Owens & Minor Reports Fourth Quarter and Full Year 2023 Financial Results
Business Delivered Strong Operating Margin Improvement in Fourth Quarter
Robust Full Year Operating Cash Flow Generation Enabled Significant Debt Reduction
Full Year 2023 Key Highlights:
-
Consolidated revenue of
$10.3 billion -
Delivered
$741 million of operating cash flow -
Reduced total debt by
$403 million and reduced net debt by$577 million -
Net loss per common share of
$(0.54) and adjusted net income per common share of$1.36
“We once again delivered on our commitments and had a strong finish to 2023, demonstrated by our top-line growth across both business segments, robust profit growth and exceptional operating cash flow which allowed us to further strengthen our balance sheet,” said
Financial Summary (1) |
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($ in millions, except per share data)
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4Q23 |
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4Q22 |
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FYE 2023 |
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FYE 2022 |
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Revenue |
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Operating income (loss), GAAP |
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Adj. Operating Income, Non-GAAP |
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Net income (loss), GAAP |
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Adj. Net Income, Non-GAAP |
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Adj. EBITDA, Non-GAAP |
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Net income (loss) per common share, GAAP |
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Adj. Net Income per share, Non-GAAP |
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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 included in the tables below. |
Fourth Quarter Results and Business Highlights
-
Consolidated revenue of
$2.7 billion in the fourth quarter of 2023, an increase of 4% as compared to the fourth quarter of 2022-
Patient Direct revenue of
$664 million , up 8% compared to the fourth quarter of 2022 from strong growth in a number of product categories -
Products & Healthcare Services revenue of nearly
$2 billion , up 3% compared to the fourth quarter of 2022, with growth in both the Medical Distribution and Global Products divisions
-
Patient Direct revenue of
-
Fourth quarter 2023 operating income of
$60 million and Adjusted Operating Income of$111 million - On a GAAP basis operating income margin expanded by 436 basis points while adjusted operating income margin expanded by 154 basis points. This expansion was primarily driven by a larger income contribution from the Patient Direct segment.
- Both Patient Direct and Products & Healthcare Services delivered increases in Segment Income both year over year and sequentially from the third quarter to the fourth quarter of 2023
-
Generated
$112 million of operating cash flow in the fourth quarter driven by strong working capital improvement and operating results -
Reduced total debt by
$49 million and net debt by$76 million for the fourth quarter
2024 Financial Outlook
The Company issued its outlook for 2024; summarized below:
-
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%
-
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
-
Capital expenditures of
$220 to$240 million - Stable commodity prices
-
FX rates as of
12/31/2023
Although the Company does provide guidance for adjusted EBITDA and adjusted EPS (which are non-GAAP financial measures), it is not able to forecast the most directly comparable measures calculated and presented in accordance with GAAP without unreasonable effort. Certain elements of the composition of the GAAP amounts are not predictable, making it impracticable for the Company to forecast. Such elements include, but are not limited to, restructuring and acquisition charges, which could have a significant and unpredictable impact on our GAAP results. As a result, no GAAP guidance or reconciliation of the Company’s adjusted EBITDA guidance or adjusted EPS guidance is provided. The outlook is based on certain assumptions that are subject to the risk factors discussed in the Company’s filings with the
Investor Conference Call for Fourth Quarter and Full Year 2023 Financial Results
Owens & Minor executives will host a conference call for investors and analysts on
All interested stakeholders are encouraged to access the simultaneous live webcast by visiting the investor relations page of the Owens & Minor website available at investors.owens-minor.com/events-and-presentations/. A replay of the webcast can be accessed following the presentation at the link provided above.
Safe Harbor
This release is intended to be disclosure through methods reasonably designed to provide broad, non-exclusionary distribution to the public in compliance with the
About Owens & Minor
*Registered Trademark or Trademark of
Consolidated Statements of Operations (unaudited) (dollars in thousands, except per share data) |
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Three Months Ended |
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2023 |
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2022 |
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Net revenue |
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$ |
2,656,150 |
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$ |
2,551,107 |
|
Cost of goods sold |
|
|
2,086,227 |
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|
2,143,987 |
|
Gross margin |
|
|
569,923 |
|
|
407,120 |
|
Distribution, selling and administrative expenses |
|
|
457,225 |
|
|
432,467 |
|
Acquisition-related charges and intangible amortization |
|
|
26,427 |
|
|
26,345 |
|
Exit and realignment charges |
|
|
24,310 |
|
|
2,018 |
|
Other operating expense (income), net |
|
|
1,940 |
|
|
(231 |
) |
Operating income (loss) |
|
|
60,021 |
|
|
(53,479 |
) |
Interest expense, net |
|
|
36,863 |
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|
41,164 |
|
Loss on extinguishment of debt |
|
|
860 |
|
|
— |
|
Other expense, net |
|
|
1,301 |
|
|
783 |
|
Income (loss) before income taxes |
|
|
20,997 |
|
|
(95,426 |
) |
Income tax provision (benefit) |
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|
3,213 |
|
|
(37,435 |
) |
Net income (loss) |
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$ |
17,784 |
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$ |
(57,991 |
) |
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Net income (loss) per common share: |
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Basic |
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$ |
0.23 |
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$ |
(0.77 |
) |
Diluted |
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$ |
0.23 |
|
$ |
(0.77 |
) |
Consolidated Statements of Operations (unaudited) (dollars in thousands, except per share data) |
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Year Ended |
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2023 |
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2022 |
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Net revenue |
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$ |
10,333,967 |
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$ |
9,955,475 |
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Cost of goods sold |
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|
8,208,806 |
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8,129,124 |
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Gross margin |
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2,125,161 |
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1,826,351 |
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Distribution, selling and administrative expenses |
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|
1,813,559 |
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|
|
1,554,821 |
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Acquisition-related charges and intangible amortization |
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|
101,037 |
|
|
|
126,972 |
|
Exit and realignment charges |
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|
99,127 |
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|
6,897 |
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Other operating expense (income), net |
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6,930 |
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(5,252 |
) |
Operating income |
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|
104,508 |
|
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|
142,913 |
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Interest expense, net |
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|
157,915 |
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|
128,891 |
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Gain on extinguishment of debt |
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(3,518 |
) |
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— |
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Other expense, net |
