Owens & Minor, Inc. Releases Preliminary Second Quarter 2024 Financial Results & Reaffirms 2024 Annual Guidance
Plans to Release Full Results on
Selected Preliminary Financial Results for the Quarter Ended |
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($ in millions, except per share data)
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2Q24 |
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Revenue |
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Operating income, GAAP |
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Adj. Operating Income, Non-GAAP |
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Net loss, GAAP |
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Adj. Net Income, Non-GAAP |
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Adj. EBITDA, Non-GAAP |
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Net loss per common share, GAAP |
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Adj. Net Income per share, Non-GAAP |
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Operating cash flow |
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Total debt and net debt reduction |
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(1) Reconciliations of the differences between the non-GAAP financial measures presented in this release and their most directly comparable GAAP financial measures are in the tables included herein. |
Tax Matter
In the second quarter of 2024, the Company recorded a one-time income tax charge of
2024 Financial Outlook
The Company reaffirms its outlook for the full year 2024 on a standalone basis excluding the expected impact of the Rotech acquisition.
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Revenue for 2024 to be in a range of
$10.5 billion to$10.9 billion -
Adjusted EBITDA for 2024 to be in a range of
$550 million to$590 million -
Adjusted EPS for 2024 to be in a range of
$1.40 to$1.70
The Company’s outlook for 2024 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 2024 financial guidance include:
- Gross margin rate of 21.0% to 21.5%
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Interest expense of
$141 to$146 million - Adjusted effective tax rate of 27.5% to 28.5%
- Diluted weighted average shares of ~78.5 million
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Capital expenditures of
$220 to$240 million - Stable commodity prices
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FX rates as of
12/31/2023
Although the Company provides 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 GAAP amounts are not predictable, making in 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 risk factors discussed in the Company’s filings with the
Investor Conference Call for Second Quarter 2024 Financial Results
Owens & Minor executives will host a conference call for investors and analysts on
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
About Owens & Minor
*Registered Trademark or Trademark of
OMI-IR
SOURCE:
GAAP/Non-GAAP Reconciliations (unaudited) (dollars in millions) |
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The following table provides a reconciliation of expected operating income, net loss and net loss per common share to non-GAAP measures used by management. |
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Three Months Ended |
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Low |
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High |
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Operating income, as reported (GAAP) |
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$ |
16 |
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$ |
20 |
Acquisition-related charges and intangible amortization (1) |
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20 |
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20 |
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Exit and realignment charges, net (2) |
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29 |
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29 |
Litigation and related charges (3) |
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7 |
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7 |
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Operating income, adjusted (non-GAAP) (Adjusted Operating Income) |
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$ |
72 |
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$ |
76 |
Net loss, as reported (GAAP) |
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$ |
(35) |
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$ |
(32) |
Pre-tax adjustments: |
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Acquisition-related charges and intangible amortization (1) |
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20 |
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20 |
Exit and realignment charges, net (2) |
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29 |
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29 |
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Litigation and related charges (3) |
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7 |
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7 |
Income tax benefit on pre-tax adjustments (4) |
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(13) |
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(13) |
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One-time income tax charge (5) |
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17 |
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17 |
Net income, adjusted (non-GAAP) (Adjusted Net Income) |
$ |
25 |
$ |
28 |
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Net loss per common share, as reported (GAAP) |
$ |
(0.46) |
$ |
(0.42) |
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After-tax adjustments: |
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Acquisition-related charges and intangible amortization (1) |
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0.19 |
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0.19 |
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Exit and realignment charges, net (2) |
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0.29 |
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0.29 |
Litigation and related charges (3) |
0.08 |
0.08 |
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One-time income tax charge (5) |
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0.22 |
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0.22 |
Net income per common share, adjusted (non-GAAP) (Adjusted EPS) |
$ |
0.32 |
$ |
0.36 |
GAAP/Non-GAAP Reconciliations (unaudited), continued (dollars in millions) |
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The following tables provide reconciliations of expected net loss and total debt to non-GAAP measures used by management. |
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Three Months Ended |
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Low |
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High |
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Net loss, as reported (GAAP) |
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$ |
(35) |
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$ |
(32) |
Income tax provision |
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15 |
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16 |
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Interest expense, net |
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36 |
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36 |
Acquisition-related charges and intangible amortization (1) |
20 |
20 |
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Exit and realignment charges, net (2) |
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29 |
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29 |
Other depreciation and amortization (6) |
46 |
46 |
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Stock compensation (7) |
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6 |
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6 |
LIFO credits (8) |
(1) |
(1) |
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Litigation and related charges (3) |
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7 |
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7 |
Adjusted EBITDA (non-GAAP) |
$ |
123 |
$ |
127 |
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Low |
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High |
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Total debt, as reported (GAAP) |
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$ |
2,083 |
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$ |
2,085 |
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$ |
2,154 |
Cash and cash equivalents |
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(244) |
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(244) |
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(245) |
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Net debt (non-GAAP) |
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$ |
1,839 |
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$ |
1,841 |
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$ |
1,909 |
The following items have been excluded in our non-GAAP financial measures:
(1) Acquisition-related charges and intangible amortization includes one-time costs related to the expected acquisition of Rotech, including legal and other professional fees, and amortization of intangible assets established during acquisition method of accounting for business combinations. 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) Exit and realignment charges, net primarily related to our Operating Model Realignment Program, including professional fees, severance, and other costs to streamline functions and processes and costs related to IT strategic initiatives such as converting certain divisions to common IT systems. These costs are not normal recurring, cash operating expenses necessary for the Company to operate its business on an ongoing basis.
(3) Litigation and related charges includes settlement costs and related charges of legal matters within our Apria division. These costs do not occur in the ordinary course of our business and are inherently unpredictable in timing and amount.
(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) One-time income tax charge relates to a recent decision associated with Notices of Proposed Adjustments received in 2020 and 2021. The matter at hand, as discussed in previously filed
(6) Other depreciation and amortization relates to property and equipment and capitalized computer software, excluding such amounts captured within exit and realignment charges, net or acquisition-related charges.
(7) Stock compensation includes share-based compensation expense related to our share-based compensation plans, excluding such amounts captured within exit and realignment charges, net or acquisition-related charges.
(8) LIFO credits 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
Use of Non-GAAP Measures
This release contains financial measures that are not calculated in accordance with
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.
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Investors
OMI@alpha-ir.com
Interim Chief Financial Officer; SVP Finance & Treasurer
Investor.Relations@owens-minor.com
Media
media@owens-minor.com
Source: