Q4 2025 Medline Inc Earnings Call
This time all participants are in a listen-only mode. After the speaker's presentation, there will be a question answer session, just a question during the session. You will need to press star 1. 1 on your telephone. You will then hear an automated message. Advising your hand is raised to withdraw your question. Please press star 1 1 again.
Please be advised that today's conference is being recorded, I would like to hand the conference over to Karen King Global head of investor relations. Please go ahead
Welcome to Medline Sports quarter and full year 2025 earnings conference. Call this morning, we issued our earnings release and shared, supplemental materials.
Joining me on today's caller, Jim Boyle, our chief executive officer and Mike Drazen our Chief Financial Officer.
During today's call, we may make forward-looking statements regarding our expectations for the future, including our business, plans, strategy, and Investments, and expected timing and impacts.
These statements are based on how we see things today, and actual results May differ materially due to risks and uncertainties.
And other SEC filings for more information. Regarding these risks and uncertainties,
We may also reference non-gaap Financial measures.
Which exclude certain items from our financial results calculated in accordance with gaap.
You can find a discussion of our non-gaap financial measures and reconciliations to the comparable. Gaap measures in the earnings release and are supplemental disclosures that accompanied these remarks, which are available on our website at IR, do medline.com under quarterly results.
I want to remind you that we close and report on a 4445 Week calendar, which can create differences in days per quarter.
What this means is that certain quarters could have slightly more or less days than the same quarter in the previous year.
For the fourth quarter of 2025, we had 1 more day versus a fourth quarter of 2024, which is a benefit.
For the full year. 2025 we had 1 left day versus the full year 2024, which is a headwind.
We have included the calendar of days in the supplemental disclosures which is available on the Medline investor relations website.
Also in that information you will find Historical quarterly information for both 2024 and 2025.
We have provided an income statement sales by Channel and segment.
Segment, adjusted. EBA and a Reconciliation of net income to adjusted. EBA by quarter to help you fill in your models and do year-over-year comparisons as you forecast, 2026.
With that, I will now turn the call over to our CEO. Jim bolay.
Thank you, Karen.
Welcome to mine's fourth quarter and full year 2025 earnings call. Our first as a public company, following our IPO last December. We appreciate you joining us.
I'll begin with the key highlights from the Year. Mike will then review our financial results and I'll close before we open the line for Q&A.
2025 was a milestone Year from outline capped by a strong fourth quarter.
Notably we are ending the year with a healthier balance sheet and Gregor Financial flexibility, which enables us to invest in future growth and continue, providing value to our customers.
Let me recap, a few of the highlights.
We added 2.4 billion in total. New customer signings driven by our ability to deliver best-in-class, Supply Chain Solutions and value through our brand.
This includes both prime minister and non-prime customers.
Major wins included the US Department of Veterans Affairs and 1 of the largest faith-based integrated delivery networks or idns in the US.
The latter was a great example of a Healthcare System who Consolidated from 5, previous Distributors to Medline.
Seeking a provider that could service them across their entire Continuum of Care including a acute care facilities Physician Offices. Ambulatory Surgery centers Home Health agencies and laboratory departments
We continue to invest in and enhance our distribution Network, through Automation and Technology.
Our Colorado facility receives its first Auto store, installation and 2. California sites, added their second installation.
As a reminder, Auto store is an automated pick module a storage and retrieval system. For individual products. What we call less than case.
We are now operating Auto store in 19 us facilities with more than 2,100 robots improving taking quality accuracy and speed.
While Auto store are used for picking less than case. We are preparing to implement a pilot in our Columbus Ohio distribution center for bulk picking
We're excited to partner with symbotic as their first customer in the healthcare vertical.
They are using AI powered robotic technology to move high volume Goods. Through complex, Supply chains. And many other sophisticated verticals, including grocery food, and beverage and consumer packaged Goods. Like Auto store, for less than case. We believe this technology can improve picking quality accuracy and speed of our Network.
we expanded our Medline brand product portfolio of approximately 190,000 products with new product Innovations, including the Comfort temp, patient warming system,
This is a forced air warming blanket. Commonly used to warm the body prior to, and during surgery.
Our product division in conjunction with our sales team and our customers identified a need and designed the product to address limitations and existing solutions that make the unit easier for clinicians to position.
Empower is a digital supply chain control tower. Our Prime. Vendor customers will be able to access to automate and streamline workflow processes for things, like inventory stabilization, forecasting, product substitutions, and approval.
The system is designed to prioritize areas at risk of supply chain disruptions before they happen.
And suggest product substitutions, automating the workflow.
We are piloting and power with multiple health systems and plan to begin. A broader customer rollout, starting mid-year.
And finally, we close the year with the successful IPO raising over 7 billion dollars.
Further, strengthening our financial position and bolstering our financial flexibility.
Turning to our performance annual. Net sales for 2025, grew 3 billion to 28.4 billion of 12% versus prior year or 11% organically driven by strong demand from existing customers and new customer signings.
Adjusted evida with 3.5 billion a 3%. Increase versus prior year reflecting robust sales partially offset by higher cost of goods, due to tariffs and investments in our business.
Our Medline brand segment. Grew 10% with volume gains, from existing customers, and convergence to Medline Brand Products as key drivers.
Surgical Solutions primarily benefited from strong demand for our custom, procedure trays or what we often refer to as kidding.
Our supply team exclusion segment, grew 13% fueled by new customer signings and growth with existing customers driven. By recognition of Medline scale and reliability across Continuum of Care.
We ended the year with strong free cash flow and continued investment in long-term growth.
Increasing capacity in our Mexico, kidding facility, upgrading our distribution center technology and investing in our people.
These Investments strengthen our ability to reliably support our customers. In the patients, they serve,
With that, I will turn the call over to Mike to do a deeper dive into the financials and our 2026 Outlook.
Thank you, Jim and good morning, everyone.
We had a strong end in the year. With fourth quarter, net sales of 7.8 billion dollars up 15% versus prior year. The majority of our growth was organic minimal contribution from acquisitions.
The 1 additional business day in the quarter, provided an approximately 180 basis point benefit.
For the full year, net sales were 28.4 billion up, 12% versus prior year with a 1 percentage, Point contribution from acquisitions.
The 1 Less business Day in the year provided an approximately 40 basis point headwind.
The Medline brand segment delivered 3.7 billion of net sales in the fourth quarter up 12%.
On a full year basis. Net sales were 13.7 billion up 10% versus prior year.
Breaking down Medline brand sales by product category.
Starting with Surgical Solutions, net sales for the fourth quarter were 1.7 billion dollars up 12%, but by strong growth and surgical kidding and other. Oh products.
Kidding, which improves operational efficiency at our customers facilities is 1 of our largest product divisions. We were pleased to see continued strong demand in the quarter in the full year.
For the full year. Net sales were 6.2 billion.
up 13% due to the reasons, I stated for the quarter and the 3 percentage, Point contribution from the Microtech, Surgical Solutions acquisition, which we lacked in the third quarter of 2025
Frontline care, net sales for the fourth quarter reached 1.8 billion dollars up, 11% with strong volume and Personal Care. Home Medical Equipment, ready care? Including the coloplast Skin Care acquisition and wound care. Which benefited from Medline brand conversions,
For the full year, net sales were 6.5 billion up 7% with strong, customer demand across multiple product divisions, including Ready, Care, wound care, and personal care, and a 1 percentage Point contribution, from the coloplast skincare acquisition, which we left in the fourth quarter of 2025.
lab and Diagnostics generated, net sales in the fourth quarter of 289 million up, 12% driven by existing customer demand and new customer implementations
This was 1 of our largest years of lab signings, which were part of the 2.4 billion dollars in new customers signings Jim mentioned earlier.
Driving strong growth and shared games.
For the full year, net sales were 1 billion dollars up, 9% driven by volume growth and laboratory products with both existing and new customers.
Transitioning to Supply Chain Solutions.
Million dollars in the fourth quarter up 18%.
Supported by new customer implementations and existing customer growth.
The full year net sales were 14.7 billion up. 13%.
Creating efficiencies of scale operating leverage and opportunity for Medline brand conversion?
Moving to sales by Channel, USA qare grew 16% in the fourth quarter to 5.3 billion and 12% for the full year to 19.5 billion driven by growth with new Prime, vendor customers and solid same store, sales growth due to strong utilization and procedure volumes at our customers facilities.
Us non andq, grew 12% in the fourth quarter to 1.9 billion and 11 for the full year to 7 billion supported by strong existing customer growth and new customer signings in post-acute which includes skilled nursing facilities long-term care, and home health and hospice, as well as our physician offices and surgery centers.
International grew 12% in the fourth quarter to 537 million and 11% for the full year to 2 billion dollars.
The strong performance was driven by volume growth in Canada and Europe.
Turning to adjusted. Evita the fourth quarter was 805 million roughly flat year-over-year. Adjusted Evita margin declined to 160 basis points to 10% due to higher costs, including tariffs and increased investment in headcount to support net sales growth.
Partially offset by higher net. Sales volumes.
Consistent with the framework, communicated at the IPO.
We have continued to invest deliberately in our people and capacity to support long-term growth.
our fourth quarter, adjusted ebit document better than our expectations due to favorable tariff cost, timing and strong sales volumes
For the full year, adjusted Eva dial was 3.5 billion up 3% versus last year.
Adjusted ebit on margin declined to 100 basis points to 12.2%, due to the same reasons. I cited for the quarter.
In 2025 the organization. Did a great job with tariff mitigation, including shifting production across sourcing partners.
optimizing internal manufacturing sites and leveraging usmca and Nairobi exemptions
We also work closely with our customers to help them navigate the evolving landscape.
In August of 2025, we implemented a tariff price increase to offset a portion of the Tariff burden.
For the full year 2025 the net tariff impact totaled, approximately 290 million.
Much of which was weighted at the second half of the year.
