omi-20230331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________________________________________

FORM 10-Q

________________________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-9810

_______________________________________________________

Owens & Minor, Inc.

(Exact name of Registrant as specified in its charter)

_____________________________________________________


Virginia			54-1701843
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

9120 Lockwood Boulevard	Mechanicsville	Virginia	23116
(Address of principal executive offices)			(Zip Code)

Post Office Box 27626, Richmond, Virginia			23261-7626
(Mailing address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code (804) 723-7000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $2 par value per share

OMI

New York Stock Exchange

_________________________________________________________

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “larger accelerated filer”, “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐ (Do not check if a smaller reporting company)	Smaller reporting company	☐
Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of Owens & Minor, Inc.’s common stock outstanding as of April 28, 2023 was 76,205,567 shares.

Table of Contents

Owens & Minor, Inc. and Subsidiaries

Index


Part I. Financial Information		Page

Item 1.	Financial Statements	3
	Consolidated Statements of Operations—Three Months Ended March 31, 2023 and 202 2	3
	Consolidated Statements of Comprehensive (Loss) Income—Three Months Ended March 31, 2023 and 2022	4
	Consolidated Balance Sheets—March 31, 2023 and December 31, 2022	5
	Consolidated Statements of Cash Flows—Three Months Ended March 31, 2023 and 2022	6
	Consolidated Statements of Changes in Equity—Three Months Ended March 31, 2023 and 2022	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	28
Part II. Other Information

Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	29
Item 5.	Other Information	29
Item 6.	Exhibits	29

Table of Contents

Part I. Financial Information

Item 1. Financial Statements

Owens & Minor, Inc. and Subsidiaries

Consolidated Statements of Operations

(unaudited)


	Three Months Ended March 31,
(in thousands, except per share data)	2023		2022
Net revenue	$	2,522,849	$	2,406,952
Cost of goods sold	2,025,542		2,033,504
Gross margin	497,307		373,448
Distribution, selling and administrative expenses	448,722		269,471
Acquisition-related charges and intangible amortization	22,188		42,135
Exit and realignment charges	15,674		1,682
Other operating expense (income), net	916		(899)
Operating income	9,807		61,059
Interest expense, net	42,198		12,019
Other expense, net	1,387		783
(Loss) income before income taxes	(33,778)		48,257
Income tax (benefit) provision	(9,360)		8,978
Net (loss) income	$	(24,418)	$	39,279

Net (loss) income per common share:
Basic	$	(0.32)	$	0.53
Diluted	$	(0.32)	$	0.52

See accompanying notes to consolidated financial statements.

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Owens & Minor, Inc. and Subsidiaries

Consolidated Statements of Comprehensive (Loss) Income

(unaudited)


	Three Months Ended March 31,
(in thousands)	2023		2022
Net (loss) income	$	(24,418)	$	39,279
Other comprehensive income (loss) net of tax:
Currency translation adjustments	5,118		(787)
Change in unrecognized net periodic pension costs	(147)		189
Change in gains and losses on derivative instruments	(3,377)		—
Total other comprehensive income (loss), net of tax	1,594		(598)
Comprehensive (loss) income	$	(22,824)	$	38,681

See accompanying notes to consolidated financial statements.

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Owens & Minor, Inc. and Subsidiaries

Consolidated Balance Sheets

(unaudited)


	March 31,		December 31,
(in thousands, except per share data)	2023		2022
Assets
Current assets
Cash and cash equivalents	$	66,840	$	69,467
Accounts receivable, net of allowances of $9,549 and $9,063	757,802		763,497
Merchandise inventories	1,288,288		1,333,585
Other current assets	155,397		128,636
Total current assets	2,268,327		2,295,185
Property and equipment, net of accumulated depreciation of $482,861 and $450,286	569,908		578,269
Operating lease assets	276,562		280,665
Goodwill	1,639,133		1,636,705
Intangible assets, net	424,530		445,042
Other assets, net	131,743		150,417
Total assets	$	5,310,203	$	5,386,283
Liabilities and equity
Current liabilities
Accounts payable	$	1,165,799	$	1,147,414
Accrued payroll and related liabilities	87,110		93,296
Other current liabilities	377,721		325,756
Total current liabilities	1,630,630		1,566,466
Long-term debt, excluding current portion	2,362,453		2,482,968
Operating lease liabilities, excluding current portion	208,276		215,469
Deferred income taxes	61,099		60,833
Other liabilities	123,345		114,943
Total liabilities	4,385,803		4,440,679
Commitments and contingencies
Equity
Common stock, par value $2 per share; authorized - 200,000 shares; issued and outstanding - 76,196 shares and 76,279 shares	152,391		152,557
Paid-in capital	420,680		418,894
Retained earnings	385,590		410,008
Accumulated other comprehensive loss	(34,261)		(35,855)
Total equity	924,400		945,604
Total liabilities and equity	$	5,310,203	$	5,386,283

