Group 1 - Owens & Minor, Inc. (NYSE: OMI) has an internationally diversified business model and long-term agreements with customers, indicating stability and profitability [1] - Recent acquisitions and capital expenditures are contributing to increases in the company's performance [1] Group 2 - The analysis emphasizes a focus on value investments, particularly in companies trading at close to 10x earnings and offering dividend yields [1]

Financial Performance - Owens & Minor, Inc. reported a net revenue of $2.72 billion for the three months ended September 30, 2024, representing a 5.0% increase compared to $2.59 billion in the same period of 2023[98]. - The Products & Healthcare Services segment generated operating income of $4.2 million for the three months ended September 30, 2024, down from $19.8 million in the prior year, primarily due to a $10.3 million increase in LIFO charges[92]. - The Patient Direct segment achieved operating income of $79.9 million for the three months ended September 30, 2024, compared to $64.4 million in the same period of 2023, reflecting a revenue growth of 5.9%[94]. - Cost of goods sold increased to $2.16 billion for the three months ended September 30, 2024, up 5.3% from $2.05 billion in the prior year, driven by revenue growth and increased LIFO charges[103]. - Gross profit for the three months ended September 30, 2024, was $559.7 million, a 3.9% increase from $538.5 million in the same period of 2023, with a gross profit margin of 20.57%[106]. - The net loss per share for the three months ended September 30, 2024, was $(0.17), compared to $(0.08) for the same period in 2023[91]. - The company reported a decline in intangible amortization of $6.2 million for the three months ended September 30, 2024, contributing to the net loss per share[91]. Expenses and Charges - Distribution, selling and administrative (DS&A) expenses for the three months ended September 30, 2024 were $469,798,000, an increase of $17,215,000 or 3.8% compared to the same period in 2023[107]. - DS&A expenses as a percentage of net revenue decreased to 17.26% for the three months ended September 30, 2024 from 17.46% in 2023[107]. - Acquisition-related charges for the three months ended September 30, 2024 were $21,097,000, a decrease of $9,120,000 or 30.2% compared to the same period in 2023[107]. - Exit and realignment charges, net for the three months ended September 30, 2024 were $28,880,000, a decrease of $1,300,000 or 4.3% compared to the same period in 2023[107]. - Other operating expenses, net for the three months ended September 30, 2024 increased significantly to $15,727,000, an increase of $14,050,000 or 837.8% compared to the same period in 2023[107]. - Interest expense, net for the three months ended September 30, 2024 decreased to $36,554,000, a decrease of $1,573,000 or 4.1% compared to the same period in 2023[114]. Cash Flow and Liquidity - Cash and cash equivalents decreased to $45,454,000 as of September 30, 2024, a decrease of $197,583,000 or 81.3% compared to December 31, 2023[124]. - Net cash provided by operating activities decreased to $90.5 million in the first nine months of 2024 from $628.9 million in 2023, primarily due to net losses and changes in working capital[125]. - Cash used for investing activities in the first nine months of 2024 included capital expenditures of $157 million, compared to $152 million in 2023, with proceeds from sales and dispositions totaling $84.8 million[126]. - Cash used for financing activities in the first nine months of 2024 was $224.5 million, down from $366.1 million in 2023, including $211 million in debt repayments[127]. - The company had no borrowings under its Receivables Financing Agreement as of September 30, 2024, with a maximum revolving borrowing capacity of $450 million[130]. - The Revolving Credit Agreement provides a revolving borrowing capacity of $450 million, with $870 million in outstanding term loans[131]. - Cash and cash equivalents held by foreign subsidiaries totaled $22.2 million as of September 30, 2024[140]. - The company believes cash generated from operating activities and available financing sources will be sufficient to fund working capital needs and long-term strategic growth[139]. - The company is in compliance with its debt covenants as of September 30, 2024[134]. Acquisitions and Agreements - The company entered into an agreement to acquire Rotech Healthcare Holdings Inc. for $1.36 billion, with a net purchase price of approximately $1.32 billion after anticipated tax benefits[90]. - The company recognized a $5.1 million gain from an agreement with Philips Respironics for previously recalled equipment during the nine months ended September 30, 2024[94]. Risks and Challenges - The company faces risks related to restrictive covenants in credit facilities and existing notes[145]. - There is a potential risk of impairment to goodwill or other long-lived assets[145]. - The company may encounter challenges in responding to technological advances in a timely manner[145]. - There are concerns regarding the profitability of capitation arrangements if actual utilization rates exceed assumptions[145]. - The company is exposed to volatility in the price of its common stock and securities[145]. - Risks related to public health crises, such as the COVID-19 pandemic, continue to be a concern for the company[145]. - The company must adequately respond to performance targets specified by customer contracts[145]. - The outcome of outstanding and future litigation, including product and professional liability claims, remains uncertain[145]. Tax and Foreign Operations - The effective tax rate for the three months ended September 30, 2024 was 7.4%, a decrease from 41.5% in the same period in 2023[121]. - Foreign currency translation had a favorable impact on net revenue of $0.2 million for the three months ended September 30, 2024[102]. - The company is permanently reinvested in its foreign subsidiaries, indicating a long-term investment strategy[140]. - The company has not experienced material changes in quantitative and qualitative market risk disclosures since the last Annual Report[147].