This was better than the 325 million. We had projected.
Due to timing of inventory deferrals.
while terrorists remain a meaningful headwind, our mitigation actions and pricing discipline demonstrates, the resilience of our model
I will share more in a few minutes on both the overall impact. And the estimated tariff burden in 2026,
We generated full year, free cash flow of 1.3 billion.
While cash flow was strong, it was impacted by both a net payment for legal settlements. In the second quarter of 2025 and the impact from increased tariffs, and the current year compared to Prior year.
Tapbacks for the full year was 447 million, which included capacity expansion in our Mexico, kidding facility to support long-term, demand and continued investment in our distribution centers, including the additional automation. Jim talked about earlier,
Cash and cash equivalents at your end were 1.9 billion, including 1 billion dollars from the IPO proceeds.
We use 4 billion of the IPO proceeds to pay down debt reducing that leverage from 4.9 times. At the end of 2024 to 3.1 times at the end of 2025
Moving to 2026 annual guidance.
We believe the strong momentum from new customer signings in 2025 will enable us to deliver another year of strong sales growth.
We are guiding a full year, 2026 organic sales growth in the range of 8 to 9%.
Activities, that could impact where we land within the range, include the time of implementation of the 2.4 billion of new customer signings.
Additional signings in 2026 and same store, sales growth driven by Healthcare utilization and procedure volumes.
Adjusted ebit do is expected to be between 3.5 and 3.6 billion.
The Tariff environment continues to be fluid. Particularly Following last week's Supreme Court decision related to aipa.
We are currently evaluating the impact of the ruling are aware that new tariff rates have been implemented and believe there's a high likelihood that additional tariff actions could take place.
We do not intend to react immediately.
Instead, we will take the time to thoughtfully assess, the situation, and determine the best course of action for our customers. And for Medline
The adjusted ebit, dog? Guidance of 3.5, to 3.6 billion dollars.
Includes an incremental, $200 million, tariff headwind.
Which reflects tariff policy prior to the Supreme Court decision?
This takes into account more recently, reduced rates in China and India balanced by a shift of roughly 30% dollars, terrific expenses in 25 to 26, due to inventory timing.
In total, we are estimating, the annualized net impact of tariffs at your plan mitigation strategies to be approximately 490 million.
Ongoing operational Investments to drive growth. The timing of Medline brand conversion and tariff. Mitigation efforts are all factors that can influence. Our final just Vivid dot performance within the projected range.
To help you with your modeling for full year 2026. We expect net interest expense, to be between 575 and 625 million reflecting our debt paid on from the IPO proceeds.
This assumes an average interest rate of 4.8%.
But does not assume any feature debt refinancing or m&a which can impact interest income generated from cash on hand.
At roughly $35 million in tariff expenses, and 25% to 26 due to inventory timing.
In total we are estimating the annualized net impact of tariffs after planned mitigation strategies to be approximately $490 million.
Capital expenditures are projected to be approximately million dollars as we complete the capacity expansion in our Mexico, kidding facility, build 2 additional distribution centers in California and Texas and further invest in automation.
Ongoing operational investments to drive growth the timing of Medline brand conversion and tariff mitigation efforts are all factors that can influence our final just EBITDA performance within our projected range.
The effective tax rate is expected to be between 17.5 and 19.5%.
To help you with your modeling for full year 2026, we expect net interest expense to be between 575 $625 million, reflecting our debt paydown from the IPO proceeds.
Tax distributions, to NCI are non-controlling, interest holders and metal line Holdings. LP are limited partnership are expected to be in the range of 250 to 350 million.
Both the effective tax rate and the tax distribution estimate are based on our current ownership.
In which 60% of the partnership income is allocated to the Medline Inc.
This assumes an average interest rate of four 8%.
The publicly traded company.
But does not assume any future debt refinancing or M&A, which could impact interest income generated from cash on hand.
It does not reflect the impact of any future changes to ownership upon sponsorship Downs.
Capital expenditures are projected to be approximately $500 million.
As we complete the capacity expansion in our Mexico Kitting facility build two additional distribution centers in California and Texas.
To provide for comparability purposes, the Medline Inc was 100% structured, as a cc Corporation, the estimated tax rate would be between 24 and 26%.
And further invest in automation.
The effective tax rate is expected to be between $17 five to 19, 5%.
While the company is recorded to 3.5 billion t for tax receivable agreement, liability as of near end 2025.
Okay.
Tax distributions to NCI Noncontrolling interest holders in Metlife Holdings LP or limited partnership are expected to be in the range of $250 million to $350 million.
We do not expect to make our first payment to early 2027 as permitted under the tra.
We're diluted earnings per share. We will wait to provide guidance until 2027 when we have a full year basis for comparison.
Both the effective tax rate and a tax distribution estimate are based on our current ownership and.
To help you with your 2026 calculation. We are estimating approximately 1.4 billion fully diluted shares outstanding.
And with 60% of the partnership income allocated to Medline, Inc. The publicly traded company.
You can find the exact number in the guidance page on our company, earning slide deck. A medline's IR site.
It does not reflect the impact of any future changes to ownership on sponsor sell downs.
That figure could change over time due to the issuance of equity based compensation.
To provide for comparability purposes.
In summary, we entered the year with broad-based double digit sales growth.
<unk> was 100% structured as a C corporation, the estimated tax rate will be between 24% to 26%.
While the company has recorded a $3 5 billion TRA for tax receivable agreement liability as of year end 2025.
Adjusted even though that remains stable, despite tariff headwinds, and the IPO, strengthened our balance sheet. While providing us with additional Capital to fund future strategic, and accretive m&a opportunities.
I'm, I'll turn it back over to Jim for closing remarks.
We do not expect to make our first payment to early 2027 as permitted under the TRA.
thanks, Mike to wrap up 2025 with a milestone year for Medline
For diluted earnings per share, we will wait to provide guidance until 2027, and we have a full year basis for comparison.
We experienced strong demand from existing customers and earned 2.4 billion in new customer signings.
To help you with your 2026 calculation, we are estimating approximately $1 4 billion fully diluted shares outstanding.
Many of which include multiple in markets or channels. We're excited about our continued investments in Partnerships like Empower and technology in our distribution centers and Manufacturing capacity. And in our people,
You can find the exact number on the guidance page in our accompanying earnings slide deck and Medline the IR site.
That figure could change over time due to the issuance of equity based compensation.
We are driving Innovation and bringing new products to Market and end of the year with a successful IPO strengthening our financial position.
Yeah.
In summary, we ended the year with broad based double digit sales growth.
Adjusted EBITDA remained stable despite tariff headwinds and the IPO strengthened our balance sheet, while providing us with additional capital to fund future strategic and accretive M&A opportunities.
I want to thank our, more than 45,000 employees around the world who work every day to deliver products and services. That create value for our customers and make Healthcare run better.
We are grateful to our new shareholders, who supported us during the IPO and to the analysts who launched coverage this year,
I'll now turn it back over to Jim for closing remarks.
Thanks, Mike to wrap up 2025 was a milestone year for Medline, we experienced strong demand from existing customers and earned $2 4 billion in new customer signings.
We have a strong and resilient business model with favorable Tailwinds. We are confident that our scale customer relationships and disciplined investment Position will allow us to create durable long-term value.
We look forward to sharing our progress throughout the year.
Thank you for joining us. We will now open the call for questions.
Many of which include multiple end markets or channels.
We are excited about our continued investments and partnerships like empower and technology in our distribution centers and manufacturing capacity and in our people.
Driving innovation, and bringing new products to market and ended the year with a successful IPO of strengthening our financial position.
As a reminder to ask a question. Please press star, 1 1 1 on your telephone and wait for a name, to be announced to withdraw your question. Please press star 1 1 1 again.
I want to thank our more than 45000 employees around the world, who work every day to deliver products and services that create value for our customers and make healthcare run better.
You up for any follow-up. Questions please stand by while we comply. The Q&A roster.
1 moment for our first question.
We are grateful to our new shareholders, who supported us during the IPO and to the analysts who launched coverage this year.
Our first question will come to line of Elizabeth Anderson from evercore isi, your line is open.
We have a strong and resilient business model with favorable tailwind.
Confident that our scale customer relationships and disciplined investment position will allow us to create durable long term value.
We look forward to sharing our progress throughout the year.
Thank you for joining us we will now open the call for questions.
As a reminder to ask a question. Please press star one on your telephone and wait for a name to be announced to withdraw your question. Please press star one again.
Yes.
We ask that you. Please limit yourself to one question. So we may we may accommodate as many participants as possible youre welcome to queue for any follow up questions. Please standby, while we compile the Q&A roster.
Hi guys. Uh, congrats on your first quarter out and and thanks so much for the question. Um, I was wondering if you from a high level perspective, you know, what are you hearing from your hospital customers regarding their priorities in 2026, um, and just sort of places where you think, maybe you guys have incrementally, something, something, um, that would change versus what we still saw in 2025. Now that we know a little bit more about the current utilization environment, Etc. Um, and secondarily, if you have any comments on the current utilization, expectations embedded in your guidance, that would also be helpful. Thank you.
One moment for our first question.
Okay.
Our first question will come from the line of Elizabeth Anderson from Evercore ISI. Your line is open.
Hi, guys. Congrats on your first quarter out and thanks, So much further question.
I was just wondering if you from a high level perspective, what are you hearing from your hospital customers regarding their priorities in 2026.
And just sort of places where you think maybe you guys have incrementally something to something that.
Yeah, good morning Liz with thank you for the call. This is Jim. Um listen, Healthcare is going through. What I would call a crisis complexity right now they're dealing with cuts and Medicaid Medicare. They're worried about the 1, big, beautiful Bill uh the concerned about what's happening with the Affordable Care Act. So first and foremost, they're looking at creating stabilization around their reimbursement profile um and mitigating uh kind of risk in the future as it relates to that and they're looking for a value player in the marketplace that we fit directly within that being the lowest cost provider in healthcare. So I mean our job is to be in the boat with our customers looking for ways to serve them as it relates to their uh long-term Financial liability by driving value second. Um I think you're going to see
That will change versus what we saw in 2025 now that we know a little bit more about the current utilization environment et cetera, and secondarily. If you have any comments on the current utilization expectations embedded in your guidance that would also be helpful. Thank you.
