Owens & Minor Reports 4th Quarter & Full-Year 2015 Financial Results
-
Company achieved record annual adjusted earnings of
$2.00 per share for 2015 -
Consolidated annual revenues increased 3.5% to
$9.77 billion -
International segment operating earnings improved
$10.6 million compared to 2014
Consolidated operating earnings for 2015 were
"I am pleased with the performance of our teams in the
Fourth Quarter 2015 Results
For the fourth quarter of 2015, consolidated net revenues were
Consolidated operating earnings for the fourth quarter of 2015 increased
Asset Management
The balance of cash and cash equivalents was
Segment Results
For the full year of 2015, Domestic segment revenue increased 4.5% to
For the full year, Domestic segment operating earnings increased
For the International segment, full-year revenues decreased 14.6% to
"Our International team worked throughout the year to achieve
operational and financial improvements, leading to a
2016 Outlook
The company reiterated its financial guidance for 2016, consistent with
the guidance originally provided at its
For 2016, the company is targeting adjusted earnings per diluted share
in a range of
Upcoming Investor Relations Events
-
Barclays Capital 2016 Global Healthcare Conference;March 15-17 ,Miami
Investors Conference Call & Supplemental Material
Conference Call: Company executives will host a conference call,
which will also be webcast,
to discuss the results on the following morning,
Included with the press release financial tables are reconciliations of the differences between the non-GAAP financial measures presented in this news release 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) |
|||||||||||
Three Months Ended |
|||||||||||
2015 | 2014 | ||||||||||
Net revenue | $ | 2,487,914 | $ | 2,491,817 | |||||||
Cost of goods sold | 2,175,632 | 2,177,802 | |||||||||
Gross margin | 312,282 | 314,015 | |||||||||
Selling, general and administrative expenses | 236,426 | 244,152 | |||||||||
Acquisition-related and exit and realignment charges | 6,647 | 17,988 | |||||||||
Depreciation and amortization | 13,745 | 15,528 | |||||||||
Other operating expense (income), net | (2,489 | ) | (4,426 | ) | |||||||
Operating earnings | 57,953 | 40,773 | |||||||||
Interest expense, net | 6,845 | 7,270 | |||||||||
Income before income taxes | 51,108 | 33,503 | |||||||||
Income tax provision | 19,040 | 19,516 | |||||||||
Net income | $ | 32,068 | $ | 13,987 | |||||||
Net income per common share: | |||||||||||
Basic | $ | 0.51 | $ | 0.22 | |||||||
Diluted | $ | 0.51 | $ | 0.22 | |||||||
Twelve Months Ended |
|||||||||||
2015 | 2014 | ||||||||||
Net revenue | $ | 9,772,946 | $ | 9,440,182 | |||||||
Cost of goods sold | 8,558,373 | 8,270,216 | |||||||||
Gross margin | 1,214,573 | 1,169,966 | |||||||||
Selling, general and administrative expenses | 933,596 | 926,977 | |||||||||
Acquisition-related and exit and realignment charges | 28,404 | 42,801 | |||||||||
Depreciation and amortization | 60,187 | 57,125 | |||||||||
Other operating expense (income), net | (7,973 | ) | (16,473 | ) | |||||||
Operating earnings | 200,359 | 159,536 | |||||||||
Loss on early retirement of debt | — | 14,890 | |||||||||
Interest expense, net | 27,149 | 18,163 | |||||||||
Income before income taxes | 173,210 | 126,483 | |||||||||
Income tax provision | 69,801 | 59,980 | |||||||||
Net income | $ | 103,409 | $ | 66,503 | |||||||
Net income per common share: | |||||||||||
Basic | $ | 1.65 | $ | 1.06 | |||||||
Diluted | $ | 1.65 | $ | 1.06 | |||||||
Condensed Consolidated Balance Sheets (unaudited) (in thousands) |
||||||||||
|
|
|||||||||
2015 | 2014 | |||||||||
Assets | ||||||||||
Current assets | ||||||||||
Cash and cash equivalents | $ | 161,020 | $ | 56,772 | ||||||
Accounts and notes receivable, net | 587,935 | 626,192 | ||||||||
Merchandise inventories | 940,775 | 872,457 | ||||||||
Other current assets | 284,970 | 314,479 | ||||||||
Total current assets | 1,974,700 | 1,869,900 | ||||||||
Property and equipment, net | 208,930 | 232,979 | ||||||||
|
419,619 | 423,276 | ||||||||
Intangible assets, net | 95,250 | 108,593 | ||||||||
Other assets, net | 79,341 | 100,658 | ||||||||
Total assets | $ | 2,777,840 | $ | 2,735,406 | ||||||
Liabilities and equity | ||||||||||
Current liabilities | ||||||||||
Accounts payable | $ | 700,116 | $ | 608,846 | ||||||
Accrued payroll and related liabilities | 45,907 | 31,507 | ||||||||
Other current liabilities |
317,566 | 326,223 | ||||||||
Total current liabilities | 1,063,589 | 966,576 | ||||||||
Long-term debt, excluding current portion | 572,559 | 608,551 | ||||||||
Deferred income taxes | 86,326 | 101,880 | ||||||||
Other liabilities | 62,776 | 67,561 | ||||||||
Total liabilities | 1,785,250 | 1,744,568 | ||||||||
Total equity | 992,590 | 990,838 | ||||||||
Total liabilities and equity | $ | 2,777,840 | $ | 2,735,406 | ||||||
Consolidated Statements of Cash Flows (unaudited) (in thousands) |
|||||||||||
Twelve Months Ended |
|||||||||||
2015 | 2014 | ||||||||||
Operating activities: | |||||||||||
Net income | $ | 103,409 | $ | 66,503 | |||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||
Depreciation and amortization | 65,982 | 63,407 | |||||||||
Share-based compensation expense | 11,306 | 8,207 | |||||||||
Deferred income tax expense (benefit) | (6,101 | ) | (3,385 | ) | |||||||
Provision for losses on accounts and notes receivable | (24 | ) | 448 | ||||||||
Loss on early retirement of debt | — | 14,890 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts and notes receivable | 18,333 | (17,803 | ) | ||||||||
Merchandise inventories | (69,727 | ) | (57,329 | ) | |||||||
Accounts payable | 103,518 | (52,148 | ) | ||||||||
Net change in other assets and liabilities | 40,670 | (25,828 | ) | ||||||||
Other, net | 2,231 | (723 | ) | ||||||||
Cash (used for) provided by operating activities | 269,597 | (3,761 | ) | ||||||||
Investing activities: | |||||||||||
Acquisitions, net of cash acquired | — | (248,536 | ) | ||||||||
Additions to computer software and intangible assets | (16,085 | ) | (22,384 | ) | |||||||
Additions to property and equipment | (20,531 | ) | (48,424 | ) | |||||||
Proceeds from the sale of investment | — | 1,937 | |||||||||
Proceeds from the sale of property and equipment | 143 | 156 | |||||||||
Cash used for investing activities | (36,473 | ) | (317,251 | ) | |||||||
Financing activities: | |||||||||||
Proceeds from issuance of debt | — | 547,693 | |||||||||
Proceeds from (repayment of) revolving credit facility | (33,700 | ) | 33,700 | ||||||||
Repayment of debt | — | (217,352 | ) | ||||||||
Cash dividends paid | (63,651 | ) | (63,104 | ) | |||||||
Repurchases of common stock | (20,000 | ) | (9,934 | ) | |||||||
Financing costs paid | — | (5,391 | ) | ||||||||
Proceeds from exercise of stock options | — | 1,180 | |||||||||
Excess tax benefits related to share-based compensation | 646 | 582 | |||||||||
Purchase of noncontrolling interest | — | (1,500 | ) | ||||||||
Other, net | (7,528 | ) | (7,314 | ) | |||||||
Cash provided by (used for) financing activities | (124,233 | ) | 278,560 | ||||||||
Effect of exchange rate changes on cash and cash equivalents | (4,643 | ) | (2,681 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | 104,248 | (45,133 | ) | ||||||||
Cash and cash equivalents at beginning of period | 56,772 | 101,905 | |||||||||
Cash and cash equivalents at end of period | $ | 161,020 | $ | 56,772 | |||||||
Financial Statistics and GAAP/Non-GAAP Reconciliations (unaudited) (in thousands, except per share data) |
|||||||||||||||||||||||||
Quarter Ended | |||||||||||||||||||||||||
(in thousands, except ratios and per share data) |
|
|
|
|
|
||||||||||||||||||||
Consolidated operating results: | |||||||||||||||||||||||||
Domestic | $ | 2,384,836 | $ | 2,368,008 | $ | 2,317,661 | $ | 2,285,635 | $ | 2,353,321 | |||||||||||||||
International | 103,078 | 103,661 | 104,506 | 105,561 | 138,496 | ||||||||||||||||||||
Net revenue | $ | 2,487,914 | $ | 2,471,669 | $ | 2,422,167 | $ | 2,391,196 | $ | 2,491,817 | |||||||||||||||
Gross margin | $ | 312,282 | $ | 306,354 | $ | 298,337 | $ | 297,601 | $ | 314,015 | |||||||||||||||
Gross margin as a percent of revenue | 12.55 | % | 12.39 | % | 12.32 | % | 12.45 | % | 12.60 | % | |||||||||||||||
SG&A expenses | $ | 236,426 | $ | 231,847 | $ | 231,498 | $ | 233,825 | $ | 244,152 | |||||||||||||||
SG&A expenses as a percent of revenue | 9.50 | % | 9.38 | % | 9.56 | % | 9.78 | % | 9.80 | % | |||||||||||||||
Operating earnings, as reported (GAAP) | $ | 57,953 | $ | 53,572 | $ | 47,860 | $ | 40,975 | $ | 40,773 | |||||||||||||||
Acquisition-related charges (1) | 4,048 | 1,335 | 1,786 | 2,605 | 7,394 | ||||||||||||||||||||
Exit and realignment charges (2) | 2,599 | 4,799 | 3,921 | 7,311 | 10,594 | ||||||||||||||||||||
Fair value adjustments related to purchase accounting (3) | — | — | — | — | (3,706 | ) | |||||||||||||||||||
Other (4) | (1,500 | ) | — | — | — | 3,907 | |||||||||||||||||||
Operating earnings, adjusted (Non-GAAP) | $ | 63,100 | $ | 59,706 | $ | 53,567 | $ | 50,891 | $ | 58,962 | |||||||||||||||
Operating earnings as a percent of revenue, adjusted (Non-GAAP) | 2.54 | % | 2.42 | % | 2.21 | % | 2.13 | % | 2.37 | % | |||||||||||||||
Net income, as reported (GAAP) | $ | 32,068 | $ | 28,176 | $ | 24,226 | $ | 18,940 | $ | 13,987 | |||||||||||||||
Acquisition-related charges, after-tax (1) | 4,125 | 1,099 | 1,349 | 2,257 | 6,211 | ||||||||||||||||||||
Exit and realignment charges, after-tax (2) | 436 | 4,280 | 3,520 | 6,335 | 11,477 | ||||||||||||||||||||
Fair value adjustments related to purchase accounting, after-tax (3) | — | — | — | — | (4,703 | ) | |||||||||||||||||||
Other, after-tax (4) | (1,500 | ) | — | — | — | 3,907 | |||||||||||||||||||
Net income, adjusted (Non-GAAP) | $ | 35,129 | $ | 33,555 | $ | 29,095 | $ | 27,532 | $ | 30,879 | |||||||||||||||
Net income per diluted common share, as reported (GAAP) | $ | 0.51 | $ | 0.45 | $ | 0.39 | $ | 0.30 | $ | 0.22 | |||||||||||||||