Owens & Minor, Inc. (NYSE:OMI) Q3 2024 Earnings Conference Call November 4, 2024 8:30 AM ET Company Participants Jackie Marcus - Investor Relations Edward Pesicka - President and Chief Executive Officer Jonathan Leon - Executive Vice President and Chief Financial Officer Conference Call Participants Kevin Caliendo - UBS Michael Cherny - Leerink Partners Allen Lutz - Bank of America John Stansel - JPMorgan Stephanie Davis - Barclays Eric Coldwell - Baird Daniel Grosslight - Citi Operator Good day, everyone, ...

Core Viewpoint - Owens & Minor reported quarterly earnings of $0.42 per share, exceeding the Zacks Consensus Estimate of $0.40 per share, but down from $0.44 per share a year ago, indicating a 5% earnings surprise [1][2] Financial Performance - The company achieved revenues of $2.72 billion for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 1.25% and showing an increase from $2.59 billion year-over-year [2] - Over the last four quarters, Owens & Minor has exceeded consensus EPS estimates four times and topped revenue estimates twice [2] Stock Performance - Owens & Minor shares have declined approximately 30.7% since the beginning of the year, contrasting with the S&P 500's gain of 20.1% [3] - The current Zacks Rank for Owens & Minor is 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $0.61 on revenues of $2.74 billion, and for the current fiscal year, it is $1.57 on revenues of $10.71 billion [7] - The trend of estimate revisions for Owens & Minor is currently mixed, which may change following the recent earnings report [6] Industry Context - The Medical - Products industry, to which Owens & Minor belongs, is currently ranked in the top 30% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8]