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4,837 |
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|
3,131 |
|
(Loss) income before income taxes |
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|
(54,726 |
) |
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|
10,891 |
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Income tax benefit |
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|
(13,425 |
) |
|
|
(11,498 |
) |
Net (loss) income |
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$ |
(41,301 |
) |
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$ |
22,389 |
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Net (loss) income per common share: |
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Basic |
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$ |
(0.54 |
) |
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$ |
0.30 |
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Diluted |
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$ |
(0.54 |
) |
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$ |
0.29 |
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Condensed Consolidated Balance Sheets (unaudited) (dollars in thousands) |
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2023 |
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2022 |
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Assets |
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Current assets |
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Cash and cash equivalents |
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$ |
243,037 |
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$ |
69,467 |
Accounts receivable, net |
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|
598,257 |
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|
763,497 |
Merchandise inventories |
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|
1,110,606 |
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|
1,333,585 |
Other current assets |
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|
150,890 |
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|
128,636 |
Total current assets |
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|
2,102,790 |
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|
2,295,185 |
Property and equipment, net |
|
|
543,972 |
|
|
578,269 |
Operating lease assets |
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|
296,533 |
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|
280,665 |
|
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|
1,638,846 |
|
|
1,636,705 |
Intangible assets, net |
|
|
361,835 |
|
|
445,042 |
Other assets, net |
|
|
149,346 |
|
|
150,417 |
Total assets |
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$ |
5,093,322 |
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$ |
5,386,283 |
Liabilities and equity |
|
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Current liabilities |
|
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Accounts payable |
|
$ |
1,171,882 |
|
$ |
1,147,414 |
Accrued payroll and related liabilities |
|
|
116,398 |
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|
93,296 |
Current portion of long-term debt |
|
|
206,904 |
|
|
17,906 |
Other current liabilities |
|
|
396,701 |
|
|
307,850 |
Total current liabilities |
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1,891,885 |
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|
1,566,466 |
Long-term debt, excluding current portion |
|
|
1,890,598 |
|
|
2,482,968 |
Operating lease liabilities, excluding current portion |
|
|
222,429 |
|
|
215,469 |
Deferred income taxes, net |
|
|
41,652 |
|
|
60,833 |
Other liabilities |
|
|
122,592 |
|
|
114,943 |
Total liabilities |
|
|
4,169,156 |
|
|
4,440,679 |
Total equity |
|
|
924,166 |
|
|
945,604 |
Total liabilities and equity |
|
$ |
5,093,322 |
|
$ |
5,386,283 |
Consolidated Statements of Cash Flows (unaudited) (dollars in thousands) |
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Three Months Ended |
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2023 |
|
|
2022 |
|
||
Operating activities: |
|
|
|
|
|
|
||
Net income (loss) |
|
$ |
17,784 |
|
|
$ |
(57,991 |
) |
Adjustments to reconcile net income (loss) to cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
70,737 |
|
|
|
73,229 |
|
Share-based compensation expense |
|
|
5,801 |
|
|
|
5,228 |
|
Loss on extinguishment of debt |
|
|
860 |
|
|
|
— |
|
Deferred income tax benefit |
|
|
(7,333 |
