Owens & Minor Reports Consolidated 4th Quarter & Full-Year 2012 Financial Results
OMI's results were highlighted by strong asset management and operating cash flow
Adjusted consolidated net income (non-GAAP), which excludes pre-tax
charges of
For the fourth quarter of 2012, consolidated operating earnings were
"We made solid progress in 2012 on strategic investments that will
support the long-term success of our company in a rapidly changing
healthcare environment," said
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 & realignment charges, and their most directly comparable GAAP financial measures.
2012 Annual Results
For the year ended
Adjusted earnings per diluted share (non-GAAP) declined to
The Domestic segment operating earnings comparability between periods
was adversely affected by legal expenses and loss contingencies of
Segment Results
Domestic segment revenue for the fourth quarter of 2012 was
Domestic segment operating earnings for the fourth quarter of 2012 were
As discussed above, the International segment contributed revenue of
Asset Management
The balance of cash and cash equivalents at
2013 Outlook
The company reiterated the following financial guidance for 2013, which
was originally issued at its
For 2013, the company is targeting revenue growth of 2% to 4% and
adjusted net income per diluted share of
Highlights & Upcoming Investor Relations Events
-
The
Owens & Minor board of directors has approved the payment of the first quarter 2013 cash dividend in the amount of$0.24 per share, a 9% increase over the prior quarter's dividend. The cash dividend is payable onMarch 29, 2013 , to shareholders of record as ofMarch 15, 2013 . In 2012, the company paid nearly$56 million in dividends to shareholders and$15 million in share repurchases, under a board authorized share repurchase program, for a total of$71 million in distributions to shareholders. -
The board of directors of
Owens & Minor, Inc. announced onJanuary 31, 2013 , following the regularly scheduled board meeting, that G. Gilmer Minor, III, 72, who served as Chairman of the Board since 1994, will retire from the board at the conclusion of the company's Annual Shareholders' Meeting onApril 26, 2013 . As part of its succession plan, the board intends to appointCraig R. Smith , 61, President & Chief Executive Officer ofOwens & Minor , to also serve as Chairman of the Board, upon Minor's retirement. Minor will assume the position of Chairman Emeritus. -
Owens & Minor will participate in theBarclays Capital 2013 Global Healthcare Conference, onMarch 13, 2013 inMiami . A webcasts of the formal presentation will be available on www.owens-minor.com under the Investor Relations section.
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
Investors Conference Call & Supplemental Material
Conference Call:
Information on www.Owens-Minor.com
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Consolidated Statements of Income (unaudited) | ||||||||
(in thousands, except per share data) | ||||||||
Three Months Ended December 31, | ||||||||
2012 | 2011 | |||||||
Net revenue | $ | 2,324,924 | $ | 2,195,890 | ||||
Cost of goods sold | 2,054,150 | 1,981,876 | ||||||
Gross margin | 270,774 | 214,014 | ||||||
Selling, general and administrative expenses | 211,415 | 150,538 | ||||||
Acquisition-related and exit and realignment charges | 1,717 | 12,817 | ||||||
Depreciation and amortization | 12,420 | 8,656 | ||||||
Other operating expense (income), net | 181 | (1,011 | ) | |||||
Operating earnings | 45,041 | 43,014 | ||||||
Interest expense, net | 3,422 | 3,519 | ||||||
Income before income taxes | 41,619 | 39,495 | ||||||
Income tax provision | 16,685 | 15,553 | ||||||
