related
to product liability, intellectual property and other claims; risks associated with customs policies or legislative
import restrictions; risks associated with disease outbreaks, epidemics,
pandemics (such as the COVID-19
pandemic), or similar wide-spread public health concerns and other
natural or man-made disasters; risks associated
with our global operations; the threat or outbreak of war (including, without
limitation, geopolitical wars), terrorism
or public unrest (including, without limitation, the wars in Ukraine
and Iran, the Israel-Gaza conflict and other
unrest and threats in the Middle East and the possibility of a wider European
or global conflict); changes to laws
and policies governing foreign trade, tariffs and sanctions or greater restrictions on
imports and exports, including
changes to international trade agreements and the current imposition of
(and the potential for additional) tariffs by