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Discontinued Operations and Assets Held-for-Sale

6 Months Ended

Jun. 30, 2025

Discontinued Operations [Abstract]

Discontinued Operations and Assets Held-for-Sale

Note 3—Discontinued Operations and Assets Held-for-Sale

On February 28, 2025, we announced that we are actively engaged in discussions regarding the contemplated sale of our P&HS segment. We are in the final stages of our process for the divestiture and have concluded the P&HS

segment has met the accounting requirements to be classified as discontinued operations and assets held for sale as of June 30, 2025. During this process we remain committed to serving our P&HS segment customers.

In accordance with GAAP, the financial position and results of operations of the P&HS segment are presented as discontinued operations and assets held for sale and, as such, have been excluded from continuing operations for all periods presented. Accordingly, the results of operations from our P&HS segment are reported in the accompanying condensed consolidated statements of operations as “Loss from discontinued operations, net of tax” for the three and six months ended June 30, 2025 and 2024, and the related assets and liabilities are classified as held-for-sale as of June 30, 2025 and December 31, 2024 in the accompanying condensed consolidated balance sheets. We have allocated interest expense, net to discontinued operations as a ratio of net assets and total debt in accordance with ASC 205, Presentation of Financial Statements.

As of June 30, 2025 the remaining P&HS goodwill balance of $106 million was fully impaired. Our sale process provided a basis for the fair value of the P&HS segment, which includes the Global Products reporting unit. We recognized a loss of $649 million in connection with the classification of the related assets and liabilities as held-for-sale, based on the estimated fair value, less costs to sell. The fair value of the P&HS segment was determined from information received during our sale process. Subsequent changes in fair value will be recorded within discontinued operations and assets held for sale.

The following table summarizes the financial results of our discontinued operations for the three and six months ended June 30, 2025 and 2024:


		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2025			2024			2025			2024
Net revenue		$	1,979,810		$	2,010,605		$	3,937,974		$	3,985,442
Cost of goods sold			1,779,250			1,782,480			3,530,643			3,521,380
Gross profit			200,560			228,125			407,331			464,062
Distribution, selling, and administrative expenses			208,114			201,914			409,355			409,482
Acquisition-related charges and intangible amortization			6,331			6,223			12,549			12,247
Exit and realignment charges, net			14,990			13,866			32,591			33,102
Goodwill impairment charge			106,389			—			106,389			—
Loss on classification to held for sale			649,140			—			649,140			—
Other operating expense, net			3,329			2,745			4,706			3,127
Operating (loss) income			(787,733)			3,377			(807,399)			6,104
Interest expense, net			10,447			10,311			20,192			20,557
Other expense			265			389			530			658
Loss from discontinued operations before income taxes			(798,445)			(7,323)			(828,121)			(15,111)
Income tax (benefit) provision for discontinued operations			(13,209)			17,848			(21,713)			18,553
Loss from discontinued operations, net of taxes		$	(785,236)		$	(25,171)		$	(806,408)		$	(33,664)

The assets and liabilities of the P&HS segment reflected on the condensed consolidated balance sheets at June 30, 2025 and December 31, 2024, are as follows:


		June 30,			December 31,
		2025			2024
Assets held for sale - discontinued operations
Cash and cash equivalents		$	38,829		$	21,810
Accounts receivable, net			359,187			471,971
Merchandise inventories			1,224,912			1,064,298
Intercompany receivable			160,000			—
Other current assets, net			131,561			67,275
Property and equipment, net			267,025			—
Operating lease assets			271,444			—
Intangible assets, net			76,771			—
Deferred tax assets			10,049			—
Valuation allowance on disposal group classified as held for sale			(649,140)			—
Current assets held for sale - discontinued operations			1,890,638			1,625,354
Property and equipment, net			—			260,064
Operating lease assets			—			228,699
Goodwill			—			103,140
Intangible assets, net			—			88,670
Deferred tax assets			—			6,726
Other noncurrent assets, net			—			43,894
Total assets held for sale - discontinued operations		$	1,890,638		$	2,356,547
Liabilities held for sale - discontinued operations
Accounts payable		$	1,002,086		$	868,764
Accrued payroll and related liabilities			41,279			77,046
Current portion of long-term debt			8,458			2,683
Other current liabilities			101,549			82,400
Operating lease liabilities, current portion			303,162			50,003
Deferred tax liabilities			3,705			—
Current liabilities held for sale - discontinued operations			1,460,239			1,080,896
Long-term debt, excluding current portion			—			9,654
Operating lease liabilities, excluding current portion			—			196,746
Other liabilities			—			28,474
Deferred tax liabilities			—			3,020
Total liabilities held for sale - discontinued operations		$	1,460,239		$	1,318,790

Assets and liabilities held for sale as of June 30, 2025 are classified as current since we expect the divestiture to be completed within one year of the balance sheet date. As of December 31, 2024, the assets and liabilities held for sale are classified separately as current or noncurrent because the noncurrent assets and liabilities did not meet the criteria for current classification as of December 31, 2024. Merchandise inventories include $97 million subject to lien with an individual supplier as of June 30, 2025.

