Press Release Details

Owens & Minor Reports Fourth Quarter and Full Year 2021 Financial Results

February 23, 2022 at 6:45 AM EST

Strong Finish to a Year with Robust Growth and Record Setting Profitability
Company Reaffirms 2022 Guidance
Acquisition of Apria Remains on Track

RICHMOND, Va.--(BUSINESS WIRE)--Feb. 23, 2022-- Owens & Minor, Inc. (NYSE-OMI) today reported financial results for the fourth quarter and the year ended December 31, 2021, as summarized in the table below.

“I’m extremely proud of our strong finish to a record year and even more excited about our future. We delivered on our commitments to all stakeholders and took major steps to help ensure the future growth of Owens & Minor,” said Edward A. Pesicka, President & Chief Executive Officer.

Pesicka added, “In an ever-changing healthcare environment it is the strength of our business model that resonates well with our customers. Our model is focused on our Americas-owned manufacturing facilities, our flexibility and scalability of our healthcare services, and the strength of our Patient Direct business. Our performance in 2021 is an example of our execution both financially and strategically towards our long-term goals.

We enter 2022 with strong momentum and are reaffirming our financial guidance for the year. Further, last month’s announcement of our definitive agreement to acquire Apria is evidence of the strength of our commitment to deliver long-term profitable growth. Apria is a leader in the attractive home health market and will meaningfully enhance our Patient Direct offering, strengthening our ability to follow patients through the hospital and into the home,” Pesicka concluded.

 

Financial Summary (1)

 

 

FYE

FYE

 
 

($ in millions, except per share data)

4Q21

4Q20

2021

2020

 
 

 

 

 

 

 
 

Revenue

$2,467

$2,362

$9,785

$8,480

 
 

 

 

 

 

 
 

Operating Income, GAAP

$62.0

$95.6

$368.5

$204.1

 
 

 

Adj. Operating Income, Non-GAAP

$84.9

$124.9

$442.4

$283.4

 
 

 

 

 

 

 

 
 

Income from continuing operations, GAAP

$42.0

$50.7

$221.6

$88.1

 
 

 

Adj. Net Income, Non-GAAP

$61.2

$79.8

$309.3

$143.7

 
 

 

Adj. EBITDA, Non-GAAP

$97.4

$138.5

$492.3

$335.2

 
 

 

 

 

 

 

 

 
 

Income from continuing operations per share, GAAP

$0.55

$0.72

$2.94

$1.39

 
 

Adj. Net income per share, Non-GAAP(2)

$0.81

$1.14

$4.10

$2.26

 

(1) Financial results relate to continuing operations. Reconciliations of the differences between the non-GAAP financial measures presented in this release and their most directly comparable GAAP financial measures are included in the tables below.

(2) Adjusted net income per share, Non-GAAP for 4Q21 was unfavorably impacted as compared to prior year by foreign currency translation in the amount of $0.02 and unfavorably impacted by $0.05 for the 2021 full-year period.

Q4 Results & Highlights

  • Adjusted Net Income of $61 million which reflects:
    • Year-over-year revenue growth
    • Our ability to manage accelerating inflationary pressures
    • $6.2 million, or 35% decrease in interest expense
  • Total company fourth quarter revenue grew by approximately 5%:
    • Global Solutions segment revenue grew to $2.0 billion or 3% year-over-year due to strong performance in our Patient Direct business combined with increased PPE sales, partially offset by one fewer selling day and continued supplier shortages
    • Global Products segment revenue grew to $629 million or 9% year-over-year due to glove cost pass through, growth of non-PPE products, partially offset by one fewer selling day
  • Balance Sheet and Cash Flow
    • Total net debt at the end of the year was $894 million
    • Net leverage ratio was 1.8 times trailing twelve months adjusted EBITDA
    • Generated $50 million of operating cash flow in the fourth quarter and $124 million for the full year
  • Business Highlights
    • Announced definitive agreement to acquire Apria, Inc. (“Apria”)
    • Launched new consumer brand, SAFESKIN®, with SAFESKIN® Nitrile Gloves available in POP-N-GO® packs to provide task-focused, high-quality protection
    • Executed on our mission to impact and empower communities by financially supporting charitable organizations through our Owens & Minor Foundation

Financial Outlook

The Company’s outlook for 2022 reflects continued reinvestment across our business while enhancing operating efficiencies through the continued deployment of our O&M Business System. The Company believes these investments have created a solid foundation for continued strong performance in 2022. Subject to the key assumptions below, the Company expects the following (all ranges exclude any expected contribution from the proposed acquisition of Apria):

  • Revenue for 2022 to be in a range of $9.2 billion to $9.6 billion, reflecting:
    • Year-over-year reduction in revenue in the range of $(400-450) million as glove costs continue to normalize
    • Elective procedures at pre-pandemic levels
    • Expecting PPE volumes to ease throughout the year
    • New glove manufacturing capacity expansion go-live in late Q1’22
  • Adjusted net income for 2022 to be in a range of $3.00 to $3.50 per share
    • Assumes FX rates as of December 31, 2021
    • Expecting near-term unfavorable commodity prices
  • Adjusted EBITDA for 2022 to be in a range of $400 million to $450 million

Apria Acquisition Update

The acquisition of Apria remains on track to close in the first half of 2022. The acquisition is subject to customary closing conditions, including the Hart Scott Rodino Act and other regulatory approvals and the approval of Apria’s stockholders.

Excluding synergies, we continue to expect Apria to generate:

  • Annualized revenue of at least $1.2 billion
  • Annualized adjusted EBITDA in excess of $230 million
  • Modest adjusted EPS accretion in 2022

We will provide further updates after acquisition close, including final purchase price allocation, financing terms, synergies and potential tax benefits.

Although the Company does provide guidance for adjusted net income per share and adjusted EBITDA (which are non-GAAP financial measures), it is not able to forecast the most directly comparable measures calculated and presented in accordance with GAAP without unreasonable effort. Certain elements of the composition of the GAAP amounts are not predictable, making it impracticable for the Company to forecast. Such elements include but are not limited to restructuring and acquisition charges. As a result, no GAAP guidance or reconciliation of the Company’s adjusted net income per share guidance or adjusted EBITDA guidance is provided. For the same reasons, the Company is unable to assess the probable significance of the unavailable information, which could have a 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 Securities and Exchange Commission (“SEC”).

Investor Conference Call for Fourth Quarter and Full Year 2021 Financial Results

Owens & Minor executives will host a conference call at 8:30 a.m. EDT today, February 23, 2022, to discuss the results. Participants may access the call at 866-393-1604. The international dial-in number is 224-357-2191. A replay of the call will be available for one week by dialing 855-859-2056. The access code for the conference call, international dial-in and replay is 2388913. A webcast of the event will be available at www.owens-minor.com under the Investor Relations section.

Safe Harbor

This release is intended to be disclosure through methods reasonably designed to provide broad, non-exclusionary distribution to the public in compliance with the SEC's Fair Disclosure Regulation. This release contains certain ''forward-looking'' statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, the statements in this release regarding our expectations with respect to our 2022 financial performance, the Apria transaction, including closing the transaction and opportunities related thereto, and the expected performance of the Apria business post-closing, as well as statements related to the impact of COVID-19 on the Company’s results and operations and the Company’s expectations regarding the performance of its business. Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results in future periods to differ materially from those projected or contemplated in the forward-looking statements, including the occurrence of any event, change or other circumstances that could give rise to the termination of the agreement relating to the Apria transaction; the inability to complete the proposed transaction due to the failure to obtain approval of Apria’s stockholders for the proposed transaction or the failure to satisfy other conditions to completion of the proposed transaction, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the proposed transaction; risks related to disruption of management’s attention from Owens & Minor’s or Apria’s ongoing business operations due to the proposed transaction; the effect of the announcement of the proposed transaction on Owens & Minor’s or Apria’s relationships with its customers, suppliers and other third parties, as well as it operating results and business generally; the risk that the proposed transaction will not be consummated in a timely manner; exceeding the expected costs of the transaction; and the risk that problems may arise in successfully integrating the businesses of the companies, which may result in the combined company not operating as effectively and efficiently as expected and the risk that the combined company may be unable to achieve synergies or it may take longer than expected to achieve those synergies. Investors should refer to Owens & Minor’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC including the sections captioned “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors,” and subsequent, quarterly reports on Form 10-Q and current reports on Form 8-K filed with or furnished to the SEC, for a discussion of certain known risk factors that could cause the Company’s actual results to differ materially from its current estimates. These filings are available at www.owens-minor.com. Given these risks and uncertainties, Owens & Minor can give no assurance that any forward-looking statements will, in fact, transpire and, therefore, cautions investors not to place undue reliance on them. Owens & Minor specifically disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

