Uwens &Minor First Quarter 2025 Supplemental Earnings Slides May 8, 2025 This presentation 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 presentation 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 ...

[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) [Q1 2025 Key Financial Results](index=1&type=section&id=Q1%202025%20Key%20Financial%20Results) Owens & Minor reported Q1 2025 total revenue of **$2.632 billion**, a GAAP net loss, but increased non-GAAP adjusted net income and Adjusted EBITDA Q1 2025 Financial Summary vs. Q1 2024 | Financial Metric | 1Q25 | 1Q24 | | :--- | :--- | :--- | | **Revenue** | $2,632 million | $2,613 million | | **Operating income, GAAP** | $0.1 million | $9.7 million | | **Adj. Operating Income, Non-GAAP** | $61.3 million | $57.4 million | | **Net loss, GAAP** | $(25.0) million | $(21.9) million | | **Adj. Net Income, Non-GAAP** | $18.1 million | $14.9 million | | **Adj. EBITDA, Non-GAAP** | $121.9 million | $116.3 million | | **Net loss per share, GAAP** | $(0.32) | $(0.29) | | **Adj. Net Income per share, Non-GAAP** | $0.23 | $0.19 | [Business Segment Performance](index=1&type=section&id=Business%20Segment%20Performance) Patient Direct segment drove growth with expanded operating margin, while Products & Healthcare Services experienced revenue decline and a significant operating income drop - The Patient Direct segment delivered **mid-single digit top-line growth** and a **mid-teen expansion in EBITDA**, with strong performance in Diabetes and Sleep Supplies[2](index=2&type=chunk) - The Patient Direct operating margin expanded by **173 basis points** year-over-year[1](index=1&type=chunk) - The Products & Healthcare Services segment saw top-line growth in its Medical Distribution division[2](index=2&type=chunk) Segment Operating Performance (Q1 2025 vs Q1 2024) | Segment | Net Revenue (1Q25) | Net Revenue (1Q24) | Operating Income (1Q25) | Operating Income (1Q24) | | :--- | :--- | :--- | :--- | :--- | | **Products & Healthcare Services** | $1,958.2 M | $1,974.8 M | $1.2 M | $11.5 M | | **Patient Direct** | $673.9 M | $637.8 M | $60.1 M | $45.9 M | [Strategic Developments](index=1&type=section&id=Strategic%20Developments) The company is actively pursuing the potential sale of its Products & Healthcare Services segment, with key strategic priorities including disciplined capital management, leverage reduction, and integrating the planned Rotech acquisition - The company remains actively engaged in the process for a potential sale of its Products & Healthcare Services segment[1](index=1&type=chunk)[2](index=2&type=chunk) - Future strategic focus is on disciplined capital deployment, achieving leverage targets, navigating potential tariffs, and integrating the planned Rotech acquisition[3](index=3&type=chunk) [2025 Financial Outlook](index=2&type=section&id=2025%20Financial%20Outlook) Owens & Minor reaffirmed its 2025 financial guidance for revenue, Adjusted EBITDA, and Adjusted EPS, notably excluding impacts from the Rotech acquisition, P&HS segment sale, or future tariffs Full-Year 2025 Financial Guidance | Metric | 2025 Guidance Range | | :--- | :--- | | **Revenue** | $10.85 billion to $11.15 billion | | **Adjusted EBITDA** | $560 million to $590 million | | **Adjusted EPS** | $1.60 to $1.85 | - The 2025 outlook excludes any impact from the planned Rotech acquisition, the potential sale of the Products & Healthcare Services segment, and potential tariffs[5](index=5&type=chunk) - The company does not provide guidance for the comparable GAAP measures because certain elements, such as exit and realignment charges, are unpredictable and cannot be forecasted without unreasonable effort[6](index=6&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Q1 2025 net revenue slightly increased, but decreased gross profit and higher operating expenses led to a significant drop in operating income and a GAAP net loss Q1 2025 Consolidated Statement of Operations (in