Owens & Minor Reports 4th Quarter & Full-Year 2013 Financial Results
- Consolidated annual revenue growth and adjusted EPS met targeted guidance for 2013
-
Adjusted consolidated net income was
$1.90 per diluted share for 2013 and$0.52 for the quarter -
4Q 2013 adjusted consolidated operating earnings (non-GAAP) improved
by more than
$11 million - The Domestic segment achieved revenue growth for the second consecutive quarter
- The International segment reported positive fourth quarter operating earnings
For the quarter ended
Consolidated operating earnings for the fourth quarter of 2013, were
"During 2013, our teams in the U.S.,
In completing a year-end review of customer contracts in the
International segment, the company has revised the presentation of a
portion of its International segment revenues from a gross to a net
basis, after determining that this presentation is more representative
of the customer arrangement. This change resulted in reductions of gross
revenues of approximately
2013 Annual Results
For the year ended
Consolidated operating earnings for 2013 improved slightly to
Asset Management
The balance of cash and cash equivalents was
Segment Results
Domestic segment revenues for the fourth quarter of 2013 were
For the fourth quarter of 2013, Domestic segment operating earnings were
For the International segment, quarterly revenues increased 8.6% to
2014 Outlook
The company reiterated the following financial guidance for 2014, which
was originally issued at its
For 2014, the company is targeting revenue growth of up to 2% and
adjusted net income per diluted share of
Upcoming Investor Relations Events
-
Leerink Swann Global Healthcare Conference 2014;February 12 ;New York -
Citi 2014 Global Healthcare Conference;
February 26 ;New York -
Barclays Capital 2014 Global Healthcare Conference;March 13 ;Miami
Investors Conference Call & Supplemental Material
Conference Call: Owens & Minor's management team will conduct a
conference call for investors on
Included with the press release financial tables are reconciliations of the differences between the non-GAAP financial measures presented in this news release, which exclude acquisition-related and exit and realignment charges, and their most directly comparable GAAP financial measures.
Safe Harbor Statement
Except for historical information, the matters discussed in this press
release may constitute forward-looking statements that involve risks and
uncertainties that could cause actual results to differ materially from
those projected. These risk factors are discussed in reports filed by
the company with the
Consolidated Statements of Income (unaudited) (in thousands, except per share data) |
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Three Months Ended |
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2013 | 2012 | |||||||
Net revenue | $ | 2,318,524 | $ | 2,294,208 | ||||
Cost of goods sold | 2,027,261 | 2,023,434 | ||||||
Gross margin | 291,263 | 270,774 | ||||||
Selling, general and administrative expenses | 222,043 | 211,415 | ||||||
Acquisition-related and exit and realignment charges | 7,049 | 1,717 | ||||||
Depreciation and amortization | 13,239 | 12,420 | ||||||
Other operating expense (income), net | (2,002 | ) | 181 | |||||
Operating earnings | 50,934 | 45,041 | ||||||
Interest expense, net | 3,263 | 3,422 | ||||||
Income before income taxes | 47,671 | 41,619 | ||||||
Income tax provision | 19,729 | 16,685 | ||||||
Net income | $ | 27,942 | $ | 24,934 | ||||
Net income per common share: | ||||||||
Basic | $ | 0.44 | $ | 0.40 | ||||
Diluted | $ | 0.44 | $ | 0.39 | ||||
Twelve Months Ended |