Yes. Good morning was with thank you for the call. This is Jim.
Listen health care is going through what I would call a crisis of complexity right now they are doing with cuts in Medicaid Medicare they're worried about there won't be beautiful bill the concerned about what's happening with the affordable Care Act, so first and foremost looking at creating stabilization around the reimbursement profile.
And mitigating kind of risk in the future as it relates to that and Theyre looking for a value player in the marketplace.
Within that people most cost provider in health care. So I mean, our job is to be in the boat with our customers looking for ways to serve them as it relates to <unk>.
Long term financial liability by driving value second.
I think youre going to see an acceleration in consolidation in health care.
With health care shifting outside of the four walls of the hospital and go into those non acute settings think about sure.
Acceleration and consolidation in healthcare uh, with Healthcare shifting outside of the 4, Walls of the hospital and going to, those non-acute settings, think about your uh higher level. Um surgical procedures like your open, like your hips and your toes knees, moving to the surgery centers are going to start acquiring the surgery centers and redeploying uh really that mode of care to the non-acute segment. Um, and I think you're going to see an expansion of the consolidation position offices. So how are they navigating that takes? Your makes sure that they create the best network to deliver. The best care at the best. Value Medline is the only provider in healthcare that serves all points across the Continuum of Care. And then finally, uh, they're looking for resilience as it relates to supply, chain Partners, Supply Chain, and really cost of goods. Sold from a supply perspective perspective is the second largest expense on their budget seconds people. Um and they want resilient sustainable supply chain partners that can deliver value get the right product to the right place at the right time at the lowest cost on a consistent basis. And we sit directly within that, um,
Higher level surgical procedures like Youre opening like your hips and your total needs moving to surgery centers are going to start acquiring surgery centers and redeploying.
Really that mode of care to the non acute segment.
And I think you're going to see an expansion of the consolidations. This analysis. So how are they navigating that take share make sure that they create the best network to deliver the best care at the best value Medline is the only provider in health care. It serves all points across the continuum of care and then finally theyre looking for resilience as it relates to supply chain partners supply chain and really cost.
As it relates to really volumes, I think we're going to see some some a little bit of slowness with, uh, really the, the cuts and, and uh, Medicare Medicaid. What's happening with 1 big, beautiful bill. Um, I don't, it's not going to disappear from a growth perspective, but it might soften a little bit uh, going into this year. Uh as they understand what's going on. It might get you want to answer it. Yeah, so hi Elizabeth. Thanks for the question. So if you think about it, from our, from our guidance perspective, we are still providing a pretty strong guide for 2026 8 to 9%.
So from a supply perspective perspective, the second largest expense on their budget second people.
And they want resilient sustainable supply chain partners, who can deliver value to get the right product the right place at the right time at the lowest cost.
On a consistent basis, and we sit directly within that.
An organic growth in the top line that growth is made up of really 2 components. Both new signings from our 2.4 billion dollars that we signed in 2025, plus new signings in 2026. Along with some same store, sales growth, we expect same store, sales growth to remain strong, albeit to Jim's point. We do expect that to moderate a little bit relative to 2025, giving the obba, and the ACA and and Medicare impacts
As it relates to really volumes I think were going to see some some a little bit of slowness with really the cuts in Medicare Medicaid what's happening with one big Bill.
Great, thank you very much.
1 moment for our next question.
Our next question will go to line of David Roman from Goldman Sachs. Your line is open.
Not going to disappear from a growth perspective, but it might soften a little bit going into this year as they understand what's going on.
Do you want to answer it.
Yes.
Highlights, but thanks for the question. So if you think about it from our from our guidance perspective, we are still providing a pretty strong guide for 2026, 8%, 9% organic growth in the topline that growth is made up of really two components, both new signings Mark $2 $4 billion that we signed in 2025, plus do signings in 2026, along with some same store sales grew.
We expect same store sales growth to remain strong, albeit to Jim's point, we do expect it to moderate a little bit relative to 2025, given the EBITDA and the ACA and Medicare.
Medicare impacts.
Great. Thank you very much.
Yes.
One moment for our next question.
Our next question comes from the line of David Roman from Goldman Sachs. Your line is open.
Uh, thank you. Good morning everyone. And, uh, appreciate very much Karen, Patrick and the teams preparation of all the supplemental materials, uh, in in your first quarter here. Uh, post IPO very helpful detail. Um, maybe we could, uh, just jump in a little bit as this is your first quarter and, and Mike and Jim. Maybe just walk us through a little bit, kind of your, your philosophy and constructing the guidance. Uh, what are some of the, the puts and takes that, that you considered, when, when creating the Outlook, I know you've had a long track record of of growth. But now, as you move into the domain, as a public company, your thought process in putting together. The Ford outlook here, both from an End Market, in Medline perspective, and then maybe if any help you can give us and how to think about just the Cadence of earnings and, and, and revenues throughout 2026 and uh, especially given given the Tariff impact, uh, increased
Everything. Uh, year-over-year.
Thank you good morning, everyone and I appreciate very much Karen Patrick and the team's preparation of all of the supplemental materials.
And your first quarter here.
The IPO very helpful detail.
Maybe we could just jump in a little bit as this is your first quarter and Mike and Jim maybe just walk us through a little bit.
Your philosophy in constructing the guidance what are some of the puts and takes that you considered when what when creating the outlook I know you've had a long track record of growth, but now as you move into the domain as a public company your thought process in putting together the forward outlook here, both from an end market and Medline perspective, and then maybe if any.
You can give us on how to think about just the cadence of earnings and revenue throughout 2026.
Our new customer signings. We feel very good about the 2.4 billion dollars that we signed in 2025, playing out in 2026. We expect about 65% of that will be recognized as Revenue incrementally in 2026 from a, from a same store, sales perspective. I already commented on that. But essentially, we expect to see strong same store sales growth. Once again in 2026 update a bit moderated from the standpoint of the obba and the impact on our customers from utilization perspective.
Especially given given the tariff impact increasing year over year.
Thanks, David lot to unpack, there, but I'll try to cover it. So we can think about our guidance for 2026, we provided you with what we believe is a realistic.
Set of projections that we believe constantly we can achieve.
<unk> broken this up into both our sales growth organic sales growth and adjusted EBITDA from an organic sales perspective really as I mentioned earlier, it's really driven by two components first our new customer signings, we feel very good about the $2 $4 billion that we signed in 2025, playing out in 2026, we expect about 65% of that will be recognized as.
Revenue incrementally in 2026 from a shift from a same store sales perspective already commented on that but essentially we expect to see strong same store sales growth once again in 2026, albeit a bit moderated from the standpoint of the DVA and the impact on our customers from a utilization perspective.
If you think about, if you think about our, our our segments, for a second, just to talk about those, you know, we, we, we shut generated in 2025, uh, sales growth and supply chain of about 13%, and, and Medline branded about 10%. That's a positive indicator for us. When we're seeing supply chain grow at a faster rate than Medline brand. We expect the same thing to happen here again, in 2026. Given the given the signings we had. And the share games we generated in 2025, from a, from a ebit DOT perspective. Again, continue to see strong growth. And even on the base business, albeit impacted by the tariffs, the tariffs that June of 2000 million dollars incrementally in 2026. So like as we called out that number really hasn't changed until totality from what we provided with you previously, uh, for 2026, but it has sort of shifted as far as how the impact, uh, plays out from the standpoint of what what's impacting it.
If you think about if you think about our our our segments for a second just to talk about those.
We generated in 2025 sales growth in the supply chain of about 13% and Medline brand at about 10%. That's a positive indicator for us and we're seeing supply chain grow at a faster rate and Medline brand. We expect the same thing to happen here again in 2026, given the given the signings we had in the share gains with energen.
<unk> in 2025.
From an EBITDA perspective, again continue to see strong growth in EBITDA and the base business, albeit impacted by the tariffs the tariffs to the tune of $200 million incrementally in 2026% of that because we called out that number really hasnt changed in totality will be provided with your previously for 2026, but it has sort of shifted.
As far as how the impact plays out from the standpoint of what what's impacting it.
If I get to your question about the quarterly view, I think the best way to think about our business is that, you know, we guide for the full year, we run the business for the full year and not the quarters. There will be some seasonality in the business by quarters and days do matter. So we have intentionally to provide tried to provide you with the days view in our supplemental, financial information. That days view, does suggest that our first quarter will have, you know, uh, 1 more day 1 less Day this year than last year and whereas in Q4 we have 1 more day. But overall for the full year we have the same number of days so you will see some some seasonality from that perspective. In addition, we do see seasonality, normally in our business primarily in the fourth quarter as you saw here in 2025, um, given sort of the volumes that we see coming out of our customers. That being said, we'll do our best to provide you with our quarterly results and tell you how those, how those compare relative to our overall annual guidance for 2026.
If I get to your question about the quarterly view I think the best way to think about our business is that we guide for the full year, we run the business for the full year not the quarters, there will be some seasonality in our business by quarters end data do matter. So we have a tendency to provide tried to provide you with the days view in our supplemental financial information that day's view does suggest that our firm.
All right. Great, appreciate all the detail. Thank you.
1 moment for next question.
Our next question will come from the line of Patrick Wood from Morgan Stanley. Your line is open
Quarter will have.
One more day, one less day this year than last year, whereas in Q4 will have one more day, but overall for the full year. We had the same number of days. So you will see some seasonality from that perspective. In addition, we do see seasonality normally in our business primarily in the fourth quarter as you saw here in 2025.
