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0000075252FALSE00000752522023-08-042023-08-04

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 4, 2023

Owens & Minor, Inc.
(Exact name of registrant as specified in its charter)
Virginia
 001-09810 54-1701843
(State or other jurisdiction of
incorporation or organization)
 (Commission
File Number)
(I.R.S. Employer
Identification No.)
9120 Lockwood Boulevard,
 Mechanicsville
Virginia
 23116
(Address of principal executive offices)
 (Zip Code)
Post Office Box 27626,
Richmond, Virginia
23261-7626
(Mailing address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code (804) 723-7000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $2 par value per share OMI New York Stock Exchange

 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.below):
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).




Item 2.02
Results of Operations and Financial Condition.

Emerging growth company o If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o On August 4, 2023, Owens & Minor, Inc. (the “Company”) issued a press release regarding its financial results for the second quarter and six months ended June 30, 2023. The Company is furnishing the press release attached hereto as Exhibit 99.1 pursuant to Item 2.02 of Form 8-K. In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01 Regulation FD Disclosure.

On August 4, 2023, the Company posted an earnings presentation on the Investor Relations section of its website. The Company is furnishing the earnings presentation attached hereto as Exhibit 99.2 pursuant to Item 7.01 of Form 8-K. In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01, including Exhibit 99.2, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01
Financial Statements and Exhibits.

(d)    Exhibits.
99.1
99.2
104 Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document)




SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
OWENS & MINOR, INC.
Date: August 4, 2023
By:
/s/ Heath H. Galloway
Name:
Heath H. Galloway
Title:
Executive Vice President, General Counsel and Corporate Secretary


EX-99.1 2 a2q238kprearnings.htm EX-99.1 Document


Owens & Minor Reports Second Quarter 2023 Financial Results

Top-line Growth Driven by Strong Performance in Patient Direct
Operating Model Realignment Program Remains on Track
Operating Cash Flow of $313 Million, Inclusive of $115 Million in Receivables Sales

RICHMOND, VA – August 4, 2023 – Owens & Minor, Inc. (NYSE: OMI) today reported financial results for the second quarter ended June 30, 2023.

Second Quarter Key Highlights:
•Consolidated revenue of $2.56 billion
•Net loss per common share of $(0.37) and adjusted net income per common share of $0.18
•$49.3 million in debt pay down and $269 million reduction in net debt

“The second quarter of 2023 shows a continuation of our Patient Direct segment’s exceptional performance, with another quarter of double-digit growth and strength across the major categories that we serve. Our Products and Healthcare Services segment demonstrated resilience during the quarter with sales growth in the Medical Distribution division, but the segment experienced continued revenue headwinds in our higher margin Global Products division. In addition, the progress we have made in the Operating Model Realignment Program is encouraging, and we are beginning to see financial benefits from the work already completed,” said Edward A. Pesicka, President & Chief Executive Officer of Owens & Minor.

Pesicka concluded, “The fluid acute care market continues to impact our Surgical & Infection Prevention (S&IP) products within the Product and Healthcare Services segment, and as a result we remain cautious for the remainder of the year. The continued strength of the Patient Direct segment, combined with overall strong operating cash flow provides flexibility to invest and strengthen our balance sheet.”

Financial Summary (1)
 YTD YTD
($ in millions, except per share data)
2Q23
 2Q22 2023 2022
Revenue
 $2,563 $2,500 $5,086 $4,907
Operating income, GAAP
 $10.8 $75.1 $20.6 $136.1
Adj. Operating Income, Non-GAAP
 $62.0 $113.6 $109.7 $218.5
Net (loss) income, GAAP
 $(28.2) $28.6 $(52.7) $67.9
Adj. Net Income, Non-GAAP
 $14.2 $58.3 $17.8 $131.0
Adj. EBITDA, Non-GAAP
 $112.8 $163.4 $221.5 $285.9
Net (loss) income per common share, GAAP
 $(0.37) $0.37 $(0.70) $0.89
Adj. Net Income per share, Non-GAAP
 $0.18 $0.76 $0.23 $1.72

(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.