Receivables Purchase Agreement

On March 14, 2023, we entered into the Receivables Purchase Agreement (RPA), pursuant to which accounts receivable with an aggregate outstanding amount not to exceed $200 million are sold, on a limited-recourse basis, to the Purchaser (as defined therein) in exchange for cash. We account for these transactions as sales with the sold receivables removed from our condensed consolidated balance sheets. Under the RPA, we provide certain servicing and collection actions on behalf of the Purchaser; however, we do not maintain any beneficial interest in the accounts receivable sold. The RPA is separate and distinct from the Receivables Sale Program and the amendment as described below. As a result of the amendment described below, the RPA was not utilized in the six months ended June 30, 2025.

Proceeds from the sale of accounts receivable are recorded as an increase to cash and cash equivalents and a reduction to current assets of discontinued operations, in the condensed consolidated balance sheets. Cash received from the sale of accounts receivable, net of payments made to the Purchaser, is reflected as cash provided by operating activities in the condensed consolidated statements of cash flows. The accounts receivable sold under the RPA were entirely accounts receivable of the P&HS segment. Total accounts receivable sold under the RPA were $573 million and $1.1 billion for the three and six months ended June 30, 2024. During the three and six months ended June 30, 2024, we received net cash proceeds of $569 million and $1.1 billion from the sale of accounts receivable under the RPA and collected $547 million and $1.1 billion of the sold accounts receivable. The losses on sale of accounts receivable, inclusive of professional fees incurred to establish the agreement, recorded in other operating expense, net in the financial results from discontinued operations were $3.9 million and $7.2 million for the three and six months ended June 30, 2024.

Receivables Sale Program

On October 18, 2024, O&M Funding LLC and Owens & Minor Medical, LLC., each a wholly-owned subsidiary of the Company, entered into a Receivables Purchase Agreement (the Receivables Sale Program) with persons from time to time, as Purchasers, PNC Bank, National Association, as Administrative Agent, and PNC Capital Markets LLC, as Structuring Agent, pursuant to which accounts receivable with an aggregate outstanding amount not to exceed $450 million are sold, on a limited-recourse basis, to the Purchasers in exchange for cash. The Receivables Sale Program amends and restates in its entirety, the Receivables Financing Agreement. Transactions under this agreement are accounted for as sales in accordance with ASC 860, Transfers and Servicing, with the sold receivables removed from our condensed consolidated balance sheets. Under the Receivables Sale Program, we provide certain servicing and collection actions on behalf of the Purchasers; however, we do not maintain any beneficial interest in the accounts receivable sold.

Proceeds from the sales of accounts receivable are recorded as an increase to cash and cash equivalents and a reduction to accounts receivable, net of allowances in the consolidated balance sheets. Cash received from the sales of accounts receivable is reflected in the change in accounts receivable within cash provided by operating activities in the consolidated statements of cash flows. The accounts receivable sold under the Receivables Sale Program were primarily accounts receivable of the P&HS segment. Total accounts receivable sold and net cash proceeds under the Receivables Sale program were $496 million and $840 million during the three and six months ended June 30, 2025, approximately $397 million and $672 million of which were accounts receivable of the P&HS segment. We collected $495 million and $704 million of the sold accounts receivable for the three and six months ended June 30, 2025, approximately $396 million and $563 million of which were collections on accounts receivable of the P&HS segment. The losses on sales of accounts receivable were $3.1 million and $5.2 million for the three and six months ended June 30, 2025, $2.5 million and $4.1 million of which relate to losses recorded in other operating expense, net in the financial results from discontinued operations.

As of June 30, 2025 and December 31, 2024, there was a total of $200 million and $70 million of uncollected accounts receivable sold and removed from our condensed consolidated balance sheets under the Receivables Sale Program, $160 million and $56 million of which relate to the assets of discontinued operations and assets held for sale. As of June 30, 2025 the $160 million of uncollected accounts receivable related to the assets of discontinued operations and assets held for sale is shown as an intercompany receivable within current assets of discontinued operations and assets held for sale with an equal amount reflected within other current liabilities in the condensed consolidated balance sheet.

The following table provides significant non-cash operating and investing cash flow information for our discontinued operations and assets held for sale:


		Six Months Ended
		June 30,
		2025			2024
Operating Activities:
Goodwill impairment charge		$	106,389		$	—
Loss on classification to held for sale			649,140			—
Depreciation and amortization			34,664			42,450
Share-based compensation			5,696			5,168
Investing Activities:
Capital expenditures		$	(26,918)		$	(11,150)
Proceeds from sale of corporate headquarters			—			33,500