Financial Performance - Consolidated revenue for Q3 2024 was $2.7 billion, reflecting a year-over-year growth of 5%[2] - Patient Direct revenue reached $687 million, up 6% year-over-year, driven by strong demand in diabetes and sleep supplies[4] - Products & Healthcare Services revenue totaled $2.0 billion, a 5% increase compared to Q3 2023, supported by strong same-store sales in Medical Distribution[4] - GAAP net loss for Q3 2024 was $(13) million, or $(0.17) per share, compared to a net loss of $(6.4) million, or $(0.08) per share in Q3 2023[2][4] - Adjusted EBITDA for Q3 2024 was $142 million, representing a 5% increase year-over-year[2][4] - Consolidated net revenue for the three months ended September 30, 2024, was $2,721,125, a 5.0% increase from $2,591,742 in the same period of 2023[17] - Net loss for the three months ended September 30, 2024, was $12,770 thousand, compared to a net loss of $6,426 thousand for the same period in 2023, representing a 98.5% increase in losses[15] - Adjusted operating income for the three months ended September 30, 2024, was $84,165, slightly down from $84,238 in the prior year[22] - The net loss per common share for the three months ended September 30, 2024, was $(0.17), compared to $(0.08) in the same period of 2023[20] Debt and Assets - Total debt was reduced by $198 million in Q3 2024, including the full redemption of the 2024 senior notes[2][4] - Total current assets increased to $2,116,538 thousand as of September 30, 2024, compared to $2,102,790 thousand at December 31, 2023, reflecting a growth of 0.65%[14] - Cash and cash equivalents decreased significantly to $45,454 thousand from $243,037 thousand, a decline of 81.3%[14] - Total liabilities increased to $4,206,690 thousand as of September 30, 2024, from $4,169,156 thousand at December 31, 2023, an increase of 0.9%[14] - Long-term debt, excluding current portion, decreased to $1,842,348 thousand from $1,890,598 thousand, a reduction of 2.5%[14] - Total debt as reported (GAAP) decreased to $1,884,974,000 as of September 30, 2024, from $2,097,502,000 as of December 31, 2023, reflecting a reduction of approximately 10.1%[26] - Net debt (non-GAAP) as of September 30, 2024, was $1,839,520,000, compared to $1,854,465,000 at the end of 2023, showing a decrease of about 0.8%[26] Future Projections - The company projects 2024 revenue to be in the range of $10.6 billion to $10.8 billion[5] - Adjusted EBITDA for 2024 is expected to be between $540 million and $550 million[5] - Adjusted EPS for 2024 is forecasted to be in the range of $1.45 to $1.55[5] - The company anticipates benefits from seasonality and investments made in previous quarters as it approaches 2025[3] Cash Flow and Investments - Cash provided by operating activities for the three months ended September 30, 2024, was $27,307 thousand, down from $157,435 thousand in the prior year, a decrease of 82.7%[15] - Cash used for investing activities was $27,189 thousand for the three months ended September 30, 2024, compared to $32,672 thousand in the same period of 2023, a decrease of 16.5%[15] - Cash, cash equivalents, and restricted cash at the end of the period was $75,090 thousand, down from $250,160 thousand at the end of September 30, 2023, a decline of 70%[16] Segment Performance - Operating income for the Patient Direct segment increased to $79,932, representing 11.64% of net revenue, compared to $64,435 or 9.94% in the prior year[17] - Consolidated net revenue for the nine months ended September 30, 2024, reached $8,004,810, up from $7,677,817 in 2023, with a slight decrease in the Products & Healthcare Services segment percentage from 75.41% to 75.20%[18] - Capital expenditures for the Patient Direct segment were $127,596 for the nine months ended September 30, 2024, compared to $133,610 in the same period of 2023[18] - Consolidated capital expenditures for the nine months ended September 30, 2024, totaled $156,726, an increase from $151,567 in the previous year[18] Charges and Expenses - The company incurred acquisition-related charges and intangible amortization of $61,395 for the nine months ended September 30, 2024, down from $74,609 in the previous year[22] - Exit and realignment charges for the three months ended September 30, 2024, were $28,880,000, compared to $30,180,000 for the same period in 2023, indicating a reduction of approximately 4.3%[27] - Acquisition-related charges for the three months ended September 30, 2024, totaled $21,097,000, down from $30,217,000 in the same period of 2023, representing a decrease of about 30%[24] - The company incurred litigation and related charges of $9,984,000 during the three months ended September 30, 2024, with no comparable charges in the same period of 2023[24] - Stock compensation expenses increased to $5,339,000 for the three months ended September 30, 2024, compared to $4,616,000 in the same period of 2023, reflecting an increase of approximately 15.6%[24] Other Notable Events - The company reported a gain of $7,400,000 on the sale of its corporate headquarters for the nine months ended September 30, 2024[27] - The company emphasizes the use of non-GAAP measures to provide a clearer view of its core business performance, excluding items that do not reflect ongoing operations[34]