Beautiful. Um, thanks so much for taking the questions, guys. Um, Jim Mike, I'd love to hear a little bit about the Q4 Prime vendor contract wins. Um, it sounds like lab and Post Acute have done particularly well, but any kind of color you could give on how those are trending in the Q4 and really the areas of strength and how we should think about that then flowing through into 2026. Thanks.
Given sort of the volumes that we see coming out of our customers that being said, we will do our best to provide you with our quarterly results and tell you how those how those compare relative to our overall annual guidance for 2026.
Hey, good morning Patrick. Good to hear from you. Um, as you know, we closed 2.4 billion uh, in 2025, uh, which was a record year for us. And it's something that that we're pretty proud of and pretty excited about we take advantage of market conditions.
Alright, great I appreciate all the detail. Thank you.
One moment for our next question.
Our next question will come from the line of Patrick Wood from Morgan Stanley. Your line is open.
Beautiful thanks, so much for taking the questions guys.
Jim Mike I'd love to hear a little bit about the Q4 prime vendor contract wins.
It sounds like lab and post acute have done, particularly well, but any kind of color you could give on how those are trending into Q4.
Really the areas of strength and how we should think about that flowing through into 2026.
Hey, good morning, Patrick good to hear from you.
As you know we closed $2 4 billion in 2025, which is a record year for us and that's something that we're pretty proud of and very excited about we take advantage of market conditions, our commitment as a $1 billion at year end due primary to closings because thats, where we can actually control and what we think is available just through natural occurrence in the marketplace.
Our commitment is a billion dollars a year and new Prime in your closings. Because that's what we, we can actually control. Uh, and what we think is available just through natural occurrence in the marketplace, uh, beyond that. Uh, if you think about what happened this year, customers were looking for resilient sustainable supply chain Partners. Uh, we have 29 million square feet in the US. Uh, we have over 4 and a half billion dollars of inventory about 99% fill rates, uh, we have the ability to drive value to our brand, which is what they're looking for, is cost savings and consistency in terms of throughput and delivery model. Uh, we are the only provider serving all points across the Continuum of Care when you think about consolidation that that's happening. Uh, you are a spot-on. We did see some expansion in the lab and Diagnostics in the fourth quarter, uh, from a conversion perspective and from a prime minister signings perspective, um, and and the non-acute business in and of itself organically is growing faster, uh, than the UK but the care business. So we're taking advantage of that. You might ask the question, why did the acute care business grow faster than non acute? Because
Beyond that if you think about what happened this year customers were looking for resilient sustainable supply chain partners with 29 million square feet in U S with over $4 5 billion inventory about 99% fill rates.
Because we sell outsized growth in our Prime vendor signings in 2025. Uh so we took more share gains in the acute care setting which is why we grew faster in the future business. Um so we still have our commitment to the billion dollars in prime minister signings.
We have the ability to drive value.
Which is what they're looking for is cost savings and consistency in terms of throughput and delivery model. We are the only provider or an all points across.
When you think about consolidation that's happening.
In 2026, something we, uh, have communicated openly, and we will continue to go down that path. But I think the market conditions are favorable for our value prop. Um, and our job is to make sure we continue to deliver value to our customers, uh, and get the right product to the right place at the right time at the lowest delivered cost.
You are spot on we did see some expansion in the lab diagnostics in the fourth quarter from a conversion perspective and from a better signings perspective.
Very clear. Thanks for calling guys.
1 moment for our next question.
In the non acute business in and of itself organically is growing faster than.
Our next question will come from the line of Matthew Taylor from Jeffrey's your line is open.
<unk>.
Your business. So we're taking advantage of that you might ask the question why the acute care business grow faster than the non acute because we saw outsized growth in our prime vendor signings in 2025.
So we took more share gains in the acute care segment, which is why we grew faster in the future business.
So we still have our commitment to $1 billion in prime Minter signings in 2026 something.
Remarks. I guess I wanted to understand 2, things 1, you know, ultimately. Do you think there's a potential that the tariffs are are less owner? And I guess, what would you do with that? Would you drop that through or would that give you some opportunities to reinvest and
As communicated openly and we will continue to go down that path, but I think the market conditions are favorable for our value prop.
when will we know more about your
Impacts and your projections. Thank you.
Our job is to make sure we continue to deliver value to our customers and get the right product right place at the right time and for most of the costs.
Alright, thanks for the color guys.
One moment for our next question.
Our next question comes from the line of Matthew Taylor from Jefferies. Your line is open.
Good morning, Thanks for taking the question.
So I know theres some uncertainty with.
Ultimately, where tariff shake out and you expressed that in your remarks, I guess I wanted to understand two things one.
Ultimately do you think there is a potential that the tariffs are less onerous and.
Guess, what would you do with that would you drop that through or would that give you some opportunities to reinvest and when will we know more about your impact.
Impacts on your projection.
Hey, Matt. Thanks for the question. So yes, I mean, there is a bit of uncertainty right now as it relates to tariffs. It feels like we're back in April of 2025, all over again I think on our in our process year, we're not going to react until we have a better understanding of what is going to have just like we did back in 2025.
Hey Matt, thanks for the question. So yeah, I mean there is a bit of uncertainty right now as it relates to terrorists. It feels like we're back in April of 2025 all over again. I think you know, in our, in our process here we're not going to react until we have a better understanding of what is going to happen just like we did back in 2025. We we obviously have a playbook in place that we've implemented over the past many, many years that Playbook is really been, uh, driving through mitigation efforts, uh, for our customers and for our Medline and we'll continue to execute on that Playbook. We, we would tell you that we expect more to come in the near term from the administration. Um as far as how they plan to lay out this program, they're also probably will be future impacts as it relates to 301 and 232 and so really can't project what they're going to do. The only thing we can do is is remain, uh, Nimble and flexible and be ready to act based upon, whatever they put in place. Once we have a better understanding of what those look like, we'll, obviously be willing. We'll obviously be able to share that with you and be more more equipment, provide more clarity around what that look like for our full year 2026 and Beyond.
We obviously have a playbook in place that we've implemented over the past. Many many years that playbook has really been driving through mitigation efforts for.
For our customers and for our Medline and will continue to execute on that playbook.
We would tell you that we expect more to come in the near term from the administration.
The only thing I would add to that is it's important to remember that we either mitigated or absorbed the vast majority of the tariffs, we had a small price increase that we close out to the marketplace. So it's it's something that uh we believe we have to be in the boat with our customers um and share share in some of the burden of the pain. Um, and as Mike said, as this situation evolves, uh, we will actually act responsibly but we do not act in times of uncertainty in crisis.
Great. Thank you guys.
As far as how they plan to lay out. This program, you're also probably will be future impacts as it relates to 301, and <unk> 32, and so really can't project, what theyre going to do the only thing. We can do is remain nimble and flexible and be ready to act based upon whatever they put in place once we have a better understanding of what those look like obviously you would be willing to go up you'll obviously be able to share that with you.
Thank you. 1 moment for our next question.
Our next question, will cover line of area code will code well from beard. Your line is open.
More more Clinton provide more clarity on what that will look like for our full year 2026 and beyond the only thing I would add to that is it's important to remember that we either mitigated or absorbed the vast majority of the tariffs we had a small price increase that we pushed out to the marketplace. So it's something that.
We believe we are going to be in the boat with our customers.
Sure sure and some of the burden of the pain.
And as Mike said.
Situation evolves, we will act responsibly, but we do not act.
In times of uncertainty and crisis.
Great. Thank you guys.
Thank you one moment for our next question.
Our next question will come from the line of Eric Coldwell.
Thanks very much, good morning. Uh, a little bit of a follow-up to Patrick's, uh, question, um, on the annual signings understanding the 1 billion guide that is, uh, you know, standard in place guidance. For the year, I am curious on your thoughts on the overall Pipeline and Market RFP, activity, relative to the recent past, um, you know, better worse the same, no change, uh, kind of commentary. And then, as well as you've seen, any, if you've seen any Market changes or, or mood, uh, changes in discussions with clients, given that the third largest acute care. Distributor just went through an ownership transition and the largest non-acute distributor has uh, announced plans for a lengthy separation. I had um, curious on, if that's changing uh, market dynamics, thanks very much.
Well from Baird. Your line is open.
Thanks, very much good morning, a little bit of a follow up to Patrick's question.
On the annual signings understanding the $1 billion guide that is.
Standard in place guidance for the year I am curious on your thoughts on the overall pipeline and market RFP activity relative to the recent past.
Better worse, the same no change kind of commentary and then as well as you have seen any if you've seen any market changes or mood changes in discussions with clients given that the third largest acute care distributor just went through an ownership transition and the largest non acute distributor has announced plans for a.
Lengthy separation I had two.
Curious on if that's changing market dynamics, thanks very much.
Great question and listen.
The $1 billion is what we commit to and the conditions that I described are still in existence right you still have.
Eric great question. And, and listen that, um, the billion dollars is what we commit to and the conditions that I described are still in existence, right? You still have, uh, customers having challenges as a place to reimbursement, uh, looking for ways to save money. Uh, you have consolidation in healthcare speeding up. You have, uh, the non-acute care Market growing faster, think about our signings, our signings are both acute and non-acute. So Prime vendor in what we call Supply deals with non acute care Market. That is growing as well. Um, and so you think about the conditions of what's happening with our competitors, right? There is some uncertainty around, what the future looks like there, as a, as a look to change their strategy and, and more than the new organization. So, uh, listen, I I believe that the market conditions look very similar in 26 that they did in 2025, um, but we don't uh, commit to things that we don't control. We take advantage of things, we don't control. Uh that's why we're sticking with our billion dollars. And then what we'll do is, we'll partner with customers and where there's opportunities where customers are having service challenges and they're looking for a better service provider we
Customers, having challenges as it relates to reimbursement looking for ways to save money.
Consolidation in the health care speeding up.