About Owens & Minor

Owens & Minor, Inc. (NYSE: OMI) is a global healthcare solutions company that incorporates product manufacturing, distribution support and innovative technology services to deliver significant and sustained value across the breadth of the industry – from acute care to patients in their home. Aligned to its Mission of Empowering Our Customers to Advance HealthcareTM, more than 15,000 global teammates serve over 4,000 healthcare industry customers. A vertically-integrated, predominantly Americas-based footprint enables Owens & Minor to reliably supply its self-manufactured surgical and PPE products. This seamless value chain integrates with a portfolio of products representing 1,200 branded suppliers. Operating continuously since 1882 from its headquarters in Richmond, Virginia, Owens & Minor has grown into a FORTUNE 500 company with operations located across North America, Asia, Europe and Latin America. For more information about Owens & Minor, visit owens-minor.com, follow @Owens_Minor on Twitter and connect on LinkedIn at www.linkedin.com/company/owens-&-minor.

Owens & Minor, Inc.

 

Consolidated Statements of Operations (unaudited)

(dollars in thousands, except per share data)

 

 

Three Months Ended December 31,

 

 

2021

 

2020

Net revenue

 

$

2,467,146

 

 

$

2,361,837

Cost of goods sold

 

 

2,125,576

 

 

 

1,963,308

Gross margin

 

 

341,570

 

 

 

398,529

Distribution, selling and administrative expenses

 

 

267,616

 

 

 

283,017

Acquisition-related and exit and realignment charges

 

 

13,108

 

 

 

19,252

Other operating (income) expense, net

 

 

(1,175

)

 

 

648

Operating income

 

 

62,021

 

 

 

95,612

Interest expense, net

 

 

11,306

 

 

 

17,476

Loss on extinguishment of debt

 

 

 

 

 

8,639

Other expense, net

 

 

799

 

 

 

785

Income from continuing operations before income taxes

 

 

49,916

 

 

 

68,712

Income tax provision

 

 

7,941

 

 

 

17,971

Income from continuing operations

 

 

41,975

 

 

 

50,741

Loss from discontinued operations, net of tax

 

 

 

 

 

Net income

 

$

41,975

 

 

$

50,741

 

 

 

 

 

Basic income per common share:

 

 

 

 

Income from continuing operations

 

$

0.57

 

 

$

0.73

Loss from discontinued operations

 

 

 

 

 

Net income

 

$

0.57

 

 

$

0.73

Diluted income per common share:

 

 

 

 

Income from continuing operations

 

$

0.55

 

 

$

0.72

Loss from discontinued operations

 

 

 

 

 

Net income

 

$

0.55

 

 

$

0.72

Owens & Minor, Inc.

 

Consolidated Statements of Operations (unaudited)

(dollars in thousands, except per share data)

 

 

For the Years Ended December 31,

 

 

2021

 

2020

Net revenue

 

$

9,785,315

 

 

$

8,480,177

 

Cost of goods sold

 

 

8,272,086

 

 

 

7,199,343

 

Gross margin

 

 

1,513,229

 

 

 

1,280,834

 

Distribution, selling and administrative expenses

 

 

1,116,871

 

 

 

1,041,336

 

Acquisition-related and exit and realignment charges

 

 

34,076

 

 

 

37,752

 

Other operating income, net

 

 

(6,191

)

 

 

(2,372

)

Operating income

 

 

368,473

 

 

 

204,118

 

Interest expense, net

 

 

48,090

 

 

 

83,398

 

Loss on extinguishment of debt

 

 

40,433

 

 

 

11,219

 

Other expense (income), net

 

 

3,196

 

 

 

(407

)

Income from continuing operations before income taxes

 

 

276,754

 

 

 

109,908

 

Income tax provision

 

 

55,165

 

 

 

21,834

 

Income from continuing operations

 

 

221,589

 

 

 

88,074

 

Loss from discontinued operations, net of tax

 

 

 

 

 

(58,203

)

Net income

 

$

221,589

 

 

$

29,871

 

 

 

 

 

 

Basic income (loss) per common share:

 

 

 

 

Income from continuing operations

 

$

3.05

 

 

$

1.39

 

Loss from discontinued operations

 

 

 

 

 

(0.92

)

Net income

 

$

3.05

 

 

$

0.47

 

Diluted income (loss) per common share:

 

 

 

 

Income from continuing operations

 

$

2.94

 

 

$

1.39

 

Loss from discontinued operations

 

 

 

 

 

(0.92

)

Net income

 

$

2.94

 

 

$

0.47

 

Owens & Minor, Inc.

