Medline Inc.

Good morning and thank you for standing by. Welcome to MEDLINE's second quarter 2026 results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You'll then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would like to now hand the conference over to your first speaker today, Karen King.

Welcome to MEDLINE's second quarter and half year 2026 earnings conference call. This morning we issued our earnings release and shared supplemental materials. Joining me on today's call are Jim Boyle, our Chief Executive Officer, and Mike Drazin, 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. Please see the cautionary statements and risk factors contained in our earnings release, which accompany these remarks, as well as our most recent and other SEC filings for more information regarding these risks and uncertainties. We may also reference non-GAAP financial measures, which excludes 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 the disclosures and non-GAAP reconciliations that accompany these remarks. which are available on our website at ir.medline.com under quarterly results. With that, I will now turn the call over to our CEO, Jim Boyle.

Thank you, Karen, and thank you all for joining Medline's second quarter earnings call. I'll begin with a brief performance update, Mike will review our financial results and outlook, and I'll return with closing remarks before opening up the call for questions. Medline delivered strong top line growth of 12% in the second quarter. reflecting positive momentum across our business. Medline Brand grew 7% for the quarter, including the impact of an IEPA tariff price refund to customers. Supply chain solutions exceeded our expectations, growing 16%, driven by new customer signings and growth within existing customers. This segment remains central to our long-term strategy because it strengthens customer relationships and creates opportunities to deliver savings and value over time through conversion to higher margin Medline Brand products. We are pleased with the continued momentum across the business and are raising our fiscal year organic sales outlook to reflect stronger demand and solid execution by our team. Adjusted EBITDA increased 13% year-over-year to $1.1 billion as strong sales growth was partially offset by higher cost of goods sold, increased operational expenses, and net tariff-related impacts. This includes a net benefit of $243 million from IEPA tariff refunds. As we look to the second half of the year, several external and internal factors have led us to moderate our adjusted EBITDA outlook. Our outlook reflects several headwinds, including the Middle East conflict, the Tracy Warehouse fire, growth-related operational investments, quality remediation efforts, and softness in our retail business. Mike will walk through the details, but we believe these investments will strengthen the business and position Medline to capture the significant growth opportunities that we see ahead. I will turn now to several key developments during the quarter. First, we secured multiple new PrimeVendor and customer partnerships across several channels, including acute care, physician office, lab, skilled nursing, senior living, home health, and hospice. Through the first half of the year, we achieved more than $650 million in total new customer signings, representing over 65% of our annual goal of $1 billion. Among those wins We announced our expanded presence in the Upper Midwest, including a new Prime Vendor Agreement with Alina Health. This agreement expands our existing relationship across their acute care and physician office settings. While new signings vary quarter to quarter, these wins underscore the opportunity we have to gain share across the continuum of care. Second, I'm incredibly proud of our employees who demonstrated agility, grit, and determination in responding to the mid-June fire at our Tracy, California distribution center. Their resilience is core to who we are and guides the commitments we make every day to our customers and to one another to make healthcare run better. Our team responded quickly to the fire by leveraging our outsized inventory position, broad distribution network, and MedTrans transportation fleet to continue delivering products and minimize customer disruption. Employees at our Tracy DC went above and beyond to support the effort and quickly transitioned to nearby MedLine sites over the first few weeks. Within a month, we secured 1.6 million square feet across two distribution centers, expanding our customer-facing Northern California footprint by 45%. We have already taken occupancy of the new Tracy Distribution Center, which we expect to begin serving customers out of in the fourth quarter, and plan to occupy our new Stockton facility in January 2027. Together, these facilities will restore capacity and support customers across Northern California. What our teams have accomplished in such a short period of time is truly remarkable, and Medline is stronger because of their efforts. I also want to thank our customers for their continued trust and our suppliers for helping us maintain continuity as we build an even stronger network going forward. Next, in addition to our Northern California expansion, we announced plans to open a new 1 million square foot distribution center in Southern California to enhance the flexibility and resiliency of our supply chain and reinforce our commitment to healthcare providers across the state. With this announcement and our Northern California expansion, our California footprint is expected to reach nearly 5 million square feet by mid-2027 and to house many of the same automation technologies already in use at other Medline facilities. This is about more than scale. It reinforces resiliency and redundancy across our network and reflects our dedication to anticipating customer needs, supporting future growth and investing ahead of demand. Finally, as I mentioned last quarter, our goal as a vertically integrated manufacturer and distributor of medical surgical products is to operate the broadest and most robust supply chain in the industry. Achieving that requires continued investment along with rigorous supply chain, quality, and regulatory discipline. Patient safety and product quality remain our highest priority. We continue to undertake remediation activities, strengthen our quality organization, and many more. As part of this work, we have also modified our complaint review process, which we expect will increase Medical Device Reporting, or MDR submissions in the second half of the year. Our updated guidance reflects our current expectations of these investments and remediation efforts. Overall, I am pleased with our commercial execution this quarter. Our top line momentum strengthens our confidence in the opportunities ahead. Prime vendor signings are tracking ahead of the pace needed to reach our billion dollar annual signings goal. And the team showed tremendous resolve in continuing to serve customers despite the Tracy fire. While we are encouraged by our commercial momentum, we are not satisfied with the margin challenges we are currently facing, and we are focused on addressing them. We believe continued execution of our growth strategy, along with disciplined cost savings initiatives to address incremental cost pressures, will position us to return to our long-term objective of growing earnings at or above the rate of sales growth. With that, I will turn the call over to Mike for a deeper look at the financials and an update on our 2026 outlook.