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2013 | 2012 | |||||||
Net revenue | $ | 9,071,532 | $ | 8,868,324 | ||||
Cost of goods sold | 7,954,457 | 7,943,670 | ||||||
Gross margin | 1,117,075 | 924,654 | ||||||
Selling, general and administrative expenses | 863,656 | 682,595 | ||||||
Acquisition-related and exit and realignment charges | 12,444 | 10,164 | ||||||
Depreciation and amortization | 50,586 | 39,604 | ||||||
Other operating expense (income), net | (7,694 | ) | (4,462 | ) | ||||
Operating earnings | 198,083 | 196,753 | ||||||
Interest expense, net | 13,098 | 13,397 | ||||||
Income before income taxes | 184,985 | 183,356 | ||||||
Income tax provision | 74,103 | 74,353 | ||||||
Net income | $ | 110,882 | $ | 109,003 | ||||
Net income per common share: | ||||||||
Basic | $ | 1.76 | $ | 1.72 | ||||
Diluted | $ | 1.76 | $ | 1.72 |
Condensed Consolidated Balance Sheets (unaudited) (in thousands) |
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2013 | 2012 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 101,905 | $ | 97,888 | |||
Accounts and notes receivable, net | 572,854 | 537,335 | |||||
Merchandise inventories | 771,663 | 763,756 | |||||
Other current assets | 279,510 | 231,264 | |||||
Total current assets | 1,725,932 | 1,630,243 | |||||
Property and equipment, net | 191,961 | 191,841 | |||||
Goodwill, net | 275,439 | 274,884 | |||||
Intangible assets, net | 40,406 | 42,313 | |||||
Other assets, net | 90,304 | 75,117 | |||||
Total assets | $ | 2,324,042 | $ | 2,214,398 | |||
Liabilities and equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 643,872 | $ | 603,137 | |||
Accrued payroll and related liabilities | 23,296 | 25,468 | |||||
Deferred income taxes | 41,613 | 42,107 | |||||
Other current liabilities | 280,398 | 254,924 | |||||
Total current liabilities | 989,179 | 925,636 | |||||
Long-term debt, excluding current portion | 213,815 | 215,383 | |||||
Deferred income taxes | 43,727 | 36,269 | |||||
Other liabilities | 52,278 | 63,454 | |||||
Total liabilities | 1,298,999 | 1,240,742 | |||||
Total equity | 1,025,043 | 973,656 | |||||
Total liabilities and equity | $ | 2,324,042 | $ | 2,214,398 |
Consolidated Statements of Cash Flows (unaudited) (in thousands) |
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Twelve Months Ended | |||||||||
2013 | 2012 | ||||||||
Operating activities: | |||||||||
Net income | $ | 110,882 | $ | 109,003 | |||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||
Depreciation and amortization | 50,586 | 39,604 | |||||||
Share-based compensation expense | 6,381 | 5,697 | |||||||
Deferred income tax expense | 3,713 | 1,060 | |||||||
Provision for losses on accounts and notes receivable | 787 | 1,004 | |||||||
Changes in operating assets and liabilities: | |||||||||
Accounts and notes receivable | (38,645 | ) | 27,161 | ||||||
Merchandise inventories | (7,064 | ) | 58,734 | ||||||
Accounts payable | 47,374 | (18,694 | ) | ||||||
Net change in other assets and liabilities | (32,337 | ) | (4,490 | ) | |||||
Other, net | (1,123 | ) | (573 | ) | |||||
Cash provided by operating activities | 140,554 | 218,506 | |||||||
Investing activities: | |||||||||
Acquisition, net of cash acquired | — | (155,210 | ) | ||||||
Additions to computer software and intangible assets | (32,010 | ) | (29,131 | ) | |||||
Additions to property and equipment | (28,119 | ) | (9,832 | ) | |||||
Proceeds from the sale of property and equipment | 3,051 | 3,298 | |||||||
Cash used for investing activities | (57,078 | ) | (190,875 | ) | |||||
Financing activities: | |||||||||
Cash dividends paid | (60,731 | ) | (55,681 | ) | |||||
Repurchases of common stock | (18,876 | ) | (15,000 | ) | |||||