thousands) | Line Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net revenue** | $2,632,048 | $2,612,680 | | **Gross profit** | $526,013 | $535,529 | | **Operating income** | $124 | $9,696 | | **Interest expense, net** | $33,959 | $35,655 | | **Net loss** | $(24,982) | $(21,886) | | **Net loss per share (Basic & Diluted)** | $(0.32) | $(0.29) | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets increased due to higher inventories, total liabilities rose from increased payables and debt, leading to a slight decrease in total equity Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $2,206,198 | $2,021,017 | | **Total assets** | $4,856,424 | $4,656,156 | | **Total current liabilities** | $1,960,215 | $1,852,052 | | **Total liabilities** | $4,285,445 | $4,069,792 | | **Total equity** | $570,979 | $586,364 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, cash used for operating activities improved, offset by increased accounts payable and inventories, while financing activities provided cash, resulting in a net cash increase Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Cash used for operating activities** | $(35,066) | $(52,962) | | **Cash used for investing activities** | $(48,200) | $(1,870) | | **Cash provided by financing activities** | $92,778 | $53,320 | | **Net increase (decrease) in cash** | $10,054 | $(2,130) | | **Cash at end of period** | $59,436 | $270,794 | [Segment Information](index=7&type=section&id=Segment%20Information) In Q1 2025, Patient Direct segment revenue and operating income grew significantly, contrasting with Products & Healthcare Services' revenue decline and sharp operating income plummet Segment Performance Summary (Q1 2025 vs Q1 2024, in thousands) | Segment | Net Revenue | Operating Income | Adjusted EBITDA | | :--- | :--- | :--- | :--- | | **Products & Healthcare Services** | | | | | 1Q25 | $1,958,164 | $1,153 | $24,218 | | 1Q24 | $1,974,837 | $11,486 | $32,972 | | **Patient Direct** | | | | | 1Q25 | $673,884 | $60,141 | $97,637 | | 1Q24 | $637,843 | $45,879 | $83,298 | [Non-GAAP Financial Measures & Reconciliations](index=9&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) [Reconciliation of GAAP to Non-GAAP Measures](index=9&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) For Q1 2025, GAAP operating income and net loss were adjusted to non-GAAP figures, reflecting core performance by excluding specific charges Q1 2025 GAAP to Non-GAAP Reconciliation (in thousands) | Metric | As Reported (GAAP) | Adjustments | Adjusted (Non-GAAP) | | :--- | :--- | :--- | :--- | | **Operating income** | $124 | $61,170 | $61,294 | | **Net loss / income** | $(24,982) | $43,055 | $18,073 | | **Net loss / income per share** | $(0.32) | $0.55 | $0.23 | Q1 2025 Net Loss to Adjusted EBITDA Reconciliation (in thousands) | Metric | Amount | | :--- | :--- | | **Net loss, as reported (GAAP)** | $(24,982) | | Income tax benefit | $(10,092) | | Interest expense, net | $33,959 | | Key Adjustments (Acquisition, Exit, D&A, etc.) | $122,970 | | **Adjusted EBITDA (non-GAAP)** | $121,855 | [Explanation of Non-GAAP Adjustments](index=10&type=section&id=Explanation%20of%20Non-GAAP%20Adjustments) Key non-GAAP adjustments for Q1 2025 primarily included acquisition-related charges, intangible amortization, and significant exit and realignment costs - Acquisition-related charges for Q1 2025 totaled **$16 million**, primarily consisting of legal and professional fees for the planned acquisition of Rotech[24](index=24&type=chunk) - Exit and realignment charges of **$31 million** in Q1 2025 included **$10 million** for kitting/manufacturing initiatives, **$7.1 million** in fees for the potential P&HS sale, and a **$6.8 million** accounts receivable provision for a non-operating customer[25](index=25&type=chunk) - Non-cash LIFO charges of **$8.6 million** for U.S. distribution inventories were excluded from Adjusted EBITDA[24](index=24&type=chunk)[29](index=29&type=chunk)