Financial Performance - For the three months ended June 30, 2024, net revenue increased by $107.8 million, or 4.2%, to $2.67 billion compared to the same period in 2023[85]. - The Products & Healthcare Services segment operating income rose to $11.5 million for the three months ended June 30, 2024, compared to $2.9 million in the prior year, driven by a revenue growth of 4.1%[80]. - The Patient Direct segment reported operating income of $64.8 million for the three months ended June 30, 2024, reflecting a revenue growth of 4.4%[80]. - Gross profit for the three months ended June 30, 2024, was $544.2 million, representing a 4.8% increase from the prior year, with a gross profit margin of 20.37%[91]. - Operating expenses for the three months ended June 30, 2024, increased by $14.3 million, or 3.1%, primarily due to incremental costs to support revenue growth[92]. - Cost of goods sold for the three months ended June 30, 2024, was $2.13 billion, reflecting an increase of $83.1 million, or 4.1%, aligned with revenue growth[87]. - The net loss per share for the three months ended June 30, 2024, was $(0.42), compared to $(0.37) for the same period in 2023[79]. Acquisition and Investments - The company entered into an agreement to acquire Rotech Healthcare Holdings Inc. for $1.36 billion, with a net purchase price of approximately $1.32 billion after anticipated tax benefits[77]. - The company expects the acquisition of Rotech to close by the end of 2024, subject to customary closing conditions[77]. - Cash used for investing activities in the first six months of 2024 included capital expenditures of $95.2 million, compared to $101 million in 2023[107]. - The company has $48.4 million in legally binding lease commitments for a center of excellence for medical supplies and logistics[121]. Tax and Interest - The income tax provision for the three months ended June 30, 2024, was $15.1 million, a significant increase of 655.4% compared to a benefit of $(2.7) million in 2023, primarily due to a one-time income tax charge of $17.2 million[102]. - Interest expense, net decreased to $35.9 million for the three months ended June 30, 2024, down 11.9% from $40.7 million in 2023, and for the six months, it decreased by 13.7% to $71.6 million from $82.9 million[100]. Cash Flow and Working Capital - Cash provided by operating activities for the six months ended June 30, 2024, was $63.2 million, a decrease from $471.5 million in the same period of 2023[105]. - The company believes cash generated from operating activities and available financing sources will be sufficient to meet its working capital needs[119]. Accounts Receivable and Inventory - Accounts receivable, net increased to $662.4 million as of June 30, 2024, from $598.3 million at the end of 2023, with DSO increasing to 22.1 days from 20.5 days[104]. - Merchandise inventories rose to $1.23 billion as of June 30, 2024, compared to $1.11 billion at the end of 2023, with inventory days increasing to 52.7 days from 49.0 days[104]. - Total accounts receivable sold under the Receivables Purchase Agreement (RPA) were $573 million and $1.1 billion for the three and six months ended June 30, 2024, with net cash proceeds of $569 million and $1.1 billion respectively[116]. Liabilities and Compliance - Total liabilities for the Guarantor Group rose from $4,243,230 thousand at December 31, 2023 to $4,521,706 thousand at June 30, 2024[124]. - The company maintained compliance with its debt covenants as of June 30, 2024[115]. Other Financial Metrics - The company experienced a foreign currency translation impact of $(1.9) million on net revenue for the three months ended June 30, 2024, compared to the prior year[86]. - Intangible amortization was $16.3 million and $36.5 million for the three and six months ended June 30, 2024, compared to $20.9 million and $41.8 million for the same periods in 2023, reflecting a reduction of $4.7 million and $5.3 million as certain intangible assets are fully amortized[96]. - Exit and realignment charges, net were $29.3 million and $56.6 million for the three and six months ended June 30, 2024, primarily related to the Operating Model Realignment Program, which incurred $22.9 million and $56.4 million in costs[97]. - Losses on the sale of accounts receivable were $3.9 million and $2.9 million for the three months ended June 30, 2024 and 2023 respectively[117]. - The Guarantor Group reported net revenue of $5,201,722 thousand and a net loss of $58,636 thousand for the six months ended June 30, 2024[123]. - Total current assets for the Collateral Group increased from $1,280,045 thousand at December 31, 2023 to $1,495,870 thousand at June 30, 2024[125]. - Cash and cash equivalents held by foreign subsidiaries totaled $21.8 million and $22.0 million at June 30, 2024 and December 31, 2023 respectively[120]. - The company is permanently reinvested in its foreign subsidiaries as of June 30, 2024[120].