) |
|
|
(29,352 |
) |
Benefit for losses on accounts receivable |
|
|
(927 |
) |
|
|
(1,974 |
) |
Changes in operating lease right-of-use assets and lease liabilities |
|
|
1,470 |
|
|
|
(569 |
) |
Gain on sale and dispositions of property and equipment |
|
|
(8,420 |
) |
|
|
(9,258 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
89,384 |
|
|
|
(6,316 |
) |
Merchandise inventories |
|
|
(22,719 |
) |
|
|
173,382 |
|
Accounts payable |
|
|
(15,341 |
) |
|
|
(16,772 |
) |
Net change in other assets and liabilities |
|
|
(22,497 |
) |
|
|
(46,121 |
) |
Other, net |
|
|
2,966 |
|
|
|
3,475 |
|
Cash provided by operating activities |
|
|
111,765 |
|
|
|
86,961 |
|
Investing activities: |
|
|
|
|
|
|
||
Additions to property and equipment |
|
|
(50,392 |
) |
|
|
(48,815 |
) |
Additions to computer software |
|
|
(5,933 |
) |
|
|
(2,619 |
) |
Proceeds from sale of property and equipment |
|
|
17,929 |
|
|
|
18,663 |
|
Other, net |
|
|
(518 |
) |
|
|
— |
|
Cash used for investing activities |
|
|
(38,914 |
) |
|
|
(32,771 |
) |
Financing activities: |
|
|
|
|
|
|
||
Borrowings under amended Receivables Financing Agreement |
|
|
— |
|
|
|
324,600 |
|
Repayments under amended Receivables Financing Agreement |
|
|
— |
|
|
|
(385,600 |
) |
Repayments of debt |
|
|
(50,504 |
) |
|
|
(1,500 |
) |
Other, net |
|
|
(711 |
) |
|
|
(980 |
) |
Cash used for financing activities |
|
|
(51,215 |
) |
|
|
(63,480 |
) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
|
1,128 |
|
|
|
2,267 |
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
|
22,764 |
|
|
|
(7,023 |
) |
Cash, cash equivalents and restricted cash at beginning of period |
|
|
250,160 |
|
|
|
93,208 |
|
Cash, cash equivalents and restricted cash at end of period(1) |
|
$ |
272,924 |
|
|
$ |
86,185 |
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
||
Income taxes paid, net |
|
$ |
515 |
|
|
$ |
405 |
|
Interest paid |
|
$ |
52,168 |
|
|
$ |
45,133 |
|
Noncash investing activity: |
|
|
|
|
|
|
||
Unpaid purchases of property and equipment and computer software at end of period |
|
$ |
77,279 |
|
|
$ |
67,852 |
|
________________________________ |
(1) Restricted cash as of |
Consolidated Statements of Cash Flows (unaudited) (dollars in thousands) |
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|
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Years Ended |
||||||
|
|
2023 |
|
|
2022 |
|
||
Operating activities: |
|
|
|
|
|
|
||
Net (loss) income |
|
$ |
(41,301 |
) |
|
$ |
22,389 |
|
Adjustments to reconcile net (loss) income to cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
287,377 |
|
|
|
228,667 |
|
Share-based compensation expense |
|
|
23,218 |
|
|
|
20,993 |
|
Gain on extinguishment of debt |
|
|
(3,518 |
) |
|
|
— |
|
Deferred income tax benefit |
|
|
(23,648 |
) |
|
|
(26,361 |
) |
(Benefit) provision for losses on accounts receivable |
|
|
(1,414 |
) |
|
|
3,315 |
|
Changes in operating lease right-of-use assets and lease liabilities |
|
|
(47 |
) |
|
|
353 |
|
Gain on sale and dispositions of property and equipment |
|
|
(34,882 |
) |
|
|
(26,260 |
) |
Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
166,581 |
|
|
|
1,101 |
|
Merchandise inventories |
|
|
224,338 |
|
|
|
166,559 |
|
Accounts payable |
|
|
30,997 |
|
|
|
13,652 |
|
Net change in other assets and liabilities |
|
|
100,370 |
|
|
|
(91,544 |
) |
Other, net |
|
|
12,639 |
|
|
|
12,142 |
|
Cash provided by operating activities |
|
|
740,710 |
|
|
|
325,006 |
|
Investing activities: |
|
|
|
|
|
|
||
Acquisition, net of cash acquired |
|
|
— |
|
|
|
(1,684,607 |
) |
Additions to property and equipment |
|
|
(190,870 |
) |
|
|
(158,090 |
) |
Additions to computer software |
|
|
(17,022 |
) |
|
|
(8,492 |
) |
Proceeds from sale of property and equipment |
|
|
71,574 |
|
|
|
48,383 |
|
Other, net |
|
|
(936 |
) |
|
|
(1,670 |
) |
Cash used for investing activities |
|
|
(137,254 |
) |
|
|
(1,804,476 |
) |
Financing activities: |
|
|
|
|
|
|
||
Borrowings under amended Receivables Financing Agreement |
|
|
476,000 |
|
|
|
1,022,300 |
|
Repayments under amended Receivables Financing Agreement |
|
|
(572,000 |
) |
|
|
(1,156,300 |
) |
Repayments of debt |
|
|
(320,693 |
) |
|
|
(4,500 |
) |
Proceeds from issuance of debt |
|
|
— |
|
|
|
1,691,000 |
|
Borrowings under revolving credit facility, net and Receivables Financing Agreement |
|
|
— |
|
|
|
30,000 |
|
Financing costs paid |
|
|
— |
|
|
|
(42,602 |
) |
Other, net |
|
|
(637 |
) |
|
|
(42,793 |
) |
Cash (used for) provided by financing activities |