 

Condensed Consolidated Balance Sheets (unaudited)

(dollars in thousands)

 

 

December 31, 2021

 

December 31, 2020

Assets

 

 

 

 

Current assets

 

 

 

 

Cash and cash equivalents

 

$

55,712

 

$

83,058

Accounts receivable, net

 

 

681,564

 

 

700,792

Merchandise inventories

 

 

1,495,972

 

 

1,233,751

Other current assets

 

 

88,564

 

 

118,264

Total current assets

 

 

2,321,812

 

 

2,135,865

Property and equipment, net

 

 

317,235

 

 

315,662

Operating lease assets

 

 

194,006

 

 

144,755

Goodwill

 

 

390,185

 

 

394,086

Intangible assets, net

 

 

209,745

 

 

243,351

Other assets, net

 

 

103,568

 

 

101,920

Total assets

 

$

3,536,551

 

$

3,335,639

Liabilities and equity

 

 

 

 

Current liabilities

 

 

 

 

Accounts payable

 

$

1,001,959

 

$

1,000,186

Accrued payroll and related liabilities

 

 

115,858

 

 

109,447

Other current liabilities

 

 

226,204

 

 

236,094

Total current liabilities

 

 

1,344,021

 

 

1,345,727

Long-term debt, excluding current portion

 

 

947,540

 

 

986,018

Operating lease liabilities, excluding current portion

 

 

162,241

 

 

119,932

Deferred income taxes

 

 

35,310

 

 

50,641

Other liabilities

 

 

108,938

 

 

121,267

Total liabilities

 

 

2,598,050

 

 

2,623,585

Total equity

 

 

938,501

 

 

712,054

Total liabilities and equity

 

$

3,536,551

 

$

3,335,639

Owens & Minor, Inc.

 

Consolidated Statements of Cash Flows (unaudited)

(dollars in thousands)

 

 

For the Years Ended December 31,

 

 

2021

 

2020

 

 

 

 

 

Operating activities:

 

 

 

 

Net income

 

$

221,589

 

 

$

29,871

 

Adjustments to reconcile net income to cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

 

90,621

 

 

 

93,336

 

Share-based compensation expense

 

 

25,016

 

 

 

20,010

 

Impairment charges

 

 

 

 

 

8,724

 

Loss on divestiture

 

 

 

 

 

65,472

 

Loss on extinguishment and modification of debt

 

 

40,433

 

 

 

11,219

 

Deferred income tax (benefit) expense

 

 

(29,736

)

 

 

15,564

 

Provision for losses on accounts receivable

 

 

21,158

 

 

 

11,292

 

Changes in operating lease right-of-use assets and lease liabilities

 

 

1,463

 

 

 

(1,676

)

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

 

(2,201

)

 

 

(34,818

)

Merchandise inventories

 

 

(263,439

)

 

 

(85,154

)

Accounts payable

 

 

3,548

 

 

 

193,240

 

Net change in other assets and liabilities

 

 

692

 

 

 

5,278

 

Other, net

 

 

15,033

 

 

 

6,865

 

Cash provided by operating activities

 

 

124,177

 

 

 

339,223

 

Investing activities:

 

 

 

 

Proceeds from divestiture

 

 

 

 

 

133,000

 

Additions to property and equipment

 

 

(40,985

)

 

 

(50,424

)

Additions to computer software

 

 

(8,705

)

 

 

(8,769

)

Other, net

 

 

(3,940

)

 

 

6,266

 

Cash (used for) provided by investing activities

 

 

(53,630

)

 

 

80,073

 

Financing activities:

 

 

 

 

Proceeds from issuance of debt

 

 

574,900

 

 

 

155,100

 

Proceeds from issuance of common stock

 

 

 

 

 

189,971

 

