AVTR 10-K & 10-Q changes, risk factors and insider trading

We face competition across our products and the markets in which we operate, both domestically and internationally. Competition is driven by proprietary technologies and know-how, capabilities, consistency of operational performance, quality, supply chain control, price, value and speed. Our competitors range from regional companies, which may be able to more quickly respond to customers’ needs because of geographic proximity, to large multinational companies, which may have greater financial, marketing, operational and research and development resources (R&D) than we do, allowing for a more rapid response with new, alternative or emerging technologies. Such actions may increase pricing pressure on us or cause us to lose existing market share. In addition, consolidation trends in the biopharma and healthcare industries have served to create fewer customer accounts and to concentrate purchasing decisions for some customers, resulting in increased pricing pressures. New competitors in low-cost manufacturing locations, particularly developing markets, may create increased pricing and competitive pressures and impede our goal to grow in those markets. Failure to anticipate and respond to competitors’ actions may adversely affect our results of operations and financial condition.

Effective January 1, 2024, we transitioned to a new operating model consisting of two complementary business segments, the Laboratory Solutions segment and the Bioscience Production segment. In conjunction with our new operating model, we launched a multi-year cost transformation initiative, with the objective to deliver approximately $300 million in annual gross run-rate savings by the end of 2026. We have expanded this initiative and now expect to generate approximately $400 million in run rate gross savings by the end of 2027. We have also committed to certain significant restructuring activities in connection with the initiative. The initiative and restructuring activities are subject to a variety of known and unknown risks and uncertainties, including the potential that we may not be able to successfully execute on the initiative or achieve the anticipated benefits and cost-saving opportunities, or that achieving such benefits and opportunities may take longer to realize than expected. If we are unable to achieve the expected benefits from the initiative and manage the effects of the restructuring activities, this could have an adverse effect on our business, results of operations and financial condition.

As we continue to refine our business model, we may also pursue divestitures in line with our new operating model. For example, in October 2024, we divested our Clinical Services business, a component of our Laboratory Solutions reportable segment. We also plan to continue expanding our commercial sales operations and scope and complexity of our business both domestically and internationally, while maintaining our commercial operations and administrative activities. Our ability to manage our business and conduct our global operations while also pursuing our strategies for improving growth and optimizing costs requires considerable management attention and resources and is subject to the challenges of supporting a rapidly growing business in an environment ofwith multiplevarying languages,cultural, cultures and customs,commercial, legal and regulatory systems, alternative dispute systems and commercial markets.frameworks. Our failure to implement these strategies in a cost-effective and timely manner could have an adverse effect on our business, results of operations and financial condition.

As part of our business strategy, we intend to continue to review,may pursue and complete selective acquisition opportunities. There can be no assurances that we will be able to complete suitable acquisitions for a variety of reasons, including the identification of, and competition for, acquisition targets, the need for regulatory approvals, the inability of the parties to agree to the structure or purchase price of the transaction and the inability to finance the transaction on commercially acceptable terms. In addition, any completed acquisition will subject us to a variety of other risks, including: (i) potential adverse effects on our business relationships with existing or future suppliers and other business partners (in particular, to the extent we consummate acquisitions that vertically integrate portions of our business); (ii) the assumption of substantial actual or contingent liabilities, known or unknown, including environmental liabilities; (iii) failure to meet expectations of future financial performance; (iv) delays or reductions in realizing expected synergies; (v) substantial unanticipated costs or other problems associated with acquired businesses or devoting time and capital to investigate a potential acquisition that is not completed; (vi) failure to achieve intended objectives for a transaction; (vii) failure to retain key personnel, customers and suppliers of the acquired business; and (viii) adverse impacts resulting from impairment charges on goodwill, other intangible assets and tangible assets. These factors related to our acquisition strategy, among others, could have an adverse effect on our business, financial condition and results of operations.

Many of the customers we serve have experienced, and are expected to continue to experience, significant industry-related changes, including reductions in governmental funding or payments for biopharmaceutical products, expirations of significant patents, adverse changes in legislation or regulations regarding the delivery or pricing of general healthcare services or mandated benefits, and increased requirements on quality. General industry changes include: (i) development of large and sophisticated group purchasing organizations and on-line auction sites that increase competition for, and reduce spending on, laboratory products; (ii) consolidation of biopharmaceutical companies resulting in a rationalization of research expenditures; (iii) increased regulatory scrutiny over drug production requiring safer raw materials; (iv) customers’ purchasing the products that we supply directly from our suppliers; and (v) significant reductions in development and production activities.

The high-purity materials and customized solutions we offer are highly exacting and complex due to demanding customer specifications and stringent regulatory and industry requirements. Our operating results depend on our ability to execute and, when necessary, improve our global quality control systems, including our ability to effectively train and maintain our employees with respect to quality control. A failure of our global quality control systems could result in problems with facility operations or preparation or provision of defective or non-compliant products. Nearly all of our products are subsequently incorporated into products sold to end users by our customers, and we have no control over the manufacture and production of such products. Our success depends on our customers’ confidence that we can provide reliable, high-quality products. We believe that customers in our target markets are likely to be particularly sensitive to product defects and errors. Our reputation and the public image of our products and technologies may be impaired if our products fail to perform as expected or fail to meet applicable quality criteria, specifications or performance standards. If our products experience, or are perceived to experience, a material defect or error, this could result in loss or delay of net sales, damaged reputation, diversion of development resources, and increased insurance or warranty costs, any of which could harm our business.