|
|
(417,330 |
) |
|
|
1,497,105 |
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
|
613 |
|
|
|
(3,485 |
) |
Net increase in cash, cash equivalents and restricted cash |
|
|
186,739 |
|
|
|
14,150 |
|
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) |
|
$ |
272,924 |
|
|
$ |
86,185 |
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
||
Income taxes (received) paid, net |
|
$ |
(6,283 |
) |
|
$ |
33,973 |
|
Interest paid |
|
$ |
153,247 |
|
|
$ |
107,022 |
|
Noncash investing activity: |
|
|
|
|
|
|
||
Unpaid purchases of property and equipment and computer software at end of period |
|
$ |
77,279 |
|
|
$ |
67,852 |
|
________________________________ |
(1) Restricted cash as of |
Summary Segment Information (unaudited) (dollars in thousands) |
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|
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||
|
|
Three Months Ended |
|
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|
|
2023 |
|
2022 |
|
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|
|
|
|
|
% of |
|
|
|
|
% of |
|
||
|
|
|
|
|
consolidated |
|
|
|
|
consolidated |
|
||
|
|
Amount |
|
net revenue |
|
Amount |
|
net revenue |
|
||||
Net revenue: |
|
|
|
|
|
|
|
|
|
|
|
||
Products & Healthcare Services |
|
$ |
1,991,716 |
|
|
74.99 |
% |
$ |
1,933,612 |
|
|
75.80 |
% |
Patient Direct |
|
|
664,434 |
|
|
25.01 |
% |
|
617,495 |
|
|
24.20 |
% |
Consolidated net revenue |
|
$ |
2,656,150 |
|
|
100.00 |
% |
$ |
2,551,107 |
|
|
100.00 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
% of segment |
|
|
|
|
% of segment |
|
||
Operating income: |
|
|
|
|
net revenue |
|
|
|
|
net revenue |
|
||
Products & Healthcare Services |
|
$ |
33,244 |
|
|
1.67 |
% |
$ |
1,202 |
|
|
0.06 |
% |
Patient Direct |
|
|
77,514 |
|
|
11.67 |
% |
|
65,957 |
|
|
10.68 |
% |
Acquisition-related charges and intangible amortization |
|
|
(26,427 |
) |
|
|
|
|
(26,345 |
) |
|
|
|
Exit and realignment charges |
|
|
(24,310 |
) |
|
|
|
|
(2,018 |
) |
|
|
|
Inventory valuation adjustment(1) |
|
|
— |
|
|
|
|
|
(92,275 |
) |
|
|
|
Consolidated operating income |
|
$ |
60,021 |
|
|
|
|
$ |
(53,479 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Depreciation and amortization: |
|
|
|
|
|
|
|
|
|
|
|
||
Products & Healthcare Services |
|
$ |
19,647 |
|
|
|
|
$ |
20,214 |
|
|
|
|
Patient Direct |
|
|
51,090 |
|
|
|
|
|
53,015 |
|
|
|
|
Consolidated depreciation and amortization |
|
$ |
70,737 |
|
|
|
|
$ |
73,229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Capital expenditures: |
|
|
|
|
|
|
|
|
|
|
|
||
Products & Healthcare Services |
|
$ |
11,405 |
|
|
|
|
$ |
11,020 |
|
|
|
|
Patient Direct |
|
|
44,920 |
|
|
|
|
|
40,414 |
|
|
|
|
Consolidated capital expenditures |
|
$ |
56,325 |
|
|
|
|
$ |
51,434 |
|
|
|
|
(1) |
Relates to an inventory valuation adjustment in our Products & Healthcare Services segment, primarily associated with PPE inventory built up and a subsequent decline in demand as a result of the COVID‑19 pandemic. |
Summary Segment Information (unaudited) (dollars in thousands) |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Year Ended |
|
||||||||||
|
|
2023 |
|
2022 |
|
||||||||
|
|
|
|
|
% of |
|
|
|
|
% of |
|
||
|
|
|
|
|
consolidated |
|
|
|
|
consolidated |
|
||
|
|
Amount |
|
net revenue |
|
Amount |
|
net revenue |
|
||||
Net revenue: |
|
|
|
|
|
|
|
|
|
|
|
||
Products & Healthcare Services |
|
$ |
7,781,395 |
|
|
75.30 |
% |
$ |
7,898,397 |
|
|
79.34 |
% |
Patient Direct |
|
|
2,552,572 |
|
|
24.70 |
% |
|
2,057,078 |
|
|
20.66 |
% |
Consolidated net revenue |
|
$ |
10,333,967 |
|
|
100.00 |
% |
$ |
9,955,475 |
|
|
100.00 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
% of segment |
|
|
|
|
% of segment |
|
||
Operating income: |
|
|
|
|
net revenue |
|
|
|
|
net revenue |
|
||
Products & Healthcare Services |
|
$ |
57,809 |
|
|
0.74 |
% |
$ |
175,309 |
|
|
2.22 |
% |
Patient Direct |
|
|
246,863 |
|
|
9.67 |
% |
|
193,748 |
|
|
9.42 |
% |
Acquisition-related charges and intangible amortization |
|
|
(101,037 |
) |
|
|
|
|
(126,972 |
) |
|
|
|
Exit and realignment charges |
|
|
(99,127 |
) |
|
|
|
|
(6,897 |
) |
|
|
|
Inventory valuation adjustment(1) |
|
|
— |
|
|
|
|
|
(92,275 |
) |
|
|
|
Consolidated operating income |
|
$ |
104,508 |
|
|
|
|
$ |
142,913 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Depreciation and amortization: |
|
|
|
|
|
|
|
|
|
|
|
||
Products & Healthcare Services |
|
$ |
77,006 |
|
|
|
|
$ |
77,539 |
|
|
|
|