Net income | $ | 24,934 | $ | 23,942 | ||||
Net income per common share: | ||||||||
Basic | $ | 0.40 | $ | 0.38 | ||||
Diluted | $ | 0.39 | $ | 0.38 | ||||
Twelve Months Ended December 31, | ||||||||
2012 | 2011 | |||||||
Net revenue | $ | 8,908,145 | $ | 8,627,912 | ||||
Cost of goods sold | 7,983,491 | 7,770,375 | ||||||
Gross margin | 924,654 | 857,537 | ||||||
Selling, general and administrative expenses | 682,595 | 610,657 | ||||||
Acquisition-related and exit and realignment charges | 10,164 | 13,168 | ||||||
Depreciation and amortization | 39,604 | 34,135 | ||||||
Other operating income, net | (4,462 | ) | (3,938 | ) | ||||
Operating earnings | 196,753 | 203,515 | ||||||
Interest expense, net | 13,397 | 13,682 | ||||||
Income before income taxes | 183,356 | 189,833 | ||||||
Income tax provision | 74,353 | 74,635 | ||||||
Net income | $ | 109,003 | $ | 115,198 | ||||
Net income per common share: | ||||||||
Basic | $ | 1.72 | $ | 1.82 | ||||
Diluted | $ | 1.72 | $ | 1.81 |
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Condensed Consolidated Balance Sheets (unaudited) | |||||
(in thousands) | |||||
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2012 | 2011 | ||||
Assets | |||||
Current assets | |||||
Cash and cash equivalents | $ | 97,888 | $ | 135,938 | |
Accounts and notes receivable, net | 553,502 | 506,758 | |||
Merchandise inventories | 763,756 | 806,366 | |||
Other current assets | 213,748 | 76,763 | |||
Total current assets | 1,628,894 | 1,525,825 | |||
Property and equipment, net | 191,841 | 108,061 | |||
Goodwill, net | 274,884 | 248,498 | |||
Intangible assets, net | 42,313 | 22,142 | |||
Other assets, net | 69,769 | 42,289 | |||
Total assets | $ | 2,207,701 | $ | 1,946,815 | |
Liabilities and equity | |||||
Current liabilities | |||||
Accounts payable | $ | 603,137 | $ | 575,793 | |
Accrued payroll and related liabilities | 25,468 | 20,668 | |||
Deferred income taxes | 40,758 | 42,296 | |||
Other current liabilities | 254,924 | 93,608 | |||
Total current liabilities | 924,287 | 732,365 | |||
Long-term debt, excluding current portion | 215,383 | 212,681 | |||
Deferred income taxes | 30,921 | 21,894 | |||
Other liabilities | 63,454 | 60,658 | |||
Total liabilities | 1,234,045 | 1,027,598 | |||
Total equity | 973,656 | 919,217 | |||
Total liabilities and equity | $ | 2,207,701 | $ | 1,946,815 |
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Consolidated Statements of Cash Flows (unaudited) | ||||||||
(in thousands) | ||||||||
Twelve Months Ended |
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2012 | 2011 | |||||||
Operating activities: | ||||||||
Net income | $ | 109,003 | $ | 115,198 | ||||
Adjustments to reconcile net income to cash provided by | ||||||||
operating activities of continuing operations: | ||||||||
Depreciation and amortization | 39,604 | 34,135 | ||||||
Share-based compensation expense | 5,697 | 5,674 | ||||||
Provision for LIFO reserve | 4,194 | 13,700 | ||||||
Deferred income tax expense | 1,060 | 14,520 | ||||||
Provision for losses on accounts and notes receivable | 1,004 | 2,176 | ||||||
Pension contributions | - | (409 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts and notes receivable | 27,161 | (37,273 | ) | |||||
Merchandise inventories | 54,540 | (99,950 | ) | |||||
Accounts payable | (18,694 | ) | 44,058 | |||||
Net change in other assets and liabilities | (4,490 | ) | (24,654 | ) | ||||
Other, net | (573 | ) | 1,244 | |||||
Cash provided by operating activities of continuing operations | 218,506 | 68,419 | ||||||
Investing activities: | ||||||||
Acquisition, net of cash acquired | (155,210 | ) | - | |||||
Additions to computer software and intangible assets | (29,131 | ) | (11,334 | ) | ||||
Additions to property and equipment | (9,832 | ) | (24,981 | ) | ||||
Proceeds from the sale of property and equipment | 3,298 | 2,430 | ||||||
Cash used for investing activities of continuing operations | (190,875 | ) | (33,885 | ) | ||||
Financing activities: | ||||||||
Cash dividends paid | (55,681 | ) | (50,909 | ) | ||||
Repurchases of common stock | (15,000 | ) | (16,124 | ) | ||||
Financing costs paid | (1,303 | ) | - | |||||
Proceeds from exercise of stock options | 4,986 | 9,179 | ||||||
Excess tax benefits related to share-based compensation | 1,293 | 2,154 | ||||||
Proceeds from termination of interest rate swaps | - | 4,005 | ||||||
Other, net | (2,710 | ) | (5,836 | ) | ||||
Cash used for financing activities of continuing operations | (68,415 | ) | (57,531 | ) | ||||
Discontinued operations: | ||||||||
Operating cash flows | - | (278 | ) | |||||
Net cash used for discontinued operations | - | (278 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | 2,734 | - | ||||||
Net decrease in cash and cash equivalents | (38,050 | ) | (23,275 | ) | ||||
Cash and cash equivalents at beginning of period | 135,938 | 159,213 | ||||||
Cash and cash equivalents at end of period | $ | 97,888 | $ | 135,938 |
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Financial Statistics and GAAP/Non-GAAP Reconciliations (unaudited) | |||||||||||||||||||
Quarter Ended | |||||||||||||||||||
(in thousands, except ratios and per share data) |
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Consolidated operating results: | |||||||||||||||||||
Net revenue | $ | 2,324,924 | $ | 2,179,895 | $ | 2,185,444 | $ | 2,217,882 | $ | 2,195,890 | |||||||||
Gross margin | $ | 270,774 | $ | 228,123 | $ | 211,429 | $ | 214,328 | $ | 214,014 | |||||||||
Gross margin as a percent of revenue | 11.65% | 10.46% | 9.67% | 9.66% | 9.75% | ||||||||||||||
SG&A expenses | $ | 211,415 | $ | 165,320 | $ | 150,288 | $ | 155,572 | $ | 150,538 | |||||||||
SG&A expenses as a percent of revenue | 9.09% | 7.58% | 6.88% | 7.01% | 6.86% | ||||||||||||||
Operating earnings, as reported (GAAP) | $ | 45,041 | $ | 46,663 | $ | 53,177 | $ | 51,872 | $ | 43,014 | |||||||||
Acquisition-related and exit and realignment charges | 1,717 | 7,831 | 617 | - | 12,817 | ||||||||||||||
Operating earnings, adjusted (Non-GAAP) | $ | 46,758 | $ | 54,494 | $ | 53,794 | $ | 51,872 | $ | 55,831 | |||||||||
Operating earnings as a percent of revenue, adjusted (Non-GAAP) | 2.01% | 2.50% | 2.46% | 2.34% | 2.54% | ||||||||||||||
Net income, as reported (GAAP) | $ | 24,934 | $ | 24,597 | $ | 30,113 | $ | 29,360 | $ | 23,942 | |||||||||
Acquisition-related and exit and realignment charges, after-tax | 1,237 | 6,588 | 375 | - | 7,780 | ||||||||||||||
Net income, adjusted (Non-GAAP) | $ | 26,171 | $ | 31,185 | $ | 30,488 | $ | 29,360 | $ | 31,722 | |||||||||
Net income per diluted common share, as reported (GAAP) | $ | 0.39 | $ | 0.39 | $ | 0.48 | $ | 0.46 | $ | 0.38 | |||||||||
Acquisition-related and exit and realignment charges | 0.02 | 0.10 | - | - | 0.13 | ||||||||||||||
Net income per diluted common share, adjusted (Non-GAAP) | $ | 0.41 | $ | 0.49 | $ | 0.48 | $ | 0.46 | $ | 0.51 | |||||||||
Financing: | |||||||||||||||||||
Cash and cash equivalents | $ | 97,888 | $ | 79,667 | $ | 224,937 | $ | 213,927 | $ | 135,938 | |||||||||
Total interest-bearing debt | $ | 217,591 | $ | 216,924 | $ | 213,982 | $ | 214,184 | $ | 214,556 | |||||||||
Stock information: | |||||||||||||||||||
Cash dividends per common share | $ | 0.22 | $ | 0.22 | $ | 0.22 | $ | 0.22 | $ | 0.20 | |||||||||
Stock price at quarter-end | $ | 28.51 | $ | 29.88 | $ | 30.63 | $ | 30.41 | $ | 27.79 |
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.