1



Results and Business Highlights

•Consolidated revenue of $2.56 billion in the second quarter of 2023, an increase of 2.5% as compared to the second quarter of 2022
◦Patient Direct revenue of $633 million, up 10.5% compared to the second quarter of 2022
◦Products & Healthcare Services revenue of $1.93 billion was virtually flat versus the prior year period as growth in the Medical Distribution division of 5.1% was nearly offset by lower S&IP product sales
•Second quarter 2023 operating income of $10.8 million and Adjusted Operating Income of $62.0 million
◦Represents sequential margin expansion of 3 basis points on a GAAP basis and expansion of 53 basis points on an adjusted basis as compared to the first quarter of 2023
•Reduced total debt by $49.3 million and net debt by $269 million in the second quarter
•Generated $313 million of operating cash flow in the second quarter
◦Up nearly 3.5x as compared to the second quarter of 2022
◦Inclusive of $115 million of net proceeds from AR Sales
•Published 2022 Environmental, Social, and Governance Report outlining certifications and commitments to reduce emissions
•Awarded Commodity and Clinical Preference Supplier of the Year at Captis Conference

2023 Financial Outlook

The Company revised its outlook for 2023; summarized below:

•Revenue for 2023 to be in a range of $10.2 billion to $10.5 billion

•Adjusted EBITDA for 2023 to be in a range of $535 million to $575 million

•Adjusted EPS for 2023 to be in a range of $1.30 to $1.55

The Company’s outlook for 2023 contains assumptions, including current expectations regarding the impact of general economic conditions, including inflation, and the continuation of pressure on pricing and demand in our Products & Healthcare Services segment. Key assumptions supporting the Company’s 2023 financial guidance include:

•Adjusted operating income benefit of $30 million from the Operating Model Realignment Program
•Gross margin rate of ~20.3%
•Interest expense of $160 to $165 million
•Adjusted effective tax rate of 27% to 28%
•Diluted weighted average shares of ~77.5 million
•Capital expenditures of $200 to $220 million
•Stable commodity prices
•FX rates as of 6/30/2023

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, restructuring and acquisition 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.
2

The outlook is based on certain assumptions that are subject to the risk factors discussed in the Company’s filings with the SEC.


Investor Conference Call for Second Quarter 2023 Financial Results
Owens & Minor executives will host a conference call for investors and analysts at 8:30 a.m. ET on the same day. Participants may access the call via the toll-free dial-in number at 1-888-696-1070, or the toll dial-in number at 1-646-394-9850. 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 2023 financial performance, our Operating Model Realignment Program and other cost-saving initiatives, future indebtedness and growth, industry trends, as well as statements related to our expectations regarding the performance of its business, including the results of our Operating Model Realignment Program and 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, 2022, filed with the SEC including the sections captioned “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors,” 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 integrating product manufacturing and delivery, home health supply and perioperative services to support care through the hospital and into the home. Owens & Minor drives visibility, control and efficiency for patients, providers and healthcare professionals across the supply chain with proprietary technology and solutions, an extensive product portfolio, an Americas-based manufacturing footprint for personal protective equipment and surgical products, as well as a robust portfolio of products and services for patients managing chronic and acute conditions in the home setting. Operating continuously since 1882 from its headquarters in Richmond, Va., Owens & Minor is a 140-year-old company powered by more than 20,000 global teammates. Learn more at https://www.owens-minor.com, follow @Owens_Minor on Twitter and connect on LinkedIn at www.linkedin.com/company/owens-&-minor.