We have global operations and derive a substantial portion of our net sales from customers outside of the United States. Accordingly, our international operations or those of our international customers could be substantially affected by a number of risks arising from operating an international business, including: (i) limitations on repatriation of earnings; (ii) taxes on imports; (iii) the possibility that unfriendly nations or groups could boycott our products; (iv) general economic and political conditions in the markets where we operate, including changes in inflation and interest rates, instability in the global banking industry, rising energy prices, potential energy shortages and actual or anticipated military or political conflicts, such as the ongoing Ukraine/Russia or Israel/Hamas conflicts; (v) foreign currency exchange rate fluctuations; (vi) escalation of geopolitical tensions or potential changes in diplomatic and trade relationships, including potential changes underto thetrade secondrestrictions, Trumptariffs administrationand exchange controls and political and trade uncertainty in China along with potential retaliatory tariffs by other countries; (vii) a global health crisis; (viii) potential increased costs associated with overlapping tax structures; (ix) potential increased reliance on third parties within less developed markets; (x) potential changes in trade restrictions, tariffs and exchange controls, such as tariffs that may be proposed by the second Trump administration and potential retaliatory tariffs by other countries; (xi) more limited protection for intellectual property rights in some countries; (xiixi) difficulties and costs associated with staffing and managing foreign operations; (xiiixii) difficulties in complying with a wide variety of foreign laws and regulations and unexpected changes thereto and costs associated with compliance; (xivxiii) expanded enforcement of laws related to data protection and personal privacy; (xvxiv) the risk that certain governments may adopt regulations or take other actions that would have a direct adverse impact on our business and market opportunities, including nationalization of private enterprise; (xvixv) violations of anti-bribery and anti-corruption laws, such as the FCPA; (xviixvi) violations of economic sanctions laws, such as the regulations enforced by OFAC; (xviiixvii) longer accounts receivable cycles in certain foreign countries, whether due to cultural differences, exchange rate fluctuation or other factors; (xixxviii) the credit risk of local customers and distributors; (xxxix) limitations on our ability to enforce legal rights and remedies with third parties or partners outside of the United States; (xxixx) import and export licensing requirements and other restrictions, such as those imposed by OFAC, BIS, DDTC and comparable regulatory agencies and policies of foreign governments; and (xxiixxi) changes to our distribution networks.

Further, we have a substantial amount of Euro denominated indebtedness, as well as intercompany loans and short-term intercompany balances between entities with the Euro as their functional currency. Fluctuations in the exchange rate between U.S. dollars and Euros may have a material adverse effect on our ability to repay such indebtedness. See Part I, Item 7A, “Quantitative and qualitative disclosures about market risk.”

While we have implemented cybersecurity and data protection measures, our efforts to minimize the risks and impacts of cyberattacks and protect our information systems may be insufficient and we may experience significant breaches or other failures or disruptions that could compromise our systems and data and, ultimately, affect our business operations and our financial position or results of operations. New technology that could result in greater operational efficiency, such as the development and adoption of AI and machine learning technology, may further exposureexpose our systems and businesses to the risk of cyberattacks. Like other companies, the systems and networks we maintain and third-partythird party systems and networks we use have in the past been, and will likely in the future be, subject to or targets of unauthorized or fraudulent access, including physical or electronic break-ins or unauthorized tampering, as well as attempted cyber and other security threats and other attacks such as “denial of service” attacks, phishing, untargeted but sophisticated and automated attacks, ransomware, and other disruptive software. For example, as AI continues to evolve, cyber-attackers could also use AI to develop malicious code and sophisticated phishing attempts. We are also exposed to similar risks resulting from cyber-attackscyberattacks that are experienced by our third-party service providers. For example, we and many of the third-party service providers we rely on use generative AI, which increases the risk that our confidential or proprietary information or personal data could be inadvertently or maliciously exposed. Security breaches can also occur as a result of intentional or inadvertent actions by our employees, third-party service providers or their personnel or other parties.

Given the nature of our business, we collect and store confidential information that customers provide in order to, among other things, purchase products and services and register on our website. We are required to comply with increasingly complex and changing data privacy regulations both in the United States and beyond that regulate the collection, use, sharing, and transfer of personal data. Many of these regulations also grant rights to individuals. Many foreign data privacy regulations (including GDPR in the EU) and certain state laws and regulations (including California’s CPRA) impose requirements beyond those enacted under federal law including, in some instances, private rights of action. For example, the EU GDPR imposes more stringent data protection requirements, including a broader scope of protected data, restrictions on cross-border transfers of personal data and more onerous breach reporting requirements, and greater penalties for non-compliance than the federal data protection laws. Other states and countries continue to enact similar legislation. We are also required to comply with expanding and increasingly complex privacy and data protection regulations in the United States and abroad with respect to reporting adverse events and additional requirements for avoiding or responding to an adverse event. We also have contractual obligations to our customers related to the protection of personal data and compliance with privacy laws.

We rely on a variety of intellectual property rights, including patents, trademarks, copyrights and trade secrets, to protect our proprietary technology and products. We place considerable emphasis on obtaining patent or maintaining trade secret protection for significant new technologies, products and processes because of the length of time and expense associated with bringing new products and processes through development and to the market. We may need to spend significant resources monitoring and enforcing our intellectual property rights and we may not be able to prove infringement by third parties. Our competitive position may be harmed if we cannot enforce our intellectual property rights. In some circumstances, we may choose to not pursue enforcement for business reasons. In addition, competitors might avoid infringement by designing around our intellectual property rights or by developing non-infringing competing technologies. Intellectual property rights and our ability to enforce them may be unavailable or limited in some countries, which could make it easier for competitors to capture market share and could result in lost revenues.

Our brands, particularly our J.T.Baker,J.T. Baker, NuSil, VWR and Masterflex brands, are valuable assets. Therefore, we actively manage our trademark portfolio, including by maintaining registrations for long-standing trademarks and applying to obtain trademark registrations for new brands. We also police our trademark portfolio against infringement. Our efforts to protect and defend our trademarks may fall short or be unsuccessful against competitors or other third parties for a variety of reasons. To the extent that third parties or distributors sell products that are counterfeit versions of our branded products, our customers could inadvertently purchase products that are inferior. This could cause our customers to refrain from purchasing our brands in the future and in turn could impair our brand equity and adversely affect our sales.

We sell our products in industries that are characterized by significant technological changes, frequent new product and technology introductions and enhancements and evolving industry standards. As a result, our customers’ needs are rapidly evolving. If we do not appropriately innovate and invest in new technologies, our offerings may become less desirable in the markets we serve, and our customers could move to new technologies offered by our competitors or make products themselves. Without the timely introduction of new products, services and enhancements, our offerings will likely become less competitive over time, in which case, our competitive position, net sales and operating results could suffer. To the extent we fail to timely introduce new and innovative products or services, adequately predict our customers’ needs or fail to obtain desired levels of market acceptance, our business may suffer.

Our operations depend upon our ability to obtain high-quality raw materials meeting our specifications and other requirements at reasonable prices, including various active pharmaceutical ingredients, components, compounds, excipients and other raw materials, many of which are sole-sourced due to market or customer demands. Our ability to maintain an adequate supply of such materials and components could be impacted by the availability and price of those raw materials and maintaining relationships with key suppliers.

We offer products from a wide range of suppliers. While there is generally more than one source of supply for most of the categories of third-party materials & consumables and equipment & instrumentation that we sell, we currently do not manufacture the majority of our products and are dependent on these suppliers for access to those products. Our ability to sustain our gross margins has been, and will continue to be, dependent in part upon our ability to obtain favorable terms from our suppliers. These terms may change from time to time, and such changes could adversely affect our gross margins over time. In addition, our results of operations and cash flows could be adversely impacted by the acceleration of payment terms to our suppliers and/or the imposition of more restrictive credit terms and other contractual requirements.

We continue to focus on strategies and systems, such as reducing greenhouse gas emissions and packaging waste, to address climate change. However, we face climate and environmental risks and the occurrence of one or more unexpected events, including fires, tornadoes, tsunamis, hurricanes, earthquakes, drought, storms, sea level rise, floods, and other severe hazards or accidents in the United States, the United Kingdom, the EU or in other countries or regions in which we operate could adversely affect our operations and financial performance. Extreme weather, natural disasters, power outages, or other unexpected events could result in physical damage to, and complete or partial closure of, one or more of our manufacturing or distribution centers; temporary or long-term disruption in the supply of products; and/or disruption of our ability to deliver products to customers. Increasing concern over climate change also may result in additional legal or regulatory requirements designed to reduce or mitigate the effects of carbon dioxide and other greenhouse gas emissions on the environment. The effects of climate change and legal or regulatory initiatives to address climate change could have a long-term adverse impact on our business, financial condition and results of operations. We also monitor rules and regulations related to environmental, socialsustainability and governancecorporate responsibility disclosure obligations, which may expose us to increased costs associated with additional reporting obligations. In addition, we have established and publicly announced goals and commitments to reduce our carbon footprint, including targets to reduce greenhouse gas emissions (scope 1, scope 2 and scope 3). We have a broad range of stakeholders, including our stockholders, employees and customers, some of whom increasingly focus on environmental, social and governance matters. If we are unable to achieve, or improperly report on our progress toward, our carbon footprint reduction goals and commitments, this may result in litigation and/or regulatory action as well as negative publicity, which could lead to the loss of business, adverse reputational impacts, diluted market valuations and challenges in attracting and retaining customers and talented employees.

Our success depends on our ability to attract, motivate and retain highly qualified individuals. Competition for senior management and other key personnel in our industry is intense, and the pool of suitable candidates is limited. We have recently experienced changes in our senior management. The failureinability to identify, attract, retain and properly motivate members of our senior management team and other key employees, or to find suitable replacements for them in the event of death, illness or their desire to pursue other professional opportunities, could have a negative effect on our operating results. Additionally, changes in our organization as a result of senior management and board transitions, which we have recently experienced, may have a disruptive impact on our ability to implement our strategy and could negatively affect our business and financial condition.

We face risks related to health epidemics and pandemics, including risks related to any responses thereto by the federal, state or foreign governments, as well as customers and suppliers. A pandemic has in the past and could in the future adversely affect our operations, supply chains and distribution network, and we could experience and expect prolonged unpredictable reductions in supply and demand for certain of our offerings similar to those experienced during the COVID-19 pandemic, as well as unpredictable increases in demand for certain of our offerings similar to those experienced during the COVID-19 pandemic. Further, it is possible that disruptions or delays in shipments of certain raw materials used in the products we manufacture and in the finished goods that we sell globally could be similar to those experienced during the COVID-19 pandemic. The implementation of any government-mandated vaccination or testing mandates may impact our ability to retain current employees and attract new employees. Any extended disruption in our ability to service our customers could have a negative effect on our operating results.

The U.S. Congress, foreign governments, and their agencies in non-U.S. jurisdictions where we and our affiliates do business, and the Organization for Economic Cooperation and Development (“OECD”), continue to focus on issues related to the taxation of multinational corporations. As part of this focus, the OECD has introduced a framework to implement a 15% global minimum corporate tax rate. While it is uncertain whether the U.S. will enact legislation to adopt the minimum tax directive, certainCertain countries in which we operate have adopted legislation and other countries are in the process of introducing legislation to implement the minimum tax directive. While we do not currently expect the minimum tax directive to have a material impact on our effective tax rate, our analysis is ongoing as the OECD continues to release additional guidance. There can be no assurance that these changes, and any further contemplated changes when finalized and adopted by countries, will not have an adverse impact on our provision for income taxes. Additionally, on July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, introducing broad changes to the U.S. tax code, including modifications to corporate and international tax provisions. As a result of OBBBA, our current cash tax obligations were reduced by approximately $43.0 million due to changes to several provisions, including the reinstatement of immediate expensing for domestic R&D expenditures, the extension of 100% bonus depreciation for qualified properties and the relaxation of limitations on the deductibility of business interest expense. The impact on income tax expense resulting from OBBBA was immaterial.

We cannot provide assurance that our internal controls and compliance systems will always protect us from acts committed by employees, agents or business partners of ours (or of businesses we acquire or partner with) that would violate U.S. and/or non-U.S. laws, including the laws governing payments to government officials, bribery, fraud, kickbacks and false claims, pricing, sales and marketing practices, conflicts of interest, competition, export and import compliance, money laundering and data privacy. In particular, the FCPA, the U.K. Bribery Act and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments for the purpose of obtaining or retaining business, and we operate in many parts of the world that have experienced corruption to some degree. Any such improper actions or allegations of such acts could damage our reputation and subject us to civil or criminal investigations in the United States and in other jurisdictions and related stockholder lawsuits, could lead to substantial civil and criminal, monetary and non monetarynon-monetary penalties and could cause us to incur significant legal and investigatory fees. In addition, the government in relevant jurisdictions may seek to hold us liable as a successor for violations committed by companies in which we invest or that we acquire. We also rely on our suppliers to adhere to our supplier standards of conduct, and material violations of such standards of conduct could occur that could have a material effect on our business, reputation and financial statements.

We are subject to the rules and regulations promulgated by a number of governmental and self-regulatory organizations, including the SEC and NYSE, as well as evolving investor expectations around environmental, socialsustainability and governancecorporate responsibility practices and disclosures. These rules and regulations continue to evolve in scope and complexity, and many new requirements have been created in response to laws and directives enacted by federal, state, local and foreign governments, making compliance more difficult and uncertain. The increasing complexity and costs to comply with such evolving expectations, rules and regulations, as well as any risk of noncompliance, could adversely affect our business.

Our credit facilities and indentures contain financial and other restrictive covenants that could limit our ability to engage in activities that may be in our long-term best interests. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all of our debt, which could adversely affect our business, earnings and financial condition.

We and our subsidiaries may be able to incur significant additional indebtedness in the future. Although our credit agreement and indentures contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial. If new debt is added to our current debt levels, the related risks that we now face could intensify. Additionally, we may not be able to obtain additional financing or refinancing on terms acceptable to us, or at all, which could adversely impact our ability to service our outstanding indebtedness or to repay our outstanding indebtedness as it becomes due and could adversely affect our business, earnings and financial condition. Further indebtedness also may increase the risk of a future downgrade in our credit ratings, which could increase future debt costs, limit the future availability of debt financing and adversely affect our business.

