0000075252-22-000030 | 10-Q | XBRL Viewer

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Cover page - shares	3 Months Ended
Cover page - shares	Mar. 31, 2022	Apr. 28, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2022
Document Transition Report	false
Entity File Number	1-9810
Entity Registrant Name	Owens & Minor, Inc.
Entity Incorporation, State or Country Code	VA
Entity Tax Identification Number	54-1701843
Entity Address, Address Line One	9120 Lockwood Boulevard
Entity Address, City or Town	Mechanicsville
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	23116
City Area Code	804
Local Phone Number	723-7000
Title of 12(b) Security	Common Stock, $2 par value per share
Trading Symbol	OMI
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Smaller Reporting Entity	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		76,109,259
Entity Central Index Key	0000075252
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Amendment Flag	false

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Income Statement [Abstract]
Net revenue	$ 2,406,952	$ 2,326,534
Cost of goods sold	2,033,504	1,883,783
Gross margin	373,448	442,751
Distribution, selling and administrative expenses	279,740	292,701
Acquisition-related and exit and realignment charges	33,548	5,963
Other operating income, net	(899)	(2,605)
Operating income	61,059	146,692
Interest expense, net	12,019	13,672
Loss on extinguishment of debt	0	40,433
Other expense, net	783	569
Income before income taxes	48,257	92,018
Income tax provision	8,978	22,429
Net income	$ 39,279	$ 69,589
Net income per common share:
Basic (in usd per share)	$ 0.53	$ 0.98
Diluted (in usd per share)	$ 0.52	$ 0.98

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Statement of Comprehensive Income [Abstract]
Net income	$ 39,279	$ 69,589
Other comprehensive (loss) income, net of tax:
Currency translation adjustments	(787)	(12,262)
Change in unrecognized net periodic pension costs	189	121
Change in gains and losses on derivative instruments	0	20,044
Total other comprehensive (loss) income, net of tax	(598)	7,903
Comprehensive income	$ 38,681	$ 77,492

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 211,298	$ 55,712
Accounts receivable, net of allowances of $20,714 and $18,003	775,779	681,564
Merchandise inventories	1,447,383	1,495,972
Other current assets	118,889	88,564
Total current assets	2,553,349	2,321,812
Property and equipment, net of accumulated depreciation of $344,569 and $334,500	586,668	317,235
Operating lease assets	278,205	194,006
Goodwill	1,657,159	390,185
Intangible assets, net	494,888	209,745
Other assets, net	137,700	103,568
Total assets	5,707,969	3,536,551
Current liabilities
Accounts payable	1,115,400	1,001,959
Accrued payroll and related liabilities	95,995	115,858
Other current liabilities	442,900	226,204
Total current liabilities	1,654,295	1,344,021
Long-term debt, excluding current portion	2,635,314	947,540
Operating lease liabilities, excluding current portion	221,612	162,241
Deferred income taxes	110,319	35,310
Other liabilities	138,807	108,938
Total liabilities	4,760,347	2,598,050
Commitments and contingencies
Equity
Common stock, par value $2 per share; authorized - 200,000 shares; issued and outstanding - 76,086 shares and 75,433 shares	152,172	150,865
Paid-in capital	409,741	440,608
Retained earnings	426,898	387,619
Accumulated other comprehensive loss	(41,189)	(40,591)
Total equity	947,622	938,501
Total liabilities and equity	$ 5,707,969	$ 3,536,551

Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Accounts receivable, allowances	$ 20,714	$ 18,003
Property and equipment, accumulated depreciation	$ 344,569	$ 334,500
Common stock, par value (in usd per share)	$ 2	$ 2
Common stock, authorized (shares)	200,000	200,000
Common stock, issued (shares)	76,086	75,433
Common stock, outstanding (shares)	76,086	75,433

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Operating activities:
Net income	$ 39,279	$ 69,589
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	24,125	22,900
Share-based compensation expense	5,403	5,182
Loss on extinguishment of debt	0	40,433
Provision for losses on accounts receivable	5,628	8,462
Deferred income tax benefit	(69)	(5,865)
Changes in operating lease right-of-use assets and lease liabilities	(462)	448
Changes in operating assets and liabilities:
Accounts receivable	(12,919)	(45,919)
Merchandise inventories	58,098	(89,393)
Accounts payable	(6,967)	18,742
Net change in other assets and liabilities	(33,165)	(1,666)
Other, net	748	2,510
Cash provided by operating activities	79,699	25,423
Investing activities:
Acquisition, net of cash acquired	(1,576,278)	0
Additions to property and equipment	(9,609)	(5,048)
Additions to computer software	(1,352)	(1,575)
Other, net	3	4
Cash used for investing activities	(1,587,236)	(6,619)
Financing activities:
Proceeds from issuance of debt	1,691,000	500,000
Borrowings (repayments) under revolving credit facility, net and accounts receivable securitization program	41,700	(21,600)
Repayments of debt	0	(523,140)
Financing costs paid	(33,744)	(11,700)
Cash dividends paid	0	(181)
Payment for termination of interest rate swaps	0	(15,434)
Other, net	(34,762)	(8,339)
Cash provided by (used for) financing activities	1,664,194	(80,394)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(669)	(2,139)
Net increase (decrease) in cash, cash equivalents and restricted cash	155,988	(63,729)
Cash, cash equivalents and restricted cash at beginning of period	72,035	134,506
Cash, cash equivalents and restricted cash at end of period	228,023	70,777
Supplemental disclosure of cash flow information:
Income taxes paid, net of refunds	4,478	898
Interest paid	$ 12,626	$ 10,255

Consolidated Statements of Changes in Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Loss
Beginning Balance (in shares) at Dec. 31, 2020		73,472
Beginning Balance at Dec. 31, 2020	$ 712,054	$ 146,944	$ 436,597	$ 167,022	$ (38,509)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	69,589			69,589
Other comprehensive income (loss)	7,903				7,903
Dividends declared	(434)			(434)
Share-based compensation expense, exercises and other (in shares)		1,628
Share-based compensation expense, exercises and other	(2,851)	$ 3,256	(6,107)
Ending Balance (in shares) at Mar. 31, 2021		75,100
Ending Balance at Mar. 31, 2021	$ 786,261	$ 150,200	430,490	236,177	(30,606)
Beginning Balance (in shares) at Dec. 31, 2021	75,433	75,433
Beginning Balance at Dec. 31, 2021	$ 938,501	$ 150,865	440,608	387,619	(40,591)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	39,279			39,279
Other comprehensive income (loss)	(598)				(598)
Share-based compensation expense, exercises and other (in shares)		653
Share-based compensation expense, exercises and other	$ (29,560)	$ 1,307	(30,867)
Ending Balance (in shares) at Mar. 31, 2022	76,086	76,086
Ending Balance at Mar. 31, 2022	$ 947,622	$ 152,172	$ 409,741	$ 426,898	$ (41,189)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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- Definition

Amount after tax and reclassification adjustments of other comprehensive income (loss).

