Total Debt Reduction of $244 Million in 2024,
Capping a Two-Year Total Debt Reduction of $647 Million
2025 Guidance Midpoint Indicates Double-Digit
Adjusted EBITDA & Adjusted EPS Growth, and Improving Cash
Flow
Active Discussions Well Underway Regarding
Potential Sale of Products & Healthcare Services (P&HS)
Segment
Board of Directors Authorizes Share Repurchase
Program of Up to $100 Million
Owens & Minor, Inc. (NYSE: OMI) today reported financial
results for the fourth quarter and year ended December 31,
2024.
“We are pleased with the progress that we have made against the
strategy as outlined at our Investor Day in December 2023. As a
reminder, we committed to optimizing our Products & Healthcare
Services business, leveraging our leading Patient Direct platform,
and building balance sheet flexibility through deleveraging. Within
P&HS we continue to see momentum in broadening our product
portfolio, developing a streamlined and efficient manufacturing
footprint, and enhancing our distribution capabilities. Within
Patient Direct, we continue to leverage our footprint and broad
product offering to support home-based care for millions of
patients with chronic conditions. These capabilities, combined with
positive demographic trends and expanding home treatment options,
leaves us very bullish on the future of this business. Finally, we
repaid $647 million of debt over the last two years which helps
provide the financial flexibility to pursue the acquisition of
Rotech - which we believe will drive long-term shareholder value,”
said Edward A. Pesicka, President & Chief Executive Officer of
Owens & Minor.
Pesicka added, “Our commitment to directing capital toward the
higher growth and higher margin Patient Direct segment has been
increasingly evident in recent years and is consistent with our
strategy. As a logical next step, we have been actively engaged in
robust discussions regarding the potential sale of our Products
& Healthcare Services segment.”
Pesicka concluded, “In the meantime, we remain focused on
delivering a strong 2025 and are confident in our ability to
achieve double-digit adjusted EBITDA growth while improving cash
flow.”
Financial
Summary (1) (2)
FYE
FYE
($ in millions, except per share data)
4Q24
4Q23
2024
2023
Revenue
$
2,696
$
2,656
$
10,701
$
10,334
Operating (loss) income, GAAP
$
(262
)
$
60
$
(208
)
$
105
Adj. Operating Income, Non-GAAP
$
95
$
111
$
313
$
305
Net (loss) income, GAAP
$
(296
)
$
18
$
(363
)
$
(41
)
Adj. Net Income, Non-GAAP
$
43
$
54
$
119
$
106
Adj. EBITDA, Non-GAAP
$
138
$
170
$
523
$
526
Net (loss) income per common share,
GAAP
$
(3.84
)
$
0.23
$
(4.73
)
$
(0.54
)
Adj. Net Income per share, Non-GAAP
$
0.55
$
0.69
$
1.53
$
1.36
(1) Reconciliations of the differences
between the non-GAAP financial measures presented in this release
and their most directly comparable GAAP financial measures are
included in the tables below.
(2) Non-GAAP results in this table exclude
a goodwill impairment charge of $305 million, net of tax. Refer to
footnote (3) of the GAAP/Non-GAAP Reconciliations below.
Share Repurchase
Authorization
On February 26, 2025, the Owens & Minor Board of Directors
authorized a share repurchase program of up to $100 million over
the next 24 months. Under the program, Owens & Minor may
repurchase shares of common stock on a discretionary basis from
time to time through open market repurchases, privately negotiated
transactions and 10b5-1 trading plans.
2025 Financial Outlook
The Company issued its outlook for 2025; summarized below:
- Revenue for 2025 to be in a range of $10.85 billion to $11.15
billion
- Adjusted EBITDA for 2025 to be in a range of $560 million to
$590 million
- Adjusted EPS for 2025 to be in a range of $1.60 to $1.85
The Company’s outlook for 2025 excludes any impact of the
previously announced Rotech acquisition, any potential transaction
involving the Products & Healthcare Services segment, or share
repurchase activity, and contains assumptions, including current
expectations regarding the impact of general economic
conditions.