We have no current plans to pay cash dividends on our common stock. The declaration, amount and payment of any future dividends on our common stock will be at the sole discretion of our Board of Directors. Our Board of Directors may take into account general and economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us, including restrictions under our credit agreement and other indebtedness we may incur, and such other factors as our Board of Directors may deem relevant. As a result, you may not receive any return on an investment in our common stock unless you sell our common stock for a price greater than your purchase price.

For the fiscal year ended December 31, 2024,2025, we recorded net sales of $6,783.6$6,552.2 million, net incomeloss of $711.5$530.2 million, Adjusted EBITDA of $1,198.8$1,069.4 million and Adjusted Operating Income of $1,089.8$957.8 million. Net sales declined 2.6%3.4% which included 2.1%2.8% organic net sales decrease compared to the same period in 2023.2024. See “Reconciliations of non-GAAP measures” for reconciliations of net (loss) income to Adjusted EBITDA and Adjusted Operating Income, and net (loss) income margin to Adjusted EBITDA margin and Adjusted Operating Income margin. See “Results of operations” for a reconciliation and explanation of changes of net sales growth (decline) to organic net sales growth (decline).

We completed the sale of our Clinical Services business, a component of the Company’s Laboratory Solutions reportable segment, on October 17, 2024, pursuant to a definitive agreement that was signed on August 16, 2024. The Clinical Services business haswas not been classified as a discontinued operation as it did not represent a strategic shift that will have a major effect on the Company’s operations and financial results.

We have been impacted by supply chain constraints and inflationary pressures

We have experienced inventory fluctuations and build up at customers as a result of global supply chain disruptions and have experienced inflationary pressures across all of our cost categories. While we have implemented pricing and productivity measures to combat these pressures, they may continue to adversely impact our results.

In Juneconnection 2023,with the refinancing, we amended theour revolving credit facility to increaseobtain itsan fundingadditional limit$425.0 upmillion in available funding, increasing the total availability under the facility to $975.0$1,400.0 million and extended the term to June 29, 2028.million.

To evaluate our performance, we monitor a number of key indicators. As appropriate, we supplement our results of operations determined in accordance with U.S. GAAP with certain non-GAAP financial measurements that we believe are useful to investors, creditors and others in assessing our performance. These measures should not be considered in isolation or as a substitute for reported GAAP results because they may include or exclude certain items as compared to similar GAAP-based measures, and such measures may not be comparable to similarly titled measures reported by other companies. Rather, these measures should be considered as an additional way of viewing aspects of our operations that provide a more complete understanding of our business.

•Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP measures discussed in the section entitled “Results of operations.” Adjusted EBITDA is our net income or loss adjusted for the following items: (i) interest expense, (ii) income tax expense, (iii) amortization of acquired intangible assets, (iv) depreciation expense, (v) losses on extinguishment of debt, (vi) charges associated with the impairment of certain assets, (vii) gain on sale of business, and (viii) and certain other adjustments. Adjusted EBITDA margin is Adjusted EBITDA divided by net sales as determined under GAAP. We believe that these measurements are useful to investors as ways to analyze the underlying trends in our business consistently across the periods presented. These measurements are used by our management for the same reason. A reconciliation of net income or loss and net income or loss margin, the most directly comparable GAAP financial measures, to Adjusted EBITDA and Adjusted EBITDA margin, respectively, are included in the section entitled “Reconciliations of non-GAAP measures”;

•Adjusted Operating Income and Adjusted Operating Income margin, which are non-GAAP measures discussed in the section entitled “Results of operations.” Adjusted Operating Income is our net income or loss adjusted for the following items: (i) interest expense, (ii) income tax expense, (iii) amortization of acquired intangible assets, (iv) losses on extinguishment of debt, (v) charges associated with the impairment of certain assets, (vi) gain on sale of business, and (vii) and certain other adjustments. This measurement is our segment reporting profitability measure under GAAP. Adjusted Operating Income margin is Adjusted Operating Income divided by net sales as determined under GAAP. We believe that these measurements are useful to investors as ways to analyze the underlying trends in our business consistently across the periods presented. These measurements are used by our management for the same reason. A reconciliation of net income or loss and net income or loss margin, the most directly comparable GAAP financial measures, to Adjusted Operating Income and Adjusted Operating Income margin, respectively, are included in the section entitled “Reconciliations of non-GAAP measures”;

Years ended December 31, 2024, 20232025 and 20222024

In the Laboratory Solutions segment, net sales decreased $128.2$210.4 million or 2.7%4.6% which included $5.5$86.0 million or 0.1%1.8% of favorable foreign currency translation impact and $42.4$147.9 million or 0.9%3.2% of impact related to our Clinical Services divestiture. Organic net sales decreased by $91.3$148.5 million or 1.9%.3.2%. The sales decline was primarily driven primarily by decreased demand infor biopharmaconsumables and healthcareequipment endand markets.instrumentation from our Total Science Solutions business due to the uncertainty around funding and increased competitive intensity.