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- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

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+ Details

Consolidated Statements of Changes in Equity (Parenthetical)	3 Months Ended
	Mar. 31, 2021 $ / shares
Statement of Stockholders' Equity [Abstract]
Dividends declared, per share (in usd per share)	$ 0.0025

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of Owens & Minor, Inc. and the subsidiaries it controls (we, us, our or the Company) and contain all adjustments (which are comprised only of normal recurring accruals and use of estimates) necessary to conform with U.S. generally accepted accounting principles (GAAP). All significant intercompany accounts and transactions have been eliminated. The results of operations for interim periods are not necessarily indicative of the results expected for the full year.

To better reflect how we go to market as well as certain changes to the leadership team, organizational structure, budgeting and financial reporting processes which drive changes to segment reporting, we have organized our business into two distinct segments: Products & Healthcare Services and Patient Direct. Products & Healthcare Services provides distribution, outsourced logistics and value-added services, and manufactures and sources medical surgical products through our production and kitting operations. Patient Direct expands our business along the continuum of care through delivery of disposable medical supplies sold directly to patients and home health agencies and is a leading provider of integrated home healthcare equipment and related services in the United States. Beginning with the quarter ended March 31, 2022, we now report financial results using this two segment structure and have recast prior year segment results on the same basis.

On March 29, 2022, we completed the acquisition of 100% of Apria, Inc. pursuant to the Agreement and Plan of Merger dated January 7, 2022, in exchange for approximately $1.7 billion, net of cash acquired. Refer to Note 3 for additional details.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make assumptions and estimates that affect reported amounts and related disclosures. Actual results may differ from these estimates.

Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash includes cash and marketable securities with an original maturity or maturity at acquisition of three months or less. Cash, cash equivalents and restricted cash are stated at cost. Nearly all of our cash, cash equivalents and restricted cash are held in cash depository accounts in major banks in the United States, Europe, and Asia. Cash that is held by a major bank and has restrictions on its availability to us is classified as restricted cash. Restricted cash included in Other assets, net as of March 31, 2022 and December 31, 2021 primarily represents cash 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.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying consolidated balance sheets that sum to the total of those same amounts presented in the accompanying consolidated statements of cash flows.


	March 31, 2022		December 31, 2021
Cash and cash equivalents	$	211,298	$	55,712
Restricted cash included in Other assets, net	16,725		16,323
Total cash, cash equivalents, and restricted cash	$	228,023	$	72,035

Patient Equipment

Patient equipment, which is included within property and equipment, net, is stated at cost less depreciation and reserves for non-recoverable and obsolete patient equipment. Patient equipment consists of medical equipment rented to patients on a month-to-month basis. Patient equipment is generally placed for rent; however, it could also be sold to customers. Once the rented equipment is returned to us, the patient equipment is assessed and repaired as necessary. Patient equipment is typically leased to subsequent patients if its condition is suitable.

Fair Value	3 Months Ended
Fair Value	Mar. 31, 2022
Fair Value Disclosures [Abstract]
Fair Value	Fair ValueThe carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued payroll and related liabilities reported in the consolidated balance sheets approximate fair value due to the short-term nature of these instruments. The carrying amount of restricted cash also approximates fair value due to its nature. The fair value of debt is estimated based on quoted market prices or dealer quotes for the identical liability when traded as an asset in an active market (Level 1) or, if quoted market prices or dealer quotes are not available, on the borrowing rates currently available for loans with similar terms, credit ratings, and average remaining maturities (Level 2). See Note 6 for the fair value of debt. The fair value of our derivative contracts are determined based on the present value of expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Observable Level 2 inputs are used to determine the present value of expected future cash flows. See Note 8 for the fair value of derivatives.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Acquisition

3 Months Ended

Mar. 31, 2022

Business Combination and Asset Acquisition [Abstract]

Acquisition

On March 29, 2022 (the Acquisition Date), we completed the acquisition of 100% of Apria, Inc. (Apria) pursuant to the Agreement and Plan of Merger (Apria Acquisition) dated January 7, 2022, in exchange for approximately $1.7 billion, including $108 million owed to holders of Apria stock awards as of March 31, 2022 that was paid in April 2022, net of $144 million of cash acquired. The purchase was funded with a combination of debt and cash on hand. At the time of the Apria Acquisition, each share of Apria’s common stock was converted into the right to receive $37.50 in cash. Apria is a leading provider of integrated home healthcare equipment and related services in the United States. This business is reported as part of the Patient Direct segment.

The following table presents the preliminary estimated fair value of the assets acquired and liabilities assumed recognized as of the Acquisition Date. The fair value and useful lives of tangible and intangible assets acquired have been estimated based on a review of publicly available data for transactions involving companies deemed comparable to the Company. The allocation of purchase price to assets and liabilities acquired is not yet complete, as valuations of tangible and intangible assets and liabilities are still in process.


	Preliminary Fair Value Currently Estimated as of Acquisition Date
Assets acquired:
Current assets	$	142,136
Goodwill	1,267,079
Intangible assets	295,466
Other non-current assets	371,320
Total assets	2,076,001
Liabilities assumed:
Current liabilities	241,266
Noncurrent liabilities	150,128
Total liabilities	391,394
Fair value of net assets acquired, net of cash	$	1,684,607

Current assets acquired includes $89.3 million in fair value of receivables, which reflects the approximate amount contractually owed. We are amortizing the preliminary fair value of acquired intangible assets, primarily customer contracts, trade names and payor and capitated relationships, over their estimated weighted average useful lives of two to 15 years.

Goodwill of $1.3 billion, which we assigned to our Patient Direct segment, consists largely of expected opportunities to expand into new markets and further develop a presence in the home healthcare business. None of the goodwill recognized is expected to be deductible for income tax purposes.

The following table provides pro forma results of net revenue and net (loss) income for the three months ended March 31, 2022 and 2021 as if Apria was acquired on January 1, 2021. The pro forma results below are not necessarily indicative of the results that would have been if the acquisition had occurred on the dates indicated, nor are the pro forma results indicative of results which may occur in the future.


	Three Months Ended March 31,
	2022		2021
Net revenue	$	2,684,065	$	2,601,808
Net (loss) income	$	(90,182)	$	74,133

Pro forma net loss of $90.2 million for the three months ended March 31, 2022 includes pro forma adjustments for interest expense of $20.8 million and amortization of intangible assets of $20.3 million. The Pro forma net loss also includes $39.4 million in seller transaction expenses and stock compensation expense associated with $108 million owed to the holders of Apria stock awards in connection with the Apria Acquisition. The amount of revenue and net income of Apria since the Acquisition Date included in the consolidated statement of operations for the three months ended March 31, 2022 have not been separately disclosed, as the effects were not material to our consolidated financial statements.

Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

In connection with our new segment structure, which began in the first quarter of 2022, goodwill is now reported as part of Products & Healthcare Services or Patient Direct. There was no change to our underlying reporting units as part of that segment change and therefore no reallocation of goodwill. The following table summarizes the goodwill balances by segment and the changes in the carrying amount of goodwill through March 31, 2022:


	Products & Healthcare Services		Patient Direct		Consolidated
Carrying amount of goodwill, December 31, 2021	$	106,280	$	283,905	$	390,185
Acquisition	—		1,267,079		1,267,079
Currency translation adjustments	(105)		—		(105)
Carrying amount of goodwill, March 31, 2022	$	106,175	$	1,550,984	$	1,657,159

Intangible assets subject to amortization at March 31, 2022 and December 31, 2021 were as follows:


	March 31, 2022							December 31, 2021
		Customer Relationships		Tradenames		Other Intangibles			Customer Relationships		Tradenames		Other Intangibles
Gross intangible assets		$	275,429	$	156,937	$	271,761		$	275,526	$	90,000	$	43,189
Accumulated amortization		(152,465)		(35,351)		(21,423)			(146,168)		(33,242)		(19,560)
Net intangible assets		$	122,964	$	121,586	$	250,338		$	129,358	$	56,758	$	23,629
Weighted average useful life		10 years		11 years		5 years			10 years		11 years		8 years

At March 31, 2022 and December 31, 2021, $158 million and $164 million in net intangible assets were held in the Products & Healthcare Services segment and $337 million and $45.7 million were held in the Patient Direct segment. Amortization expense for intangible assets was $10.3 million and $10.0 million for the three months ended March 31, 2022 and 2021. At March 31, 2022, other intangibles includes preliminary estimated fair values of payor relationships, customer list and other intangible assets acquired as part of the Apria Acquisition.

Based on the current carrying value of intangible assets subject to amortization, estimated amortization expense is approximately $96 million for the remainder of 2022, $126 million for 2023, $67 million for 2024, $42 million for 2025, $41 million for 2026 and $38 million for 2027.

Exit and Realignment Costs

3 Months Ended

Mar. 31, 2022

Restructuring and Related Activities [Abstract]

Exit and Realignment Costs

Exit and Realignment CostsWe periodically incur exit and realignment and other charges associated with optimizing our operations which includes the consolidation of certain distribution and outsourced logistics centers, administrative offices and warehouses, our client engagement center and IT restructuring charges. These charges also include costs associated with our strategic organizational

realignment which include leadership reorganization costs, certain professional fees, and costs to streamline administrative functions and processes and divestiture related costs.

Exit and realignment charges by segment for the three months ended March 31, 2022 and 2021 were as follows:


	Three Months Ended March 31,
	2022		2021
Products & Healthcare Services	$	1,199	$	5,963
Patient Direct	483		—
Total exit and realignment charges	$	1,682	$	5,963

The following table summarizes the activity related to exit and realignment cost accruals through March 31, 2022 and 2021:


	Total
Accrued exit and realignment costs, December 31, 2021	$	8,306
Provision for exit and realignment activities:
Severance	811
Other	871
Cash payments	(6,903)
Accrued exit and realignment costs, March 31, 2022	$	3,085

Accrued exit and realignment costs, December 31, 2020	$	3,146
Provision for exit and realignment activities:
Information system restructuring costs	1,029
Lease obligations	347
Other	781
Cash payments	(2,915)
Accrued exit and realignment costs, March 31, 2021	$	2,388

In addition to the exit and realignment accruals in the preceding table, we also incurred $3.8 million of costs that were expensed as incurred for the three months ended March 31, 2021, including $3.2 million related to an increase in reserves associated with certain retained assets of Fusion5, $0.5 million in impairment charges related to our client engagement center, and $0.1 million in other asset charges.

Acquisition-related charges within acquisition-related and exit and realignment charges presented in our consolidated statements of operations were $31.9 million for the three months ended March 31, 2022, which consisted primarily of costs related to the Apria acquisition. There were no acquisition-related charges included within acquisition-related and exit and realignment charges presented in our consolidated statements of operations for the three months ended March 31, 2021.

We expect material additional costs in 2022 for activities that were initiated through March 31, 2022.

Debt

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Debt

Debt consists of the following:


	March 31, 2022				December 31, 2021
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Receivables Securitization Program	$	226,169	$	230,000	$	197,026	$	200,000
4.375% Senior Notes, due December 2024	245,286		250,068		245,086		263,263
Revolver	11,700		11,700		—		—
Term Loan A	489,848		500,000		—		—
4.500% Senior Notes, due March 2029	491,887		478,415		491,656		515,225
Term Loan B	579,080		589,878		—		—
6.625% Senior Notes, due March 2030	583,930		617,484		—		—
Finance leases and other	15,615		15,615		15,809		15,809
Total debt	2,643,515		2,693,160		949,577		994,297
Less current maturities	(8,201)		(8,100)		(2,037)		(2,037)
Long-term debt	$	2,635,314	$	2,685,060	$	947,540	$	992,260

We have $246 million, excluding deferred financing costs and third party fees, of 4.375% senior notes due in 2024 (the 2024 Notes), with interest payable semi-annually. The 2024 Notes were sold at 99.6% of the principal amount with an effective yield of 4.422%. We have the option to redeem the 2024 Notes in part or in whole prior to maturity at a redemption price equal to the greater of 100% of the principal amount or the present value of the remaining scheduled payments discounted at the applicable Benchmark Treasury Rate (as defined) plus 30 basis points.

In March 2021, we issued $500 million, excluding deferred financing costs and third party fees, of 4.500% senior unsecured notes due in 2029 (the 2029 Unsecured Notes), with interest payable semi-annually (the Notes Offering). The 2029 Unsecured Notes were sold at 100% of the principal amount with an effective yield of 4.500%. We may redeem all or part of the 2029 Unsecured Notes prior to March 31, 2024, at a price equal to 100% of the principal amount of the 2029 Unsecured Notes redeemed, plus accrued and unpaid interest, if any, to, but not including, the redemption date, plus a “make-whole” premium, as described in the Indenture dated March 10, 2021 (the Indenture). On or after March 31, 2024, we may redeem all or part of the 2029 Unsecured Notes at the applicable redemption prices described in the Indenture, plus accrued and unpaid interest, if any, to, but not including, the redemption date. We may also redeem up to 40% of the aggregate principal amount of the 2029 Unsecured Notes at any time prior to March 31, 2024, at a redemption price equal to 104.5% with an amount equal to or less than the net cash proceeds from certain equity offerings, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

On March 29, 2022, we completed the sale of $600 million in aggregate principal amount of our 6.625% senior notes due 2030 (the 2030 Unsecured Notes), with interest payable semi-annually. The 2030 Unsecured Notes were sold at 100% of the principal amount with an effective yield of 6.625%.