CONTACT:
Investors
Alpha IR Group
Jackie Marcus or Alec Buchmelter
OMI@alpha-ir.com

Jonathan Leon
SVP Finance & Treasurer
Investor.Relations@owens-minor.com

Media
Stacy Law
media@owens-minor.com

SOURCE: Owens & Minor, Inc.
3

Owens & Minor, Inc.
Consolidated Statements of Operations (unaudited)
(dollars in thousands, except per share data)

Three Months Ended June 30,
2023 2022
Net revenue $ 2,563,226  $ 2,500,015 
Cost of goods sold 2,043,794  1,967,510 
Gross margin 519,432  532,505 
Distribution, selling and administrative expenses 455,030  421,925 
Acquisition-related charges and intangible amortization 22,203  37,276 
Exit and realignment charges 28,963  1,214 
Other operating expense (income), net 2,397  (2,995)
Operating income 10,839  75,085 
Interest expense, net 40,728  35,839 
Other expense, net 1,072  783 
(Loss) income before income taxes (30,961) 38,463 
Income tax (benefit) provision (2,720) 9,859 
Net (loss) income $ (28,241) $ 28,604 
Net (loss) income per common share:
Basic $ (0.37) $ 0.38 
Diluted $ (0.37) $ 0.37 
4

Owens & Minor, Inc.
Consolidated Statements of Operations (unaudited)
(dollars in thousands, except per share data)

Six Months Ended June 30,
2023 2022
Net revenue $ 5,086,075  $ 4,906,967 
Cost of goods sold 4,069,336  4,001,014 
Gross margin 1,016,739  905,953 
Distribution, selling and administrative expenses 903,752  691,397 
Acquisition-related charges and intangible amortization 44,392  79,410 
Exit and realignment charges 44,637  2,896 
Other operating expense (income), net 3,312  (3,894)
Operating income 20,646  136,144 
Interest expense, net 82,926  47,858 
Other expense, net 2,458  1,565 
(Loss) income before income taxes (64,738) 86,721 
Income tax (benefit) provision (12,079) 18,837 
Net (loss) income $ (52,659) $ 67,884 
Net (loss) income per common share:
Basic $ (0.70) $ 0.92 
Diluted $ (0.70) $ 0.89 

























5

Owens & Minor, Inc.
Condensed Consolidated Balance Sheets (unaudited)
(dollars in thousands)
June 30, December 31,
2023 2022
Assets
Current assets
Cash and cash equivalents $ 286,307  $ 69,467 
Accounts receivable, net of allowances of $9,270 and $9,063
 672,511  763,497 
Merchandise inventories 1,168,227  1,333,585 
Other current assets 135,409  128,636 
Total current assets 2,262,454  2,295,185 
Property and equipment, net of accumulated depreciation of $510,394 and $450,286
 559,508  578,269 
Operating lease assets 292,809  280,665 
Goodwill 1,637,149  1,636,705 
Intangible assets, net 403,020  445,042 
Other assets, net 133,060  150,417 
Total assets $ 5,288,000  $ 5,386,283 
Liabilities and equity
Current liabilities
Accounts payable $ 1,194,173  $ 1,147,414 
Accrued payroll and related liabilities 92,264  93,296 
Other current liabilities 405,204  325,756 
Total current liabilities 1,691,641  1,566,466 
Long-term debt, excluding current portion 2,309,853  2,482,968 
Operating lease liabilities, excluding current portion of $86,437 and $76,805 214,905  215,469 
Deferred income taxes 55,354  60,833 
Other liabilities 120,018  114,943 
Total liabilities 4,391,771  4,440,679 
Total equity 896,229  945,604 
Total liabilities and equity $ 5,288,000  $ 5,386,283 
6

Owens & Minor, Inc.
Consolidated Statements of Cash Flows (unaudited)
(dollars in thousands)