Group 1 - The article discusses the aggressive deal-making strategy of Owens & Minor, Inc. (NYSE: OMI), suggesting that the company has pursued many large deals in the past [1] - The investing group "Value In Corporate Events" provides members with opportunities to capitalize on significant corporate events such as IPOs, mergers & acquisitions, and earnings reports [1] - The coverage includes 10 major events a month, focusing on identifying the best investment opportunities [1]

Core Insights - Owens & Minor, Inc. (OMI) reported strong fourth-quarter results, exceeding analyst expectations for both earnings and revenues, leading to a 39% increase in share price [1][3] - The company's strategic transformation, including the potential sale of its Products and Healthcare Services (P&HS) segment and the acquisition of Rotech, has bolstered investor confidence [1][5] Financial Performance - OMI's fourth-quarter revenues reached $2.7 billion, a 1.5% year-over-year increase, surpassing estimates by 0.7% [3] - Earnings per share were reported at $0.55, exceeding estimates by 3.8% [3] - The Products and Healthcare Services segment grew by 0.5%, supported by stable same-store medical distribution sales [3] Segment Performance - The Patient Direct segment saw a 5% revenue increase, driven by strong demand for diabetes and sleep therapy products [4] - Despite a decline in home respiratory therapies, growth is expected to resume in 2025 based on positive trends observed late in Q4 [4] Strategic Initiatives - OMI is exploring the sale of its P&HS segment, which has attracted significant interest from potential buyers [5] - The company aims to reinvest in high-growth areas like Patient Direct, enhancing profitability and streamlining operations [7] Acquisition Plans - OMI is optimistic about its pending $1.4 billion acquisition of Rotech, which is expected to drive long-term shareholder value [9] - The acquisition is projected to generate at least $50 million in cost synergies by year three, with potential for quicker realization [10] Future Outlook - For 2025, OMI projects revenues between $10.85 billion and $11.15 billion, primarily driven by the Patient Direct segment [11] - Adjusted EBITDA is expected to be between $560 million and $590 million, indicating a 10% increase year-over-year [11] - The company anticipates adjusted EPS in the range of $1.60 to $1.85 per share, suggesting a 13% year-over-year growth [11] - A $100 million share repurchase program has been announced, reflecting management's confidence in the company's valuation and prospects [11]

Mergers and Acquisitions - Owens & Minor is engaged in discussions for the potential sale of its Products & Healthcare Services segment, with no set timetable for completion[9]. - The company has 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 tax benefits[10]. - Owens & Minor completed the acquisition of Apria, Inc. for approximately $1.7 billion, net of cash acquired, which is now part of the Patient Direct segment[11]. - The proposed acquisition of Rotech may not be completed as anticipated, with risks including failure to satisfy closing conditions[140]. Revenue and Customer Base - In 2024, sales to Vizient, Premier, and HealthTrust Purchasing Group represented 33%, 21%, and 10% of consolidated net revenue, respectively[29]. - The top ten customers in the U.S. represented approximately 23% of the company's consolidated net revenue in 2024[121]. - Approximately 65% of the company's consolidated net revenue in 2024 was from sales to member hospitals under contract with its largest GPOs: Vizient, Premier, and HPG[121]. - The largest Payor represented approximately 22% of the company's Patient Direct net revenue in 2024[121]. Operations and Supply Chain - The company operates a network of distribution centers across the U.S. to efficiently serve healthcare providers, utilizing advanced information technology for inventory and supply chain management[17]. - The company has significant investments in inventory and accounts receivable to meet customer delivery requirements, emphasizing efficient asset management[32]. - The company relies on a relatively small number of suppliers for the majority of patient service equipment and supplies, which could adversely affect results if procurement issues arise[129]. - Supply chain disruptions and increased costs, particularly related to international freight and commodities, may negatively impact the company's ability to meet customer demand and maintain profitability[161]. Competition and Market Environment - Owens & Minor faces competition from major manufacturers and distributors, including Cardinal Health and Medline Industries, as well as regional competitors[39]. - The company competes with national and regional healthcare providers in the Patient Direct segment, including AdaptHealth Corp., Lincare, and CVS Health Corporation[41]. - The home healthcare industry is highly fragmented and competitive, with potential disruptions from large technology companies entering the market, which may lead to a loss of referrals or revenue[154]. - The company faces increasing competition and pricing pressure in the medical/surgical supply distribution industry, which could adversely affect its market share and profitability[153]. Regulatory Compliance and Legal Risks - Compliance with healthcare regulations significantly increases the time and costs associated with obtaining and maintaining product approvals[49]. - The company is subject to numerous federal and state laws regarding the privacy and security of Protected Health Information (PHI) under HIPAA and other regulations[51]. - The company is subject to extensive regulation by various federal and state agencies, including the FDA and the EPA, impacting its operations and compliance costs[61]. - The company is subject to extensive federal and state healthcare laws, and failure to comply could result in investigations, civil or criminal sanctions, and loss of participation in Medicare and Medicaid programs[172]. Financial Performance and Risks - The company incurred research and development costs of $13 million, $13 million, and $12 million for the years ended 2024, 2023, and 2022 respectively[42]. - The company recorded a goodwill impairment charge of $307 million in the Apria reporting unit during the three months ended December 31, 2024, with no impairment charges in 2023 or 2022[152]. - Rising inflationary pressures may impact the costs of sourcing materials and could limit the company's ability to pass these costs onto customers, affecting profitability[168]. - The company may experience adverse effects on demand for its products and services due to poor economic conditions and changes in political environments, which could impact accounts receivable collectability[162]. Human Capital and Corporate Culture - At the end of 2024, the company employed approximately 13,500 full-time and part-time teammates in the U.S. and 9,700 teammates outside the U.S.[92]. - The company has implemented enterprise-wide talent development and succession planning programs to identify future candidates for key positions[93]. - The Board of Directors emphasizes that effective human capital management is vital for the company's growth and success[99]. - The company regularly conducts teammate engagement surveys to solicit feedback and improve corporate culture[100]. Intellectual Property and Innovation - The company has patents and patent applications pending in the U.S. and other countries related to its surgical and infection protection products, with expiration dates ranging from 2025 to 2044[45]. - The company continuously reviews third-party proprietary rights to develop an effective intellectual property strategy and avoid infringement[44]. - The company’s intellectual property rights are crucial for maintaining competitive advantage, and failure to protect these rights could lead to revenue loss[192]. Environmental, Social, and Governance (ESG) Commitments - The company established the Owens & Minor Foundation in 2021, focusing on the environment, healthcare, and culture[95]. - The company faces risks related to its ESG commitments, which could impact reputation and stock price if not met[203]. - Voluntary ESG disclosures may be based on uncertain assumptions, leading to potential misinterpretations and revisions[204]. - Activism related to ESG initiatives could impose additional costs and adversely affect the company's business[206].

Financial Data and Key Metrics Changes - Revenue for Q4 2024 was $2.7 billion, up 1.5% compared to the prior year [25] - Adjusted net income for Q4 was $43 million or $0.55 per share, compared to $54 million or $0.69 per share last year [31] - Adjusted EBITDA was $138 million, down from $170 million reported in Q4 2023 [32] - Gross profit in Q4 was $580 million, representing 21.5% of net revenue [28] Business Line Data and Key Metrics Changes - Patient Direct revenue grew by 5% in Q4 2024, with strong growth in sleep supplies and diabetes [27] - The Products and Health Care Services (P&HS) segment grew 0.5% overall in Q4, with same-store sales growth in medical distribution offset by lower glove pricing [26][20] - Adjusted operating income was $95 million in Q4, an increase compared to the third quarter but lower than the previous year [30] Market Data and Key Metrics Changes - The IV fluid shortage impacted procedure volume and sales volume to distribution customers [26] - Home respiratory therapies such as NIV and oxygen declined year-over-year, but there are expectations for a return to growth in 2025 [28] Company Strategy and Development Direction - The company is focused on optimizing its P&HS segment and leveraging its Patient Direct platform for growth [9] - Plans to acquire Rotech are underway, with expectations to close in the first half of 2025, aiming to drive long-term shareholder value [10][14] - A share repurchase program of up to $100 million has been authorized by the Board of Directors [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the future of the Patient Direct business, citing positive demographic trends and expanding home treatment options [9] - The company anticipates mid-single-digit revenue growth for 2025, primarily driven by the Patient Direct segment [35] - Management remains focused on reducing debt and maintaining a debt-to-EBITDA leverage ratio between two and three times [38] Other Important Information - The company repaid $647 million of debt over the last two years, demonstrating strong cash flow capabilities [10][33] - A goodwill impairment charge of $305 million was recorded in Q4, primarily due to adverse financial market changes [32] Q&A Session Summary Question: Concerns about Rotech's performance - Management indicated there were no surprises in Rotech's results, consistent with expectations despite external legislative impacts [46][47] Question: Free cash flow and share repurchase strategy - The primary objective is to pay down debt, but share repurchase will be considered opportunistically if the stock remains undervalued [50] Question: Trends in Patient Direct growth - Management noted strong growth in diabetes and sleep supplies, with plans to improve performance in home respiratory categories [57][58] Question: Impact of tariffs - Tariffs are not significantly impacting the company, as most products are not sourced from high-tariff regions [72][74] Question: Capitated contract impact - The large capitated contract is not expected to have a meaningful impact on 2025 results, as current pricing is already modeled into projections [104][105] Question: Growth expectations for P&HS and Patient Direct - The majority of revenue growth is expected to come from the Patient Direct segment, with modest improvements in margins across both segments [111]