Financing costs paid | — | (1,303 | ) | ||||||
Proceeds from exercise of stock options | 5,352 | 4,986 | |||||||
Excess tax benefits related to share-based compensation | 898 | 1,293 | |||||||
Other, net | (8,623 | ) | (2,710 | ) | |||||
Cash used for financing activities | (81,980 | ) | (68,415 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | 2,521 | 2,734 | |||||||
Net increase (decrease) in cash and cash equivalents | 4,017 | (38,050 | ) | ||||||
Cash and cash equivalents at beginning of period | 97,888 | 135,938 | |||||||
Cash and cash equivalents at end of period | $ | 101,905 | $ | 97,888 |
Financial Statistics and GAAP/Non-GAAP Reconciliations (unaudited) |
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Quarter Ended | ||||||||||||||||||||
(in thousands, except ratios and per share data) |
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Consolidated operating results: | ||||||||||||||||||||
Domestic | $ | 2,213,949 | $ | 2,175,663 | $ | 2,143,691 | $ | 2,154,715 | $ | 2,197,932 | ||||||||||
International (1) | 104,575 | 94,884 | 92,386 | 91,669 | 96,276 | |||||||||||||||
Net revenue | $ | 2,318,524 | $ | 2,270,547 | $ | 2,236,077 | $ | 2,246,384 | $ | 2,294,208 | ||||||||||
Gross margin | $ | 291,263 | $ | 273,329 | $ | 273,431 | $ | 279,052 | $ | 270,774 | ||||||||||
Gross margin as a percent of revenue | 12.56 | % | 12.04 | % | 12.23 | % | 12.42 | % | 11.80 | % | ||||||||||
SG&A expenses | $ | 222,043 | $ | 211,344 | $ | 212,548 | $ | 217,721 | $ | 211,415 | ||||||||||
SG&A expenses as a percent of revenue | 9.58 | % | 9.31 | % | 9.51 | % | 9.69 | % | 9.22 | % | ||||||||||
Operating earnings, as reported (GAAP) | $ | 50,934 | $ | 49,215 | $ | 50,050 | $ | 47,884 | $ | 45,041 | ||||||||||
Acquisition-related and exit and realignment charges | 7,049 | 2,747 | 638 | 2,010 | 1,717 | |||||||||||||||
Operating earnings, adjusted (Non-GAAP) | $ | 57,983 | $ | 51,962 | $ | 50,688 | $ | 49,894 | $ | 46,758 | ||||||||||
Operating earnings as a percent of revenue, adjusted (Non-GAAP) | 2.50 | % | 2.29 | % | 2.27 | % | 2.22 | % | 2.04 | % | ||||||||||
Net income, as reported (GAAP) | $ | 27,942 | $ | 27,970 | $ | 28,872 | $ | 26,098 | $ | 24,934 | ||||||||||
Acquisition-related and exit and realignment charges, after-tax | 5,024 | 1,899 | 412 | 1,521 | 1,237 | |||||||||||||||
Net income, adjusted (Non-GAAP) | $ | 32,966 | $ | 29,869 | $ | 29,284 | $ | 27,619 | $ | 26,171 | ||||||||||
Net income per diluted common share, as reported (GAAP) | $ | 0.44 | $ | 0.44 | $ | 0.46 | $ | 0.41 | $ | 0.39 | ||||||||||
Acquisition-related and exit and realignment charges | 0.08 | 0.03 | — | 0.03 | 0.02 | |||||||||||||||
Net income per diluted common share, adjusted (Non-GAAP) | $ | 0.52 | $ | 0.47 | $ | 0.46 | $ | 0.44 | $ | 0.41 | ||||||||||
Financing: | ||||||||||||||||||||
Cash and cash equivalents | $ | 101,905 | $ | 153,789 | $ | 207,826 | $ | 218,563 | $ | 97,888 | ||||||||||
Total interest-bearing debt | $ | 216,243 | $ | 216,850 | $ | 216,994 | $ | 216,414 | $ | 217,591 | ||||||||||
Stock information: | ||||||||||||||||||||
Cash dividends per common share | $ | 0.24 | $ | 0.24 | $ | 0.24 | $ | 0.24 | $ | 0.22 | ||||||||||
Stock price at quarter-end | $ | 36.56 | $ | 34.59 | $ | 33.83 | $ | 32.56 | $ | 28.51 | ||||||||||
(1) Revised to reflect net presentation of revenues for
certain customer contracts. Previously reported revenues were
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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
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 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.
