Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 26, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
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, $2 par value per share | |
Trading Symbol | OMI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Smaller reporting company | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 76,499,288 | |
Entity Central Index Key | 0000075252 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Net revenue | $ 2,612,680 | $ 2,522,849 |
Cost of goods sold | 2,077,151 | 2,025,542 |
Gross profit | 535,529 | 497,307 |
Distribution, selling and administrative expenses | 477,613 | 448,722 |
Acquisition-related charges and intangible amortization | 20,313 | 22,188 |
Exit and realignment charges, net | 27,356 | 15,674 |
Other operating expense, net | 551 | 916 |
Operating income | 9,696 | 9,807 |
Interest expense, net | 35,655 | 42,198 |
Other expense, net | 1,153 | 1,387 |
Loss before income taxes | (27,112) | (33,778) |
Income tax benefit | (5,226) | (9,360) |
Net loss | $ (21,886) | $ (24,418) |
Net loss per common share | ||
Basic (in dollars per share) | $ (0.29) | $ (0.32) |
Diluted (in dollars per share) | $ (0.29) | $ (0.32) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (21,886) | $ (24,418) |
Other comprehensive (loss) income net of tax: | ||
Currency translation adjustments | (13,266) | 5,118 |
Change in unrecognized net periodic pension costs | 235 | (147) |
Change in gains and losses on derivative instruments | 1,412 | (3,377) |
Total other comprehensive (loss) income, net of tax | (11,619) | 1,594 |
Comprehensive loss | $ (33,505) | $ (22,824) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets | ||
Cash and cash equivalents | $ 244,866 | $ 243,037 |
Accounts receivable, net of allowances of $7,005 and $7,861 | 669,861 | 598,257 |
Merchandise inventories | 1,144,597 | 1,110,606 |
Other current assets | 177,020 | 150,890 |
Total current assets | 2,236,344 | 2,102,790 |
Property and equipment, net of accumulated depreciation and amortization of $546,326 and $546,397 | 501,385 | 543,972 |
Operating lease assets | 349,984 | 296,533 |
Goodwill | 1,635,368 | 1,638,846 |
Intangible assets, net | 342,593 | 361,835 |
Other assets, net | 142,319 | 149,346 |
Total assets | 5,207,993 | 5,093,322 |
Current liabilities | ||
Accounts payable | 1,218,817 | 1,171,882 |
Accrued payroll and related liabilities | 79,480 | 116,398 |
Current portion of long-term debt | 207,658 | 206,904 |
Other current liabilities | 427,136 | 396,701 |
Total current liabilities | 1,933,091 | 1,891,885 |
Long-term debt, excluding current portion | 1,946,005 | 1,890,598 |
Operating lease liabilities, excluding current portion | 276,327 | 222,429 |
Deferred income taxes, net | 34,437 | 41,652 |
Other liabilities | 123,265 | 122,592 |
Total liabilities | 4,313,125 | 4,169,156 |
Commitments and contingencies | ||
Equity | ||
Common stock, par value $2 per share; authorized - 200,000 shares; issued and outstanding - 76,449 shares and 76,546 shares | 152,897 | 153,092 |
Paid-in capital | 438,587 | 434,185 |
Retained earnings | 346,821 | 368,707 |
Accumulated other comprehensive loss | (43,437) | (31,818) |
Total equity | 894,868 | 924,166 |
Total liabilities and equity | $ 5,207,993 | $ 5,093,322 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Allowances for losses on accounts receivable | $ 7,005 | $ 7,861 |
Accumulated depreciation and amortization | $ 546,326 | $ 546,397 |
Common stock, par value (in usd per share) | $ 2 | $ 2 |
Common stock, authorized (shares) | 200,000 | 200,000 |
Common stock, issued (shares) | 76,449 | 76,546 |
Commons stock, outstanding (shares) | 76,449 | 76,546 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating activities: | ||
Net loss | $ (21,886) | $ (24,418) |
Adjustments to reconcile net loss to cash provided by operating activities: | ||
Depreciation and amortization | 74,095 | 70,926 |
Share-based compensation expense | 6,866 | 6,463 |
Provision (benefit) for losses on accounts receivable | 181 | (521) |
Loss on extinguishment of debt | 0 | 564 |
Deferred income tax benefit | (3,659) | (591) |
Changes in operating lease right-of-use assets and lease liabilities | 1,139 | (225) |
Gain on sale and dispositions of property and equipment | (15,619) | (8,269) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (75,144) | 5,240 |