Financial Data and Key Metrics Changes - Revenue for Q4 2024 was $2.7 billion, up 1.5% compared to the prior year [25] - Adjusted net income for the quarter was $43 million or $0.55 per share, compared to $54 million or $0.69 per share last year [31] - Adjusted EBITDA was $138 million versus $170 million reported during Q4 2023 [32] - Gross profit in Q4 was $580 million or 21.5% of net revenue, with margin essentially flat year-over-year [28] Business Line Data and Key Metrics Changes - Patient Direct revenue grew by 5% compared to Q4 2023, with strong growth in sleep supplies and diabetes [27] - The products and health care services segment grew 0.5% overall compared to Q4 2023, with same-store sales growth in medical distribution offset by lower glove pricing [26][20] - Adjusted operating income was $95 million in Q4, an $11 million increase compared to Q3 [30] Market Data and Key Metrics Changes - The IV fluid shortage impacted procedure volume and subsequently sales volume to some distribution customers [26] - Home respiratory therapies such as NIV and oxygen declined year-over-year, but there are expectations for a return to growth in 2025 [27] Company Strategy and Development Direction - The company is focused on optimizing its product and health care services segment while leveraging its Patient Direct platform [9] - Plans to pursue the acquisition of Rotech, which is expected to close in the first half of 2025, are underway [14] - A share repurchase program of up to $100 million has been authorized by the Board of Directors [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future of the Patient Direct business, citing positive demographic trends and expanding home treatment options [10] - The company expects mid-single-digit revenue growth for 2025, primarily driven by the Patient Direct segment [35] - Management remains focused on reducing debt levels and maintaining a debt to EBITDA leverage between two and three times [38] Other Important Information - The company repaid $647 million of debt over the last two years, demonstrating strong cash flow capabilities [10][33] - A goodwill impairment charge of $305 million was recorded in Q4, primarily related to adverse financial market changes [32] Q&A Session Summary Question: Concerns regarding Rotech's performance - Management indicated there were no surprises in Rotech's results and acknowledged the impact of government reimbursement changes [46][47] Question: Free cash flow and capital deployment strategy - The primary objective is to pay down debt, but share repurchases will be considered if the stock remains undervalued [50] Question: Trends in Patient Direct business - Management noted mid-single-digit growth in Patient Direct, with strong performance in diabetes and sleep supplies, while focusing on improving home respiratory categories [56][57] Question: Impact of tariffs on costs - Tariffs are not significantly impacting the company as most products are not made in China, with minimal exposure to Mexican tariffs [72][78] Question: Future capital deployment and focus areas - The company will focus on Patient Direct and debt repayment, with potential for expansion into other areas in the future [86][87] Question: Insights on the Apria capitated contract - Management stated that the impact of the contract on 2025 results is already baked into the numbers and will not be significant [104][105]

Uwens &Minor Fourth Quarter 2024 Supplemental Earnings Slides February 28, 2025 | Modeling Assumptions | 2025 Outlook | | --- | --- | | Revenue | $10.85 - $11.15 billion | | Gross Margin | 20.75% - 21.25% | | Interest Expense | $138 - $142 million | | Gross Capital Expenditures | $250 - $270 million | | Adj. Effective Tax Rate | 29.0% - 30.0% | | Diluted Wtd. Avg. Shares Outstanding | ~80 million | | Adjusted EBITDA | $560 - $590 million | | Adjusted EPS | $1.60 – $1.85 | | Commodity Prices | Stable | | For ...

Owens & Minor (OMI) came out with quarterly earnings of $0.55 per share, beating the Zacks Consensus Estimate of $0.53 per share. This compares to earnings of $0.69 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 3.77%. A quarter ago, it was expected that this medical supply distributor would post earnings of $0.40 per share when it actually produced earnings of $0.42, delivering a surprise of 5%.Over the last four quarters, t ...

Financial Projections - Preliminary revenue for full year 2024 is expected to be between $10.67 billion and $10.70 billion, with a net loss projected between $(378) million and $(355) million[6]. - Adjusted EBITDA for full year 2024 is anticipated to be between $520 million and $525 million, with adjusted EPS ranging from $1.50 to $1.53[6]. - Cash provided by operating activities for full year 2024 is expected to be between $160 million and $165 million[6]. - Gross capital expenditures for full year 2024 are projected to be between $228 million and $233 million[6]. Debt Management - The company plans to raise additional debt to finance the acquisition of Rotech Healthcare Holdings, expected to close in the first half of 2025[3]. - Total debt is projected to be between $1.854 billion and $1.859 billion, with net debt between $1.805 billion and $1.810 billion[6]. - The company reduced total debt by over $240 million during 2024 despite significant reinvestment in the business[4]. Segment Performance - The Patient Direct segment showed solid mid-single digit growth for the full year 2024, with even higher growth in key categories[4]. Impairment Charges - A non-cash goodwill impairment charge of approximately $310 million is expected, impacting net loss per share by about $(4.00)[7]. Upcoming Events - The investor conference call for the fourth quarter and full year 2024 results is scheduled for February 28, 2025[9].