Key assumptions supporting the Company’s 2025 financial guidance
include:
- Gross margin of 20.75% to 21.25%
- Interest expense of $138 million to $142 million
- Adjusted effective tax rate of 29.0% to 30.0%
- Diluted weighted average shares of ~80 million
- Capital expenditures, gross, of $250 million to $270
million
- Stable commodity prices
- FX rates as of 12/31/2024
Although the Company does provide guidance for adjusted EBITDA
and adjusted EPS (which are non-GAAP financial measures), it is not
able to forecast the most directly comparable measures calculated
and presented in accordance with GAAP without unreasonable effort.
Certain elements of the composition of the GAAP amounts are not
predictable, making it impracticable for the Company to forecast.
Such elements include, but are not limited to, exit and realignment
charges and acquisition-related charges, which could have a
significant and unpredictable impact on our GAAP results. As a
result, no GAAP guidance or reconciliation of the Company’s
adjusted EBITDA guidance or adjusted EPS guidance is provided. The
outlook is based on certain assumptions that are subject to the
risk factors discussed in the Company’s filings with the SEC.
Financial Advisor
Citi is serving as exclusive financial advisor to Owens &
Minor in connection with the potential sale of the Products &
Healthcare Services (P&HS) segment.
Investor Conference Call for Fourth
Quarter and Full Year 2024 Financial Results
Owens & Minor will host a conference call for investors and
analysts on Friday, February 28, 2025, at 8:30 a.m. EST.
Participants may access the call via the toll-free dial-in number
at 1-888-300-2035, or the toll dial-in number at 1-646-517-7437.
The conference ID access code is 1058917. All interested
stakeholders are encouraged to access the simultaneous live webcast
by visiting the investor relations page of the Owens & Minor
website available at
investors.owens-minor.com/events-and-presentations/. A replay of
the webcast can be accessed following the presentation at the link
provided above.
Safe Harbor
This release is intended to be disclosure through methods
reasonably designed to provide broad, non-exclusionary distribution
to the public in compliance with the SEC’s Fair Disclosure
Regulation. This release contains certain “forward-looking”
statements made pursuant to the Safe Harbor provisions of the
Private Securities Litigation Reform Act of 1995. These statements
include, but are not limited to, the statements in this release
regarding our future prospects and performance, including our
expectations with respect to our financial performance, our 2025
financial results, Owens & Minor’s ability to successfully
complete the sale of the P&HS business in any specific
transaction on favorable terms or at all, our ability to raise
additional financing for our acquisition of Rotech on favorable
terms or at all, the risk that the proposed acquisition of Rotech
will not be consummated in a timely manner or at all, our
cost-saving initiatives, future indebtedness and growth, industry
trends, as well as statements related to our expectations regarding
the performance of our business, including our ability to address
macro and market conditions. Forward-looking statements involve
known and unknown risks and uncertainties that may cause our actual
results in future periods to differ materially from those projected
or contemplated in the forward-looking statements. Investors should
refer to Owens & Minor’s Annual Report on Form 10-K for the
year ended December 31, 2024, expected to be filed with the SEC on
or around February 28, 2025, including the section captioned “Item
1A. Risk Factors,” as applicable, and subsequent quarterly reports
on Form 10-Q and current reports on Form 8-K filed with or
furnished to the SEC, for a discussion of certain known risk
factors that could cause the Company’s actual results to differ
materially from its current estimates. These filings are available
at www.owens-minor.com. Given these risks and uncertainties, Owens
& Minor can give no assurance that any forward-looking
statements will, in fact, transpire and, therefore, cautions
investors not to place undue reliance on them. Owens & Minor
specifically disclaims any obligation to update or revise any
forward-looking statements, whether as a result of new information,
future developments or otherwise.
About Owens & Minor
Owens & Minor, Inc. (NYSE: OMI) is a Fortune 500 global
healthcare solutions company providing essential products and
services that support care from the hospital to the home. For over
100 years, Owens & Minor and its affiliated brands, Apria®,
Byram® and HALYARD*, have helped to make each day better for the
patients, providers, and communities we serve. Powered by more than
20,000 teammates worldwide, Owens & Minor delivers comfort and
confidence behind the scenes so healthcare stays at the forefront.