Summary Segment Information (unaudited) (in thousands) |
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Three Months Ended |
Twelve Months Ended |
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2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
% of | % of | % of | % of | |||||||||||||||||||||
consolidated | consolidated | consolidated | consolidated | |||||||||||||||||||||
Amount | net revenue | Amount | net revenue | Amount | net revenue | Amount | net revenue | |||||||||||||||||
Net revenue: | ||||||||||||||||||||||||
Domestic | $ | 2,213,949 | 95.49% | $ | 2,197,932 | 95.80% | $ | 8,688,018 | 95.77% | $ | 8,731,484 | 98.46% | ||||||||||||
International | 104,575 | 4.51% | 96,276 | 4.20% | 383,514 | 4.23% | 136,839 | 1.54% | ||||||||||||||||
Consolidated net revenue | $ | 2,318,524 | 100.00% | $ | 2,294,208 | 100.00% | $ | 9,071,532 | 100.00% | $ | 8,868,323 | 100.00% | ||||||||||||
% of segment net revenue |
% of segment net revenue |
% of segment net revenue |
% of segment net revenue |
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Operating earnings (loss): | ||||||||||||||||||||||||
Domestic | $ | 56,568 | 2.56% | $ | 51,546 | 2.35% | $ | 211,932 | 2.44% | $ | 212,335 | 2.43% | ||||||||||||
International | 1,415 | 1.35% | (4,788 | ) | (4.97)% | (1,405 | ) | (0.37)% | (5,418 | ) | (3.96)% | |||||||||||||
Acquisition-related and exit and realignment charges | (7,049 | ) | N/A | (1,717 | ) | N/A | (12,444 | ) | N/A | (10,164 | ) | N/A | ||||||||||||
Consolidated operating earnings | $ | 50,934 | 2.20% | $ | 45,041 | 1.96% | $ | 198,083 | 2.18% | $ | 196,753 | 2.22% | ||||||||||||
Depreciation and amortization: | ||||||||||||||||||||||||
Domestic | $ | 9,033 | $ | 9,121 | $ | 35,808 | $ | 35,016 | ||||||||||||||||
International | 4,206 | 3,299 | 14,778 | 4,588 | ||||||||||||||||||||
Consolidated depreciation and amortization | $ | 13,239 | $ | 12,420 | $ | 50,586 | $ | 39,604 | ||||||||||||||||
Capital expenditures: (1) | ||||||||||||||||||||||||
Domestic | $ | 8,295 | $ | 7,364 | $ | 42,802 | $ | 34,450 | ||||||||||||||||
International | 6,328 | 3,775 | 17,327 | 4,513 | ||||||||||||||||||||
Consolidated capital expenditures | $ | 14,623 | $ | 11,139 | $ | 60,129 | $ | 38,963 | ||||||||||||||||
2013 |
2012 |
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Total assets: | ||||||||||||||||||||||||
Domestic | $ | 1,747,572 | $ | 1,730,396 | ||||||||||||||||||||
International | 474,565 | 386,114 | ||||||||||||||||||||||
Segment assets | 2,222,137 | 2,116,510 | ||||||||||||||||||||||
Cash and cash equivalents | 101,905 | 97,888 | ||||||||||||||||||||||
Consolidated total assets | $ | 2,324,042 | $ | 2,214,398 | ||||||||||||||||||||
(1) Represents additions to property and equipment and additions to computer software and separately acquired intangible assets. |
Net Income Per Common Share (unaudited) (in thousands, except per share data) |
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Three Months Ended |
Twelve Months Ended |
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2013 | 2012 | 2013 | 2012 | |||||||||||||
Numerator: | ||||||||||||||||
Net income | $ | 27,942 | $ | 24,934 | $ | 110,882 | $ | 109,003 | ||||||||
Less: income allocated to unvested restricted shares | (193 | ) | (173 | ) | (738 | ) | (749 | ) | ||||||||
Net income attributable to common shareholders - basic | 27,749 | 24,761 | 110,144 | 108,254 | ||||||||||||
Add: undistributed income attributable to unvested restricted shares -basic | 67 | 61 | 257 | 292 | ||||||||||||
Less: undistributed income attributable to unvested restricted shares -diluted | (67 | ) | (61 | ) | (257 | ) | (292 | ) | ||||||||
Net income attributable to common shareholders - diluted | $ | 27,749 | $ | 24,761 | $ | 110,144 | $ | 108,254 | ||||||||
Denominator: | ||||||||||||||||
Weighted average shares outstanding — basic | 62,446 | 62,671 | 62,625 | 62,765 | ||||||||||||
Dilutive shares - stock options | 21 | 67 | 36 | 79 | ||||||||||||
Weighted average shares outstanding — diluted | 62,467 | 62,738 | 62,661 | 62,844 | ||||||||||||
Net income per share attributable to common shareholders: | ||||||||||||||||
Basic | $ | 0.44 | $ | 0.40 | $ | 1.76 | $ | 1.72 | ||||||||
Diluted | $ | 0.44 | $ | 0.39 | $ | 1.76 | $ | 1.72 |
or
chuck.graves@owens-minor.com
Source:
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