Acquisition-related charges, after-tax (1) | 0.07 | 0.02 | 0.02 | 0.03 | 0.10 | ||||||||||||||||||||
Exit and realignment charges, after-tax (2) | — | 0.07 | 0.05 | 0.11 | 0.18 | ||||||||||||||||||||
Fair value adjustments related to purchase accounting, after-tax (3) | — | — | — | — | (0.07 | ) | |||||||||||||||||||
Other, after-tax (4) | (0.02 | ) | — | — | — | 0.06 | |||||||||||||||||||
Net income per diluted common share, adjusted (Non-GAAP) | $ | 0.56 | $ | 0.54 | $ | 0.46 | $ | 0.44 | $ | 0.49 | |||||||||||||||
Financing: | |||||||||||||||||||||||||
Cash and cash equivalents | $ | 161,020 | $ | 125,245 | $ | 200,969 | $ | 159,056 | $ | 56,772 | |||||||||||||||
Total interest-bearing debt | $ | 577,585 | $ | 578,512 | $ | 579,415 | $ | 579,505 | $ | 613,809 | |||||||||||||||
Stock information: | |||||||||||||||||||||||||
Cash dividends per common share | $ | 0.2525 | $ | 0.2525 | $ | 0.2525 | $ | 0.2525 | $ | 0.25 | |||||||||||||||
Stock price at quarter-end | $ | 35.98 | $ | 31.94 | $ | 34.00 | $ | 33.84 | $ | 35.11 | |||||||||||||||
Financial Statistics and GAAP/Non-GAAP Reconciliations (unaudited)
The following items have been excluded in our non-GAAP financial measures:
(1) Acquisition-related charges in 2015 consist primarily of
costs to continue the integration of Medical Action and
(2) Exit and realignment charges in 2015 and 2014 were
associated with optimizing our operations and include the consolidation
of distribution and logistics centers and closure of offsite warehouses
in
(3) The fourth quarter of 2014 included a gain of
(4) The fourth quarter of 2015 included a partial recovery of
These charges have been tax effected in the preceding table 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.
Use of Non-GAAP Measures
This earnings release contains financial measures that are not
calculated in accordance with
Summary Segment Information (unaudited) (in thousands) |
||||||||||||||||||||||||||||||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||||||||||||||
% of | % of | % of | % of | |||||||||||||||||||||||||||||||||
consolidated | consolidated | consolidated | consolidated | |||||||||||||||||||||||||||||||||
Amount | net revenue | Amount | net revenue | Amount | net revenue | Amount | net revenue | |||||||||||||||||||||||||||||
Net revenue: | ||||||||||||||||||||||||||||||||||||
Domestic | $ | 2,384,836 | 95.86 | % | $ | 2,353,321 | 94.44 | % | $ | 9,356,140 | 95.74 | % | $ | 8,951,852 | 94.83 | % | ||||||||||||||||||||
International | 103,078 | 4.14 | % | 138,496 | 5.56 | % | 416,806 | 4.26 | % | 488,330 | 5.17 | % | ||||||||||||||||||||||||
Consolidated net revenue | $ | 2,487,914 | 100.00 | % | $ | 2,491,817 | 100.00 | % | $ | 9,772,946 | 100.00 | % | $ | 9,440,182 | 100.00 | % | ||||||||||||||||||||
% of segment | % of segment | % of segment | % of segment | |||||||||||||||||||||||||||||||||
Operating earnings (loss): | net revenue | net revenue | net revenue | net revenue | ||||||||||||||||||||||||||||||||
Domestic | $ | 62,459 | 2.62 | % | $ | 57,428 | 2.44 | % | $ | 223,364 | 2.39 | % | $ | 209,277 | 2.34 | % | ||||||||||||||||||||
International | 641 | 0.62 | % | 1,534 | 1.11 | % | 3,899 | 0.94 | % | (6,739 | ) | (1.38 | )% | |||||||||||||||||||||||