Owens & Minor exists because every day, everywhere, Life Takes
Care™. For more information about Owens & Minor and our
affiliated brands, visit owens-minor.com or follow us on LinkedIn
and Instagram.
* Registered Trademark or Trademark of O&M Halyard or its
affiliates.
Exhibit 99.1
Owens & Minor, Inc.
Consolidated Statements of Operations
(unaudited)
(dollars in thousands, except per share
data)
Three Months Ended December
31,
2024
2023
Net revenue
$
2,696,073
$
2,656,150
Cost of goods sold
2,116,307
2,086,227
Gross profit
579,766
569,923
Distribution, selling and administrative
expenses
493,066
457,225
Goodwill impairment charge
307,112
—
Acquisition-related charges and intangible
amortization
25,148
26,427
Exit and realignment charges, net
24,632
24,310
Other operating (income) expense, net
(8,225
)
1,940
Operating (loss) income
(261,967
)
60,021
Interest expense, net
35,696
36,863
Loss on extinguishment of debt
790
860
Other expense, net
1,199
1,301
(Loss) income before income taxes
(299,652
)
20,997
Income tax (benefit) provision
(3,535
)
3,213
Net (loss) income
$
(296,117
)
$
17,784
Net (loss) income per common share:
Basic
$
(3.84
)
$
0.23
Diluted
$
(3.84
)
$
0.23
Owens & Minor, Inc.
Consolidated Statements of Operations
(unaudited)
(dollars in thousands, except per share
data)
Years Ended December
31,
2024
2023
Net revenue
$
10,700,883
$
10,333,967
Cost of goods sold
8,481,728
8,208,806
Gross profit
2,219,155
2,125,161
Distribution, selling and administrative
expenses
1,909,791
1,813,559
Goodwill impairment charge
307,112
—
Acquisition-related charges and intangible
amortization
86,543
101,037
Exit and realignment charges, net
110,162
99,127
Other operating expense, net
13,316
6,930
Operating (loss) income
(207,769
)
104,508
Interest expense, net
143,804
157,915
Loss (gain) on extinguishment of debt
1,101
(3,518
)
Other expense, net
4,683
4,837
Loss before income taxes
(357,357
)
(54,726
)
Income tax provision (benefit)
5,329
(13,425
)
Net loss
$
(362,686
)
$
(41,301
)
Net loss per common share:
Basic
$
(4.73
)
$
(0.54
)
Diluted
$
(4.73
)
$
(0.54
Owens & Minor, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(dollars in thousands)
December 31,
December 31,
2024
2023
Assets
Current assets
Cash and cash equivalents
$
49,382
$
243,037
Accounts receivable, net
690,241
598,257
Merchandise inventories
1,131,879
1,110,606
Other current assets
149,515
150,890
Total current assets
2,021,017
2,102,790
Property and equipment, net
509,347
543,972
Operating lease assets
355,627
296,533
Goodwill
1,331,281
1,638,846
Intangible assets, net
298,726
361,835
Other assets, net
140,158
149,346
Total assets
$
4,656,156
$
5,093,322
Liabilities and equity
Current liabilities
Accounts payable
$
1,251,964
$
1,171,882
Accrued payroll and related
liabilities
151,039
116,398
Current portion of long-term debt
45,549
206,904
Other current liabilities
425,187
396,701
Total current liabilities
1,873,739
1,891,885
Long-term debt, excluding current
portion
1,808,047
1,890,598
Operating lease liabilities, excluding
current portion
286,212
222,429
Deferred income taxes, net
22,456
41,652
Other liabilities
100,476
122,592
Total liabilities
4,090,930
4,169,156
Total equity
565,226
924,166
Total liabilities and equity
$
4,656,156
$
5,093,322
Owens & Minor, Inc.