Repayments of revolving credit facility, net

 

 

(103,200

)

 

 

(74,700

)

Repayments of debt

 

 

(553,140

)

 

 

(617,271

)

Financing costs paid

 

 

(13,912

)

 

 

(10,367

)

Cash dividends paid

 

 

(731

)

 

 

(648

)

Senior Notes make-whole premium paid

 

 

 

 

 

(4,980

)

Payment for termination of Interest rate swaps

 

 

(15,434

)

 

 

 

Other, net

 

 

(17,961

)

 

 

(16,491

)

Cash used for financing activities

 

 

(129,478

)

 

 

(379,386

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

(3,540

)

 

 

9,909

 

Net (decrease) increase in cash, cash equivalents and restricted cash

 

 

(62,471

)

 

 

49,819

 

Cash, cash equivalents and restricted cash at beginning of year

 

 

134,506

 

 

 

84,687

 

Cash, cash equivalents and restricted cash at end of year (1)

 

$

72,035

 

 

$

134,506

 

Supplemental disclosure of cash flow information:

 

 

 

 

Income taxes paid (received), net of refunds

 

$

99,400

 

 

$

(17,455

)

Interest paid

 

$

38,717

 

 

$

89,961

 

 

(1) Restricted cash as of December 31, 2021 and 2020 represents $16.3 million held in an escrow account as required by the Centers for Medicare & Medicaid Services (CMS) in conjunction with the Bundled Payments for Care Improvement (BPCI) initiatives related to wind-down costs of Fusion5. Restricted cash as of December 31, 2020 also includes $35.1 million held in a designated account as required by the Fifth Amendment to the Credit Agreement, which stipulates that the cash held within this account is to be used to repay the 2021 Notes, which were fully repaid as of December 31, 2020, or the Term Loans.

Owens & Minor, Inc.

 

Summary Segment Information (unaudited)

(dollars in thousands)

 

Three Months Ended December 31,

 

2021

 

2020

 

 

 

% of

 

 

 

% of

 

 

 

consolidated

 

 

 

consolidated

 

Amount

 

net revenue

 

Amount

 

net revenue

Net revenue:

 

 

 

 

 

 

 

Segment net revenue

 

 

 

 

 

 

 

Global Solutions

$

2,010,467

 

 

81.49

%

 

$

1,950,596

 

 

82.59

%

Global Products

 

629,343

 

 

25.51

%

 

 

574,940

 

 

24.34

%

Total segment net revenue

 

2,639,810

 

 

 

 

 

2,525,536

 

 

 

Inter-segment net revenue

 

 

 

 

 

 

 

Global Products

 

(172,664

)

 

(7.00

)%

 

 

(163,699

)

 

(6.93

)%

Total inter-segment net revenue

 

(172,664

)

 

 

 

 

(163,699

)

 

 

Consolidated net revenue

$

2,467,146

 

 

100.00

%

 

$

2,361,837

 

 

100.00

%

 

 

 

 

 

 

 

 

 

 

 

% of segment

 

 

 

% of segment

Operating income:

 

 

net revenue

 

 

 

net revenue

Global Solutions

$

18,904

 

 

0.94

%

 

$

22,424

 

 

1.15

%

Global Products

 

61,688

 

 

9.80

%

 

 

99,660

 

 

17.33

%

Inter-segment eliminations

 

4,268

 

 

 

 

 

2,807

 

 

 

Intangible amortization

 

(9,731

)

 

 

 

 

(10,027

)

 

 

Acquisition-related and exit and realignment charges

 

(13,108

)

 

 

 

 

(19,252

)

 

 

Consolidated operating income

$

62,021

 

 

2.51

%

 

$

95,612

 

 

4.05

%

 

 

 

 

 

 

 

 

Depreciation and amortization:

 

 

 

 

 

 

 

Global Solutions

$

9,807

 

 

 

 

$

10,014

 

 

 

Global Products

 

12,671

 

 

 

 

 

13,828

 

 

 

Consolidated depreciation and amortization

$

22,478

 

 

 

 

$

23,842

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures:

 

 

 

 

 

 

 

Global Solutions

$

5,490

 

 

 

 

$

12,841

 

 

 

Global Products

 

11,575

 

 

 

 

 

19,972

 

 

 

Consolidated capital expenditures

$

17,065

 

 

 

 

$

32,813

 

 

 

Owens & Minor, Inc.

