Owens & Minor Reports Consolidated Financial Results for 3rd Quarter 2012, Including Results from the Movianto Acquisition
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Owens & Minor to host Annual Investor Day onNovember 29, 2012 inNew York -
Company completes acquisition of the
Movianto Group , a leading European 3PL provider
"With the third party logistics capabilities of the Movianto acquisition
and our core U.S. hospital distribution and supply chain services
business,
Adjusted consolidated operating earnings for the third quarter of 2012,
which exclude
Year-to-Date Results
For the nine months ended
For the first nine months of 2012, adjusted consolidated operating
earnings, excluding Movianto acquisition-related costs, were
"As we reflect on the third quarter 2012 results, we are targeting the
fourth quarter 2012 adjusted operating results to be similar to those
reported this quarter," said
Segment Discussion
As a result of the
Domestic Segment
In the third quarter of 2012, Domestic revenues were
Operating earnings for the Domestic segment for the third quarter of
2012 were
International Segment
Revenues in the International segment were
For the third quarter of 2012, the International segment had an
operating loss of less than
Movianto Update
After completing the acquisition of Movianto, a leading European
healthcare third-party logistics (3PL) business,
With the acquisition,
Asset Management
The balance of cash and cash equivalents at
Highlights & Upcoming Events
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The
Owens & Minor board of directors declared a fourth quarter 2012 dividend of$0.22 per diluted share. The dividend is payable onDecember 31, 2012 , to shareholders of record onDecember 14, 2012 .Owens & Minor views dividends as an important component of total return to shareholders. -
Effective
October 18, 2012 , theOwens & Minor board of directors has namedMartha Marsh , retired president & chief executive officer ofStanford Hospital and Clinics , to serve on the company's board of directors. Marsh brings more than 30 years of experience as a hospital executive to theOwens & Minor board. -
Owens & Minor is scheduled to participate in the 2012Credit Suisse Healthcare Conference onNovember 15, 2012 inPhoenix . The presentation is scheduled for11:00 a.m. Mountain Time . -
Owens & Minor has scheduled its Annual Investor Day inNew York forThursday, November 29, 2012 .Owens & Minor executives will provide an operational and strategic overview, as well as the company's financial outlook for 2013. The meeting is scheduled to begin at8:00 a.m. EST and conclude at approximately10:30 a.m. EST . A live, listen-only webcast of the briefing can be accessed on the company website at www.owens-minor.com under the Investor Relations Section.Professional Wall Street analysts and investors may register via http://investors.owens-minor.com/registration.cfm.
Investors' 3Q 2012 Conference Call & Supplemental Material
Owens & Minor's management team will conduct a conference call to
discuss the third quarter financial results on
Information on www.Owens-Minor.com
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
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Condensed Consolidated Statements of Income (unaudited) | ||||||
(in thousands, except per share data) | ||||||
Three Months Ended September 30, | ||||||
2012 | 2011 | |||||
Net revenue | $ | 2,179,895 | $ | 2,176,759 | ||
Cost of goods sold | 1,951,772 | 1,960,077 | ||||
Gross margin | 228,123 | 216,682 | ||||
Selling, general and administrative expenses | 165,320 | 152,825 | ||||
Acquisition-related and exit and realignment charges | 7,831 | 351 | ||||
Depreciation and amortization | 10,090 | 8,463 | ||||
Other operating income, net | (1,781) | (3,422) | ||||
Operating earnings | 46,663 | 58,465 | ||||
Interest expense, net | 3,066 | 3,426 | ||||
Income before income taxes | 43,597 | 55,039 | ||||
Income tax provision | 19,000 | 21,687 | ||||
Net income | $ | 24,597 | $ | 33,352 | ||
Net income per common share: | ||||||
Basic | $ | 0.39 | $ | 0.53 | ||
Diluted | $ | 0.39 | $ | 0.53 | ||
Nine Months Ended September 30, | ||||||
2012 | 2011 | |||||
Net revenue | $ | 6,583,221 | $ | 6,432,022 | ||
Cost of goods sold | 5,929,341 | 5,788,499 | ||||
Gross margin | 653,880 | 643,523 | ||||
Selling, general and administrative expenses | 471,179 | 460,119 | ||||
Acquisition-related and exit and realignment charges | 8,448 | 351 | ||||
Depreciation and amortization | 27,184 | 25,479 | ||||
Other operating income, net | (4,643) | (2,927) | ||||
Operating earnings | 151,712 | 160,501 | ||||
Interest expense, net | 9,975 | 10,163 | ||||
Income before income taxes | 141,737 | 150,338 | ||||
Income tax provision | 57,667 | 59,082 | ||||
Net income | $ | 84,070 | $ | 91,256 | ||
Net income per common share: | ||||||
Basic | $ | 1.33 | $ | 1.44 | ||
Diluted | $ | 1.33 | $ | 1.44 | ||
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Condensed Consolidated Balance Sheets (unaudited) | ||||||
(in thousands) | ||||||
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2012 | 2011 | |||||
Assets | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | 79,667 | $ | 135,938 | ||
Accounts and notes receivable, net | 582,994 | 506,758 | ||||
Merchandise inventories | 776,898 | 806,366 | ||||
Other current assets | 211,967 | 76,763 | ||||
Total current assets | 1,651,526 | 1,525,825 | ||||
Property and equipment, net | 176,035 | 108,061 | ||||
Goodwill, net | 285,363 | 248,498 | ||||
Intangible assets, net | 44,540 | 22,142 | ||||
Other assets, net | 64,285 | 42,289 | ||||
Total assets | $ | 2,221,749 | $ | 1,946,815 | ||
Liabilities and equity | ||||||
Current liabilities | ||||||
Accounts payable | $ | 642,123 | $ | 575,793 | ||
Accrued payroll and related liabilities | 18,033 | 20,668 | ||||
Deferred income taxes | 36,982 | 42,296 | ||||
Other current liabilities | 252,131 | 93,608 | ||||
Total current liabilities | 949,269 | 732,365 | ||||
Long-term debt, excluding current portion | 214,795 | 212,681 | ||||
Deferred income taxes | 31,311 | 21,894 | ||||
Other liabilities | 66,312 | 60,658 | ||||
Total liabilities | 1,261,687 | 1,027,598 | ||||
Total equity | 960,062 | 919,217 | ||||
Total liabilities and equity | $ | 2,221,749 | $ | 1,946,815 | ||
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Condensed Consolidated Statements of Cash Flows (unaudited) | |||||
(in thousands) | |||||
Nine Months Ended |
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2012 | 2011 | ||||
Operating activities: | |||||
Net income | $ | 84,070 | $ | 91,256 | |
Adjustments to reconcile net income to cash provided by | |||||
operating activities of continuing operations: | |||||
Depreciation and amortization | 27,184 | 25,479 | |||
Provision for LIFO reserve | 5,223 | 11,265 | |||
Share-based compensation expense | 4,844 | 4,335 | |||
Deferred income tax expense | 1,098 | 908 | |||
Provision for losses on accounts and notes receivable | 414 | 1,107 | |||
Pension contributions | - | (543) | |||
Changes in operating assets and liabilities: | |||||
Accounts and notes receivable | (7,886) | (36,598) | |||
Merchandise inventories | 40,078 | (52,141) | |||
Accounts payable | 32,467 | 81,188 | |||
Net change in other assets and liabilities | (16,355) | (18,465) | |||
Other, net | (773) | 335 | |||
