While the company remains focused on executing the transformation
strategy it launched in 2017, a number of factors continue to affect
overall performance. Performance during the fourth quarter of 2017 was
affected by increased price and margin compression, longer than expected
sales cycles for the company's fee-for-service businesses, and, more
recently, product supply issues with certain larger manufacturers. In
the Domestic Segment, price and margin compression affected revenue and
gross margin results, which were only partially offset by transformation
and expense reduction initiatives. In addition, during the fourth
quarter, the Domestic Segment incurred higher than expected healthcare
costs and LIFO expense. The International Segment lagged expectations
mainly due to softer than expected fee-for-service revenues, increased
costs to onboard new customers, and a lag in implementing cost reduction
activities. Additionally, in the Proprietary Products Segment, lower
revenues and inventory write-offs negatively impacted the results.
Somewhat offsetting these results, were solid fourth quarter
"We are disappointed with our results for 2017 and the fourth quarter,"
Owens & Minor Board Approves First Quarter 2018 Dividend Payment
The company also announced that the Board of Directors approved a first
quarter 2018 dividend of
Investor Conference Call & Supplemental Material for 2017 Financial Results
The company plans to release its fourth quarter and full year 2017
financial results on
This release is intended to be disclosure through methods reasonably
designed to provide broad, non-exclusionary distribution to the public
in compliance with the
Our financial statements for the year ended
Owens & Minor uses its web site, www.owens-minor.com, as a channel of distribution for material company information, including news releases, investor presentations and financial information. This information is routinely posted and accessible under the Investor Relations section.
Although the company does provide guidance for adjusted earnings per
share (which is a non-GAAP financial measure), it is not able to
forecast the most directly comparable measure calculated and presented
in accordance with GAAP. Certain elements of the composition of the GAAP
amounts are not predictable, making it impractical for the company to
forecast without unreasonable efforts. Such elements include, but are
not limited to restructuring and acquisition charges. As a result, no
GAAP guidance is provided. For the same reasons, the company is unable
to address the probable significance of the unavailable information,
which could have a potentially unpredictable, and potentially
significant, impact on its future GAAP financial results. The outlook is
based on certain assumptions that are subject to the risk factors
discussed in the company's filings with the
Included is a reconciliation of the differences between the non-GAAP financial measures presented in this news release and their most directly comparable GAAP financial measures.
The following table provides a reconciliation of estimated net income per diluted common share to non-GAAP adjusted net income per diluted share used by management:
Estimated range for the year ended
|Net income per diluted common share, as reported (GAAP)||$||1.17||$||1.20|
|Acquisition-related intangible amortization (1)||0.18||0.18|
|Acquisition-related and exit and realignment charges (2)||0.64||0.67|
|Tax reform impact (4)||(0.55||)||(0.60||)|
|Net income per diluted common share, adjusted (non-GAAP) (Adjusted EPS)||$||1.58||$||1.61|
Use of Non-GAAP Measures
Adjusted net income per diluted share is an alternative view of performance used by management, and we believe that investors' understanding of our performance is enhanced by disclosing this performance measure. In general, the measure excludes items and charges that (i) management does not believe reflect our 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 this non-GAAP financial measure internally to evaluate our performance, evaluate the balance sheet, engage in financial and operational planning and determine incentive compensation.
Management provides this non-GAAP financial measure to investors as a supplemental metric to assist readers in assessing the effects of items and events on our financial and operating results and in comparing our performance to that of our competitors. However, the non-GAAP financial measure used by us 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 us should not be considered a substitute 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.
The following items have been excluded in our non-GAAP financial measures:
(1) Acquisition-related intangible amortization includes amortization of certain intangible assets established during purchase 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 and the results of our peers.
(2) Acquisition-related and exit and realignment charges include transaction and transition costs associated with the acquisition of Byram and the upcoming Halyard S&IP transaction and severance from reduction in force and other employee costs associated with the establishment of our new client engagement centers, and the write-down of information system assets which are no longer used and other IT restructuring charges.
(3) Includes software as a service (SaaS) implementation costs associated with the upgrading of our global IT platforms in connection with the redesign of our global information system strategy.
(4) Includes a recognized income tax benefit associated with the estimated benefits under the Tax Cuts and Jobs Act.
Director, Investor & Media Relations
Director, Finance & Investor Relations
News Provided by Acquire Media