Consolidated Statements of Cash Flows
(unaudited)
(dollars in thousands)
Three Months Ended December
31,
2024
2023
Operating activities:
Net (loss) income
$
(296,117
)
$
17,784
Adjustments to reconcile net (loss) income
to cash provided by operating activities:
Depreciation and amortization
65,187
70,737
Goodwill impairment charge
307,112
—
Share-based compensation expense
7,555
5,801
Loss on extinguishment of debt
790
860
Deferred income tax benefit
(10,996
)
(7,333
)
Changes in operating lease right-of-use
assets and lease liabilities
3,088
1,470
Gain from sales and dispositions of
property and equipment
(7,023
)
(8,420
)
Changes in operating assets and
liabilities:
Accounts receivable
(33,663
)
88,457
Merchandise inventories
106,205
(22,719
)
Accounts payable
(99,074
)
(15,341
)
Net change in other assets and
liabilities
25,434
(22,497
)
Other, net
2,503
2,966
Cash provided by operating
activities
71,001
111,765
Investing activities:
Additions to property and equipment
(62,834
)
(50,392
)
Additions to computer software
(8,602
)
(5,933
)
Proceeds from sales of property and
equipment
18,667
17,929
Other, net
465
(518
)
Cash used for investing
activities
(52,304
)
(38,914
)
Financing activities:
Borrowings under amended Receivables
Financing Agreement
179,400
—
Repayments under amended Receivables
Financing Agreement
(179,400
)
—
Borrowings under Revolving Credit
Facility
635,800
—
Repayments under Revolving Credit
Facility
(635,800
)
—
Repayments of debt
(32,750
)
(50,504
)
Other, net
(10,346
)
(711
)
Cash used for financing
activities
(43,096
)
(51,215
)
Effect of exchange rate changes on
cash, cash equivalents and restricted cash
(1,309
)
1,128
Net (decrease) increase in cash, cash
equivalents and restricted cash
(25,708
)
22,764
Cash, cash equivalents and restricted
cash at beginning of period
75,090
250,160
Cash, cash equivalents and restricted
cash at end of period(1)
$
49,382
$
272,924
Supplemental disclosure of cash flow
information:
Income taxes (received) paid, net
$
(2,057
)
$
515
Interest paid
$
37,269
$
52,168
Noncash investing activity:
Unpaid purchases of property and equipment
and computer software at end of period
$
84,562
$
77,279
_________________
(1) There was no restricted cash as of
December 31, 2024. Restricted cash as of September 30, 2024 was $30
million and includes amounts held in an escrow account as required
by the Centers for Medicare & Medicaid Services (CMS) in
conjunction with the Bundled Payments for Care Improvement (BPCI)
initiatives related to wind-down costs of a subsidiary, Fusion5, as
well as restricted cash deposits received under the Master
Receivables Purchase Agreement to be remitted to a third-party
financial institution.
Owens & Minor, Inc.
Consolidated Statements of Cash Flows
(unaudited)
(dollars in thousands)
Years Ended December
31,
2024
2023
Operating activities:
Net loss
$
(362,686
)
$
(41,301
)
Adjustments to reconcile net loss to cash
provided by operating activities:
Depreciation and amortization
264,775
287,377
Goodwill impairment charge
307,112
—
Share-based compensation expense
26,836
23,218
Loss (gain) on extinguishment of debt
1,101
(3,518
)
Deferred income tax benefit
(26,115
)
(23,648
)
Changes in operating lease right-of-use
assets and lease liabilities
10,244
(47
)
Gain from sales and dispositions of
property and equipment
(44,705
)
(34,882
)
Changes in operating assets and
liabilities:
Accounts receivable
(94,550
)
165,167
Merchandise inventories
(26,228
)
224,338
Accounts payable
65,187
30,997
Net change in other assets and
liabilities
30,153
100,370
Other, net
10,371
12,639
Cash provided by operating
activities
161,495
740,710
Investing activities:
Additions to property and equipment
(210,865
)
(190,870
)
Additions to computer software
(17,297
)
(17,022
)
Proceeds from sales of property and
equipment
103,426
71,574
Other, net
8,203
(936
)
Cash used for investing
activities
(116,533
)
(137,254
)
Financing activities:
Borrowings under amended Receivables
Financing Agreement
1,465,800
476,000
Repayments under amended Receivables
Financing Agreement
(1,465,800
)
(572,000
)
Borrowings under Revolving Credit
Facility
635,800
—
Repayments under Revolving Credit
Facility
(635,800
)
—
Repayments of debt
(244,197
)
(320,693
)
Other, net