We may redeem all or part of the 2030 Unsecured Notes, prior to April 1, 2025, at a price equal to 100% of the principal amount of the 2030 Unsecured Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, plus a “make-whole” premium, as described in the New Indenture. From and after April 1, 2025, we may redeem all or part of the 2030 Unsecured Notes at the applicable redemption prices described in the New Indenture, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. We may also redeem up to 40% of the aggregate principal amount of 2030 Unsecured Notes at any time prior to April 1, 2025, at a redemption price equal to 106.625% with an amount equal to or less than the net cash proceeds from certain equity offerings, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

The 2029 Unsecured Notes and 2030 Unsecured Notes will be effectively subordinated to any of our secured indebtedness, including indebtedness under the credit agreements.

On March 29, 2022, we entered into a term loan credit agreement with an administrative agent and collateral agent and a syndicate of financial institutions, as lenders (the Credit Agreement) that provides for two new credit facilities (i) a $500 million Term Loan A facility (the Term Loan A), and (ii) a $600 million Term Loan B facility (the Term Loan B). The interest rate on the Term Loan A is based on either the Term SOFR or the Base Rate plus an Applicable Rate which varies depending on the current Debt Ratings or Total Leverage Ratio, determined as to whichever shall result in more favorable

pricing to the Borrowers (each as defined in the Credit Agreement). The interest rate on the Term Loan B is based on either the Term SOFR or the Base Rate plus an Applicable Rate. The Term Loan A will mature in March 2027 and the Term Loan B will mature in March 2029.

On March 29, 2022, we entered into an amendment to our revolving credit agreement, dated as of March 10, 2021 with an administrative agent and collateral agent and a syndicate of financial institutions, as lenders (Revolving Credit Agreement). The amendment will (i) increase the aggregate revolving credit commitments under the Revolving Credit Agreement by $150 million, to an aggregate amount of $450 million and (ii) replace the Eurocurrency Rate with the Adjusted Term SOFR Rate (each as defined in the Revolving Credit Agreement). The Revolving Credit Agreement matures in March 2027.

At March 31, 2022, we had borrowings of $11.7 million and letters of credit of $28.0 million under our revolving credit facility. At December 31, 2021, we had no borrowings and letters of credit of $9.4 million outstanding under our revolving credit facilities. At March 31, 2022 and December 31, 2021, we had $410 million and $291 million available for borrowing. We also had letters of credit and bank guarantees, which were issued outside of the Revolving Credit Facility for $2.1 million and $2.2 million as of March 31, 2022 and December 31, 2021, which supports certain leased facilities as well as other normal business activities in the United States and Europe.

We entered into a Security and Pledge Agreement (the Security Agreement), dated March 10, 2021 and amended March 29, 2022, pursuant to which we granted collateral on behalf of the holders of the 2024 Notes, and the parties secured under the credit agreements (the Secured Parties) including first priority liens and security interests in (a) all present and future shares of capital stock owned by the Credit Parties (as defined) in the Credit Parties’ present and future subsidiaries, subject to certain customary exceptions, and (b) all present and future personal property and assets of the Credit Parties, subject to certain exceptions.

On March 29, 2022, we entered into an amendment to our accounts receivable securitization program (the Receivables Financing Agreement). Pursuant to the amended Receivables Financing Agreement, the aggregate principal amount of the loans made by the Lenders (as defined) will not exceed $450 million outstanding at any time. The interest rate under the Receivables Financing Agreement is based on a spread over a benchmark SOFR rate (as described in the Fourth Amendment to the Receivables Financing Agreement). Under the Receivables Financing Agreement, certain of our subsidiaries sell substantially all of their accounts receivable balances to our wholly owned special purpose entity, O&M Funding LLC. The Receivables Financing Agreement matures in March 2025.

The Revolving Credit Agreement, Term Loan A, Term Loan B, Receivables Financing Agreement, 2024 Notes, 2029 Unsecured Notes, and 2030 Unsecured Notes contain cross-default provisions which could result in the acceleration of payments due in the event of default of any of the related agreements. The terms of the credit agreements also require us to maintain ratios for leverage and interest coverage, including on a pro forma basis in the event of an acquisition or divestiture. We were in compliance with our debt covenants at March 31, 2022.

As of March 31, 2022, scheduled future principal payments of debt, excluding finance leases and other, were $4.5 million in 2022, $15.4 million in 2023, $274 million in 2024, $270 million in 2025, $43.5 million due in 2026, $415 million in 2027, $6.0 million due in 2028, $1.1 billion in 2029, and $600 million in 2030. Current maturities at March 31, 2022 include $6.0 million in principal payments on our Term Loan B and $2.2 million in current portion of finance leases.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

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+ Details

Retirement Plans

3 Months Ended

Mar. 31, 2022

Retirement Benefits [Abstract]

Retirement Plans

We have a frozen noncontributory, unfunded retirement plan for certain retirees in the United States (U.S. Retirement Plan). As of March 31, 2022 and December 31, 2021, the accumulated benefit obligation of the U.S. Retirement Plan was $49.6 million and $50.2 million. Certain of our foreign subsidiaries also have defined benefit pension plans covering substantially all of their respective teammates.

The components of net periodic benefit cost for the three months ended March 31, 2022 and 2021 were as follows:


	Three Months Ended March 31,
	2022		2021
Service cost	$	633	$	704
Interest cost	523		446
Recognized net actuarial loss	267		353
Net periodic benefit cost	$	1,423	$	1,503

- Definition

The entire disclosure for retirement benefits.

+ References

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+ Details

Derivatives

3 Months Ended

Mar. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

We are directly and indirectly affected by changes in foreign currency, which may adversely impact our financial performance and are referred to as “market risks.” When deemed appropriate, we use derivatives as a risk management tool to mitigate the potential impact of certain market risks. We do not enter into derivative financial instruments for trading purposes.

We enter into foreign currency contracts to manage our foreign exchange exposure related to certain balance sheet items that do not meet the requirements for hedge accounting. These derivative instruments are adjusted to fair value at the end of each period through earnings. The gain or loss recorded on these instruments is substantially offset by the remeasurement adjustment on the foreign currency denominated asset or liability.

We determine the fair value of our foreign currency derivatives based on observable market-based inputs or unobservable inputs that are corroborated by market data. We do not view the fair value of our derivatives in isolation, but rather in relation to the fair values or cash flows of the underlying exposure. All derivatives are carried at fair value in our consolidated balance sheets in other current assets and other current liabilities. We consider the risk of counterparty default to be minimal. We report cash flows from our hedging instruments in the same cash flow statement category as the hedged items.