Cash provided by operating activities of continuing operations | 170,364 | 108,126 | |||
Investing activities: | |||||
Acquisition, net of cash acquired | (149,910) | - | |||
Additions to computer software and intangible assets | (19,934) | (8,035) | |||
Additions to property and equipment | (7,890) | (16,846) | |||
Proceeds from the sale of property and equipment | 3,237 | 46 | |||
Cash used for investing activities of continuing operations | (174,497) | (24,835) | |||
Financing activities: | |||||
Cash dividends paid | (41,791) | (38,156) | |||
Repurchases of common stock | (11,250) | (16,124) | |||
Financing costs paid | (1,303) | - | |||
Proceeds from termination of interest rate swap | - | 4,005 | |||
Excess tax benefits related to share-based compensation | 1,223 | 1,977 | |||
Proceeds from exercise of stock options | 4,114 | 7,937 | |||
Other, net | (4,444) | (5,127) | |||
Cash used for financing activities of continuing operations | (53,451) | (45,488) | |||
Discontinued operations: | |||||
Operating cash flows | - | (164) | |||
Net cash used for discontinued operations | - | (164) | |||
Effect of exchange rate changes on cash and cash equivalents | 1,313 | - | |||
Net (decrease) increase in cash and cash equivalents | (56,271) | 37,639 | |||
Cash and cash equivalents at beginning of period | 135,938 | 159,213 | |||
Cash and cash equivalents at end of period | $ | 79,667 | $ | 196,852 | |
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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 | $ | 2,179,895 | $ | 2,185,444 | $ | 2,217,882 | $ | 2,195,890 | $ | 2,176,759 | |||||||||||
Gross margin | $ | 228,123 | $ | 211,429 | $ | 214,328 | $ | 214,014 | $ | 216,682 | |||||||||||
Gross margin as a percent of revenue | 10.46% | 9.67% | 9.66% | 9.75% | 9.95% | ||||||||||||||||
SG&A expenses | $ | 165,320 | $ | 150,288 | $ | 155,572 | $ | 150,538 | $ | 152,825 | |||||||||||
SG&A expenses as a percent of revenue | 7.58% | 6.88% | 7.01% | 6.86% | 7.02% | ||||||||||||||||
Operating earnings, as reported (GAAP) | $ | 46,663 | $ | 53,177 | $ | 51,872 | $ | 43,014 | $ | 58,465 | |||||||||||
Acquisition-related and exit and realignment charges | 7,831 | 617 | - | 12,708 | 351 | ||||||||||||||||
Operating earnings, adjusted (Non-GAAP) | $ | 54,494 | $ | 53,794 | $ | 51,872 | $ | 55,722 | $ | 58,816 | |||||||||||
Operating earnings as a percent of revenue, adjusted (Non-GAAP) | 2.50% | 2.46% | 2.34% | 2.54% | 2.70% | ||||||||||||||||
Net income, as reported (GAAP) | $ | 24,597 | $ | 30,113 | $ | 29,360 | $ | 23,942 | $ | 33,352 | |||||||||||
Acquisition-related and exit and realignment charges, after-tax | 6,588 | 375 | - | 7,714 | 213 | ||||||||||||||||
Net income, adjusted (Non-GAAP) | $ | 31,185 | $ | 30,488 | $ | 29,360 | $ | 31,656 | $ | 33,565 | |||||||||||
Net income per diluted common share, as reported (GAAP) | $ | 0.39 | $ | 0.48 | $ | 0.46 | $ | 0.38 | $ | 0.53 | |||||||||||
Acquisition-related and exit and realignment charges | 0.10 |
- |
- | 0.13 | - | ||||||||||||||||
Net income per diluted common share, adjusted (Non-GAAP) | $ | 0.49 | $ |
0.48 |
$ | 0.46 | $ | 0.51 | $ | 0.53 | |||||||||||
Financing: | |||||||||||||||||||||
Cash and cash equivalents | $ | 79,667 | $ | 224,937 | $ | 213,927 | $ | 135,938 | $ | 196,852 | |||||||||||
Total interest-bearing debt | $ | 216,924 | $ | 213,982 | $ | 214,184 | $ | 214,556 | $ | 215,037 | |||||||||||
Stock information: | |||||||||||||||||||||
Cash dividends per common share | $ | 0.22 | $ | 0.22 | $ | 0.22 | $ | 0.20 | $ | 0.20 | |||||||||||
Stock price at quarter-end | $ | 29.88 | $ | 30.63 | $ | 30.41 | $ | 27.79 | $ | 28.48 | |||||||||||
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 |
Nine Months Ended September 30, | ||||||||||||||||||||||||||||||
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 | $ | 2,130,226 | 97.72 | % | $ | 2,176,759 | 100.00 | % | $ | 6,533,552 | 99.25 | % | $ | 6,432,022 | 100.00 | % | |||||||||||||||
International | 49,669 | 2.28 | % | N/A | N/A | 49,669 | 0.75 | % | N/A | N/A | |||||||||||||||||||||
Consolidated net revenue | $ | 2,179,895 | 100.00 | % | $ | 2,176,759 | 100.00 | % | $ | 6,583,221 | 100.00 | % | $ | 6,432,022 | 100.00 | % | |||||||||||||||
Operating earnings (loss): | |||||||||||||||||||||||||||||||
Domestic | $ | 55,120 | 2.53 | % | $ | 58,816 | 2.70 | % | $ | 160,786 | 2.44 | % | $ | 160,852 | 2.50 | % | |||||||||||||||
International | (626) | (0.03) | % | N/A | N/A | (626) | (0.01) | N/A | N/A | ||||||||||||||||||||||
Acquisition-related and exit and | - | ||||||||||||||||||||||||||||||
realignment charges | (7,831) | (0.36) | % | (351) | (0.01) | % | (8,448) | (0.13) | % | (351) | - | % | |||||||||||||||||||
Consolidated operating earnings | $ | 46,663 | 2.14 | % | $ | 58,465 | 2.69 | % | $ | 151,712 | 2.30 | % | $ | 160,501 | 2.50 | % | |||||||||||||||
Depreciation and amortization: | |||||||||||||||||||||||||||||||
Domestic | $ | 8,801 | $ | 8,463 | $ | 25,895 | $ | 25,479 | |||||||||||||||||||||||
International | 1,289 | N/A | 1,289 | N/A | |||||||||||||||||||||||||||
Consolidated depreciation and amortization | $ | 10,090 | $ | 8,463 | $ | 27,184 | $ | 25,479 | |||||||||||||||||||||||
Capital expenditures: (1) | |||||||||||||||||||||||||||||||
Domestic | $ | 8,929 | $ | 11,133 | $ | 27,086 | $ | 24,881 | |||||||||||||||||||||||
International | 738 | N/A | 738 | N/A | |||||||||||||||||||||||||||
Consolidated capital expenditures | $ | 9,667 | $ | 11,133 | $ | 27,824 | $ | 24,881 | |||||||||||||||||||||||
September 30, |
December 31, |
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Total assets: | |||||||||||||||||||||||||||||||
Domestic | $ | 1,732,460 | $ | 1,810,877 | |||||||||||||||||||||||||||
International | 409,622 | N/A | |||||||||||||||||||||||||||||
Segment assets | 2,142,082 | 1,810,877 | |||||||||||||||||||||||||||||
Cash and cash equivalents | 79,667 | 135,938 | |||||||||||||||||||||||||||||
Consolidated total assets | $ | 2,221,749 | $ | 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 |
Nine Months Ended September 30, | ||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||
Numerator: | |||||||||||||
Net income | $ | 24,597 | $ | 33,352 | $ | 84,070 | $ | 91,256 | |||||
Less: income allocated to unvested restricted shares | (153) | (252) | (574) | (856) | |||||||||
Net income attributable to common shareholders - basic | 24,444 | 33,100 | 83,496 | 90,400 | |||||||||
Add: undistributed income attributable to unvested restricted shares - basic | 53 | 136 | 229 | 397 | |||||||||
Less: undistributed income attributable to unvested restricted shares - diluted | (53) | (135) | (228) | (396) | |||||||||
Net income attributable to common shareholders - diluted |
$ | 24,444 | $ | 33,101 | $ | 83,497 | $ | 90,401 | |||||
Denominator: | |||||||||||||
Weighted average shares outstanding — basic | 62,763 | 62,802 | 62,806 | 62,801 | |||||||||
Dilutive shares - stock options | 78 | 145 | 84 | 183 | |||||||||
Weighted average shares outstanding — diluted |
62,841 | 62,947 | 62,890 | 62,984 | |||||||||
Net income per share attributable to common shareholders: | |||||||||||||
Basic | $ | 0.39 | $ | 0.53 | $ | 1.33 | $ | 1.44 | |||||
Diluted | $ | 0.39 | $ | 0.53 | $ | 1.33 | $ | 1.44 |
Director,
Investor & Media Relations
truitt.allcott@owens-minor.com
or
Director, Finance & Investor Relations
chuck.graves@owens-minor.com
Source:
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