Three Months Ended June 30,
2023 2022
Operating activities:
Net (loss) income $ (28,241) $ 28,604 
Adjustments to reconcile net (loss) income to cash provided by operating activities:
Depreciation and amortization 72,062  73,161 
Share-based compensation expense 5,212  5,807 
Benefit for losses on accounts receivable (379) (1,116)
Loss on extinguishment of debt 279  — 
Deferred income tax benefit (6,167) 1,670 
Changes in operating lease right-of-use assets and lease liabilities (2,852) 1,068 
(Gain) loss on sale and dispositions of property and equipment (10,294) 226 
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable 84,963  29,194 
Merchandise inventories 119,819  (82,536)
Accounts payable 29,077  19,316 
Net change in other assets and liabilities 46,471  9,220 
Other, net 3,162  5,210 
Cash provided by operating activities 313,112  89,824 
Investing activities:
Acquisition, net of cash acquired —  (108,329)
Additions to property and equipment (46,600) (52,627)
Additions to computer software (2,889) (2,111)
Proceeds from sale of property and equipment 18,423  5,843 
Other, net (418) (839)
Cash used for investing activities (31,484) (158,063)
Financing activities:
Borrowings under amended Receivables Financing Agreement 116,100  347,800 
Repayments under amended Receivables Financing Agreement (116,100) (402,800)
Repayments of debt (51,801) (1,500)
Borrowings under revolving credit facility, net and Receivables Financing Agreement —  (11,700)
Financing costs paid —  (7,735)
Other, net (3,830) (7,625)
Cash used for by financing activities (55,631) (83,560)
Effect of exchange rate changes on cash, cash equivalents and restricted cash (88) (3,195)
Net increase (decrease) in cash, cash equivalents and restricted cash 225,909  (154,994)
Cash, cash equivalents and restricted cash at beginning of period 83,194  228,023 
Cash, cash equivalents and restricted cash at end of period(1)
 $ 309,103  $ 73,029 
Supplemental disclosure of cash flow information:
Income taxes (received) paid, net $ (12,911) $ 21,304 
Interest paid $ 46,089  $ 19,791 
Noncash investing activity:
Unpaid purchases of property and equipment and computer software at end of period $ 65,808  $ 56,429 

(1) Restricted cash as of June 30, 2023 and March 31, 2023 was $22.8 million and $16.4 million, primarily 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 Fusion5. Restricted cash as of June 30, 2023 also includes $6.4 million of restricted cash deposits received under the Master Receivables Purchase Agreement to be remitted to a third-party financial institution.



7



Owens & Minor, Inc.
Consolidated Statements of Cash Flows (unaudited)
(dollars in thousands)
Six Months Ended June 30,
2023 2022
Operating activities:
Net (loss) income $ (52,659) $ 67,884 
Adjustments to reconcile net (loss) income to cash provided by operating activities:
Depreciation and amortization 142,988  97,286 
Share-based compensation expense 11,675  11,210 
(Benefit) provision for losses on accounts receivable (900) 4,512 
Loss on extinguishment of debt 843  — 
Deferred income tax (benefit) provision (6,758) 1,601 
Changes in operating lease right-of-use assets and lease liabilities (3,077) 606 
(Gain) loss on sale and dispositions of property and equipment (18,563) 226 
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable 90,203  16,275 
Merchandise inventories 165,651  (24,438)
Accounts payable 52,159  12,349 
Net change in other assets and liabilities 82,954  (23,945)
Other, net 6,994  5,958 
Cash provided by operating activities 471,510  169,524 
Investing activities:
Acquisition, net of cash acquired —  (1,684,607)
Additions to property and equipment (92,750) (62,236)
Additions to computer software (8,229) (3,463)
Proceeds from sale of property and equipment 35,729  5,846 
Other, net (418) (839)
Cash used for investing activities (65,668) (1,745,299)
Financing activities:
Borrowings under amended Receivables Financing Agreement 348,200  347,800 
Repayments under amended Receivables Financing Agreement (444,200) (402,800)
Repayments of debt (78,301) (1,500)
Proceeds from issuance of debt —  1,691,000 
Borrowings under revolving credit facility, net and Receivables Financing Agreement —  30,000 
Financing costs paid —  (41,479)
Other, net (8,819) (42,388)
Cash (used for) provided by financing activities (183,120) 1,580,633 
Effect of exchange rate changes on cash, cash equivalents and restricted cash 196  (3,864)
Net increase in cash, cash equivalents and restricted cash 222,918  994 
Cash, cash equivalents and restricted cash at beginning of period 86,185  72,035 
Cash, cash equivalents and restricted cash at end of period(1)
 $ 309,103  $ 73,029 
Supplemental disclosure of cash flow information:
Income taxes (received) paid, net $ (10,506) $ 25,782 
Interest paid $ 78,625  $ 32,417 
Noncash investing activity:
Unpaid purchases of property and equipment and computer software at end of period $ 65,808  $ 56,429 

