Medline Inc.

Strong operating momentum; raising organic sales outlook - Q2 net sales: $7.7B (+12% YoY); organic growth strong (customer repayments tied to IEEPA tariff refunds reduced growth by ~1ppt). - Medline Brand: $3.5B (+7% YoY). - Supply Chain Solutions: $4.1B (+16% YoY), driven by new signings and existing customer growth. - Guidance raised (2nd time in 2026): Full-year organic sales +9% to +10% (up from 8.5% to 9.5%). Includes planned $89M of IEEPA customer repayments.

EBITDA leverage challenged; outlook cut due to “baseline” margin headwinds - Adjusted EBITDA Q2: $1.1B (+13% YoY), but includes $243M net IEEPA tariff refund benefits. - Underlying (ex-tariff benefit) adjusted EBITDA: referenced as ~$817M in Q2; company emphasizes guidance is conservative and excludes tariff refund impacts. - Full-year adjusted EBITDA lowered: $3.3B to $3.4B (down from $3.5B to $3.6B), reflecting non-tariff cost pressures and investments. - Company frames incremental margin pressure as: ~25% external (Middle East conflict + Tracy fire) and ~75% internal (operational investment to support growth, quality remediation, and retail softness).

Major operational disruption handled; capex and recovery uncertainty - Tracy, CA distribution center fire (mid-June): company worked quickly using inventory + MedTrans fleet + network rerouting; began transitioning customers to other sites. - Capacity restoration: secured 1.6M sq ft across 2 DCs within a month; new Tracy DC expected to begin serving in Q4 2026, Stockton facility in Jan 2027. - Earnings impact: Tracy fire reduced net income by $336M in first half (insurance expectations noted). - Tracy-related costs outlook: additional $50M–$100M in 2H 2026 (some excluded from adjusted EBITDA; lease/labor inefficiencies expected to remain). - Capex updated: $500M–$600M for 2026 (higher due to Tracy); insurance recovery expected but timing uncertain.