The non acute care market growing faster if you think about our signings signings for both acute and non acute so prime vendor in what we call supply deals in the non acute care market that is growing as well.
So you think about the conditions of what's happening with our competitors right. There is some uncertainty around what the future looks like there.
can take advantage of that. Uh, when there's customers that are looking for value and savings and outside face of change from a cost conversion perspective, we take advantage of that. Um, and when we look at customers who have uncertainty around, what's happening with their potential uh kind of competitors from a consolidation and a change perspective, we take advantage of that and and none of that has changed um, in some cases. It's actually accelerated. So we feel confident about the future
But to change the strategy and more from the new organization. So.
Thank you. 1 moment for our next question.
Listen.
I believe that the market conditions look very similar in 2006 that they did in 2025.
Our next question comes from the line of Andrew. Obin from Bank of America. Your line is open,
Yes, good morning. How are you?
But we don't commit to things that we don't control and take advantage of things, we don't control that.
Good.
That's why we're sticking with our $1 billion and then what we'll do is we'll partner with customers and where there's opportunities where customers are having service challenges and not looking for a better service provider would take advantage of that.
When there's customers that are looking for value and savings and outsize pace of change from a cost control perspective, we take advantage of that.
When we look at customers, who have uncertainty around what's happening with their potential.
Kind of competitors from a consolidation and change perspective, we take advantage of that and none of that has changed.
In some cases, it's actually accelerated so we feel confident about the future.
Thank you for a moment for our next question.
Our next question will come from the line of Andrew <unk> from Bank of America. Your line is open.
Okay.
Hey, guys. Good morning, how are you.
Okay.
Congratulations on the first call, yes, just a question of the timing.
The tariff impact I think is that on the call that it's $290 million. This quarter versus 325 projects that are I think for next year, you said 490 million. So I just wanted to understand if there was any.
Sort of a shift.
A shift of the tariff impact into 'twenty six.
Because the 25 number seems to be $35 million lower but 26 was broadly in line with what you would telegraphic before just want to understand what this 35 billion of EBITDA goes thank you.
Back into 26. Uh, because the 25 number seems to be 35 million lower, but 26 is broadly in line with what you were telling graphic before. Just want to understand where this, uh, 35 million will be. Thank you. Yeah, thanks Andrew. So, um, we we had, uh, we originally had called out through the IPO process. We thought we'd be impacted to the tune of 325 million in 2025, from the Tariff impact. We actually ended end of the year at 290 million 35 million less than we expected. That really just the timing matter, it's capitalized on our inventory. We'll be recognized as a tariff burden in 2026, so it's just shifting 35 million dollars on the 2526. That being said under the old regime prior to the Supreme Court ruling, um, the, the they didn't reduce China and India's tariff rates that also impacted us favorably, the tune of about 3035 million. So, the net impact overall to our overall tariff burden is 490 million versus
Yes. Thanks, Andrew So we had we originally had called out through the IPO process. We thought we would be impacted to the tune of $325 million in 2025, when the tariff impact. We actually ended blended ended the year at $290 million $35 million less than we expected that really just a timing matter, it's capitalize on our inventory.
Lori will be recognized as a tariff burden in 2020. So it's just shifting $35 million from $25 26 that being said under the old regime prior to the Supreme Court ruling.
The 525, they previously told you. So the overall burden has come down, but the impact for 2026 Is Still Remains at 200 million dollars, 35 million shifting from 25 to 26 offset by the reduction in China and India's lower rate. Now, that being said as we've talked about before, um, given the recent Supreme Court ruling and the recent announcement of of 122, uh, tariffs, we will continue to evaluate what what that means for our business, um, and and and act accordingly. Once we have a better understanding
They didn't reduce China and Indias tariff rates that also impacted us favorably the tune of about $35 million. So the net impact overall to our overall tariff burden is $490 million versus the 525. We previously told you. So the overall burden has come down but the impact for 2026 is still remained at.
Oh, this is great. Thank you. And, but it's uh, this 35 million. Does it show up in first quarter, or is it pretty smooth over the next year? It's the, the majority of the Tariff burden for 2026 will be in the first half of the year. A little bit of it will trigger going to Q3, but the vast majority will be in the first half of the year. We expect Terrace to normalize into our base.
Uh, in 2026 in the back half.
I'll take it offline. Thanks so much.
Thank you. 1 moment for our next question.
$200 million.
$35 million shifting from 'twenty five 'twenty six offset by the reduction in China, and India is lower right now that being said as we've talked about before given the recent Supreme Court ruling and the recent announcement of.
Our next question comes from Lisa Gil from JP Morgan. Your line is open.
122 tariffs, we will continue to evaluate what that means for our business.
And act accordingly, once we have better understanding.
Oh, that's great, but it's a 35 million it doesn't show up in first quarter or is it pretty smooth over the next year.
Dedicated or ACA and the potential impact on utilization. Can you talk about what you've seen here in the first part of 26? Um, has there been an impact on utilization? And then, secondly, can you just spend a few minutes talking about potential Medline product areas of expansion? Do you see anything that's particularly ripe for for share gains as we move into 26?
The majority of the tariff burden for 2026 will be in the first half of the year, a little bit will trickle into Q3, but the vast majority will be in the first half of the year, we expect tariffs will normalize into our base.
In 2026 in the back half.
I'll take it offline. Thanks, so much.
Thank you one moment for our next question.
Our next question comes from the line of Lisa Gill from Jpmorgan. Your line is open.
Thanks, very much good morning, Tim.
Good morning Lisa. Good to hear from you. Uh, listen, there's no change to date as it relates to utilization, but we're just, um, giving a cautious view of the future of what we think Could Happen depending on what the overall impact is. If you want to know the number 1 area that I think it will create a challenge as its Community or role helped. Um, those folks are heavily, uh, select select kind of slanted towards uh that risk of reimbursement, going away, uh, which may lead to faster consolidation for those Community facilities. So,
Tim you made a comment several times around the changes or when you think about Medicaid or ACO and the potential impact on utilization can you talk about what you've seen here in the first part of 2000 and.
Has there been an impact on utilization and then secondly can you just spend a few minutes talking about potential medline product areas of expansion.
See anything that's particularly ripe for share gains as we move into 'twenty.
Good morning, and good to hear from you.
There is no change to date as it relates to utilization.
That we don't end up completely removing access to care in the community kind of locations. If we did that, what would happen is FAA. Folks would actually wait until they were sicker and had much much broader, uh, complications before they went into the, ER, and 1 of the metroplexes and they ended up in the ICU and we had actually raised cost of healthcare. So, uh, that's the biggest risk, uh, from an overall Eco system and, and really a cut and, uh, kind of reimbursement profile. But at today, no, there hasn't been a time, uh, from a Medline brand. You saw outside growth in 2012.
Given our cautious view of the future of what we think could happen depending on what the overall impact if you want to know the number one area that I think it will create a challenge as it is community overall health.
Those folks are heavily.
Select kind of slanted towards that risk of reimbursement going away.
Which may lead to faster consolidation for those community facilities. So that we don't end up completely removing access to care in the community locations. If we did that what would happen is.
Folks that actually wait until they were sicker at much much broader complications before they went into the EUR. One in the Metroplex is made up in the ICU and we actually raised costs in health care. So.
The biggest risk.
From an overall eco system and really kind of reimbursement.
To date, no there hasnt been a time.
From a medline brand you saw outsized growth in 2025, and our surgical kitting business. It was our largest signing year ever sort of hitting us like open our trades about poetry is all the way in that nursing procedure trays and think about Ctrip mobile trades.
In our surgical kiting business. It was our largest assigned year ever. Uh, certificate is like open heart. Trace lab Co Trace all the way in the nursing procedure trace and think about future removal trays, uh, in kind of nursing procedure kits, or dressing change trays, um, that, uh, we believe we will continue to see outside of growth, uh, in 2026. Uh, and, and the nice thing about that business is the Tam expansion is organic because we can work with our customers to find those categories or those. Uh, really procedures that have many items, they're having to pick to care for the patient and create that Consolidated delivery model, uh, through a custom kiting solution where they take 1 item that everything they need for that procedure. Uh, and really it creates a much more cohesive solution for the customer and leads to better outcomes for the patients. So I think there's opportunity there, I think laving diagnostics at 25 billion dollar market that we currently do a billion dollars in is something we're very excited about uh that we should see uh significant growth in on the go forward basis to
And kind of nursing procedure kits addressing change trade zones that we believe will continue to see outsized growth in 2026.
And the nice thing about that business as the Tam expansion is organic because we can work with our customers define those categories of those procedures that have many items that are having to pick to care for the patient and create that consolidated delivery model through a custom kitting solutions, where they pick one item that everything that proceed.
Sure.
And really it creates a much more cohesive solution for the customer and leads to better outcomes for the patients. So I think there's opportunity there I think <unk> diagnostics at $25 billion market that we currently do a $1 billion and it's something we're very excited about that.
Years. We're going to see significant growth. So I think we've got many different vert verticals that we'll be able to take advantage of from an opportunity set perspective. But from a brand perspective, uh surgical kidding uh really think about um, what's happening as it relates to the lavender diagnostic growth and then Frontline care. I think we'll continue to see growth there and I feel confident in all of them, which we saw 10% growth in the Medline brand this past year.
Great. Thank you.
We should see significant growth on a go forward basis, just purely because of the market in and of itself.
Thank you. 1 moment for our next question.
Is looking.
Change is ripe for disruption and Theyre looking for differentiation. When you look from a channel or a market perspective, you start looking at this in office 9 billion of our market that we think $1 $8 billion.
Our next question will come up. I know Michael Journey from Ling Partners. Your line is open.
Again, another area I think we'll see outsize growth some of the newer segments, we've gotten into animal health, a $4 billion market that.
We just got into in the last couple of years, we're going to see significant growth. So I think we've got many different verticals that will be able to take advantage of from an opportunity set perspective, but from a brand perspective.
Article Kitting.
Really think about.
Uh, good morning and thanks for taking the question. Maybe to build on Lisa's ever so slightly. You talked a lot about Capital deployment, cash flow, generation Debt, Pay down 1 thing, you didn't spend as much time talking about is m&a. As you think about, you know, forget the organic expansion. What are some of the best opportunities that are ripe for m&a from here and maybe just because it's your first call as well. Can you give us some of the more recent success stories you've had be it product or Channel based on using m&a to bolster your offering. Thank you.
Whats happening as it relates to the <unk> diagnostics growth and then frontline care I think we'll continue to see growth.
I feel confident in what we saw 10% growth in the bottling brands faster.
Great. Thank you.
Thank you Laura for next question.
Next question will come from the line of Michael Cherny from Leerink Partners. Your line is open.
Yep. We're pretty optimistic about m&a. As you know historically our 90% of our growth has been organic. Only 10% has been through m&a however um just because of the IPO and how we handle it, we have a billion 9 in cash on the books specifically allocated for looking for those m&a opportunities. And I think the market didn't end up itself as a right or for m&a that you're going to see some uh of our competitors.
Good morning, and thanks for taking the question maybe to build on leases ever. So slightly you talked a lot about capital deployment cash flow generation debt Paydown. One thing you didn't spend as much time talking about is M&A as you think about forget the organic expansion what are some of the best opportunities that are right for M&A.
From here and maybe just because this is your first call as well can you give us some of the more recent success stories, you've had be it product or channel based on using M&A to bolster your offering thank you.
We're pretty optimistic about M&A as you know historically, our 90% of our growth has been organic only 10% of spend through M&A.
Forever.
Because of the IPO and how we handle that we have a $1 billion of cash on the books specifically allocated for looking for those are M&A opportunities. So I think the market itself is bright.
M&A I think youre going to see some.
Of our competitors sell some of their non core assets. Some of our competitors are actually looking to move up.
I am going to clinical curve to those class III class four devices, where the class one and two don't make sense and their overall product portfolio. So I think we're going to see some opportunities there for us to take advantage of.
Sell some of their non-core assets. Uh, some of our competitors are actually looking to move up, uh, like the clinical curve to those class 3, and class 4 devices where the class 1 and 2, don't make sense and their overall product portfolio. So I think we're going to see some opportunities there for us to take advantage of. Uh I very, very similar to channels. All right, we're going to continue to look at channels. We bought diamet in 2012 to get in the position office space. It was a 50 million dollar position office distributor. We bought it because, uh, the owner, we thought could help us actually build the business model that to 1.8 billion for business. For us, that was a great acquisition. Uh, recently we bought comment texts skin care line, uh, which was a, which again, was a non-core asset for them. Uh, we bought Sinclair Dental business, and then not too distant past, uh, to really test out the dental Market in Canada to see how that looks. Um, and we bought the surgical, so kind of draping down but surgical drape business from uh micro Tech from Eagle lab last year which again was a non-racist for them.
Very very similar to channels all right, we're going to continue to look at channels, we bought <unk> in 2012.
The office space of the <unk>.
$50 million of physician office distributor, we bought it.
The owner, we thought could help was actually built the business model.
$8 billion business for us that was a great acquisition.
Recently, but context skin care line, which was which again was a noncore asset for them.
Um and then we're looking at Services, right? We a couple years ago, we bought a a solution uh that actually provides perfect card management for our customers uh called pref connect. Uh so we're looking at product categories that we think fit within the flywheel of who we are. We're looking for markets or channels that can allow us to expand our, our really our Tam expansion if you will or to strengthen our physician and existing Market that we serve uh or what kind of service offering you can actually make us better uh on to go forward basis and we will
Sinclair dental business in the not too distant past.
Need to do that. But I do think there's opportunities and then I also believe uh there's going to be some opportunities from an m&a, perspective internationally, that will help us accelerate the growth outside of the US.
Really test out the dental market in Canada to see how that looks.
And we bought the surgical suite draping surgical type business from micro Tech from Ecolab last year, which again was a noncore asset for them.
And then we're looking at services right couple of years ago, we bought it.
Our next question will come line of Patrick n Donnelly from City. Illinois is open.
Solution that actually provides carpets card management for our customers called <unk> connect so we're looking at product categories that we think fit within the flywheel, who we are we're looking for markets or channels that can allow us to expand our really our Tam expansion, if you will or to strengthen our position in existing markets that we serve.
Or what kind of service offering can actually make us better.
On a go forward basis, and we will continue to do that but I do think there's opportunities and then I also believe.
There's going to be some opportunities from an M&A perspective internationally that will help us accelerate the growth outside of the U S.
Thank you one moment for our next question.
Yes.
Our.
Our next question will come from the line of Patrick Donnelly from Citi. Your line is open.
Hey, guys. Thanks for taking the questions.
It might be one for you just you touched a little bit on some of the pricing strategies around tariffs would love. If you could just expand a little more how you are approaching the pricing side, where youre looking to be strategic in terms of capturing some of that along is that still an upside lever as we go through the year.
Hey guys, thanks for taking the questions. Um, Mike, it might be 1 for you. Just you touched a little bit on some of the pricing strategies around tariffs would love. If you could, just expand a little more how you're approaching the pricing side where you're looking to be strategic. In terms of passing. Some of that along is that still an upside lever as we go through the year. Um, it would be helpful just to talk through the pricing strategy, a bit, particularly on the tower side. Thank you guys. Yeah, sure. Hi Patrick. So, yeah, in 2025, we we implemented our Playbook. Um, that we've been implementing for years as it relates to managing our cost structure, and our products to provide the best value to our customers that Playbook includes uh, both um, moving production around us to the lower costs locations and through includes driving down improving efficiencies in our own manufacturing facility. We Leverage The usmca and that at Roi protocols as well and we did Implement a price increase that price increase happened in August of last year. That was a tariff specific price increase. We do not expect to do any additional tariff price increases.
Be helpful. Just to talk to the pricing strategy a bit, particularly on the tower side. Thank you guys sure Hi, Patrick So yes in 2025, we implemented our playbook.
That we've been implementing for years as it relates to managing our cost structure and our products to provide the best value to our customers that playbook includes.
At this time, uh, we have returned back to our normal pricing model, which is every year, we do, what's called Smart Pricing once a year twice a year once in January and again, in July and those typical price increases as we've called out in the past are, are typically less than 50 basis points of overall growth for us as a company. Price has not been a lever for growth really, we've been driving volume and share games through our our continued value delivery to our customers.
Understood. Thank you, guys.
1 moment for our next question.
Both.
Moving production around us to lower cost locations and through includes driving down improving efficiencies in our own manufacturing facility, we leveraged the Usmc Nia Adobe protocols as well and we did implement a price increase that price increase happened in August of last year that was a tariff specific price increase we do not expect to do any additional tariff.
Next question comes from the line of Glenn santangelo from Barclays. Your line is open.
Price increases at this time, we have returned back to our normal pricing model, which is every year, we do what's called a smart pricing once a year twice a year once in January and again in July.
Typical price increases as we called out in the past are typically less than 50 basis points of overall growth for us as a company price has not been a lever for growth really we've been driving volume and share gains through our continued value delivery to our customers.
Uh, yeah, thanks maybe just 1 quick 1 on the regulatory front for me. I mean, I feel like we we've already talked about tariffs but but Jim I'm kind of curious. Have you heard anything else on the regulatory front? That's sort of on your radar. And, you know, in particular, I'm sort of focused on the CMS has been weighing around the proposal. Uh, that would benefit hospitals that buy American. I'm just kind of curious if there's anything else. You know, that that's being kicked around Washington, that that, that you guys may be have on your radar screen at this point. Thanks.
Sure.
Understood. Thank you guys.
Okay.
One moment for our next question.
Yeah.
Your next question comes from the line of Glen Santangelo.
From Barclays. Your line is open.
Yeah. The the specifically where everything that domestic PPE uh, tied to to Medicare reimbursement, right? And and that yep, represents about 20% of the total spend in healthcare, so it's it's not meaningful, but but here's the reality. Um, what's happening? Now very, very similar to the section. 232 is where you can actually uh, publicly submit comments. We suggested and we
Yeah. Thanks, maybe just one quick one on the regulatory front for me I mean, I feel like we've already talked about tariffs, but Jim I'm kind of curious have you heard anything else on the regulatory front, that's sort of on your radar.
In particular im sort of focused on the CMS has been waiting around the proposal.
That would benefit hospitals that buy American I'm, just kind of curious if theres anything else.
move Productions of domestically. If there was committed volume by the government, there's going to have to be some significant, uh, segments if you will, in order for us to move production on tpe into the United States. If you have to remember the cost of the manufacturing, some of these items in the states is 3 to 7x, what it is out of the United States. So it's going to have to be a meaningful impact in order for that to happen. Um, what we will do is we will continue to Advocate, uh, and and
That's been kicked around Washington.
Can you guys maybe have on the radar screen at this point.
Okay.
You, specifically referencing the domestic PPE tied to Medicare reimbursement right.
<unk> represents about 20% of the total spend in health care, so it's not meaningful but here's the reality.
What's happening now very very similar to the <unk>, where you can actually.
Publicly submit comments we suggested.
We can move production domestically if there was committed volume by the government there is going to have to be some significant.
<unk>, if you will in order for us to move production of PPE in the United States you have to remember the cost of manufacturing some of these items and the stages three to seven X what it is.
So it's going to have to be a meaningful impact.
<unk>.
