Owens & Minor(OMI) - 2025 Q2 - Quarterly Results

Executive Summary & Strategic Update Second Quarter 2025 Highlights Owens & Minor reported solid growth in its continuing operations, primarily the Patient Direct segment, for the second quarter of 2025, while reclassifying the Products & Healthcare Services segment as discontinued operations - The company has classified its Products & Healthcare Services segment as discontinued operations, anticipating its sale to focus on the Patient Direct business[1][2] Second Quarter and Year-to-Date 2025 Financial Summary for Continuing Operations | Metric ($ in millions, except per share data) | 2Q25 | 2Q24 | YTD 2025 | YTD 2024 | | :--------------------------------------- | :----- | :----- | :--------- | :--------- | | Revenue | $681.9 | $660.4 | $1,355.8 | $1,298.2 | | Loss from continuing operations, net of tax, GAAP | $(83.8) | $(6.7) | $(87.6) | $(20.1) | | Adj. net income from continuing operations, Non-GAAP | $20.5 | $19.3 | $43.7 | $21.9 | | Adj. EBITDA, Non-GAAP | $96.6 | $91.1 | $192.7 | $160.3 | | Loss from continuing operations, net of tax per common share, GAAP | $(1.09) | $(0.09) | $(1.14) | $(0.26) | | Adj. net income from continuing operations per share, Non-GAAP | $0.26 | $0.25 | $0.55 | $0.28 | Strategic Business Transformation The company is in the final stages of divesting its Products & Healthcare Services segment, reclassifying it as discontinued operations to transform into a pure-play Patient Direct company, with management confident in future growth - The company is divesting its Products & Healthcare Services segment, reclassifying it as discontinued operations to partner with a buyer for enhanced customer support and long-term growth[1][2] - The company will transform into a pure-play Patient Direct business, confident in its evolving leadership within this market, benefiting from favorable demographic trends and significant scale[3] 2025 Continuing Operations Financial Outlook The company will provide its 2025 financial outlook for continuing operations during its earnings conference call on August 11, 2025, at 8:30 AM EDT - The company will provide its 2025 financial outlook for continuing operations during the earnings conference call[4] Investor Conference Call for Second Quarter 2025 Financial Results Owens & Minor will host an investor and analyst conference call on Monday, August 11, 2025, at 8:30 AM EDT, providing dial-in numbers and a webcast link - The investor conference call will be held on Monday, August 11, 2025, at 8:30 AM EDT, accessible via toll-free dial-in or webcast[5] Financial Performance (Continuing Operations) Consolidated Statements of Operations (Unaudited) Net revenue from continuing operations increased in Q2 and H1 2025, but the company reported a significantly expanded net loss due to substantial losses from discontinued operations and a transaction termination fee Three Months Ended June 30. 2025 In Q2 2025, net revenue from continuing operations increased, but the net loss significantly expanded due to a transaction termination fee and substantial losses from discontinued operations Key Data from Consolidated Statements of Operations for Q2 2025 | Metric (dollars in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------- | :-------------------- | :-------------------- | | Net Revenue | $681,917 | $660,401 | | Operating (Loss) Income | $(39,710) | $16,922 | | Loss from Continuing Operations, Net of Tax | $(83,822) | $(6,742) | | Loss from Discontinued Operations, Net of Tax | $(785,236) | $(25,171) | | Net Loss | $(869,058) | $(31,913) | | Transaction Termination Fee | $80,000 | - | Six Months Ended June 30. 2025 For the first half of 2025, net revenue from continuing operations increased, but the net loss significantly expanded due to losses from discontinued operations and a transaction termination fee Key Data from Consolidated Statements of Operations for H1 2025 | Metric (dollars in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :-------------------- | :-------------------- | | Net Revenue | $1,355,801 | $1,298,244 | | Operating (Loss) Income | $(19,919) | $23,892 | | Loss from Continuing Operations, Net of Tax | $(87,632) | $(20,135) | | Loss from Discontinued Operations, Net of Tax | $(806,408) | $(33,664) | | Net Loss | $(894,040) | $(53,799) | | Transaction Termination Fee | $80,000 | - | Condensed Consolidated Balance Sheets (Unaudited) As of June 30, 2025, total assets and total shareholders' equity decreased, primarily due to the reclassification of assets and liabilities of discontinued operations, resulting in a deficit in shareholders' equity Key Data from Condensed Consolidated Balance Sheets | Metric (dollars in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :------------- | | Total Assets | $4,154,545 | $4,656,156 | | Current Assets of Discontinued Operations | $1,890,638 | $1,625,354 | | Non-Current Assets of Discontinued Operations | - | $731,193 | | Total Liabilities | $4,435,555 | $4,069,792 | | Current Liabilities of Discontinued Operations | $1,460,239 | $1,080,896 | | Non-Current Liabilities of Discontinued Operations | - | $237,894 | | Total (Deficit) Equity | $(281,010) | $586,364 | - As of June 30, 2025, total assets decreased by 10.77% from December 31, 2024, while total liabilities increased by 9.00%, leading to a shift from positive shareholders' equity to a deficit[12] Consolidated Statements of Cash Flows (Unaudited) In Q2 and H1 2025, operating cash flow significantly decreased, and investing cash outflows increased, while financing cash flow turned into a net inflow in Q2, primarily due to revolving credit facility financing Three Months Ended June 30, 2025 In Q2 2025, cash flow from operating activities decreased to $37.6 million from $116.1 million in Q2 2024, investing cash outflows increased, and financing cash flow shifted from a net outflow to a net inflow of $31.7 million Key Data from Consolidated Statements of Cash Flows for Q2 2025 | Metric (dollars in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------- | :-------------------- | :-------------------- | | Net Loss | $(869,058) | $(31,913) | | Net Cash Provided by Operating Activities | $37,610 | $116,149 | | Net Cash Used in Investing Activities | $(52,917) | $(35,170) | | Net Cash Provided by (Used in) Financing Activities | $31,699 | $(78,240) | | Cash and Cash Equivalents, End of Period | $77,087 | $273,469 | - In Q2 2025, cash flow from operating activities decreased by 67.6% year-over-year, primarily due to an expanded net loss and changes in inventory[13] Six Months Ended June 30, 2025 For the first half of 2025, cash flow from operating activities significantly decreased to $2.5 million from $63.2 million in H1 2024, investing cash outflows substantially increased, and financing cash flow shifted from a net outflow to a net inflow of $124.5 million Key Data from Consolidated Statements of Cash Flows for H1 2025 | Metric (dollars in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :-------------------- | :-------------------- | | Net Loss | $(894,040) | $(53,799) | | Net Cash Provided by Operating Activities | $2,544 | $63,187 | | Net Cash Used in Investing Activities | $(101,117) | $(37,040) | | Net Cash Provided by (Used in) Financing Activities | $124,477 | $(24,920) | | Cash and Cash Equivalents, End of Period | $77,087 | $273,469 | - For H1 2025, cash flow from operating activities decreased by 95.9% year-over-year, primarily due to an expanded net loss and changes in accounts receivable and inventory[15] Net Loss Per Common Share (Unaudited) The company reported significant net losses per common share in Q2 and H1 2025, substantially higher than the prior year, primarily due to considerable losses from discontinued operations Three Months Ended June 30, 2025 In Q2 2025, the loss from continuing operations per share was $1.09, and the loss from discontinued operations per share was $10.21, resulting in a total net loss per share of $11.30 Net Loss Per Common Share for Q2 2025 | Metric (except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--------------------------- | :-------------------- | :-------------------- | | Loss from Continuing Operations, Net of Tax, Per Share | $(1.09) | $(0.09) | | Loss from Discontinued Operations, Net of Tax, Per Share | $(10.21) | $(0.33) | | Net Loss Per Share | $(11.30) | $(0.42) | Six Months Ended June 30, 2025 For the first half of 2025, the loss from continuing operations per share was $1.14, and the loss from discontinued operations per share was $10.46, resulting in a total net loss per share of $11.60 Net Loss Per Common Share for H1 2025 | Metric (except per share data) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------- | :-------------------- | :-------------------- | | Loss from Continuing Operations, Net of Tax, Per Share | $(1.14) | $(0.26) | | Loss from Discontinued Operations, Net of Tax, Per Share | $(10.46) | $(0.44) | | Net Loss Per Share | $(11.60) | $(0.70) | Non-GAAP Financial Measures & Reconciliations GAAP/Non-GAAP Reconciliations (Unaudited) The company provides GAAP to Non-GAAP reconciliations for adjusted operating income, net income, EPS, adjusted EBITDA, net debt, and net capital expenditures for continuing operations, excluding items not reflective of core business Operating Income, Net Income, and EPS Reconciliations show that adjusted operating income, adjusted net income, and adjusted EPS for continuing operations are significantly higher than GAAP reported values after excluding acquisition-related, transaction termination, exit, restructuring, litigation, and financing costs GAAP/Non-GAAP Reconciliation of Operating Income, Net Income, and EPS for Continuing Operations | Metric (dollars in thousands, except per share data) | 2Q25 | 2Q24 | H1 2025 | H1 2024 | | :----------------------------------------------- | :---------- | :---------- | :----------- | :----------- | | Reported Operating (Loss) Income (GAAP) | $(39,710) | $16,922 | $(19,919) | $23,892 | | Adjusted Operating Income (Non-GAAP) | $56,870 | $52,788 | $114,012 | $82,167 | | Reported Loss from Continuing Operations, Net of Tax (GAAP) | $(83,822) | $(6,742) | $(87,632) | $(20,135) | | Adjusted Income from Continuing Operations, Net of Tax (Non-GAAP) | $20,483 | $19,306 | $43,716 | $21,868 | | Reported Loss from Continuing Operations, Net of Tax, Per Share (GAAP) | $(1.09) | $(0.09) | $(1.14) | $(0.26) | | Adjusted Income from Continuing Operations, Net of Tax, Per Share (Non-GAAP) | $0.26 | $0.25 | $0.55 | $0.28 | Adjusted EBITDA and Net Debt The company reported growth in adjusted EBITDA for Q2 and H1 2025, derived from multiple adjustments to loss from continuing operations, while net debt is calculated by subtracting cash and cash equivalents from total debt Reconciliation of Adjusted EBITDA and Net Debt | Metric (dollars in thousands) | 2Q25 | 2Q24 | H1 2025 | H1 2024 | | :-------------------------- | :---------- | :---------- | :----------- | :----------- | | Adjusted EBITDA (Non-GAAP) | $96,635 | $91,080 | $192,653 | $160,300 | | Metric (dollars in thousands) | June 30, 2025 | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :------------ | :------------- | | Total Debt (GAAP) | $1,977,745 | $1,938,429 | $1,841,259 | | Cash and Cash Equivalents | $(38,258) | $(29,710) | $(27,572) | | Net Debt (Non-GAAP) | $1,939,487 | $1,908,719 | $1,813,687 | Net Capital Expenditures The company provides a reconciliation of net capital expenditures for continuing operations, calculated by deducting capital expenditures of discontinued operations and proceeds from the sale of patient service equipment and other fixed assets from GAAP capital expenditures Reconciliation of Net Capital Expenditures for Continuing Operations | Metric (dollars in thousands) | 2Q25 | 2Q24 | H1 2025 | H1 2024 | | :-------------------------- | :---------- | :---------- | :----------- | :----------- | | Reported Capital Expenditures (GAAP) | $69,537 | $45,800 | $134,211 | $95,208 | | Capital Expenditures from Continuing Operations | $59,171 | $42,344 | $107,293 | $84,058 | | Net Capital Expenditures from Continuing Operations (Non-GAAP) | $41,051 | $24,856 | $72,289 | $50,532 | Use of Non-GAAP Measures The company utilizes Non-GAAP financial measures for internal performance evaluation, financial planning, and incentive compensation, serving as supplementary metrics for investors, but these should not replace or supersede GAAP measures - Management uses Non-GAAP financial measures to evaluate company performance, balance sheet, conduct financial and operational planning, and determine incentive compensation[29] - Non-GAAP financial measures serve as supplementary indicators, assisting investors in evaluating the impact of items and events on financial and operating results, and for comparison with competitors[30] - Non-GAAP financial measures should not be considered substitutes for or superior to GAAP financial measures, and may differ from similarly titled measures used by other companies[31] Company Information & Disclosures Safe Harbor Statement This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995, addressing future prospects, performance, financial results, and the P&HS business sale, while cautioning investors about inherent risks and uncertainties - This press release contains forward-looking statements concerning future prospects, financial performance, the P&HS business sale, cost savings, growth, and industry trends[7] - Forward-looking statements involve known and unknown risks and uncertainties that could cause actual results to differ materially from expectations[7] - Investors should refer to the risk factors discussed in the company's 10-K, 10-Q, and 8-K reports filed with the SEC[7] About Owens & Minor Owens & Minor, Inc. is a Fortune 500 global healthcare solutions company providing essential products and services from hospitals to homes, operating with brands like Apria®, Byram®, and HALYARD* and employing over 20,000 people worldwide - Owens & Minor is a Fortune 500 global healthcare solutions company, providing essential products and services from hospitals to homes[8] - The company operates with affiliated brands such as Apria®, Byram®, and HALYARD*, employing over 20,000 people globally[8] Contact Information This section provides detailed contact information for investor relations and media inquiries, including respective email addresses - Investor contacts: Jackie Marcus or Nick Teves of Alpha IR Group (OMI@alpha-ir.com)[32] - Media contact: Stacy Law (media@owens-minor.com)[33]