Patient Direct |
|
|
210,371 |
|
|
|
|
|
151,128 |
|
|
|
|
Consolidated depreciation and amortization |
|
$ |
287,377 |
|
|
|
|
$ |
228,667 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Capital expenditures: |
|
|
|
|
|
|
|
|
|
|
|
||
Products & Healthcare Services |
|
$ |
29,361 |
|
|
|
|
$ |
49,824 |
|
|
|
|
Patient Direct |
|
|
178,531 |
|
|
|
|
|
116,758 |
|
|
|
|
Consolidated capital expenditures |
|
$ |
207,892 |
|
|
|
|
$ |
166,582 |
|
|
|
|
(1) |
Relates to an inventory valuation adjustment in our Products & Healthcare Services segment, primarily associated with PPE inventory built up and a subsequent decline in demand as a result of the COVID‑19 pandemic. |
Net (Loss) Income Per Common Share (unaudited) (dollars in thousands, except per share data) |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Three Months Ended |
|
Year Ended |
||||||||||
|
|
2023 |
|
2022 |
|
|
2023 |
|
|
2022 |
||||
Net income (loss) |
|
$ |
17,784 |
|
$ |
(57,991 |
) |
|
$ |
(41,301 |
) |
|
$ |
22,389 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Weighted average shares outstanding - basic |
|
|
76,284 |
|
|
74,991 |
|
|
|
75,785 |
|
|
|
74,496 |
Dilutive shares |
|
|
1,491 |
|
|
— |
|
|
|
— |
|
|
|
1,721 |
Weighted average shares outstanding - diluted |
|
|
77,775 |
|
|
74,991 |
|
|
|
75,785 |
|
|
|
76,217 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net income (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
||
Basic |
|
$ |
0.23 |
|
$ |
(0.77 |
) |
|
$ |
(0.54 |
) |
|
$ |
0.30 |
Diluted |
|
$ |
0.23 |
|
$ |
(0.77 |
) |
|
$ |
(0.54 |
) |
|
$ |
0.29 |
Share-based awards for the year ended
|
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 |
|
Years Ended |
|
||||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
||||
Operating income (loss), as reported (GAAP) |
|
$ |
60,021 |
|
|
$ |
(53,479 |
) |
|
$ |
104,508 |
|
|
$ |
142,913 |
|
|
Acquisition-related charges and intangible amortization (1) |
|
|
26,427 |
|
|
|
26,345 |
|
|
|
101,037 |
|
|
|
126,972 |
|
|
Exit and realignment charges (2) |
|
|
24,310 |
|
|
|
2,018 |
|
|
|
99,127 |
|
|
|
6,897 |
|
|
Inventory valuation adjustment (3) |
|
|
— |
|
|
|
92,275 |
|
|
|
— |
|
|
|
92,275 |
|
|
Operating income, adjusted (non-GAAP) (Adjusted Operating Income) |
|
$ |
110,758 |
|
|
$ |
67,159 |
|
|
$ |
304,672 |
|
|
$ |
369,057 |
|
|
Operating income (loss) as a percent of net revenue (GAAP) |
|
|
2.26 |
|
% |
|
(2.10 |
) |
% |
|
1.01 |
|
% |
|
1.44 |
|
% |
Adjusted operating income as a percent of net revenue (non-GAAP) |
|
|
4.17 |
|
% |
|
2.63 |
|
% |
|
2.95 |
|
% |
|
3.71 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss), as reported (GAAP) |
|
$ |
17,784 |
|
|
$ |
(57,991 |
) |
|
$ |
(41,301 |
) |
|
$ |
22,389 |
|
|
Pre-tax adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Acquisition-related charges and intangible amortization (1) |
|
|
26,427 |
|
|
|
26,345 |
|
|
|
101,037 |
|
|
|
126,972 |
|
|
Exit and realignment charges (2) |
|
|
24,310 |
|
|
|
2,018 |
|
|
|
99,127 |
|
|
|
6,897 |
|
|
Inventory valuation adjustment (3) |
|
|
— |
|
|
|
92,275 |
|
|
|
— |
|
|
|
92,275 |
|
|
Other (4) |
|
|
1,425 |
|
|
|
525 |
|
|
|
(1,260 |
) |
|
|
2,099 |
|
|
Tax adjustments (5) |
|
|
— |
|
|
|
(10,492 |
) |
|
|
— |
|
|
|
(10,492 |
) |
|
Income tax benefit on pre-tax adjustments (6) |
|
|
(16,383 |
) |
|
|
(30,975 |
) |
|
|
(52,095 |
) |
|
|
(55,975 |
) |
|
Net income, adjusted (non-GAAP) (Adjusted Net Income) |
|
$ |
53,563 |
|
|
$ |
21,705 |
|
|
$ |
105,508 |
|
|
$ |
184,165 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) per common share, as reported (GAAP) |
|
$ |
0.23 |
|
|
$ |
(0.77 |
) |
|
$ |
(0.54 |
) |
|
$ |
0.29 |
|
|
After-tax adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Acquisition-related charges and intangible amortization (1) |
|
|
0.23 |
|
|
|
0.26 |
|
|
|
0.96 |
|
|
|
1.27 |
|
|
Exit and realignment charges (2) |
|
|
0.22 |
|
|
|
0.02 |
|
|
|
0.95 |
|
|
|
0.07 |
|
|
Inventory valuation adjustment (3) |
|
|
— |
|
|
|
0.90 |
|
|
|
— |
|
|
|
0.91 |
|
|
Other (4) |
|
|
0.01 |
|
|
|
0.01 |
|
|
|
(0.01 |
) |
|
|
0.02 |
|
|
Tax adjustments (5) |
|
|
— |
|
|
|
(0.14 |
) |
|
|
— |
|
|
|
(0.14 |
) |
|
Net income per common share, adjusted (non-GAAP) (Adjusted EPS) |
|
$ |
0.69 |
|
|
$ |
0.28 |
|
|
$ |
1.36 |
|
|
$ |
2.42 |
|
|
|
GAAP/Non-GAAP Reconciliations (unaudited), continued |
(dollars in thousands) |
The following tables provide reconciliations of net income (loss) and total debt to non-GAAP measures used by management.