In the Bioscience Production segment, net sales decreased $55.4$21.0 million or 2.5%,1.0%, which included $1.8$18.7 million or 0.1%0.8% of favorable foreign currency translation impact. Organic net sales decreased $57.2$39.7 million or 2.6%.1.8%. The sales declinedecrease was primarily driven primarily by decreasedlower demand infor biopharmathird party clean room consumables due to reduced usage and healthcaredecreased endvolume markets.in our proprietary clinical and industrial chemicals offerings. These decreases were partially offset by increased volume of our formulated offerings to customers in the semiconductor industry.

In 2023, grossGross margin decreased 7090 basis points resulting primarily fromdue to inflationary pressures, higher freight costs, unfavorable manufacturing variances, unfavorable product mix and the impactdivestiture of inflationaryour pressures,Clinical Services business, partially offset by lower distributioninventory costs.reserves.

InOperating 2024, operating(loss) income increaseddecreased primarily fromdue to a non-cash impairment charge recorded in our Distribution reporting unit, the absence of the gain on sale of our Clinical Services business andrecognized in the absenceprior ofyear, impairmentand chargeslower ingross 2024,profit, as previously discussed. These impacts were partially offset by lowera grossreduction profitin asSG&A previouslyexpenses. discussed,The higherdecrease operatingin SG&A expenses drivenresulted byfrom lower restructuring and severance charges, transformation expenses, andreduced annual incentive compensation expenses.expense, savings from our cost transformation initiative and the divestiture of our Clinical Services business, partially offset by inflationary pressures.

InNet 2024, net(loss) income increaseddecreased primarily due to higherlower operating income, as previously discussed, asand wellpension astermination charges, partially offset by lower interest expense dueresulting tofrom debt repayments onmade ourover variable-ratethe debt,last partiallytwelve offsetmonths byand higherlower income tax expense duedriven toby higherreduced income before income taxes.

For reconciliations of Adjusted EBITDA and Adjusted EBITDA margin to net (loss) income and net (loss) income margin, respectively, the most directly comparable measures under GAAP, see “Reconciliations of non-GAAP financial measures.”

In 2024, Adjusted EBITDA decreased $110.3$129.4 million or 8.4%,10.8%, which included a favorable foreign currency translation impact of $3.3$16.4 million or 0.3%.1.3%. The remaining decline of $113.6$145.8 million or 8.7%12.1% was primarily driven primarilyby bythe divestiture of our Clinical Services business and lower gross profitprofit, andas higherpreviously annual incentive compensation expenses,discussed, partially offset by savings from our cost transformation initiative.initiative and lower annual incentive compensation expense.

For a reconciliationreconciliations of Adjusted Operating Income and Adjusted Operating Income margin to net (loss) income and net (loss) income margin, respectively, the most directly comparable measures under GAAP, see “Reconciliations of non-GAAP financial measures.”

Adjusted Operating Income decreased $122.0$132.0 million or 10.1%,12.1%, which included ana unfavorablefavorable foreign currency translation impact of $1.3$13.5 million or 0.1%.1.2%. The remaining decline of $120.7$145.5 million or 10.0%13.3% is discussed below.

In the Laboratory Solutions segment, Adjusted Operating Income declined $70.3$87.6 million or 10.5%,14.6%, or 10.2%16.2% when adjusted for unfavorablefavorable foreign currency translation impact. The decrease was primarily driven primarilyby bythe divestiture of our Clinical Services business, lower sales volume and higherinflationary annual incentive compensation expenses,pressures, partially offset by savings from our cost transformation initiative.initiative and lower annual incentive compensation expense.

In the Bioscience Production segment, Adjusted Operating Income declined $43.7$40.4 million or 7.3%.7.2% Theor impact8.0% ofwhen adjusted for favorable foreign currency translation impact was immaterial.impact. The decrease was primarily driven primarily by lower sales volume, unfavorable productmanufacturing mixvariances and higher annualfreight incentive compensation expenses,costs, partially offset by commercial excellence, savings from our cost transformation initiative.initiative and lower annual incentive compensation expense.

In Corporate, Adjusted Operating Income decreased $8.0$4.0 million drivendue primarilyto byvarious increasedimmaterial stock-based compensation expense.factors.

The following table presents the reconciliation of net (loss) income and net (loss) income margin to Adjusted EBITDA and Adjusted EBITDA margin, respectively:

3.Reflects1.Reflects the incremental expenses incurred in the period related to restructuring initiatives to increase profitability and productivity. Costs included in this caption are specific to employee severance, site-related exit costs, and contract termination costs. TheThese expenses recognized in 2024 & 2025 represent costs incurred to achieve the Company’s publicly-announced cost transformation initiative.

6.Represents4.Represents net foreign currency (gain) loss from financing activities andactivities, other stock-based compensation expense (benefit)., $6.7 million of severance and transition costs associated with the replacement of our Chief Executive Officer in 2025, and other costs.

The following table presents the reconciliation of net (loss) income and net (loss) income margin to Adjusted Operating Income and Adjusted Operating Income margin, respectively:

3.Reflects1.Reflects the incremental expenses incurred in the period related to restructuring initiatives to increase profitability and productivity. Costs included in this caption are specific to employee severance, site-related exit costs, and contract termination costs. TheThese expenses recognized in 2024 & 2025 represent costs incurred to achieve the Company’s publicly-announced cost transformation initiative.

Our consolidated balance sheet includes goodwill, intangible assets and other long-lived assets that must be periodically evaluated for potential impairment. We assess the realizability of the reported goodwill, intangible assets and other long-lived assets annually, as well as whenever events or changes in circumstances indicate that the assets may be impaired. During the first quarter of 2026, a sustained decline in our share price and market capitalization constituted a triggering event that required an interim goodwill impairment assessment. Although no impairment was recorded, the VWR Distribution reporting unit is considered at risk of impairment because the estimated fair value exceeded the carrying value by a limited margin. The valuation is sensitive to adverse changes in operating performance, forecasted cash flows, discount rates and market conditions. If these factors deteriorate, we could be required to record a material non‑cash goodwill impairment charge in a future reporting period (see note 7 to the unaudited condensed consolidated financial statements included in this quarterly report).

During the three months ended MarchJune 31,30, 2026, we recorded net sales of $1,581.4$1,692.3 million, net income of $43.3$38.1 million, Adjusted EBITDA of $219.4$254.3 million, operating income of $99.5$121.8 million, and Adjusted Operating Income of $190.6$225.1 million. Net sales for the three months ended MarchJune 31,30, 2026 remainedincreased flatby on a year-over-year basis,0.5%, which included a 4.1%0.4% organic net sales decrease compared to the same period in 2025. See “Reconciliations of non-GAAP measures” for reconciliations of net income to Adjusted EBITDA, net income margin to Adjusted EBITDA margin, operating income to Adjusted Operating Income, and operating income margin to Adjusted Operating Income margin. See “Results of operations” for a reconciliation and explanation of changes of net sales growth (decline) to organic net sales growth (decline).

The following updates the discussion of the factors and current trends disclosed in our Annual Report. These updates may affect our performance and financial condition in future periods.

Net sales for the firstsecond quarter wereincreased, flatdriven onprimarily by higher sales volume and commercial excellence within our VWR Distribution & Services segment and a year‑over‑yearfavorable basis.foreign currency impact, partially offset by lower sales volumes within our Bioscience & Medtech Products segment. Gross margin decreased, reflecting unfavorable product mix, inflationary pressures and lower sales volume,volumes. inflationaryThese pressures, higher inventory reserves and freight costs,factors, partially offset by a favorable foreign currency impact. These factorsimpact, reduced gross profit compared to the prior-year period. Lower gross profit, inflationary pressures on compensation expense and an unfavorable foreign currency impact on SG&A expensesprofit resulted in reduced operating income, Adjusted Operating IncomeIncome, and Adjusted EBITDA.

Net sales forincreased the three months ended March 31, 2026 remained flat on a year-over-year basis. The period included $64.3$8.9 million, or 4.1%,0.5%, which included $15.7 million, or 0.9%, of favorable foreign currency impact, while organic net sales decreased by $64.3$6.8 millionmillion, or 4.1%.0.4%.

In the Bioscience & Medtech Products segment, net sales increaseddecreased by $5.0$24.1 million, or 1.2%,5.1%, whichincluding included $13.6$2.7 million, or 3.2%,0.5%, of favorable foreign currency impact. Organic net sales decreased by $8.6$26.8 million, or 2.0%.5.6%. The organic sales decrease was primarily driven by lower sales volumevolumes in the Fluid Handling and NuSil businesses, partially offset by higher sales volumevolumes in Process Chemicals.

In the VWR Distribution & Services segment, net sales decreasedincreased by $5.0$33.0 million, or 0.4%,2.7%, whichincluding included $50.7$13.0 million, or 4.4%,1.0%, of favorable foreign currency impact. Organic net sales decreasedincreased by $55.7$20.0 millionmillion, or 4.8%.1.7%. The organic sales decreaseincrease was primarily driven by lowerhigher sales volumes of labcontrolled environment consumables and equipmentincreased andspecialty instrumentationprocurement insales, thepartially VWRoffset Channel.by lower sales of lab consumables.

Gross margin for the three months ended MarchJune 31,30, 2026 contracted by 210120 basis points, reflecting unfavorable product mix, inflationary pressures and lower sales volume,volumes. inflationaryGross pressures,margin for the six months ended June 30, 2026 contracted by 170 basis points, reflecting those same factors, as well as higher inventory reserves and freight costs, partiallywhich offset byhad a favorablemore foreignpronounced currencyimpact impact.during the six-month period.

Operating income for the three months ended MarchJune 31,30, 2026 decreased primarily due to lower gross profit, as previously discussed, andpartially higheroffset by lower SG&A expenses,expenses driven mainly by inflationarythe pressuresabsence onof compensationtransformation expensecosts andincurred in the prior year. This decrease in SG&A expenses was partially offset by unfavorable foreign exchange fluctuations.

NetOperating income for the threesix months ended MarchJune 31,30, 2026 decreased primarily due to lower operatinggross income,profit, as previously discussed, and higher SG&A expenses, driven mainly by inflationary pressures on compensation expense and unfavorable foreign exchange fluctuations, partially offset by the absence of pensiontransformation termination chargescosts incurred in the prior year and lower income tax expense from reduced taxable income.year.

For the three months ended MarchJune 31,30, 2026, Adjusted EBITDA decreased by $50.1$25.5 million, or 18.6%,9.1%, which included a favorable foreign currency translation impact of $8.9$2.4 millionmillion, or 3.3%.0.9%. The remaining decline of $59.0$27.9 million, or 21.9%,10.0%, was primarily driven by lower gross profit and higher SG&A costs, as previously discussed.

In the Bioscience & Medtech Products segment, Adjusted Operating Income declined by $11.8$13.8 millionmillion, or 10.3%,10.5%, or 13.1%11.0% when adjusted for a favorable foreign currency impact. The decrease was primarily due to lower sales volume, higher inventory reserves, unfavorable product mix and inflationary pressures on compensation expense.volume.

In the VWR Distribution & Services segment, Adjusted Operating Income declined by $42.5$15.2 millionmillion, or 28.7%,10.7%, or 31.8%11.7% when adjusted for a favorable foreign currency impact. The decrease was primarily driven by lowerunfavorable salesproduct volume,mix and inflationary pressures andon higherSG&A freight costs.expenses.

In Corporate, Adjusted Operating Income decreasedimproved by $2.1$1.9 millionmillion, or 9.1%, due to various immaterial factors.

1.Reflects the incremental expensescharges incurred induring the period related to restructuring initiatives to increase profitability and productivity. Costs included in this caption areconsist specific toof employee severance, site-related exit costs,site-exit and contract termination costs.costs, and non-cash impairment charges on long-lived assets associated with site exits.

1.Reflects the incremental expensescharges incurred induring the period related to restructuring initiatives to increase profitability and productivity. Costs included in this caption areconsist specific toof employee severance, site-related exit costs,site-exit and contract termination costs.costs, and non-cash impairment charges on long-lived assets associated with site exits.

We fund short-term cash requirements primarily from operating cash flows and credit facilities. The majority of our long-term financing is from indebtedness. For the three and six months ended MarchJune 31,30, 2026, we generated $58.7$178.2 million and $236.9 million of cash from operating activities, respectively, ended the quarter with $279.3$306.8 million of cash and cash equivalents and our availability under our credit facilities was $1,380.5$1,379.8 million.

In October 2025, our Board of Directors authorized the repurchase of up to $500.0 million of our common stock. Repurchases may be funded through available cash, borrowings under existing credit facilities, or other financing arrangements. The program may be modified, suspended, or terminated at any time. As of MarchJune 31,30, 2026, $425.0 million remained available for repurchase under the program.

Our debt agreements include representations and covenants that we believe are usual and customary. The credit facility includes a leverage-based financial maintenance covenant and a consolidated interest coverage ratio financial maintenance covenant, each of which is subject to customary definitions, adjustments and exclusions. As of MarchJune 31,30, 2026, our net leverage and consolidated interest coverage ratio were within the covenant requirements.

At MarchJune 31,30, 2026, $227.7$231.7 millionmillion, or 81.5%75.5%, of our $279.3$306.8 million in cash and cash equivalents was held by our non-U.S. subsidiaries and may be subject to certain taxes upon repatriation, primarily where foreign withholding taxes apply.

Cash flows from operating activities provided $50.6$26.8 million less cash in 2026, primarily due to a reduction in net income, as previously discussed, and higher net working capital requirements. These impacts were partially offset by favorable changes in other assets and liabilities, primarily driven by lower income tax payments, lower incentive compensation payments, and lower cash outflows related to deferred income. These favorable changes were partially offset by customer prebate payments made during 2026.

Investing activities used $3.8$12.5 million more cash in 2026. The change was primarily attributable to a modestan increase in capital expenditures compared to the prior year.

Financing activities used $73.6$179.1 million more cash in 2026, primarily due to the higher prepayments of term loans.loans compared to the prior year.

Free cash flow was $56.9$39.5 million lower in 2026, primarily due to lower cash flow from operating activities, as previously discussed, and a modestan increase in capital expenditures.

Our consolidated balance sheet includes significant amounts of goodwill and other intangible assets. At MarchJune 31,30, 2026, the combined carrying value of goodwill and other intangible assets, net of accumulated amortization and impairment charges, was $8,050.8$7,949.6 million, representing approximately 69% of our total assets. As a result, impairment assessments for these assets involve significant management judgment and represent a critical accounting estimate.

During the first quarter ended March 31,of 2026, a sustained decline in our share price and market capitalization represented a triggering event under the goodwill impairment guidance. As a result, we performed an interim goodwill impairment assessment for all of our reporting units (see note 7).