In April 2022, in order to mitigate the risk of increases in benchmark rates, we entered into an interest rate swap agreement whereby we agree to exchange with the counterparty, at specified intervals, the difference between fixed and variable amounts calculated by reference to the notional amount.

The following table summarizes the terms and fair value of our outstanding derivative financial instruments as of March 31, 2022:

Derivative Assets

Derivative Liabilities

Notional Amount

Maturity Date

Classification

Fair Value

Classification

Fair Value

Economic (non-designated) hedges

Foreign currency contracts

20,000

April 2022

Other current assets

127

Other current liabilities

—

In March 2021, we terminated the remaining $300 million in notional value of interest rate swaps concurrent with the debt financing transaction. The remaining balance of the fair value adjustments of $25.1 million, which related to these terminated interest rate swaps, within Accumulated other comprehensive loss was reclassified to Loss on extinguishment of debt within our consolidated statements of operations for the three months ended March 31, 2021.

The following table summarizes the terms and fair value of our outstanding derivative financial instruments as of December 31, 2021:

Derivative Assets

Derivative Liabilities

Notional Amount

Maturity Date

Classification

Fair Value

Classification

Fair Value

Economic (non-designated) hedges

Foreign currency contracts

9,700

January 2022

Other current assets

Other current liabilities

—

The following table summarizes the effect of cash flow hedge accounting on our consolidated statements of operations for the three months ended March 31, 2021:


	Amount of Gain Recognized in Other Comprehensive Income		Location of Loss Reclassified from Accumulated Other Comprehensive Loss into Income	Total Amount of Expense Line Items Presented in the Consolidated Statement of Operations in Which the Effects are Recorded		Amount of Loss Reclassified from Accumulated Other Comprehensive Loss into Income
Interest rate swaps	$	2,426	Loss on extinguishment of debt	$	(40,433)	$	(25,518)

The amount of ineffectiveness associated with these contracts was immaterial for the period presented.

For the three months ended March 31, 2022 and 2021, we recognized losses of $0.1 million and $1.0 million associated with our economic (non-designated) foreign currency contracts.

We recorded the change in fair value of derivative instruments and the remeasurement adjustment of the foreign currency denominated asset or liability in other operating income, net for our foreign exchange contracts.

Leases

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

Leases

The components of lease expense were as follows:


		Three Months Ended March 31,
	Classification	2022		2021
Operating lease cost	DS&A Expenses	$	16,100	$	14,086
Finance lease cost:
Amortization of lease assets	DS&A Expenses	331		239
Interest on lease liabilities	Interest expense, net	307		307
Total finance lease cost		638		546
Short-term lease cost	DS&A Expenses	116		259
Variable lease cost	DS&A Expenses	4,729		4,317
Total lease cost		$	21,583	$	19,208

Variable lease cost consists primarily of taxes, insurance, and common area or other maintenance costs for our leased facilities which are paid as incurred.

Supplemental balance sheet information is as follows:


	Classification	March 31, 2022		December 31, 2021
Assets:
Operating lease assets	Operating lease assets	$	278,205	$	194,006
Finance lease assets	Property and equipment, net	8,728		8,896
Total lease assets		$	286,933	$	202,902
Liabilities:
Current
Operating	Other current liabilities	$	67,388	$	41,817
Finance	Other current liabilities	2,202		2,037
Noncurrent
Operating	Operating lease liabilities, excluding current portion	221,612		162,241
Finance	Long-term debt, excluding current portion	11,116		11,314
Total lease liabilities		$	302,318	$	217,409

The gross value recorded under finance leases was $20.7 million and $20.6 million with associated accumulated amortization of $12.0 million and $11.7 million as of March 31, 2022 and December 31, 2021. Operating lease assets include $69.1 million in right-of-use assets and $70.3 million of operating lease liabilities acquired as a result of the Apria Acquisition, as of March 31, 2022.

Other information related to leases was as follows:


	Three Months Ended March 31,
	2022		2021
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating and finance leases	$	15,965	$	13,848
Financing cash flows from finance leases	$	397	$	234

Right-of-use assets obtained in exchange for new operating and finance lease liabilities	$	27,300	$	23,986

Weighted average remaining lease term (years)
Operating leases	4.6		5.4
Finance leases	6.2		7.7

Weighted average discount rate
Operating leases	7.0%		8.8%
Finance leases	10.7%		12.2%

Maturities of lease liabilities as of March 31, 2022 were as follows:


	Operating Leases		Finance Leases		Total
2022	$	69,487	$	2,094	$	71,581
2023	83,056		2,750		85,806
2024	69,605		2,697		72,302
2025	49,727		2,631		52,358
2026	33,658		2,248		35,906
Thereafter	44,571		4,538		49,109
Total lease payments	350,104		16,958		367,062
Less: Interest	(61,104)		(3,640)		(64,744)
Present value of lease liabilities	$	289,000	$	13,318	$	302,318

Leases

The components of lease expense were as follows:


		Three Months Ended March 31,
	Classification	2022		2021
Operating lease cost	DS&A Expenses	$	16,100	$	14,086
Finance lease cost:
Amortization of lease assets	DS&A Expenses	331		239
Interest on lease liabilities	Interest expense, net	307		307
Total finance lease cost		638		546
Short-term lease cost	DS&A Expenses	116		259
Variable lease cost	DS&A Expenses	4,729		4,317
Total lease cost		$	21,583	$	19,208

Variable lease cost consists primarily of taxes, insurance, and common area or other maintenance costs for our leased facilities which are paid as incurred.

Supplemental balance sheet information is as follows:


	Classification	March 31, 2022		December 31, 2021
Assets:
Operating lease assets	Operating lease assets	$	278,205	$	194,006
Finance lease assets	Property and equipment, net	8,728		8,896
Total lease assets		$	286,933	$	202,902
Liabilities:
Current
Operating	Other current liabilities	$	67,388	$	41,817
Finance	Other current liabilities	2,202		2,037
Noncurrent
Operating	Operating lease liabilities, excluding current portion	221,612		162,241
Finance	Long-term debt, excluding current portion	11,116		11,314
Total lease liabilities		$	302,318	$	217,409

Other information related to leases was as follows:


	Three Months Ended March 31,
	2022		2021
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating and finance leases	$	15,965	$	13,848
Financing cash flows from finance leases	$	397	$	234

Right-of-use assets obtained in exchange for new operating and finance lease liabilities	$	27,300	$	23,986

Weighted average remaining lease term (years)
Operating leases	4.6		5.4
Finance leases	6.2		7.7

Weighted average discount rate
Operating leases	7.0%		8.8%
Finance leases	10.7%		12.2%

Maturities of lease liabilities as of March 31, 2022 were as follows:


	Operating Leases		Finance Leases		Total
2022	$	69,487	$	2,094	$	71,581
2023	83,056		2,750		85,806
2024	69,605		2,697		72,302
2025	49,727		2,631		52,358
2026	33,658		2,248		35,906
Thereafter	44,571		4,538		49,109
Total lease payments	350,104		16,958		367,062
Less: Interest	(61,104)		(3,640)		(64,744)
Present value of lease liabilities	$	289,000	$	13,318	$	302,318

Income Taxes	3 Months Ended
Income Taxes	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The effective tax rate was 18.6% for the three months ended March 31 2022, compared to 24.4% in the same quarter of 2021. The change in these rates resulted primarily from the mixture of income and losses in jurisdictions in which we operate and the incremental income tax benefit associated with the vesting of restricted stock recorded in the first quarter of 2022. The liability for unrecognized tax benefits was $21.6 million at March 31, 2022 and $21.4 million at December 31, 2021. Included in the liability at March 31, 2022 and December 31, 2021 were $2.7 million of tax positions for which ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. On August 26, 2020, we received a Notice of Proposed Adjustment (NOPA) from the Internal Revenue Service (IRS) regarding our 2015 and 2016 consolidated income tax returns. On June 30, 2021, we received a NOPA from the IRS regarding our 2017 and 2018 consolidated income tax returns. Within the NOPAs, the IRS has asserted that our taxable income for the aforementioned years should be higher based on their assessment of the appropriate amount of taxable income that we should report in the United States in connection with our sourcing of products by our foreign subsidiaries for sale in the United States by our domestic subsidiaries. Our amount of taxable income in the United States is based on our transfer pricing methodology, which has been consistently applied through the current date. We strongly disagree with the IRS position and will pursue all available administrative and judicial remedies, including those available under the U.S. - Ireland Income Tax Treaty to alleviate double taxation. We regularly assess the likelihood of adverse outcomes resulting from examinations such as this to determine the adequacy of our tax reserves. We believe that we have adequately reserved for this matter and that the final adjudication of this matter will not have a material impact on our consolidated financial position, results of operations or cash flows. However, the ultimate outcome of disputes of this nature is uncertain, and if the IRS were to prevail on its assertions, the additional tax, interest, and any potential penalties could have a material adverse impact on our financial position, results of operations or cash flows.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

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+ Details

Net Income per Common Share

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Net Income per Common Share

The following summarizes the calculation of net income per common share attributable to common shareholders for the three months ended March 31, 2022 and 2021:


	Three Months Ended March 31,
(in thousands, except per share data)	2022		2021
Net income	$	39,279	$	69,589

Weighted average shares outstanding - basic	73,643		70,834
Dilutive shares	2,376		104
Weighted average shares outstanding - diluted	76,019		70,938

Net income per common share:
Basic	$	0.53	$	0.98
Diluted	$	0.52	$	0.98

Shareholders' Equity	3 Months Ended
Shareholders' Equity	Mar. 31, 2022
Equity [Abstract]
Shareholders' Equity	Shareholders' EquityIn May 2020, we entered into an equity distribution agreement, pursuant to which we may offer and sell, from time to time, shares of our common stock having an aggregate offering price of up to $50.0 million. We intend to use the net proceeds from the sale of our securities offered by this program for the repayment of indebtedness and/or for general corporate and working capital purposes. As of March 31, 2022, no shares were issued and $50.0 million of common stock remained available under the at-the-market equity financing program.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Accumulated Other Comprehensive Loss

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Accumulated Other Comprehensive Loss

The following table shows the changes in accumulated other comprehensive loss by component for the three months ended March 31, 2022 and 2021:


	Retirement Plans		Currency Translation Adjustments		Derivatives		Total
Accumulated other comprehensive loss, December 31, 2021	$	(14,597)	$	(25,994)	$	—	$	(40,591)
Other comprehensive loss before reclassifications	—		(787)		—		(787)
Income tax	—		—		—		—
Other comprehensive loss before reclassifications, net of tax	—		(787)		—		(787)
Amounts reclassified from accumulated other comprehensive loss	249		—		—		249
Income tax	(60)		—		—		(60)
Amounts reclassified from accumulated other comprehensive loss, net of tax	189		—		—		189
Other comprehensive income (loss)	189		(787)		—		(598)
Accumulated other comprehensive loss, March 31, 2022	$	(14,408)	$	(26,781)	$	—	$	(41,189)


	Retirement Plans		Currency Translation Adjustments		Derivatives		Total
Accumulated other comprehensive loss, December 31, 2020	$	(18,447)	$	(18)	$	(20,044)	$	(38,509)
Other comprehensive income (loss) before reclassifications	—		(12,262)		2,426		(9,836)
Income tax	—		—		(611)		(611)
Other comprehensive income (loss) before reclassifications, net of tax	—		(12,262)		1,815		(10,447)
Amounts reclassified from accumulated other comprehensive loss	156		—		25,518		25,674
Income tax	(35)		—		(7,289)		(7,324)
Amounts reclassified from accumulated other comprehensive loss, net of tax	121		—		18,229		18,350
Other comprehensive income (loss)	121		(12,262)		20,044		7,903
Accumulated other comprehensive loss, March 31, 2021	$	(18,326)	$	(12,280)	$	—	$	(30,606)

We include amounts reclassified out of accumulated other comprehensive loss related to defined benefit pension plans as a component of net periodic pension cost recorded in Other expense, net.

Segment Information

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Segment Information

We periodically evaluate our application of accounting guidance for reportable segments and disclose information about reportable segments based on the way management organizes the enterprise for making operating decisions and assessing performance. We report our business under two segments: Products & Healthcare Services and Patient Direct. The Products & Healthcare Services segment includes our United States distribution business (Medical Distribution), outsourced logistics and value-added services business, and Global Products which manufactures and sources medical surgical products through our production and kitting operations. The Patient Direct segment includes our home healthcare businesses (Byram and Apria).

We evaluate the performance of our segments based on their operating income excluding intangible amortization and acquisition-related and exit and realignment charges that, either as a result of their nature or size, would not be expected to occur as part of our normal business operations on a regular basis. Segment assets exclude inter-segment account balances as we believe their inclusion would be misleading and not meaningful.