Communicate, what we think it would take in order to move production here during the pandemic, we actually did stand up a face mask, uh, production facility in Lithia Springs, Georgia. Um, and we will continue to do those types of things where it makes sense. Uh, candidly. I don't think that's more near-term because the cost model won't justify it. Uh, and our jobs to, to first and foremost, uh, deliver the right cost quality, and service to our customers, regardless of where we can find that. So, we're always looking both in, uh, country and out of country. Where do we deliver on those 3? Key metrics cost quality and service? Um, so if there's some kind of, uh, advantageous major that the government wants to put in, place to actually inscent a manufacturing of these Goods in the states. Uh, we will, we will participate in that, but I can tell you, I don't think that's near-term and it's a discussion now. It's not a policy change and and that's all we're hearing today.
What we will do is we will continue to advocate.
Okay, thank you.
And communicate what we think it would take in order to move production here during the pandemic, we actually did stand up a face mask production facility in Lithia Springs, Georgia, and we will continue to do those types of things where it makes sense candidly.
Thank you. 1 moment for our next question.
Our next question will come from the line of Kevin Kendo from UBS. The line is open.
Candidly I don't think Thats near term because the cost model not justify it.
And our job is to first and foremost deliver the right cost quality and service to our customers regardless of where we can find that so we're always looking both in country and out of country, where do we deliver on those three key metrics cost quality and service.
Thanks, thanks for taking my question. Can you explain sort of the logistics of how if and when the tariffs change, what, what you actually do? What the process is, um, like what actually happens, what happens to the inventory? That's already here. What happens at the docks in the ports when when tariffs are applied
So if there's some kind of advantageous nature of that the government put into place to IC.
The manufacturing of these codes in the states.
We will participate in that but I can tell you I don't think thats near term and it's a discussion now it's not a policy change and Thats. All we are hearing today.
How and when would you actually see any impacts financially? I'm just trying to understand like how this all works logistically and and what it would actually mean to you uh from an accounting perspective, Financial perspective, inventories on hand and and stuff like that.
Okay. Thank you.
Thank you one moment for our next question.
Our next question comes from the line of.
Kevin Caliendo from UBS Your line is open.
Thanks, Thanks for taking my question.
Can you explain sort of the logistics of how.
If and when the tariffs change what what.
You actually do what the processes.
Like what actually happens what happens to the inventory that's already here what's happened at the docks in the ports when when tariffs are applied.
And when would you actually see any impact financially I'm just trying to understand like how this all works logistically and what it would actually mean to you.
From an accounting perspective financial perspective inventories on hand and stuff like that.
Yeah. Thanks, Kevin So if you think about the tariff rates the rate this changed effective yesterday to 10% across the board.
Yeah, thanks Kevin. So, if you think about the Tariff, uh, rates the rate has changed effective yesterday to 10% across the board from the 122 chains that the administration announced so effective as the yesterday and the arrived and do it, and do a port yesterday would be charged at 10% tariff Duty. Um, prior to that anything that was, um, that was already in our inventory. Uh, would be would be in our inventory and capitalized at the higher tariff rate. And if you think about our inventory, we carry more inventory in a hand than most of our competitors. And all of our competitors potentially to provide the best level of service to our customers. And so our Medline brand inventory is somewhere in the neighborhood of call it 3 to 5 months on hand. So if you think about what's sitting in our inventory, today, there's probably roughly 4 months of tariffs inventory at a higher tariff rate. So it takes time for that to bleed off of our inventory, which is why you see the the timing uh impact that I talked about in 2025 low in the 2026. Um, so even if the Tariff rate were to change the 10% yesterday, which it did, you would still
22 changes that the administration announced so effective as of yesterday I didn't arrive and do it into a port yesterday with a charged 10% tariff duty.
Yes, uh be impacted in our cost of goods by the higher tariff, burden to the next, Call It 4 to 5 months into our p&l.
Prior to that anything that was.
Thank you. 1 moment for our next question.
That was already in our inventory would be would be in our inventory and capitalize at the higher tariff rate and if you think about our inventory we carry more inventory in hand, and most of our competitors in all of our competitors potentially to provide the best level of service to our customers and so our med <unk> brand inventory is somewhere in the neighborhood of call. It three to five months on hand, So if you think about what's sitting in our inventory.
Next question will come from the line of Charles Ry from TD. Colin is open.
Great, thanks for taking a question. Maybe just a clarification.
Today, Theres, probably roughly four months of tariff inventory at a higher tariff rate.
So it takes time for that to bleed off of our inventory, which is why you see the timing impacts I talked about in 2025 well into 2026.
So even if the tariff rate were to change the 10% yesterday, which it did you will still see us be impacted in our cost of goods by the higher tariff burden for the next call. It four to five months into our P&L.
Thank you one moment for our next question.
Can you uh give us a sense on the timing of when you expect those new contracts to roll on and sort of remind us sort of what your expectations for Medline brand conversion within that new Prime vendor uh cohort here in 26 and maybe just think about how that Ram typically goes and and if there's any sort of deviation or kind of adjustments relative, sort of your historic patterns you would expect for this big trunch thanks.
Your next question comes from the line of Charles <unk> from TD Cowen Your line is open.
Okay, great. Thanks for taking the question, maybe just a clarification there Mike on tariffs real quick first.
Is there any reason you wouldn't apply for a refund on the tariffs even though the 122 are in place and then my main question. Though is can you remind us obviously, you've signed $2 4 billion of prime vendor contracts for last year can you.
Give us a sense on the timing of when you expect those new contracts to roll on and sort of remind us sort of what's your expectation for medline brand conversion within that new prime vendor.
Cohort here in 2006, and maybe just think about how that ramp typically goes in and if there's any sort of deviation or kind of adjustment relative to sort of your historic patterns you would expect with this big tranche.
I'll take that one.
Jim So first and foremost, yes, absolutely we will apply for the refunds.
I'll take that 1. Uh, this is Jim, so, first and foremost of the absolutely, we will apply for the refunds. Um, and and uh, you and we want to take bets on when those are actually going to come through, right? And so we will 100% apply for the refund uh and take advantage of any opportunity for us to uh, regain that business. So that's first, um, as Mike said, there are already putting new service in place. Uh, we're analyzing what that means, uh, in terms of relative skill to what the uh, Liberation day terrorists were and how does that relate to our customers from a cost perspective? And from a price perspective, um, as it relates to the prime relates to the 2.4 billion in prime minister signings, 25% of that Revenue was realized in 2025 you'll see brought these 65% realizing 20206 and 15% of that realized in 2027 from us. Throughput perspective, from a Medline brand uh the way the Medline brand normally works when we sign a new Prime in our customer, we already have 10% of the business in our brand.
<unk>.
Yeah.
And we wanted to take bets on when those are actually going to come through right and so we will have 100% applied for the refunds.
Take advantage of any opportunity for us to regain that business. So that's first.
As Mike said they are already putting these tariffs in place.
We're analyzing what that means in terms of relative scale to what the <unk>.
<unk> data tariffs, where and how does that relate to our customers from a cost perspective and from a price perspective.
It relates to the relates to the $2 4 billion in Prime Minter signings, 25% of that revenue was realized in 2025, roughly 65% realized.
26, and 15% of that realized in 2027 from a throughput perspective.
Medline brand.
The way the Medline brand normally words, when we sign a new private or customer, we already have 10% of the business and our brand.
And when you think about that kind of the conversion curve day, one at 90% other people's products WOMAC limit when the truck yesterday was maroon and today, it's blue 90% of the products as third party distributors, 10% is in our brand and the first year, we normally see.
Um, and when you think about the kind of the conversion curve day, 1 is 90% of other people's products. When they, when the, when the truck yesterday was maroon and today, it's blue. 90% of the products is third-party, Distributors. 10% is in our brand and the first year we normally see, uh, a list of 100% of Medline brand conversions year-over-year. So from 10 to 20%, uh, and then from a, from a, go forward basis, beyond that, uh, we have a intentional pace of change learn through many years of trial. And tribulation to make sure we change at a pace of change that is accepted in a positive manner manner. So, we look for a 3 to 4% lift in additional Medline brand. Conversions post year 2, uh, and the opportunity in the acute care. Business is roughly 60% convertible opportunity of the total business, uh, in a traditional nursing home. Uh, it's up to 80%, uh, and and, and the other segments in the non acute segment, it tends to be higher than what, uh, some of the other areas are. But, um, we don't expect to see much of an acceleration, although we did see a few customer 68 turning
Get it in front of the cuts and reimbursement, but we think the pace of change is going to be very, very similar to what it has been in the past.
Great. Thank you.
A list of 100% of online brand conversions year over year, so from 10% to 20%.
Thank you. 1 moment for our next question.
And then from a go forward basis beyond that.
We have a intentional pace of change learned through many years of traffic trial and tribulation to make sure. We can change at a pace of change that is accepted in a positive manner. So we look for a 3% to 4% lift in.
Our next question will come from the line of Jason Bedard from Piper Sandler. Your line is open.
An additional medline brand conversions post year or two.
And the opportunity in the acute care business is roughly 60% convertible opportunity of the total business.
In a traditional nursing home is up to 80%.
And the other segments in the non acute segment it tends to be higher than what some of the others are but.
Hey good morning, thanks for taking the question. Um Mike hoping you can help um with an accounting 1 here. Just how you're how you handle hedging and how we should think about FX movements impacting your cogs line. Um asking really in part as we look at movements in the pace over the past year, knowing you have a sizable and growing manufacturing presence in Mexico. Just so really how how should we think about those Dynamics flowing through the p&l this year? Thank you.
We don't expect to see much of an acceleration, although we did see a few customers accelerate try and get it in.
Hunt.
The cuts in reimbursement, but we think the pace of change is going to be very very similar to what it has been in past.
Yeah, thanks for the question Jason. Um, so we we we do not hedge, um, our currency. Um, we have a natural Hedge for the vast majority of our business.
Great. Thank you.
Thank you.
One moment for our next question.
Um, however, that being said, as you call out, we do have a little bit of currency risk, as it relates to our Mexico operations, um, the Mexican peso, um uh does impact our labor costs.
Our next question will come from the line of Jason Bednar from Piper Sandler Your line is open.