(23,406
)
(637
)
Cash used for financing
activities
(267,603
)
(417,330
)
Effect of exchange rate changes on
cash, cash equivalents and restricted cash
(901
)
613
Net (decrease) increase in cash, cash
equivalents and restricted cash
(223,542
)
186,739
Cash, cash equivalents and restricted
cash at beginning of period
272,924
86,185
Cash, cash equivalents and restricted
cash at end of period(1)
$
49,382
$
272,924
Supplemental disclosure of cash flow
information:
Income taxes paid (received), net
$
5,553
$
(6,283
)
Interest paid
$
141,547
$
153,247
Noncash investing activity:
Unpaid purchases of property and equipment
and computer software at end of period
$
84,562
$
77,279
_________________
(1) There was no restricted cash as of
December 31, 2024. Restricted cash as of December 31, 2023 was $30
million and includes amounts held in an escrow account as required
by the Centers for Medicare & Medicaid Services (CMS) in
conjunction with the Bundled Payments for Care Improvement (BPCI)
initiatives related to wind-down costs of a subsidiary, Fusion5, as
well as restricted cash deposits received under the Master
Receivables Purchase Agreement to be remitted to a third-party
financial institution.
Owens & Minor, Inc.
Summary Segment Information
(unaudited)
(dollars in thousands)
Three Months Ended December
31,
2024
2023
% of
% of
consolidated
consolidated
Amount
net revenue
Amount
net revenue
Net revenue:
Products & Healthcare Services
$
2,001,050
74.22
%
$
1,991,716
74.99
%
Patient Direct
695,023
25.78
%
664,434
25.01
%
Consolidated net revenue
$
2,696,073
100.00
%
$
2,656,150
100.00
%
% of segment
% of segment
Operating income:
net revenue
net revenue
Products & Healthcare Services
$
25,825
1.29
%
$
33,244
1.67
%
Patient Direct
69,558
10.01
%
77,514
11.67
%
Acquisition-related charges and intangible
amortization
(25,148
)
(26,427
)
Exit and realignment charges, net
(24,632
)
(24,310
)
Goodwill impairment charge
(307,112
)
—
Litigation and related charges (1)
(458
)
—
Consolidated operating (loss) income
$
(261,967
)
$
60,021
Depreciation and amortization:
Products & Healthcare Services
$
11,407
$
12,019
Patient Direct
34,959
36,685
Intangible amortization
13,770
20,831
Other (2)
5,051
1,202
Consolidated depreciation and
amortization
$
65,187
$
70,737
Capital expenditures:
Products & Healthcare Services
$
20,920
$
11,405
Patient Direct
50,516
44,920
Consolidated capital expenditures
$
71,436
$
56,325
(1)
Litigation and related charges are
reported within Other operating (income) expense, net in our
Statements of Operations. Refer to footnote 4 in the GAAP/Non-GAAP
Reconciliations below.
(2)
Other depreciation and amortization
expense is captured within exit and realignment charges, net or
acquisition-related charges and intangible amortization for the
three months ended December 31, 2024 and 2023.
Owens & Minor, Inc.
Summary Segment Information
(unaudited)
(dollars in thousands)
Years Ended December
31,
2024
2023
% of
% of
consolidated
consolidated
Amount
net revenue
Amount
net revenue
Net revenue:
Products & Healthcare Services
$
8,020,771
74.95
%
$
7,781,395
75.30
%
Patient Direct
2,680,112
25.05
%
2,552,572
24.70
%
Consolidated net revenue
$
10,700,883
100.00
%
$
10,333,967
100.00
%
% of segment
% of segment
Operating income:
net revenue
net revenue
Products & Healthcare Services
$
53,012
0.66
%
$
57,809
0.74
%
Patient Direct
260,155
9.71
%
246,863
9.67
%
Acquisition-related charges and intangible
amortization
(86,543
)
(101,037
)
Exit and realignment charges, net
(110,162
)
(99,127
)
Goodwill impairment charge
(307,112
)
—
Litigation and related charges (1)
(17,119
)
—
Consolidated operating (loss) income
$
(207,769
)
$
104,508
Depreciation and amortization:
Products & Healthcare Services
$
45,835
$
47,756
Patient Direct
141,032
152,583
Intangible amortization
64,943
83,522
Other (2)
12,965
3,516
Consolidated depreciation and
amortization
$
264,775
$
287,377
Capital expenditures:
Products & Healthcare Services
$
50,050
$
29,361
Patient Direct
178,112
178,531
Consolidated capital expenditures
$
228,162
$
207,892
(1)
Litigation and related charges are
reported within Other operating (income) expense, net in our
Statements of Operations. Refer to footnote 4 in the GAAP/Non-GAAP
Reconciliations below.
(2)
Other depreciation and amortization
expense is captured within exit and realignment charges, net or
acquisition-related charges and intangible amortization for the
years ended December 31, 2024 and 2023.
Owens & Minor, Inc.
Net (Loss) Income Per Common Share
(unaudited)
(dollars in thousands, except per share
data)
Three Months Ended December
31,
Years Ended December
31,
2024
2023
2024
2023
Net (loss) income
$
(296,117
)
$
17,784
$
(362,686
)
$
(41,301
)
Weighted average shares outstanding -
basic
77,169
76,284
76,741
75,785
Dilutive shares
—
1,491
—
—
Weighted average shares outstanding -
diluted
77,169
77,775
76,741
75,785
Net (loss) income per common share:
Basic
$
(3.84
)
$
0.23
$
(4.73
)
$
(0.54
)
Diluted
$
(3.84
)
$
0.23
$
(4.73
)
$
(0.54
)
Share-based awards of approximately 1.4
million and 1.5 million shares for the three months and year ended
December 31, 2024 and 1.6 million for the year ended December 31,
2023 were excluded from the calculation of net loss per diluted
common share as the effect would be anti-dilutive.
Owens & Minor, Inc.
GAAP/Non-GAAP Reconciliations
(unaudited)
(dollars in thousands, except per share
data)
The following table provides a
reconciliation of reported operating (loss) income, net (loss)
income and net (loss) income per share to non-GAAP measures used by
management.
Three Months Ended December
31,
Years Ended December
31,
2024
2023
2024
2023
Operating (loss) income, as reported
(GAAP)
$
(261,967
)
$
60,021
$
(207,769
)
$
104,508
Acquisition-related charges and intangible
amortization (1)
25,148
26,427
86,543
101,037
Exit and realignment charges, net (2)
24,632
24,310
110,162
99,127
Goodwill impairment charge (3)
307,112
—
307,112
—
Litigation and related charges (4)
458
—
17,119
—
Operating income, adjusted (non-GAAP)
(Adjusted Operating Income)
$
95,383
$
110,758
$
313,167
$
304,672
Operating (loss) income as a percent of
net revenue (GAAP)
(9.72
)%
2.26
%
(1.94
)%
1.01
%
Adjusted operating income as a percent of
net revenue (non-GAAP)
3.54
%
4.17
%
2.93
%
2.95
%
Net (loss) income, as reported (GAAP)
$
(296,117
)
$
17,784
$
(362,686
)
$
(41,301
)
Pre-tax adjustments:
Acquisition-related charges and intangible
amortization (1)
25,148
26,427
86,543
101,037
Exit and realignment charges, net (2)
24,632
24,310
110,162
99,127
Goodwill impairment charge (3)
307,112
—
307,112
—
Litigation and related charges (4)
458
—
17,119
—
Other (5)
1,221
1,425
2,823
(1,260
)
Income tax benefit on pre-tax adjustments
(6)
(19,168
)
(16,383
)
(58,834
)
(52,095
)
One-time income tax charge (7)
—
—
17,233
—
Net income, adjusted (non-GAAP) (Adjusted
Net Income)
$
43,286
$
53,563
$
119,472
$
105,508
Net (loss) income per common share, as
reported (GAAP)
$
(3.84
)
$
0.23
$
(4.73
)
$
(0.54
)
After-tax adjustments:
Acquisition-related charges and intangible
amortization (1)
0.22
0.23
0.83
0.96
Exit and realignment charges, net (2)
0.21
0.22
1.04
0.95
Goodwill impairment charge (3)
3.95
—
3.97
—
Litigation and related charges (4)
—
—
0.17
—
Other (5)
0.01
0.01
0.03
(0.01
)
One-time income tax charge (7)
—
—
0.22
—
Net income per common share, adjusted
(non-GAAP) (Adjusted EPS)
$
0.55
$
0.69
$
1.53
$
1.36
Owens & Minor, Inc.