 

Summary Segment Information (unaudited)

(dollars in thousands)

 

For the Years Ended December 31,

 

2021

 

2020

 

 

 

% of

 

 

 

% of

 

 

 

consolidated

 

 

 

consolidated

 

Amount

 

net revenue

 

Amount

 

net revenue

Net revenue:

 

 

 

 

 

 

 

Segment net revenue

 

 

 

 

 

 

 

Global Solutions

$

7,860,475

 

 

80.33

%

 

$

7,212,011

 

 

85.04

%

Global Products

 

2,655,728

 

 

27.14

%

 

 

1,810,331

 

 

21.34

%

Total segment net revenue

 

10,516,203

 

 

 

 

 

9,022,342

 

 

 

Inter-segment net revenue

 

 

 

 

 

 

 

Global Products

 

(730,888

)

 

(7.47

)%

 

 

(542,165

)

 

(6.38

)%

Total inter-segment net revenue

 

(730,888

)

 

 

 

 

(542,165

)

 

 

Consolidated net revenue

$

9,785,315

 

 

100.00

%

 

$

8,480,177

 

 

100.00

%

 

 

 

 

 

 

 

 

 

 

 

% of segment

 

 

 

% of segment

Operating income:

 

 

net revenue

 

 

 

net revenue

Global Solutions

$

66,634

 

 

0.85

%

 

$

30,946

 

 

0.43

%

Global Products

 

371,929

 

 

14.00

%

 

 

259,929

 

 

14.36

%

Inter-segment eliminations

 

3,793

 

 

 

 

 

(7,515

)

 

 

Intangible amortization

 

(39,807

)

 

 

 

 

(41,490

)

 

 

Acquisition-related and exit and realignment charges

 

(34,076

)

 

 

 

 

(37,752

)

 

 

Consolidated operating income

$

368,473

 

 

3.77

%

 

$

204,118

 

 

2.41

%

 

 

 

 

 

 

 

 

Depreciation and amortization:

 

 

 

 

 

 

 

Global Solutions

$

39,485

 

 

 

 

$

41,286

 

 

 

Global Products

 

51,136

 

 

 

 

 

52,050

 

 

 

Consolidated depreciation and amortization

$

90,621

 

 

 

 

$

93,336

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures:

 

 

 

 

 

 

 

Global Solutions

$

20,266

 

 

 

 

$

20,386

 

 

 

Global Products

 

29,424

 

 

 

 

 

35,780

 

 

 

Discontinued operations

 

 

 

 

 

 

3,027

 

 

 

Consolidated capital expenditures

$

49,690

 

 

 

 

$

59,193

 

 

 

Owens & Minor, Inc.

 

Net Income (Loss) Per Common Share (unaudited)

(dollars in thousands, except per share data)

 

Three Months Ended December 31,

 

For the Years Ended December 31,

 

2021

 

2020

 

2021

 

2020

Income from continuing operations, net of tax

$

41,975

 

$

50,741

 

$

221,589

 

$

88,074

 

Loss from discontinued operations, net of tax

 

 

 

 

 

 

 

(58,203

)

Net income

$

41,975

 

$

50,741

 

$

221,589

 

$

29,871

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding - basic

 

73,286

 

 

69,948

 

 

72,744

 

 

63,368

 

Dilutive shares

 

2,711

 

 

167

 

 

2,742

 

 

144

 

Weighted average shares outstanding - diluted

 

75,997

 

 

70,115

 

 

75,486

 

 

63,512

 

 

 

 

 

 

 

 

 

Basic income (loss) per common share:

 

 

 

 

 

 

 

Income from continuing operations

$

0.57

 

$

0.73

 

$

3.05

 

$

1.39

 

Loss from discontinued operations

 

 

 

 

 

 

 

(0.92

)

Net income

$

0.57

 

$

0.73

 

$

3.05

 

$

0.47

 

 

 

 

 

 

 

 

 

Diluted income (loss) per common share:

 

 

 

 

 

 

 

Income from continuing operations

$

0.55

 

$

0.72

 

$

2.94

 

$

1.39

 

Loss from discontinued operations

 

 

 

 

 

 

 

(0.92

)

Net income

$

0.55

 

$

0.72

 

$

2.94

 

$

0.47

 

Owens & Minor, Inc.
GAAP/Non-GAAP Reconciliations (unaudited)
(dollars in thousands, except per share data)

The following table provides a reconciliation of reported operating income, income from continuing operations and income from continuing operations per share to non-GAAP measures used by management.