See accompanying notes to consolidated financial statements.

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Owens & Minor, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(unaudited)


	Three Months Ended March 31,
(in thousands)	2023		2022
Operating activities:
Net (loss) income	$	(24,418)	$	39,279
Adjustments to reconcile net (loss) income to cash provided by operating activities:
Depreciation and amortization	70,926		24,125
Share-based compensation expense	6,463		5,403
(Benefit) provision for losses on accounts receivable	(521)		5,628
Loss on extinguishment of debt	564		—
Deferred income tax benefit	(591)		(69)
Changes in operating lease right-of-use assets and lease liabilities	(225)		(462)
Gain on sale and dispositions of property and equipment	(8,269)		—
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	5,240		(12,919)
Merchandise inventories	45,832		58,098
Accounts payable	23,082		(6,967)
Net change in other assets and liabilities	36,483		(33,165)
Other, net	3,832		748
Cash provided by operating activities	158,398		79,699
Investing activities:
Acquisition, net of cash acquired	—		(1,576,278)
Additions to property and equipment	(46,150)		(9,609)
Additions to computer software	(5,340)		(1,352)
Proceeds from sale of property and equipment	17,306		3
Cash used for investing activities	(34,184)		(1,587,236)
Financing activities:
Borrowings under amended Receivables Financing Agreement	232,100		—
Repayments under amended Receivables Financing Agreement	(328,100)		—
Repayments of debt	(26,500)		—
Proceeds from issuance of debt	—		1,691,000
Borrowings under revolving credit facility, net and Receivable Financing Agreement	—		41,700
Financing costs paid	—		(33,744)
Other, net	(4,989)		(34,762)
Cash (used for) provided by financing activities	(127,489)		1,664,194
Effect of exchange rate changes on cash, cash equivalents and restricted cash	284		(669)
Net (decrease) increase in cash, cash equivalents and restricted cash	(2,991)		155,988
Cash, cash equivalents and restricted cash at beginning of period	86,185		72,035
Cash, cash equivalents and restricted cash at end of period	$	83,194	$	228,023
Supplemental disclosure of cash flow information:
Income taxes paid, net of refunds	$	2,405	$	4,478
Interest paid	$	32,536	$	12,626
Noncash investing activity:
Unpaid purchases of property and equipment and software at end of period	$	64,658	$	—

See accompanying notes to consolidated financial statements.

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Owens & Minor, Inc. and Subsidiaries

Consolidated Statements of Changes in Equity

(unaudited)


(in thousands, except per share data)	Common Shares Outstanding	Common Stock ($2 par value )		Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Equity
Balance, December 31, 2022	76,279	$	152,557	$	418,894	$	410,008	$	(35,855)	$	945,604
Net loss	—	—		—		(24,418)		—		(24,418)
Other comprehensive income	—	—		—		—		1,594		1,594
Share-based compensation expense, exercises and other	(83)	(166)		1,786		—		—		1,620
Balance, March 31, 2023	76,196	$	152,391	$	420,680	$	385,590	$	(34,261)	$	924,400

Balance, December 31, 2021	75,433	$	150,865	$	440,608	$	387,619	$	(40,591)	$	938,501
Net income	—	—		—		39,279		—		39,279
Other comprehensive loss	—	—		—		—		(598)		(598)
Share-based compensation expense, exercises and other	653	1,307		(30,867)		—		—		(

SEC Form 10-Q filed by Owens & Minor Inc.