GAAP/Non-GAAP Reconciliations
(unaudited), continued
(dollars in thousands)
The following tables provide
reconciliations of net (loss) income and total debt to non-GAAP
measures used by management.
Three Months Ended December
31,
Years Ended December
31,
2024
2023
2024
2023
Net (loss) income, as reported (GAAP)
$
(296,117
)
$
17,784
$
(362,686
)
$
(41,301
)
Income tax (benefit) provision
(3,535
)
3,213
5,329
(13,425
)
Interest expense, net
35,696
36,863
143,804
157,915
Acquisition-related charges and intangible
amortization (1)
25,148
26,427
86,543
101,037
Exit and realignment charges, net (2)
24,632
24,310
110,162
99,127
Other depreciation and amortization
(8)
46,367
48,704
186,867
200,339
Litigation and related charges (4)
458
—
17,119
—
Stock compensation (9)
7,304
5,181
25,131
20,942
LIFO (credits) and charges (10)
(10,074
)
5,655
912
2,402
Goodwill impairment charge (3)
307,112
—
307,112
—
Other (5)
1,221
1,425
2,823
(1,260
)
Adjusted EBITDA (non-GAAP)
$
138,212
$
169,562
$
523,116
$
525,776
December 31,
December 31,
2024
2023
Total debt, as reported (GAAP)
$
1,853,596
$
2,097,502
Cash and cash equivalents
(49,382
)
(243,037
)
Net debt (non-GAAP)
$
1,804,214
$
1,854,465
_________________ The following items have been excluded in our
non-GAAP financial measures:
(1) Acquisition-related charges and intangible amortization for
the three months and year ended December 31, 2024 includes $11
million and $22 million of acquisition-related costs related to the
expected acquisition of Rotech, which consisted primarily of legal
and professional fees. For the three months and year ended December
31, 2023, we incurred $6 million and $18 million of
acquisition-related costs, consisting of costs primarily related to
the acquisition of Apria, Inc., as well as amortization of
intangible assets established during acquisition method of
accounting for business combinations. Acquisition-related charges
consist primarily of one-time costs related to acquisitions,
including transaction costs necessary to consummate acquisitions,
which consist of investment banking advisory fees and legal fees,
director and officer tail insurance expense, as well as transition
costs, such as severance and retention bonuses, information
technology (IT) integration costs and professional fees. These
amounts are highly dependent on the size and frequency of
acquisitions and are being excluded to allow for a more consistent
comparison with forecasted, current and historical results.
(2) During the three months and year ended December 31, 2024
exit and realignment charges, net were $25 million and $110
million. These charges primarily related to our (1) Operating Model
Realignment Program of $19 million and $95 million, including
professional fees, severance, and other costs to streamline
functions and processes, (2) costs related to IT strategic
initiatives such as converting certain divisions to common IT
systems of $1.2 million and $15 million and (3) other costs
associated with strategic initiatives of $4.8 million and $7.5
million for the three months and year ended December 31, 2024. Exit
and realignment charges, net also included a $7.4 million gain on
the sale of our corporate headquarters for the year ended December
31, 2024. During the three months and year ended December 31, 2023,
exit and realignment charges, net were $24 million and $99 million.
These charges primarily related to our (1) Operating Model
Realignment Program of $19 million and $83 million, including
professional fees, severance and other costs to streamline
functions and processes, (2) IT strategic initiatives such as
converting to common IT systems of $2.5 million and $9.2 million
and, (3) other costs associated with strategic initiatives of $2.7
million and $7.0 million for the three months and year ended
December 31, 2023. These costs are not normal recurring, cash
operating expenses necessary for the Company to operate its
business on an ongoing basis.