|
|
Three Months Ended |
|
|
Year Ended |
||||||||||
|
|
2023 |
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Net income (loss), as reported (GAAP) |
|
$ |
17,784 |
|
$ |
(57,991 |
) |
|
$ |
(41,301 |
) |
|
$ |
22,389 |
|
Income tax provision (benefit) |
|
|
3,213 |
|
|
(37,435 |
) |
|
|
(13,425 |
) |
|
|
(11,498 |
) |
Interest expense, net |
|
|
36,863 |
|
|
41,164 |
|
|
|
157,915 |
|
|
|
128,891 |
|
Acquisition-related charges and intangible amortization (1) |
|
|
26,427 |
|
|
26,345 |
|
|
|
101,037 |
|
|
|
126,972 |
|
Exit and realignment charges (2) |
|
|
24,310 |
|
|
2,018 |
|
|
|
99,127 |
|
|
|
6,897 |
|
Other depreciation and amortization (7) |
|
|
48,704 |
|
|
49,841 |
|
|
|
200,339 |
|
|
|
149,820 |
|
Inventory valuation adjustment (3) |
|
|
— |
|
|
92,275 |
|
|
|
— |
|
|
|
92,275 |
|
Stock compensation (8) |
|
|
5,181 |
|
|
4,907 |
|
|
|
20,942 |
|
|
|
20,501 |
|
LIFO charges (9) |
|
|
5,655 |
|
|
8,725 |
|
|
|
2,402 |
|
|
|
5,396 |
|
Other (4) |
|
|
1,425 |
|
|
525 |
|
|
|
(1,260 |
) |
|
|
2,099 |
|
Adjusted EBITDA (non-GAAP) |
|
$ |
169,562 |
|
$ |
130,374 |
|
|
$ |
525,776 |
|
|
$ |
543,742 |
|
|
|
|
|
|
|
|
|
|
|
||
|
2023 |
|
2022 |
||
Total debt, as reported (GAAP) |
$ |
2,097,502 |
|
$ |
2,500,874 |
Cash and cash equivalents |
|
(243,037) |
|
|
(69,467) |
Net debt (non-GAAP) |
$ |
1,854,465 |
|
$ |
2,431,407 |
The following items have been excluded in our non-GAAP financial measures:
(1) Acquisition-related charges and intangible amortization includes acquisition-related charges of
(2) During the three months and year ended
(3) Relates to an inventory valuation adjustment in our Products & Healthcare Services segment, primarily associated with personal protective equipment inventory built up and a subsequent decline in demand as a result of the COVID-19 pandemic.
(4) For the three months and year ended
(5) Tax adjustments in 2022 includes a change in our foreign repatriation plans related to the permanent reinvestment of earnings associated with a subsidiary in
(6) 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.
(7) 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.
(8) 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.
(9) LIFO 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
Use of Non-GAAP Measures
This earnings 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.
OMI-IR
View source version on businesswire.com: https://www.businesswire.com/news/home/20240220733257/en/
Investors
OMI@alpha-ir.com
SVP Finance & Treasurer
Investor.Relations@owens-minor.com
Media
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Source: