Owens & Minor(US:OMI)2023-11-03 20:08Revenue and Growth - For the three months ended September 30, 2023, net revenue increased by 3.8% to $2.59 billion compared to $2.50 billion for the same period in 2022[104] - The Products & Healthcare Services segment reported a net revenue of $1.94 billion, a 2.1% increase from $1.90 billion in the prior year, while the Patient Direct segment saw a 9.1% increase to $648.3 million from $594.0 million[104] - For the nine months ended September 30, 2023, net revenue rose by 3.7% to $7.68 billion, driven by a $308 million contribution from Apria and strong growth in Patient Direct[105] Profitability and Loss - The net loss per share for the three months ended September 30, 2023, was $(0.08), a decrease from net income of $0.16 in the same period of 2022[97] - Operating income for the Products & Healthcare Services segment decreased to $19.8 million for the three months ended September 30, 2023, down from $23.8 million in 2022, while the Patient Direct segment's operating income increased to $64.4 million from $59.7 million[98] Costs and Expenses - Cost of goods sold for the three months ended September 30, 2023, was $2.05 billion, reflecting a 3.5% increase from $1.98 billion in the prior year[107] - Distribution, selling and administrative (DS&A) expenses for the three months ended September 30, 2023, increased by $21,626 thousand, or 5.0%, compared to the same period in 2022, representing 17.46% of net revenue[111] - For the nine months ended September 30, 2023, DS&A expenses rose by $233,981 thousand, or 20.8%, totaling $1,356,334 thousand, with an increase in percentage of net revenue to 17.67%[112] Charges and Financial Adjustments - The company incurred exit and realignment charges of $28.2 million and $69.9 million for the three and nine months ended September 30, 2023, respectively, primarily related to the Operating Model Realignment Program[97] - Acquisition-related charges for the three months ended September 30, 2023, were $9,400 thousand, compared to $6,900 thousand in the same period of 2022, while for the nine months, charges decreased to $11,900 thousand from $45,200 thousand[114] - Exit and realignment charges for the three months ended September 30, 2023, were $30,180 thousand, a significant increase of 1,421.9% compared to $1,983 thousand in the same period of 2022[115] Cash Flow and Liquidity - Cash and cash equivalents as of September 30, 2023, were $215,191 thousand, a substantial increase of 209.8% from $69,467 thousand at December 31, 2022[123] - Net cash provided by operating activities for the nine months ended September 30, 2023, was $628,945 thousand, compared to $238,045 thousand in the same period of 2022[124] - Cash used for financing activities in the first nine months of 2023 included repayments of debt totaling $270 million, with $125 million in unscheduled and $10.8 million in scheduled principal payments on Term Loan A and Term Loan B[127] Assets and Liabilities - As of September 30, 2023, the company had total current assets of $1,471.9 million and total assets of $4,609.1 million[144] - The company had a maximum revolving borrowing capacity of $450 million under the Receivables Financing Agreement as of September 30, 2023[128] - The company has $421 million in borrowings under Term Loan A and $539 million under Term Loan B, with no borrowings under the Revolving Credit Agreement as of September 30, 2023[155] Foreign Currency and Risk Management - Foreign currency translation had an unfavorable impact on net revenue of $6.2 million for the nine months ended September 30, 2023, compared to the prior year[106] - The company is exposed to foreign currency translation and transaction risks due to business transactions in multiple currencies including euro and Malaysian ringgit[153] - The company is implementing strategies to manage operating expenses and improve operational efficiencies[153] Fuel and Shipping Costs - The average benchmark price for domestic diesel fuel was $4.20 per gallon in the first nine months of 2023, compared to $5.00 per gallon in the same period of 2022[156] - A 10 cents per gallon increase in diesel fuel prices could reduce annual operating income by approximately $0.6 million[156] - The company is indirectly exposed to increased shipping and freight costs due to fluctuations in fuel prices[156]