(3) Goodwill impairment charge relates to a non-cash goodwill
impairment charge recognized in the Apria reporting unit during the
quarter ended December 31, 2024 resulting from a combination of
factors, including fourth quarter 2024 market changes inclusive of
a decline in Owens & Minor’s stock price and rising interest
rates. Additionally, anticipated changes in pricing of a capitated
contract within the Apria division also contributed to this charge.
This is a non-cash charge and does not occur in the ordinary course
of our business and is inherently unpredictable in timing and
amount.
(4) Litigation and related charges includes settlement costs and
related charges of legal matters within our Apria division. These
costs do not occur in the ordinary course of our business, are
non-recurring/infrequent and are inherently unpredictable in timing
and amount.
(5) For the three months and year ended December 31, 2024 and
2023, other includes interest costs and net actuarial losses
related to our frozen noncontributory, unfunded retirement plan for
certain retirees in the United States (U.S.). Additionally, other
for the three months and year ended December 31, 2024 includes
losses on extinguishment of debt of $0.8 million and $1.1 million.
For the three months and year ended December 31, 2023 other
includes loss on extinguishment of debt of $0.9 million and a
(gain) on extinguishment of debt of $(3.5) million associated with
the early retirement of indebtedness of $46 million and $314
million.
(6) These charges have been tax effected by determining the
income tax rate depending on the amount of charges incurred in
different tax jurisdictions and the deductibility of those charges
for income tax purposes.
(7) One-time income tax charge, recorded during the three months
ended June 30, 2024, excluding the impact of incremental interest,
relates to a recent decision associated with the Notice of Proposed
Adjustments received in 2020 and 2021. The matter at hand, as
discussed in previously filed SEC documents, is related to past
transfer pricing methodology which is no longer employed. We
believe the matter will be concluded without further impact to our
financial results.
(8) Other depreciation and amortization relates to property and
equipment and capitalized computer software, excluding such amounts
captured within exit and realignment charges, net or
acquisition-related charges and intangible amortization.
(9) Stock compensation includes share-based compensation expense
related to our share-based compensation plans, excluding such
amounts captured within exit and realignment charges, net or
acquisition-related charges and intangible amortization.
(10) LIFO (credits) and charges includes non-cash adjustments to
merchandise inventories valued at the lower of cost or market, with
the approximate cost determined by the last-in, first-out (LIFO)
method for distribution inventories in the U.S. within our Products
& Healthcare Services segment.
Use of Non-GAAP
Measures
This earnings release contains financial measures that are not
calculated in accordance with U.S. generally accepted accounting
principles (GAAP). In general, the measures exclude items and
charges that (i) management does not believe reflect Owens &
Minor, Inc.’s (the Company) core business and relate more to
strategic, multi-year corporate activities; or (ii) relate to
activities or actions that may have occurred over multiple or in
prior periods without predictable trends. Management uses these
non-GAAP financial measures internally to evaluate the Company’s
performance, evaluate the balance sheet, engage in financial and
operational planning and determine incentive compensation.
Management provides these non-GAAP financial measures to
investors as supplemental metrics to assist readers in assessing
the effects of items and events on its financial and operating
results and in comparing the Company’s performance to that of its
competitors. However, the non-GAAP financial measures used by the
Company may be calculated differently from, and therefore may not
be comparable to, similarly titled measures used by other
companies.
The non-GAAP financial measures disclosed by the Company should
not be considered substitutes for, or superior to, financial
measures calculated in accordance with GAAP, and the financial
results calculated in accordance with GAAP and reconciliations to
those financial statements set forth above should be carefully
evaluated.
OMI-CORP
OMI-IR
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250228859189/en/
Investors Alpha IR Group
Jackie Marcus or Nick Teves OMI@alpha-ir.com
Jonathan Leon Executive Vice President & Chief Financial
Officer Investor.Relations@owens-minor.com
Media Stacy Law
media@owens-minor.com
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