(1) Restricted cash as of June 30, 2023 and December 31, 2022 was $22.8 million and $16.7 million, primarily held in an escrow account as required by the CMS in conjunction with the BPCI initiatives related to wind-down costs of Fusion5. Restricted cash as of June 30, 2023 also includes $6.4 million of restricted cash deposits received under the Master Receivables Purchase Agreement to be remitted to a third-party financial institution.

8





Owens & Minor, Inc.
Summary Segment Information (unaudited)
(dollars in thousands)
Three Months Ended June 30,
2023 2022
% of  % of
consolidated consolidated
Amount net revenue Amount  net revenue
Net revenue:
Products & Healthcare Services $ 1,930,723  75.32  % $ 1,927,388  77.10  %
Patient Direct 632,503  24.68  % 572,627  22.90  %
Consolidated net revenue $ 2,563,226  100.00  % $ 2,500,015  100.00  %
% of segment % of segment
Operating income: net revenue net revenue
Products & Healthcare Services $ 2,940  0.15  % $ 61,243  3.18  %
Patient Direct 59,065  9.34  % 52,332  9.14  %
Acquisition-related charges and intangible amortization (22,203) (37,276)
Exit and realignment charges (28,963) (1,214)
Consolidated operating income $ 10,839  0.42  % $ 75,085  3.00  %
Depreciation and amortization:
Products & Healthcare Services $ 18,772  $ 19,209 
Patient Direct 53,290  53,952 
Consolidated depreciation and amortization $ 72,062  $ 73,161 
Capital expenditures:
Products & Healthcare Services $ 6,602  $ 18,418 
Patient Direct 42,887  36,320 
Consolidated capital expenditures $ 49,489  $ 54,738 















9



Owens & Minor, Inc.
Summary Segment Information (unaudited)
(dollars in thousands)
Six Months Ended June 30,
2023 2022
% of  % of
consolidated consolidated
Amount net revenue Amount  net revenue
Net revenue:
Products & Healthcare Services $ 3,846,212  75.62  % $ 4,061,429  82.77  %
Patient Direct 1,239,863  24.38  % 845,538  17.23  %
Consolidated net revenue $ 5,086,075  100.00  % $ 4,906,967  100.00  %
% of segment % of segment
Operating income: net revenue net revenue
Products & Healthcare Services $ 4,761  0.12  % $ 150,325  3.70  %
Patient Direct 104,914  8.46  % 68,125  8.06  %
Acquisition-related charges and intangible amortization (44,392) (79,410)
Exit and realignment charges (44,637) (2,896)
Consolidated operating income $ 20,646  0.41  % $ 136,144  2.77  %
Depreciation and amortization:
Products & Healthcare Services $ 37,338  $ 38,203 
Patient Direct 105,650  59,083 
Consolidated depreciation and amortization $ 142,988  $ 97,286 
Capital expenditures:
Products & Healthcare Services $ 12,934  $ 29,061 
Patient Direct 88,045  36,638 
Consolidated capital expenditures $ 100,979  $ 65,699 













10


Owens & Minor, Inc.
Net (Loss) Income Per Common Share (unaudited)
(dollars in thousands, except per share data)