Acquisition-related and exit and realignment charges (1) | (6,647 | ) | N/A | (17,988 | ) | N/A | (28,404 | ) | N/A | (42,801 | ) | N/A | ||||||||||||||||||||||||
Fair value adjustments related to purchase accounting | — | N/A | 3,706 | N/A | — | N/A | 3,706 | N/A | ||||||||||||||||||||||||||||
Other | 1,500 | N/A | (3,907 | ) | N/A | 1,500 | N/A | (3,907 | ) | N/A | ||||||||||||||||||||||||||
Consolidated operating earnings | $ | 57,953 | 2.33 | % | $ | 40,773 | 1.64 | % | $ | 200,359 | 2.05 | % | $ | 159,536 | 1.69 | % | ||||||||||||||||||||
Depreciation and amortization: | ||||||||||||||||||||||||||||||||||||
Domestic | $ | 9,143 | $ | 10,420 | $ | 40,582 | $ | 37,193 | ||||||||||||||||||||||||||||
International | 4,967 | 5,406 | 20,926 | 20,230 | ||||||||||||||||||||||||||||||||
Consolidated depreciation and amortization | $ | 14,110 | $ | 15,826 | $ | 61,508 | $ | 57,423 | ||||||||||||||||||||||||||||
Capital expenditures: (2) | ||||||||||||||||||||||||||||||||||||
Domestic | $ | 4,286 | $ | 12,419 | $ | 18,458 | $ | 52,529 | ||||||||||||||||||||||||||||
International | 133 | 4,232 | 18,158 | 18,279 | ||||||||||||||||||||||||||||||||
Consolidated capital expenditures | $ | 4,419 | $ | 16,651 | $ | 36,616 | $ | 70,808 | ||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||
Total assets: | ||||||||||||||||||||||||||||||||||||
Domestic | $ | 2,155,236 | $ | 2,139,972 | ||||||||||||||||||||||||||||||||
International | 461,584 | 538,662 | ||||||||||||||||||||||||||||||||||
Segment assets | 2,616,820 | 2,678,634 | ||||||||||||||||||||||||||||||||||
Cash and cash equivalents | 161,020 | 56,772 | ||||||||||||||||||||||||||||||||||
Consolidated total assets | $ | 2,777,840 | $ | 2,735,406 | ||||||||||||||||||||||||||||||||
(1) The years ended |
||||||||||||||||||||||||||||||||||||
(2) 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) |
||||||||||||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||
Numerator: | ||||||||||||||||||
Net income | $ | 32,068 | $ | 13,987 | $ | 103,409 | $ | 66,503 | ||||||||||
Less: income allocated to unvested restricted shares | (307 | ) | (141 | ) | (925 | ) | (597 | ) | ||||||||||
Net income attributable to common shareholders - basic | 31,761 | 13,846 | 102,484 | 65,906 | ||||||||||||||
Add: undistributed income attributable to unvested restricted shares -basic | 107 | — | 235 | 18 | ||||||||||||||
Less: undistributed income attributable to unvested restricted shares -diluted | (107 | ) | — | (235 | ) | (18 | ) | |||||||||||
Net income attributable to common shareholders - diluted | $ | 31,761 | $ | 13,846 | $ | 102,484 | $ | 65,906 | ||||||||||
Denominator: | ||||||||||||||||||
Weighted average shares outstanding — basic | 61,771 | 62,193 | 62,116 | 62,220 | ||||||||||||||
Dilutive shares - stock options | — | 4 | 1 | 6 | ||||||||||||||
Weighted average shares outstanding — diluted | 61,771 | 62,197 | 62,117 | 62,226 | ||||||||||||||
Net income per share attributable to common shareholders: | ||||||||||||||||||
Basic | $ | 0.51 | $ | 0.22 | $ | 1.65 | $ | 1.06 | ||||||||||
Diluted | $ | 0.51 | $ | 0.22 | $ | 1.65 | $ | 1.06 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20160208006389/en/
804-723-7555
truitt.allcott@owens-minor.com
or
804-723-7556
chuck.graves@owens-minor.com
Source:
News Provided by Acquire Media