Merchandise inventories | (35,412) | 45,832 |
Accounts payable | 52,926 | 23,082 |
Net change in other assets and liabilities | (39,617) | 36,483 |
Other, net | 3,168 | 3,832 |
Cash (used for) provided by operating activities | (52,962) | 158,398 |
Investing activities: | ||
Additions to property and equipment | (45,997) | (46,150) |
Additions to computer software | (3,411) | (5,340) |
Proceeds from sale of property and equipment | 49,538 | 17,306 |
Other | (2,000) | 0 |
Cash used for investing activities | (1,870) | (34,184) |
Financing activities: | ||
Borrowings under amended Receivables Financing Agreement | 205,000 | 232,100 |
Repayments under amended Receivables Financing Agreement | (139,300) | (328,100) |
Repayments of term loans | (4,625) | (26,500) |
Other, net | (7,755) | (4,989) |
Cash provided by (used for) financing activities | 53,320 | (127,489) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (618) | 284 |
Net decrease in cash, cash equivalents and restricted cash | (2,130) | (2,991) |
Cash, cash equivalents and restricted cash at beginning of period | 272,924 | 86,185 |
Cash, cash equivalents and restricted cash at end of period | 270,794 | 83,194 |
Supplemental disclosure of cash flow information: | ||
Income taxes paid, net | 2,365 | 2,405 |
Interest paid | 18,211 | 32,536 |
Noncash investing activity: | ||
Unpaid purchases of property and equipment and computer software at end of period | $ 69,368 | $ 64,658 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock | Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total |
Beginning balance (in shares) at Dec. 31, 2022 | 76,279 | ||||
Beginning balance at Dec. 31, 2022 | $ 152,557 | $ 418,894 | $ 410,008 | $ (35,855) | $ 945,604 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (24,418) | (24,418) | |||
Other comprehensive income (loss) | 1,594 | 1,594 | |||
Share-based compensation expense, exercises and other (in shares) | (83) | ||||
Share-based compensation expense, exercises and other | $ (166) | 1,786 | 1,620 | ||
Ending balance (in shares) at Mar. 31, 2023 | 76,196 | ||||
Ending balance at Mar. 31, 2023 | $ 152,391 | 420,680 | 385,590 | (34,261) | $ 924,400 |
Beginning balance (in shares) at Dec. 31, 2023 | 76,546 | 76,546 | |||
Beginning balance at Dec. 31, 2023 | $ 153,092 | 434,185 | 368,707 | (31,818) | $ 924,166 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (21,886) | (21,886) | |||
Other comprehensive income (loss) | (11,619) | (11,619) | |||
Share-based compensation expense, exercises and other (in shares) | (97) | ||||
Share-based compensation expense, exercises and other | $ (195) | 4,402 | $ 4,207 | ||
Ending balance (in shares) at Mar. 31, 2024 | 76,449 | 76,449 | |||
Ending balance at Mar. 31, 2024 | $ 152,897 | $ 438,587 | $ 346,821 | $ (43,437) | $ 894,868 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 |
Statement of Stockholders' Equity [Abstract] | |||
Common stock, par value (in usd per share) | $ 2 | $ 2 | $ 2 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1—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, or our) and contain all adjustments 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. We report our business under two distinct segments: Products & Healthcare Services and Patient Direct. The Products & Healthcare Services segment includes our United States (U.S.) distribution division (Medical Distribution), including outsourced logistics and value-added services and our Global Products division which manufactures and sources medical surgical products through our production and kitting operations. The Patient Direct segment includes our home healthcare divisions (Byram and Apria). 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 North America, 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 as of March 31, 2024 and December 31, 2023 includes cash held in an escrow account as required by the Centers for Medicare & Medicaid Services in conjunction with the Bundled Payments for Care Improvement initiatives related to wind-down costs of Fusion5, as well as $9.5 million and $13.5 million of cash deposits received subject to limitations on use until remitted to a third-party financial institution (the Purchaser), pursuant to the Master Receivables Purchase Agreement (RPA). 