Three Months Ended
 June 30,		 Six Months Ended
 June 30,
2023 2022 2023 2022
Net (loss) income $ (28,241) $ 28,604  $ (52,659) $ 67,884 
Weighted average shares outstanding - basic 75,801 74,710 75,559 74,158 
Dilutive shares —  1,587  —  2,011 
Weighted average shares outstanding - diluted 75,801  76,297  75,559  76,169 
Net (loss) income per common share:
Basic $ (0.37) $ 0.38  $ (0.70) $ 0.92 
Diluted $ (0.37) $ 0.37  $ (0.70) $ 0.89 
Share-based awards for the three and six months ended June 30, 2023 of approximately 1.8 million and 1.7 million shares were excluded from the calculation of net loss per diluted common share as the effect would be anti-dilutive.





























11


Owens & Minor, Inc.
GAAP/Non-GAAP Reconciliations (unaudited)
(dollars in thousands, except per share data)

The following table provides a reconciliation of reported operating income, net (loss) income and net (loss) income per share to non-GAAP measures used by management.
Three Months Ended
June 30,		 Six Months Ended
June 30,
2023 2022 2023 2022
Operating income, as reported (GAAP) $ 10,839 $ 75,085 $ 20,646 $ 136,144
Acquisition-related charges and intangible amortization (1)
 22,203 37,276 44,392 79,410
Exit and realignment charges (2)
 28,963 1,214 44,637 2,896
Operating income, adjusted (non-GAAP) (Adjusted Operating Income) $ 62,005 $ 113,575 $ 109,675 $ 218,450
Operating income as a percent of net revenue (GAAP) 0.42% 3.00% 0.41% 2.77%
Adjusted operating income as a percent of net revenue (non-GAAP) 2.42% 4.54% 2.16% 4.45%
Net (loss) income, as reported (GAAP) $ (28,241) $ 28,604 $ (52,659) $ 67,884
Pre-tax adjustments:
Acquisition-related charges and intangible amortization (1)
 22,203 37,276 44,392 79,410
Exit and realignment charges (2)
 28,963 1,214 44,637 2,896
Other (3)
 843 525 1,972 1,049
Income tax benefit on pre-tax adjustments (4)
 (9,551) (9,358) (20,530) (20,225)
Net income, adjusted (non-GAAP) (Adjusted Net Income) $ 14,217 $ 58,261 $ 17,812 $ 131,014
Net (loss) income per common share, as reported (GAAP) $ (0.37) $ 0.37 $ (0.70) $ 0.89
After-tax adjustments:
Acquisition-related charges and intangible amortization (1)
 0.24 0.37 0.45 0.79
Exit and realignment charges (2)
 0.30 0.01 0.46 0.03
Other (3)
 0.01 0.01 0.02 0.01
Net income per common share, adjusted (non-GAAP) (Adjusted EPS) $ 0.18 $ 0.76 $ 0.23 $ 1.72



















12


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
June 30,		 Six Months Ended
June 30,
2023 2022 2023 2022
Net (loss) income, as reported (GAAP) $ (28,241) $ 28,604  $ (52,659) $ 67,884 
Income tax (benefit) provision (2,720) 9,859  (12,079) 18,837 
Interest expense, net 40,728  35,839  82,926  47,858 
Acquisition-related charges and intangible amortization (1)
 22,203  37,276  44,392  79,410 
Exit and realignment charges (2)
 28,963  1,214  44,637  2,896 
Other depreciation and amortization (5)
 50,737  42,273  100,726  56,129 
Stock compensation (6)
 4,796  5,624  11,146  10,220 
LIFO (credits) and charges (7)
(4,534) 2,136  406  1,628 
Other (3)
 843  525  1,972  1,049 
Adjusted EBITDA (non-GAAP) $ 112,775  $ 163,350  $ 221,467  $ 285,911 


June 30,
2023
Total debt, as reported (GAAP) $ 2,334,256 
Cash and cash equivalents (286,307)
Net debt (non-GAAP) $ 2,047,949 





