 

Three Months Ended
December 31,

 

Years Ended
December 31,

 

 

2021

 

2020

 

2021

 

2020

Operating income, as reported (GAAP)

 

$

62,021

 

 

$

95,612

 

 

$

368,473

 

 

$

204,118

 

Intangible amortization (1)

 

 

9,731

 

 

 

10,027

 

 

 

39,807

 

 

 

41,490

 

Acquisition-related and exit and realignment charges (2)

 

 

13,108

 

 

 

19,252

 

 

 

34,076

 

 

 

37,752

 

Operating income, adjusted (non-GAAP) (Adjusted Operating Income)

 

$

84,860

 

 

$

124,891

 

 

$

442,356

 

 

$

283,360

 

 

 

 

 

 

 

 

 

 

Income from continuing operations, as reported (GAAP)

 

$

41,975

 

 

$

50,741

 

 

$

221,589

 

 

$

88,074

 

Intangible amortization (1)

 

 

9,731

 

 

 

10,027

 

 

 

39,807

 

 

 

41,490

 

 

 

 

(2,509

)

 

 

(2,747

)

 

 

(10,354

)

 

 

(10,808

)

Acquisition-related and exit and realignment charges (2)

 

 

13,108

 

 

 

19,252

 

 

 

34,076

 

 

 

37,752

 

 

 

 

(3,380

)

 

 

(5,274

)

 

 

(8,863

)

 

 

(9,835

)

Loss on extinguishment of debt (3)

 

 

 

 

 

8,639

 

 

 

40,433

 

 

 

11,219

 

 

 

 

 

 

 

(2,366

)

 

 

(10,516

)

 

 

(2,923

)

Other (4)

 

 

570

 

 

 

573

 

 

 

2,279

 

 

 

(1,185

)

 

 

 

(147

)

 

 

(157

)

 

 

(593

)

 

 

308

 

Tax adjustments (5)

 

 

1,886

 

 

 

1,082

 

 

 

1,406

 

 

 

(10,439

)

Income from continuing operations, adjusted (non-GAAP) (Adjusted Net Income)

 

$

61,234

 

 

$

79,770

 

 

$

309,264

 

 

$

143,653

 

 

 

 

 

 

 

 

 

 

Income from continuing operations per diluted common share, as reported (GAAP)

 

$

0.55

 

 

$

0.72

 

 

$

2.94

 

 

$

1.39

 

Intangible amortization (1)

 

 

0.10

 

 

 

0.10

 

 

 

0.39

 

 

 

0.47

 

Acquisition-related and exit and realignment charges (2)

 

 

0.13

 

 

 

0.20

 

 

 

0.33

 

 

 

0.44

 

Loss on extinguishment of debt (3)

 

 

 

 

 

0.09

 

 

 

0.40

 

 

 

0.13

 

Other expense (income) (4)

 

 

0.01

 

 

 

0.01

 

 

 

0.02

 

 

 

(0.01

)

Tax adjustments (5)

 

 

0.02

 

 

 

0.02

 

 

 

0.02

 

 

 

(0.16

)

Income from continuing operations per diluted common share, adjusted (non-GAAP) (Adjusted EPS)

 

$

0.81

 

 

$

1.14

 

 

$

4.10

 

 

$

2.26

 

Owens & Minor, Inc.
GAAP/Non-GAAP Reconciliations (unaudited), continued
(dollars in thousands)

The following tables provide reconciliations of net income and total debt to non-GAAP measures used by management.