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Summary Segment Information (unaudited) | |||||||||||||||||||||||||||||||||||||||
(in thousands, except ratios) | |||||||||||||||||||||||||||||||||||||||
Three Months Ended |
Twelve Months Ended December 31, | ||||||||||||||||||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||||
% of | % of | % of | % of | ||||||||||||||||||||||||||||||||||||
consolidated | consolidated | consolidated | consolidated | ||||||||||||||||||||||||||||||||||||
Amount | net revenue | Amount | net revenue | Amount | net revenue | Amount | net revenue | ||||||||||||||||||||||||||||||||
Net revenue: | |||||||||||||||||||||||||||||||||||||||
Domestic | $ | 2,197,932 | 94.54 | % | $ | 2,195,890 | 100.00 | % | $ | 8,731,484 | 98.02 | % | $ | 8,627,912 | 100.00 | % | |||||||||||||||||||||||
International | 126,992 | 5.46 | N/A | N/A | 176,661 | 1.98 | N/A | N/A | |||||||||||||||||||||||||||||||
Consolidated net revenue | $ | 2,324,924 | 100.00 | % | $ | 2,195,890 | 100.00 | % | $ | 8,908,145 | 100.00 | % | $ | 8,627,912 | 100.00 | % | |||||||||||||||||||||||
% of segment |
% of segment |
% of segment |
% of segment |
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Operating earnings (loss): | net revenue | net revenue | net revenue | net revenue | |||||||||||||||||||||||||||||||||||
Domestic | $ | 51,546 | 2.35 | % | $ | 55,831 | 2.54 | % | $ | 212,335 | 2.43 | % | $ | 216,683 | 2.51 | % | |||||||||||||||||||||||
International | (4,788 | ) | (3.77 | ) | % | N/A | N/A | (5,418 | ) | (3.07 | ) | % | N/A | N/A | |||||||||||||||||||||||||
Acquisition-related and exit and realignment charges | (1,717 | ) | N/A | (12,817 | ) | N/A | (10,164 | ) | N/A | (13,168 | ) | N/A | |||||||||||||||||||||||||||
Consolidated operating earnings | $ | 45,041 | 1.94 | % | $ | 43,014 | 1.96 | % | $ | 196,753 | 2.21 | % | $ | 203,515 | 2.36 | % | |||||||||||||||||||||||
Depreciation and amortization: | |||||||||||||||||||||||||||||||||||||||
Domestic | $ | 9,121 | $ | 8,656 | $ | 35,016 | $ | 34,135 | |||||||||||||||||||||||||||||||
International | 3,299 | N/A | 4,588 | N/A | |||||||||||||||||||||||||||||||||||
Consolidated depreciation and amortization | $ | 12,420 | $ | 8,656 | $ | 39,604 | $ | 34,135 | |||||||||||||||||||||||||||||||
Capital expenditures: (1) | |||||||||||||||||||||||||||||||||||||||
Domestic | $ | 7,364 | $ | 11,434 | $ | 34,450 | $ | 36,315 | |||||||||||||||||||||||||||||||
International | 3,775 | N/A | 4,513 | N/A | |||||||||||||||||||||||||||||||||||
Consolidated capital expenditures | $ | 11,139 | $ | 11,434 | $ | 38,963 | $ | 36,315 | |||||||||||||||||||||||||||||||
December 31, 2012 |
December 31, 2011 |
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Total assets: | |||||||||||||||||||||||||||||||||||||||
Domestic | $ | 1,723,699 | $ | 1,810,877 | |||||||||||||||||||||||||||||||||||
International | 386,114 | N/A | |||||||||||||||||||||||||||||||||||||
Segment assets | 2,109,813 | 1,810,877 | |||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | 97,888 | 135,938 | |||||||||||||||||||||||||||||||||||||
$ | 2,207,701 | $ | 1,946,815 | ||||||||||||||||||||||||||||||||||||
(1) Represents additions to property and equipment and additions to computer software and separately acquired intangible assets. |
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Net Income Per Common Share (unaudited) | ||||||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||||
Three Months Ended |
Twelve Months Ended December 31, | |||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||
Net income | $ | 24,934 | $ | 23,942 | $ | 109,003 | $ | 115,198 | ||||||||||||||||
Less: income allocated to unvested restricted shares | (173 | ) | (199 | ) | (749 | ) | (1,059 | ) | ||||||||||||||||
Net income attributable to common shareholders - basic | 24,761 | 23,743 | 108,254 | 114,139 | ||||||||||||||||||||
Add: undistributed income attributable to unvested restricted shares - basic | 61 | 80 | 292 | 480 | ||||||||||||||||||||
Less: undistributed income attributable to unvested restricted shares - diluted | (61 | ) | (80 | ) | (292 | ) | (479 | ) | ||||||||||||||||
Net income attributable to common shareholders - diluted | $ | 24,761 | $ | 23,743 | $ | 108,254 | $ | 114,140 | ||||||||||||||||
Denominator: | ||||||||||||||||||||||||
Weighted average shares outstanding — basic | 62,671 | 62,655 | 62,765 | 62,756 | ||||||||||||||||||||
Dilutive shares - stock options | 67 | 129 | 79 | 168 | ||||||||||||||||||||
Weighted average shares outstanding — diluted | 62,738 | 62,784 | 62,844 | 62,924 | ||||||||||||||||||||
Net income per share attributable to common shareholders: | ||||||||||||||||||||||||
Basic | $ | 0.40 | $ | 0.38 | $ | 1.72 | $ | 1.82 | ||||||||||||||||
Diluted | $ | 0.39 | $ | 0.38 | $ | 1.72 | $ | 1.81 |
Director,
Investor & Media Relations
truitt.allcott@owens-minor.com
or
Director, Finance & Investor Relations
chuck.graves@owens-minor.com
Source:
News Provided by Acquire Media