The following tables present financial information by segment:


	Three Months Ended March 31,
	2022		2021
Net revenue:
Products & Healthcare Services	$	2,134,041	$	2,109,445
Patient Direct	272,911		217,089
Consolidated net revenue	$	2,406,952	$	2,326,534

Operating income:
Products & Healthcare Services	$	89,083	$	150,418
Patient Direct	15,793		12,263
Intangible amortization	(10,269)		(10,026)
Acquisition-related and exit and realignment charges	(33,548)		(5,963)
Consolidated operating income	$	61,059	$	146,692

Depreciation and amortization:
Products & Healthcare Services	$	18,994	$	19,160
Patient Direct	5,131		3,740
Consolidated depreciation and amortization	$	24,125	$	22,900

Capital expenditures:
Products & Healthcare Services	$	10,643	$	6,464
Patient Direct	318		159
Consolidated capital expenditures	$	10,961	$	6,623


	March 31, 2022		December 31, 2021
Total assets:
Products & Healthcare Services	$	2,960,748	$	3,012,303
Patient Direct	2,535,923		468,536
Segment assets	5,496,671		3,480,839
Cash and cash equivalents	211,298		55,712
Consolidated total assets	$	5,707,969	$	3,536,551

The following table presents net revenue by geographic area, which were attributed based on the location from which we ship products or provide services.


	Three Months Ended March 31,
	2022		2021
Net revenue:
United States	$	2,262,019	$	2,182,755
International	144,933		143,779
Consolidated net revenue	$	2,406,952	$	2,326,534

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

Recent Accounting Pronouncements	3 Months Ended
Recent Accounting Pronouncements	Mar. 31, 2022
Accounting Policies [Abstract]
Recent Accounting Pronouncements	Recent Accounting PronouncementsOn June 16, 2016, the FASB issued ASU No. 2016-13 Financial Instruments - Credit Losses, Measurement of Credit Losses on Financial Instruments, which changes the way entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net earnings. This standard will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. We are still evaluating the impact the adoption of ASU No. 2016-13 will have on our consolidated financial statements and related disclosures; however, we do not expect this to have a material impact. Subsequent to the issuance of ASU No. 2016-13, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses and ASU No. 2019-05, Financial Instruments - Credit Losses (Topic 326) Targeted Transition Relief. These ASUs do not change the core principle of the guidance in ASU No. 2016-13. Instead these amendments are intended to clarify and improve operability of certain topics included within the credit losses standard. These ASUs will have the same effective date and transition requirements as ASU No. 2016-13. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments are effective for all entities as of March 12, 2020 through December 31, 2022. Our material debt agreements no longer reference LIBOR as a benchmark rate. The transition did not have a material impact on our consolidated financial statements. In October 2020, the FASB issued ASU No. 2020-10, Codification Improvements, to improve consistency by amending the FASB Accounting Standards Codification (the Codification) to include all disclosure guidance in the appropriate disclosure sections. This ASU also clarifies application of various provisions in the Codification by amending and adding new headings, cross referencing to other guidance, and refining or correcting terminology. The amendments in this ASU do not change GAAP and, therefore, are not expected to result in a significant change in practice. We adopted ASU No. 2020-10 effective beginning January 1, 2021. Its adoption did not have a material impact on our consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. ASU 2021-08 requires the company acquiring contract assets and contract liabilities obtained in a business combination to recognize and measure them in accordance with ASC 606, Revenue from Contracts with Customers. At the acquisition date, the company acquiring the business should record related revenue, as if it had originated the contract. Before the update such amounts were recognized by the acquiring company at fair value. The amendments in this ASU are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. We adopted ASU 2021-08 prospectively, effective beginning January 1, 2022. Its adoption did not have a material impact on our consolidated financial statements. In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, which requires certain annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. We adopted ASU No. 2021-10 effective beginning January 1, 2022. Its adoption did not have a material impact on our consolidated financial statements.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

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+ Details

Summary of Significant Accounting Policies (Policies)	3 Months Ended
Summary of Significant Accounting Policies (Policies)	Mar. 31, 2022
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited consolidated financial statements include the accounts of Owens & Minor, Inc. and the subsidiaries it controls (we, us, our or the Company) and contain all adjustments (which are comprised only of normal recurring accruals and use of estimates) necessary to conform with U.S. generally accepted accounting principles (GAAP). All significant intercompany accounts and transactions have been eliminated. The results of operations for interim periods are not necessarily indicative of the results expected for the full year. To better reflect how we go to market as well as certain changes to the leadership team, organizational structure, budgeting and financial reporting processes which drive changes to segment reporting, we have organized our business into two distinct segments: Products & Healthcare Services and Patient Direct. Products & Healthcare Services provides distribution, outsourced logistics and value-added services, and manufactures and sources medical surgical products through our production and kitting operations. Patient Direct expands our business along the continuum of care through delivery of disposable medical supplies sold directly to patients and home health agencies and is a leading provider of integrated home healthcare equipment and related services in the United States. Beginning with the quarter ended March 31, 2022, we now report financial results using this two segment structure and have recast prior year segment results on the same basis. On March 29, 2022, we completed the acquisition of 100% of Apria, Inc. pursuant to the Agreement and Plan of Merger dated January 7, 2022, in exchange for approximately $1.7 billion, net of cash acquired. Refer to Note 3 for additional details.
Reclassifications	Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation.
Use of Estimates	Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires us to make assumptions and estimates that affect reported amounts and related disclosures. Actual results may differ from these estimates.
Cash, Cash Equivalents and Restricted Cash	Cash, Cash Equivalents and Restricted CashCash, cash equivalents and restricted cash includes cash and marketable securities with an original maturity or maturity at acquisition of three months or less. Cash, cash equivalents and restricted cash are stated at cost. Nearly all of our cash, cash equivalents and restricted cash are held in cash depository accounts in major banks in the United States, Europe, and Asia. Cash that is held by a major bank and has restrictions on its availability to us is classified as restricted cash. Restricted cash included in Other assets, net as of March 31, 2022 and December 31, 2021 primarily represents cash 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.
Patient Equipment	Patient Equipment Patient equipment, which is included within property and equipment, net, is stated at cost less depreciation and reserves for non-recoverable and obsolete patient equipment. Patient equipment consists of medical equipment rented to patients on a month-to-month basis. Patient equipment is generally placed for rent; however, it could also be sold to customers. Once the rented equipment is returned to us, the patient equipment is assessed and repaired as necessary. Patient equipment is typically leased to subsequent patients if its condition is suitable.
Fair Value	The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued payroll and related liabilities reported in the consolidated balance sheets approximate fair value due to the short-term nature of these instruments. The carrying amount of restricted cash also approximates fair value due to its nature. The fair value of debt is estimated based on quoted market prices or dealer quotes for the identical liability when traded as an asset in an active market (Level 1) or, if quoted market prices or dealer quotes are not available, on the borrowing rates currently available for loans with similar terms, credit ratings, and average remaining maturities (Level 2). See Note 6 for the fair value of debt. The fair value of our derivative contracts are determined based on the present value of expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Observable Level 2 inputs are used to determine the present value of expected future cash flows. See Note 8 for the fair value of derivatives.
Segment Information	We periodically evaluate our application of accounting guidance for reportable segments and disclose information about reportable segments based on the way management organizes the enterprise for making operating decisions and assessing performance. We report our business under two segments: Products & Healthcare Services and Patient Direct. The Products & Healthcare Services segment includes our United States distribution business (Medical Distribution), outsourced logistics and value-added services business, and Global Products which manufactures and sources medical surgical products through our production and kitting operations. The Patient Direct segment includes our home healthcare businesses (Byram and Apria). We evaluate the performance of our segments based on their operating income excluding intangible amortization and acquisition-related and exit and realignment charges that, either as a result of their nature or size, would not be expected to occur as part of our normal business operations on a regular basis. Segment assets exclude inter-segment account balances as we believe their inclusion would be misleading and not meaningful.
Recent Accounting Pronouncements	On June 16, 2016, the FASB issued ASU No. 2016-13 Financial Instruments - Credit Losses, Measurement of Credit Losses on Financial Instruments, which changes the way entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net earnings. This standard will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. We are still evaluating the impact the adoption of ASU No. 2016-13 will have on our consolidated financial statements and related disclosures; however, we do not expect this to have a material impact. Subsequent to the issuance of ASU No. 2016-13, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses and ASU No. 2019-05, Financial Instruments - Credit Losses (Topic 326) Targeted Transition Relief. These ASUs do not change the core principle of the guidance in ASU No. 2016-13. Instead these amendments are intended to clarify and improve operability of certain topics included within the credit losses standard. These ASUs will have the same effective date and transition requirements as ASU No. 2016-13. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments are effective for all entities as of March 12, 2020 through December 31, 2022. Our material debt agreements no longer reference LIBOR as a benchmark rate. The transition did not have a material impact on our consolidated financial statements. In October 2020, the FASB issued ASU No. 2020-10, Codification Improvements, to improve consistency by amending the FASB Accounting Standards Codification (the Codification) to include all disclosure guidance in the appropriate disclosure sections. This ASU also clarifies application of various provisions in the Codification by amending and adding new headings, cross referencing to other guidance, and refining or correcting terminology. The amendments in this ASU do not change GAAP and, therefore, are not expected to result in a significant change in practice. We adopted ASU No. 2020-10 effective beginning January 1, 2021. Its adoption did not have a material impact on our consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. ASU 2021-08 requires the company acquiring contract assets and contract liabilities obtained in a business combination to recognize and measure them in accordance with ASC 606, Revenue from Contracts with Customers. At the acquisition date, the company acquiring the business should record related revenue, as if it had originated the contract. Before the update such amounts were recognized by the acquiring company at fair value. The amendments in this ASU are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. We adopted ASU 2021-08 prospectively, effective beginning January 1, 2022. Its adoption did not have a material impact on our consolidated financial statements. In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, which requires certain annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. We adopted ASU No. 2021-10 effective beginning January 1, 2022. Its adoption did not have a material impact on our consolidated financial statements.