 

 

Three Months Ended
December 31,

 

Years Ended
December 31,

 

 

2021

 

2020

 

2021

 

2020

Net income (loss), as reported (GAAP)

 

$

41,975

 

$

50,741

 

$

221,589

 

$

29,871

 

Loss from discontinued operations, net of tax

 

 

 

 

 

 

 

 

58,203

 

Income tax provision

 

 

7,941

 

 

17,971

 

 

55,165

 

 

21,834

 

Interest expense, net

 

 

11,306

 

 

17,476

 

 

48,090

 

 

83,398

 

Intangible amortization (1)

 

 

9,731

 

 

10,027

 

 

39,807

 

 

41,490

 

Other depreciation and amortization (7)

 

 

12,747

 

 

13,815

 

 

50,813

 

 

51,846

 

EBITDA (non-GAAP)

 

$

83,700

 

$

110,030

 

$

415,464

 

$

286,642

 

Acquisition-related and exit and realignment charges (2)

 

 

13,108

 

 

19,252

 

 

34,076

 

 

37,752

 

Loss on extinguishment of debt (3)

 

 

 

 

8,639

 

 

40,433

 

 

11,219

 

Other expense (income) (4)

 

 

570

 

 

573

 

 

2,279

 

 

(407

)

EBITDA, adjusted (non-GAAP) (Adjusted EBITDA)

 

$

97,378

 

$

138,494

 

$

492,252

 

$

335,206

 

 

 

December 31,

 

 

2021

Total debt, as reported (GAAP)

 

$

949,577

Cash and cash equivalents

 

 

55,712

Net debt (non-GAAP)

 

 

893,865

Trailing twelve-months EBITDA, adjusted (non-GAAP) (Adjusted EBITDA)

 

 

492,252

Leverage ratio of net debt to trailing twelve-months adjusted EBITDA

 

 

1.8

Owens & Minor, Inc.
GAAP/Non-GAAP Reconciliations (unaudited), continued
The following items have been excluded in our non-GAAP financial measures:

(1) Intangible amortization in 2021 and 2020 includes amortization of 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 charges were $3.0 million for the three months and year ended December 31, 2021 as compared to $2.7 million and $11.8 million for the three months and year ended December 31, 2020. Amounts in 2021 consisted primarily of costs related to the pending Apria transaction. Amounts in 2020 consisted primarily of transition costs for the Halyard acquisition. Exit and realignment charges were $10.1 million and $31.1 million for the three months and year ended December 31, 2021 as compared to $16.6 million and $25.9 million for the three months and year ended December 31, 2020. Amounts in 2021 consisted of wind-down costs related to Fusion5, IT restructuring charges, costs associated with our strategic organizational realignment, and other items. Amounts in 2020 were associated with severance from reduction in workforce, IT restructuring charges, post closing costs associated with the Movianto divestiture, costs associated with the sale of certain assets of Fusion5 and other costs related to the reorganization of the U.S. commercial, operations and executive teams.

(3) Loss on extinguishment of debt for the year ended December 31, 2021 included the write-off of deferred financing costs and third party fees associated with the debt financing in March 2021 of $15.3 million and amounts reclassified from accumulated other comprehensive loss as a result of the termination of our interest rate swaps of $25.1 million. Loss on extinguishment and modification of debt for the three months and year ended December 31, 2020 includes a make-whole premium related to the extinguishment of our 2021 Notes of $5.0 million, the write-off of deferred financing costs of $2.7 million and $5.1 million, third party fees incurred of $1.0 million and $4.3 million, which were partially offset by a gain on extinguishment of debt related to the partial repurchase of our 2021 and 2024 Notes of $(3.1) million for the year ended December 31, 2020.

(4) Other includes interest costs and net actuarial losses related to the U.S. Retirement Plan of $0.6 million and $2.3 million for the three months and year ended December 31, 2021. Other includes interest costs and net actuarial losses related to the U.S. Retirement Plan of $0.6 million and $2.3 million for the three months and year ended December 31, 2020, and gain from the surrender of company-owned life insurance policies of $(3.5) million for the year ended December 31, 2020.

(5) Includes tax adjustments associated with a valuation allowance on the capital loss related to the divestiture of our Movianto business, partially offset by the estimated benefits under the Tax Cuts and Jobs Act and the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

(6) 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.

(7) Other depreciation and amortization includes depreciation expense for property and equipment and amortization for capitalized computer software.

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 Owens & Minor, Inc.'s (the "Company") 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 these non-GAAP financial measures internally to evaluate the Company's performance, evaluate the balance sheet, engage in financial and operational planning and determine incentive compensation.

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.

Alex Jost, CPA
Director, Investor Relations
Investor.Relations@owens-minor.com

Source: Owens & Minor, Inc.

IR Contact

Alex Jost, CPA
Director, Investor Relations
investor.relations@owens-minor.com