Financial Data and Key Metrics - Revenue for Q2 2024 was $2.7 billion, up 4% YoY, driven by growth in both the Products & Healthcare Services and Patient Direct segments [11] - Gross profit was $544 million, or 20.4% of net revenue, reflecting an 11 basis point margin expansion YoY [12] - GAAP operating income was $20.3 million, up 87% YoY, while adjusted operating income was $76.3 million, up 23% YoY [13] - Adjusted EBITDA was $127 million, up 12% YoY [15] - Operating cash flow for the quarter was $116 million, allowing the company to reduce net debt by $70 million [15] Business Segment Performance - Products & Healthcare Services segment revenue was $2 billion, up 4% YoY, driven by strong same-store sales growth and new business wins [6] - Medical Distribution division within P&HS grew 5% YoY [11] - Patient Direct segment revenue was $660 million, up 4% YoY, driven by growth in diabetes and sleep supplies [7] - Respiratory therapies such as NIV and oxygen underperformed expectations in the Patient Direct segment [12] Market and Strategic Developments - The company announced a definitive agreement to acquire Rotech Healthcare Holdings, Inc, which aligns with its strategy to expand the Patient Direct business and achieve a long-term revenue target of $5 billion by 2028 [4] - The acquisition of Rotech is expected to enhance capabilities in respiratory and home medical equipment, improving service levels for patients, providers, and payers [9] - The company is focusing on optimizing the P&HS segment through cost efficiencies, expanding its branded product portfolio, and entering adjacent markets [7] Management Commentary on Operating Environment and Outlook - Management expects stronger performance in the second half of 2024, consistent with historical trends [5] - The company remains committed to its Vision 2028 plan, which includes driving efficiencies, improving customer service, and building organic growth channels [10] - Management highlighted demographic tailwinds in the Patient Direct segment, with 133 million Americans suffering from chronic conditions, supporting long-term growth [8] - The company does not currently see an impact from GLP-1 medications on its diabetic or sleep apnea patient populations [9] Other Important Information - The company recorded a one-time tax charge of $17 million related to past transfer pricing methodology, with an expected cash payment of $30-35 million in the second half of 2024 [14] - Adjusted net income for the quarter doubled to $28.2 million, or $0.36 per share, from $14.2 million, or $0.18 per share, in Q2 2023 [15] - The company plans to redeem $171 million of notes due in December 2024 with cash on hand [16] Q&A Session Summary Question: Opportunities for margin expansion in the back half of the year - Management highlighted operational efficiencies, sourcing improvements, and automation in warehouses as key drivers for margin expansion [19][20] Question: Cash flow dynamics and customer onboarding - The company expects improved cash flow in the second half of the year due to better working capital management and seasonality in the Patient Direct segment [21][22][23] Question: Impact of shipping costs and tariffs - Shipping costs are expected to create a headwind, but the company has mitigated some impact by pre-shipping inventory and focusing on nearshore manufacturing [28][29] Question: Patient Direct segment growth and backlog - The company is clearing a backlog of sleep patients, which is expected to drive stronger growth in the second half of the year [32][33] Question: Gross margin trends - Gross margins are expected to improve in the second half of the year, driven by mix shifts in the Patient Direct segment [37] Question: Feedback on Rotech acquisition - Initial feedback from payers and providers has been positive, with expectations of improved patient experience and service efficiency [39][40] Question: Legal expenses related to Apria - Legal expenses in Q2 were related to a one-time settlement and are not expected to recur [46] Question: Medical Distribution growth breakdown - Growth in the Medical Distribution division was driven by a combination of same-store sales and new customer wins [48]

LOS ANGELES, Aug. 2, 2024 /PRNewswire/ -- The Schall Law Firm, a national shareholder rights litigation firm, announces that it is investigating claims on behalf of investors of Owens & Minor, Inc. ("Owens & Minor" or "the Company") (NYSE: OMI) for violations of the securities laws. The investigation focuses on whether the Company issued false and/or misleading statements and/or failed to disclose information pertinent to investors. Owens & Minor announced on June 24, 2024, that its Executive Vice President ...

Owens & Minor (OMI) came out with quarterly earnings of $0.36 per share, beating the Zacks Consensus Estimate of $0.33 per share. This compares to earnings of $0.18 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 9.09%. A quarter ago, it was expected that this medical supply distributor would post earnings of $0.17 per share when it actually produced earnings of $0.19, delivering a surprise of 11.76%. Over the last four quart ...

Exhibit 99.1 Owens & Minor Reports Second Quarter 2024 Financial Results Top Line Expansion Driven by Solid Growth in Both Segments Second Quarter Operating Cash Flow of $116 Million Drove $71 million in Debt Reduction Expanding Patient Direct Segment with Agreement to Acquire Rotech Healthcare Holdings RICHMOND, VA – August 2, 2024 – Owens & Minor, Inc. (NYSE: OMI) today reported financial results for the second quarter ended June 30, 2024. Key Highlights: ● Consolidated revenue of $2.7 billion in the seco ...