13


Owens & Minor, Inc.
GAAP/Non-GAAP Reconciliations (unaudited), continued

The following items have been excluded in our non-GAAP financial measures:

(1) Acquisition-related charges and intangible amortization includes acquisition-related charges of $1.3 million and $2.5 million for the three and six months ended June 30, 2023 and $6.4 million and $38.3 million for the three and six months ended June 30, 2022, 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 the Apria Acquisition, including transaction costs necessary to consummate the acquisition, which consisted of investment banking advisory fees and legal fees, director and officer tail insurance expense, severance and retention bonuses, 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 and six months ended June 30, 2023 exit and realignment charges were $29.0 million and $44.6 million. These charges primarily related to our (1) Operating Model Realignment Program of $24.3 million and $39.3 million, including professional fees, severance and other costs to streamline functions and processes, (2) IT restructuring charges such as converting to common IT systems of $3.4 million and $3.5 million and, (3) other costs associated with strategic initiatives of $1.3 million and $1.8 million for the three and six months ended June 30, 2023. During the three and six months ended June 30, 2022 exit and realignment charges consisted of wind-down costs related to the exit of the Fusion5 business, IT restructuring charges such as converting our divisions to a common IT system, costs associated with our strategic organizational realignment including severance charges, and other costs associated with strategic initiatives. These costs are not normal recurring, cash operating expenses necessary for the Company to operate its business on an ongoing basis.
(3) For the three and six months ended June 30, 2023 other includes loss on extinguishment of debt of $0.3 million and $0.8 million associated with the early retirement of indebtedness of $48.0 million and $73.0 million. Additionally, for the three and six months ended June 30, 2023 and 2022 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.).
(4) 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.
(5) Other depreciation and amortization relates to property and equipment and capitalized computer software, excluding such amounts captured within exit and realignment charges or acquisition-related charges.
(6) Stock compensation includes share-based compensation expense related to our share-based compensation plans, excluding such amounts captured within exit and realignment charges or acquisition-related charges.
(7) 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.
14
EX-99.2 3 omi_2q23supplementalearn.htm EX-99.2 omi_2q23supplementalearn
1 Confidential & Proprietary to Owens & Minor, Inc. Second Quarter 2023 Supplemental Earnings Slides August 4, 2023

 
2 Confidential & Proprietary to Owens & Minor, Inc. Safe Harbor 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 presentation regarding our future prospects and performance, including our expectations with respect to our 2023 financial performance, our Operating Model Realignment Program and other cost-saving initiatives, future indebtedness and growth, industry trends, as well as statements related to our expectations regarding the performance of its business, including the results of our Operating Model Realignment Program and 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, 2022, filed with the SEC including the sections captioned “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors,” 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. This presentation 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.

 
3 Confidential & Proprietary to Owens & Minor, Inc. 2023 Company Outlook & Modeling Assumptions Modeling Assumptions 2023 Outlook Revenue $10.2 - $10.5 billion Gross Margin ~20.3% Interest Expense $160 - $165 million Capital Expenditures $200 - $220 million Adjusted Effective Tax Rate 27% - 28% Diluted Weighted Average Shares Outstanding ~77.5 million Adjusted EBITDA $535 - $575 million Adjusted EPS $1.30 - $1.55 Operating Model Realignment Program $30 million Adjusted Operating Income benefit in 2023 Commodity Prices Stable Customer Destocking Begins to subside in second half of 2023 Foreign Currency Rates As of 6/30/2023 1. Company outlook and modelling assumptions are assumptions used for 2023 adjusted EPS guidance, and the Company undertakes no obligation to update such assumptions subsequent to the date of this presentation (August 4, 2023). Please see Form 8-K filed by Owens & Minor, Inc. with the SEC on or around August 4, 2023 for additional financial information. 2. Although the Company does provide guida ce 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, restructuring and acquisition 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 Securities and Exchange Commission (“SEC”).