Hey, good morning, Thanks for taking the question Mike.
Mike, hoping you can help.
With an accounting one here just how you're how you handle hedging and how we should think about FX movements impacting your Cogs line.
Asking really in part as we look at movement from the pace over the past year. When you have a sizable and growing manufacturing presence in Mexico, just so really how should we think about those dynamics flowing through the P&L. This year. Thank you.
Yes, thanks for the question Jason.
Um, and so we have, we have a, a bacon, assumption into this, uh, into this 2026 guide that our current Mexico. Uh, rate is the current rate it has a roughly today. Um, and if that were to change, obviously it would impact, uh, either favorably or unfavorably, the overall earnings of the business that being said, uh, we obviously have initi efficiency plans in place nicias in place to reduce the cost of our products. So we'll continue to do that with labor being 1 element. There are other elements as well such as our sourcing savings. That will help to drive that that impact to our business.
So we do not hedge.
Our currency.
Got it. Thank you.
We have a natural hedge for the vast majority of our business.
1 moment for our next question.
However that being said as you call out we do have a little bit of a currency risk as it relates to our Mexico operations.
Our next question will come from the line of David Larsen from btig. Your line is open.
Mexican peso.
It does impact our labor costs.
And so we have we have baked in assumption into this.
Into this 2026 guide and our current Mexico right at the current rate is roughly today.
Hi uh congratulations on uh the great quarter in year. Can you talk a little bit more about um Automation in your picking and packing capabilities? I think you mentioned uh introductory comments.
That were to change obviously what impact.
Favorably or unfavorably the overall earnings of the business that being said, we obviously you have.
As you planned in place initiatives in place to reduce the cost of our products. So we will continue to do that with labor being one element the other amounts as well such as our sourcing savings that will help to drive that impact to our business.
That I'm timing uh service things like that would be very helpful. Thank you.
Got it thank you.
One moment for our next question.
Our next question will come from the line of David Larsen from BTG. Your line is open.
Hi, congratulations on a great quarter and year can you just talk a little bit more about automation in your picking and packing capabilities. I think you mentioned in your introductory comments you got the low unit of measure very well covered and youre expanding potentially into the larger.
Our products just what could that mean overall any numbers you could put around it would be great lets say it actually works how far can you expand this into your facilities.
Yeah, so you you have to know ahead just for contact, 70% of our lines are less than case uh which is why Auto store is. So important 2100 robots across our Network, we were the first installation of auto store in the United States. Uh, and it's been an extremely successful Model Auto store, uh is a good person, taking module it, shrinks the square footage of the distribution space from a manual pick, uh, which increases the capacity for utilization in our distribution centers. Uh, and it also increases the quality of the accuracy and the speed and the throughput for our customers. And it's something that we will continue to expand across our Network 19 facilities currently have that. Uh and we will expand even further this year, uh, from a, uh, ownership of real estate. I mentioned we have 29 million square feet of distribution space in the US, that will be expanded in the next year, as we add a couple new DC's.
Metrics around timing.
It seems like that would be very helpful. Thank you.
Yes.
Get to know him just for context, 70% of our lines and less the case, which is why auto source. So important for 'twenty 100 robots across our network. We were the first installation of August towards the United States.
And it's been an extremely successful model auto store.
As a goods to person picking module that shrinks the square footage in the distribution space from a manual pick.
Which increases the capacity for utilization in our distribution centers.
And it also increases the quality accuracy and the speed in the throughput for our customers and it's something that we will continue to expand across our network 19 facilities currently have that.
Um but that 29 million square feet, 1 of the challenges I gave are head of Ops, how do we make that? 29 million square feet operate as if it was 32 million square feet. The only way you do that is if you shrink the internal capacity and the largest real estate owner in a distribution center, is your bulk, pick your pallet Goods where you store stuff, a symbotic will help us do that. It helps shrink the internal footprint, leverages Ai and Robotics to actually create, uh, quality, uh, picking faster, uh, much more reliable through a decreases, the labor burden and, and allows us to increase the capacity within our existing footprint, uh, our
And we will expand even further this year.
From a.
Ownership of real estate as I mentioned, we have 29 million square feet of distribution space in the U S that will be expanded in the next year as we had hoped.
Yes.
But that 29 million square feet, one of the challenges I gave our head of ops is how do we make that 29 million square feet operated as it was 32 million square feet. The only way you do that shrink the internal capacity and the largest real estate owner in the distribution centers or bulk pick your palette goods, where you store stuff.
Symbiotic will help us do that it helps to shrink the internal footprint Leverages AI and robotics to actually create.
The first installation, this is Columbus Ohio to take about 18 months, to get that thing deployed. That is a beta, right? That's going to we're going to test it out and if it proves that we will move that to the hubs across the country because uh, a couple things 1, it'll decrease the labor burden 2. It'll shrink the internal footprint throughout our Network. So we we have more capacity within our existing Network without having to build a new building. Um, and we think it's something that will create differentiation in our ability to serve our customers. So um, AI automation uh, and really technology is is focused specifically on reducing the cost and increasing the quality and service to our customers, throughout our distribution Network and it something we will continue to invest in our go forward basis.
Quality picking faster much more reliable decreases the labor burden and it allows us to increase the capacity within our existing footprint.
Our first installation is in Columbus, Ohio to take about 18 months to get that thing deploy that as a beta right, that's kind of where to test it out and if it proves out but we will move that to the hubs across the country because a couple of things one it will decrease the labor burden to shrink the internal footprint through our network. So we hope we will have more capacity in our existing network.
That's that's great. And then I think you mentioned that you want a large IDM that had been using 5 Distributors previously. Can anybody just talk about that when in particular and what enabled you to to bring that on on board budget pricing just any more color? There will be very helpful.
<unk>.
Building and.
We think it's something that will create differentiation and our ability to serve our customers. So.
AI automation and really technology is focused specifically on reducing costs and increasing the quality and service to our customers through our distribution network something we will continue to invest in a go forward basis.
Yeah, this is a a healthcare system that was a merger of 2 very large systems. Uh, 1 side of the house Medline with the Prime Minister and there are 2 care business. The other side of the house, uh, someone else was the Prime Minister for their non-acute business, uh, and uh, 1 side of the house. Uh, another vendor was the Prime Minister for the surgery center business. The other side of the house at different vendor was the Prime vendor for their s Surgery Center business. Same thing with Physician Offices, same thing for labs. So every care setting that they owned across each
That's great and then I think you mentioned that you won a large IDM that had been using five distributors. Previously can you maybe just talk about that win in particular and what enabled you to bring that onboard was the pricing just any more color there would be very helpful.
Yes. This is a health care system.
Merger of two very large systems.
One side of the house Medline with the prime they are in their acute care business. The other side of the house.
Someone else was the prime minister for their non acute business.
And one side of the house.
Another vendor was the parameter for the surgery Center business. The other side of the house a different vendor with the prime minister for their service.
Service Center business same thing with physician office same thing for lab. So every care setting that they owned across each setting had a different.
Provider partner and that's normally what happens when you have systems that consolidate our aggregate multiple quest to create traded in acute care facilities in a pretty fast fashion when they put the RFP market. They put the RFP market, saying, we will only accept bids from folks that can serve the entire continuum of care we own. So we can number one maximize.
Setting had a different uh, provider partner, and and that's normally what happens when you have systems that consolidate or aggregate multiple classes, that create trade in a key care facilities that are pretty fast fashion. Uh, when they put the RFP to Market, they put the RFP to Market saying we will only accept bids from folks that can serve the entire Continuum of Care we own. So we can number 1 to maximize cost. How do we get the best value from a cost perspective? Number 2, how do we look at our entire network, uh, to really create Consolidated really Channel optimization and standardization of across both our delivery model and the products that we use across our ministry, um, and they were looking for resilience, uh, sustainable supply, chain Partners. So, um, listen, when they put the bid to Market, uh, mine is the only provider that can serve every single care setting they own. So they went from multiple Distributors across multiple classes, to the trade, to 1 distributor for their entire Ministry. Which is something that we we feel very proud and thankful to be a part of
Um, it actually is just now going live, um, and it's something something that is pretty robust. It's something that I think is going to be the norm in the future because customers need to have
Cost how do we get the best value from a cost perspective number two how do we look at our entire network.
Disability across their entire network, regardless of the Care setting. The model is being delivered in, so they can drive maximum value and savings, uh, and really get the best overall outcome for their caregivers and for their patients,
Thanks very much, congrats.
To really create consolidated really channel optimization and standardization across both our delivery model and the products that we use across our ministry.
Thank you.
so, maybe just
And they were looking for resilience sustainable supply chain partner so.
Listen when they put the bid market.
<unk> is the only provider that every single person in day, one so they went from multiple distributors across multiple classes of trade one distributor for their entire Ministry, which is something that we feel very proud and thankful Arnaud.
It actually is just now going live.
And it's something something that is pretty robust, it's something that I think is going to be the norm in the future because customers do you have visibility across their entire network regardless of the curious I think the model is being delivered to them. So they can drive maximum value and savings.
So thanks everybody for joining, thank you very much, we appreciate it.
Alrighty, you can go ahead and disconnect.
Thank you for participating, you may now. Disconnect everyone have a great day.
Get the best overall outcome for their caregivers and for the patient.
Thanks very much congrats.
Thank you.
So maybe just.
Just two quick things before I wrap.
When Jim said it earlier, but I just want to reiterate because I know everybody is getting used to the terms of the business total new customer signings. When we say that that is the prime vendor.
The vendor.
Wanted to reiterate that.
Second thing is thank you to the analysts are actually keeping your question shorter so that people had a chance to ask we appreciate that as well and for those that did not get a question in.
For a discussion with you after the call.
Everybody for joining thank you very much we appreciate it.
Operator.
Thank you for participating you may now disconnect everyone have a great day.
Okay.
[music].