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Schedule of Cash and Cash Equivalents


	March 31, 2022		December 31, 2021
Cash and cash equivalents	$	211,298	$	55,712
Restricted cash included in Other assets, net	16,725		16,323
Total cash, cash equivalents, and restricted cash	$	228,023	$	72,035

Schedule of Restrictions on Cash and Cash Equivalents


	March 31, 2022		December 31, 2021
Cash and cash equivalents	$	211,298	$	55,712
Restricted cash included in Other assets, net	16,725		16,323
Total cash, cash equivalents, and restricted cash	$	228,023	$	72,035

Acquisition (Tables)

3 Months Ended

Mar. 31, 2022

Business Combination and Asset Acquisition [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed


	Preliminary Fair Value Currently Estimated as of Acquisition Date
Assets acquired:
Current assets	$	142,136
Goodwill	1,267,079
Intangible assets	295,466
Other non-current assets	371,320
Total assets	2,076,001
Liabilities assumed:
Current liabilities	241,266
Noncurrent liabilities	150,128
Total liabilities	391,394
Fair value of net assets acquired, net of cash	$	1,684,607

Schedule of Pro Forma


	Three Months Ended March 31,
	2022		2021
Net revenue	$	2,684,065	$	2,601,808
Net (loss) income	$	(90,182)	$	74,133

Goodwill and Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Changes in Carrying Amount of Goodwill

The following table summarizes the goodwill balances by segment and the changes in the carrying amount of goodwill through March 31, 2022:


	Products & Healthcare Services		Patient Direct		Consolidated
Carrying amount of goodwill, December 31, 2021	$	106,280	$	283,905	$	390,185
Acquisition	—		1,267,079		1,267,079
Currency translation adjustments	(105)		—		(105)
Carrying amount of goodwill, March 31, 2022	$	106,175	$	1,550,984	$	1,657,159

Schedule of Intangible Assets

Intangible assets subject to amortization at March 31, 2022 and December 31, 2021 were as follows:


	March 31, 2022							December 31, 2021
		Customer Relationships		Tradenames		Other Intangibles			Customer Relationships		Tradenames		Other Intangibles
Gross intangible assets		$	275,429	$	156,937	$	271,761		$	275,526	$	90,000	$	43,189
Accumulated amortization		(152,465)		(35,351)		(21,423)			(146,168)		(33,242)		(19,560)
Net intangible assets		$	122,964	$	121,586	$	250,338		$	129,358	$	56,758	$	23,629
Weighted average useful life		10 years		11 years		5 years			10 years		11 years		8 years

Exit and Realignment Costs (Tables)

3 Months Ended

Mar. 31, 2022

Restructuring and Related Activities [Abstract]

Schedule of Exit And Realignment Charges By Segment

Exit and realignment charges by segment for the three months ended March 31, 2022 and 2021 were as follows:


	Three Months Ended March 31,
	2022		2021
Products & Healthcare Services	$	1,199	$	5,963
Patient Direct	483		—
Total exit and realignment charges	$	1,682	$	5,963

Schedule Of Restructuring And Related Costs Accrual Activity

The following table summarizes the activity related to exit and realignment cost accruals through March 31, 2022 and 2021:


	Total
Accrued exit and realignment costs, December 31, 2021	$	8,306
Provision for exit and realignment activities:
Severance	811
Other	871
Cash payments	(6,903)
Accrued exit and realignment costs, March 31, 2022	$	3,085

Accrued exit and realignment costs, December 31, 2020	$	3,146
Provision for exit and realignment activities:
Information system restructuring costs	1,029
Lease obligations	347
Other	781
Cash payments	(2,915)
Accrued exit and realignment costs, March 31, 2021	$	2,388

Debt (Tables)

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Schedule Of Debt

Debt consists of the following:


	March 31, 2022				December 31, 2021
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Receivables Securitization Program	$	226,169	$	230,000	$	197,026	$	200,000
4.375% Senior Notes, due December 2024	245,286		250,068		245,086		263,263
Revolver	11,700		1