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, 2024 December 31, 2023 Cash and cash equivalents $ 244,866 $ 243,037 Restricted cash included in Other current assets 25,928 29,887 Total cash, cash equivalents, and restricted cash $ 270,794 $ 272,924 Rental Revenue Within our Patient Direct segment, revenues are recognized under fee-for-service arrangements for equipment we rent to patients and sales of equipment, supplies and other items we sell to patients. Revenue that is generated from equipment that we rent to patients is primarily recognized over the noncancelable rental period, typically one month, and commences on delivery of the equipment to the patients. Revenues are recorded at amounts estimated to be received under reimbursement arrangements with third-party payors, including private insurers, prepaid health plans, Medicare, Medicaid and patients. Rental revenue, less estimated adjustments, is recognized as earned on a straight-line basis over the noncancelable lease term. We recorded $147 million and $172 million for the three months ended March 31, 2024 and 2023 in revenue related to equipment we rent to patients. Sales of Accounts Receivable On March 14, 2023, we entered into the RPA, pursuant to which accounts receivable with an aggregate outstanding amount not to exceed $200 million are sold, on a limited-recourse basis, to the Purchaser in exchange for cash. As of March 31, 2024 and December 31, 2023, there were a total of $103 million and $124 million of uncollected accounts receivable, that had been sold and removed from our consolidated balance sheets. We account for these transactions as sales with the sold receivables removed from our consolidated balance sheets. Under the RPA, we provide certain servicing and collection actions on behalf of the Purchaser; however, we do not maintain any beneficial interest in the accounts receivable sold. Proceeds from the sale of accounts receivable are recorded as an increase to cash and cash equivalents and a reduction to accounts receivable, net of allowances, in the consolidated balance sheets. Cash received from the sale of accounts receivable, net of payments made to the Purchaser, is reflected as cash provided by operating activities in the consolidated statements of cash flows. Total accounts receivable sold under the RPA were $515 million for the three months ended March 31, 2024. During the three months ended March 31, 2024, we received net cash proceeds of $512 million from the sale of accounts receivable under the RPA and collected $536 million of the sold accounts receivable. No accounts receivables were sold under the RPA for the three months ended March 31, 2023. The losses on sale of accounts receivable, inclusive of professional fees incurred to establish the agreement, recorded in other operating expense, net in the consolidated statements of operations were $3.3 million and $0.8 million for the three months ended March 31, 2024 and 2023. The RPA is separate and distinct from the accounts receivable securitization program (the Receivables Financing Agreement). |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Note 2—Fair Value Fair value is determined based on assumptions that a market participant would use in pricing an asset or liability. The assumptions used are in accordance with a three-tier hierarchy, defined by GAAP, that draws a distinction between market participant assumptions based on (i) observable inputs such as quoted prices in active markets (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2) and (iii) unobservable inputs that require the use of present value and other valuation techniques in the determination of fair value (Level 3). The carrying amounts of cash and cash equivalents, restricted cash, 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 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 5 for the fair value of debt. The fair value of our derivative contracts is 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 7 for the fair value of derivatives. Our acquisitions may include contingent consideration as part of the purchase price. The fair value of contingent consideration is estimated as of the acquisition date and at the end of each subsequent reporting period based on the present value of the contingent payments to be made using a weighted probability of possible payments (Level 3). Subsequent changes in fair value are recorded as adjustments to acquisition-related charges and intangible amortization within the consolidated statements of operations. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Note 3—Goodwill and Intangible Assets The following table summarizes the goodwill balances by segment and the changes in the carrying amount of goodwill at March 31, 2024: Products & Healthcare Patient Direct Services Consolidated Carrying amount of goodwill, December 31, 2023 $ 1,535,252 $ 103,594 $ 1,638,846 Currency translation adjustments — (3,478) (3,478) Carrying amount of goodwill, March 31, 2024 $ 1,535,252 $ 100,116 $ 1,635,368 Intangible assets subject to amortization, which exclude indefinite-lived intangible assets, at March 31, 2024 and December 31, 2023 were as follows: March 31, 2024 December 31, 2023 Customer Other Customer Other Relationships Tradenames Intangibles Relationships Tradenames Intangibles Gross intangible assets $ 397,193 $ 202,000 $ 73,055 $ 433,750 $ 202,000 $ 73,958 Accumulated amortization (213,793) (74,544) (43,318) (236,791) (69,655) (41,427) Net intangible assets $ 183,400 $ 127,456 $ 29,737 $ 196,959 $ 132,345 $ 32,531 Weighted average useful life 14 years 10 years 6 years 13 years 10 years 6 years At March 31, 2024 and December 31, 2023, $236 million and $250 million in net intangible assets were held in the Patient Direct segment and $107 million and $112 million were held in the Products & Healthcare Services segment. Amortization expense for intangible assets was $20.3 million and $20.9 million for the three months ended March 31, 2024 and 2023. As of March 31, 2024, based on the current carrying value of intangible assets subject to amortization, estimated amortization expense were as follows: Year 2024 (remainder) $ 44,080 2025 54,389 2026 50,036 2027 41,687 2028 32,008 Thereafter 118,393 Total future amortization $ 340,593 |
Exit and Realignment Costs
Exit and Realignment Costs | 3 Months Ended |
Mar. 31, 2024 | |
Restructuring and Related Activities [Abstract] | |
Exit and Realignment Costs | Note 4—Exit and Realignment Costs We periodically incur exit and realignment and other charges associated with optimizing our operations which includes the consolidation of certain facilities, IT strategic initiatives and other strategic actions. These charges also include costs associated with our Operating Model Realignment Program, which include professional fees, severance and other costs to streamline functions and processes. Exit and realignment charges, net were $27.4 million and $15.7 million for the three months ended March 31, 2024 and 2023. These amounts are excluded from our segments’ operating income. During the three months ended March 31, 2024, exit and realignment charges, net included a gain of $7.4 million associated with the sale of our corporate headquarters and $34.7 million in charges under our Operating Model Realignment Program and IT strategic initiatives. We expect to incur material future costs relating to our Operating Model Realignment Program and IT strategic initiatives, which we are not able to reasonably estimate. The following table summarizes the activity related to exit and realignment cost accruals, which are classified as other current liabilities in our consolidated balance sheets, through March 31, 2024 and 2023: Total Accrued exit and realignment costs, December 31, 2023 $ 20,047 Provision for exit and realignment activities: Severance 184 Professional fees 25,625 Other 2,493 Cash payments (11,728) Accrued exit and realignment costs, March 31, 2024 $ 36,621 Accrued exit and realignment costs, December 31, 2022 $ 969 Provision for exit and realignment activities: Severance 4,127 Professional fees 9,012 Other 2,535 Cash payments (5,546) Accrued exit and realignment costs, March 31, 2023 $ 11,097 In addition to the exit and realignment accruals in the preceding table and the $7.4 million gain associated with the sale of our corporate headquarters, we also incurred $6.5 million of costs that were expensed as incurred for the three months ended March 31, 2024, which primarily related to accelerated depreciation of certain assets held in our Products & Healthcare Services segment. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Debt | Note 5—Debt Debt, net of unamortized deferred financing costs, consists of the following: March 31, 2024 December 31, 2023 Carrying Estimated Carrying Estimated Amount Fair Value Amount Fair Value 4.375% Senior Notes, due December 2024 $ 171,306 $ 169,816 $ 171,232 $ 168,754 Receivables Financing Agreement 64,438 65,700 — — Term Loan A 385,003 389,513 387,591 390,668 4.500% Senior Notes, due March 2029 473,162 438,337 472,869 422,647 Term Loan B 502,481 518,722 503,212 518,293 6.625% Senior Notes, due April 2030 540,947 547,661 540,445 529,472 Finance leases and other 16,326 16,326 22,153 22,153 Total debt 2,153,663 2,146,075 2,097,502 2,051,987 Less current maturities (207,658) (207,658) (206,904) (206,904) Long-term debt $ 1,946,005 $ 1,938,417 $ 1,890,598 $ 1,845,083 We have $171 million of 4.375% senior notes due in December 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 in the Indenture which governs the 2024 Notes On March 29, 2022, we entered into a Security Agreement Supplement pursuant to which the Security and Pledge Agreement (the Security Agreement), dated March 10, 2021 was supplemented to grant collateral on behalf of the holders of the 2024 Notes, and the parties secured under the credit agreements including first priority liens and security interests in (a) all present and future shares of capital stock owned by the Grantors (as defined in the Security Agreement) in the Grantors’ present and future subsidiaries, subject to certain customary exceptions, and (b) all present and future personal property and assets of the Grantors, subject to certain exceptions. The Receivables Financing Agreement has a maximum borrowing capacity of $450 million. 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, as further amended by the Fifth Amendment to the Receivables Financing Agreement). Under the Receivables Financing Agreement, certain of our accounts receivable balances are sold to our wholly owned special purpose entity, O&M Funding LLC. The Receivables Financing Agreement matures in March 2025. We had $65.7 million in principal outstanding and no borrowings at March 31, 2024 and December 31, 2023 under our Receivables Financing Agreement. At March 31, 2024 and December 31, 2023, we had maximum revolving borrowing capacity of $384 million and $450 million under our Receivables Financing Agreement. 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 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 the sum of either Term SOFR or the Base Rate and 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 10, 2021, we issued $500 million of 4.500% senior unsecured notes due in March 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 issued $600 million of 6.625% senior unsecured notes due in April 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 Indenture dated March 29, 2022 (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 the 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 the 2030 Unsecured Notes are subordinated to any of our secured indebtedness, including indebtedness under our credit agreements. We have a revolving credit agreement with an administrative agent and collateral agent and a syndicate of financial institutions, as lenders (Revolving Credit Agreement) with a maximum borrowing capacity of $450 million. The interest rate under our Revolving Credit Agreement is based on the Adjusted Term SOFR Rate (as defined in the Revolving Credit Agreement). The Revolving Credit Agreement matures in March 2027. At March 31, 2024 and December 31, 2023, our Revolving Credit Agreement was undrawn, and we had letters of credit, which reduce Revolver availability, totaling $26.7 million and $27.4 million, leaving $423 million available for borrowing at the end of each period. We also had letters of credit and bank guarantees which support certain leased facilities as well as other normal business activities in the U.S. and Europe that were issued outside of the Revolving Credit Agreement for $3.0 million as of March 31, 2024 and December 31, 2023. The Revolving Credit Agreement, the Credit Agreement, the Receivables Financing Agreement, the 2024 Notes, the 2029 Unsecured Notes and the 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 applicable 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, 2024. As of March 31, 2024, scheduled future principal payments of debt, excluding finance leases and other, were as follows: Year 2024 (remainder) $ 194,572 2025 106,075 2026 43,500 2027 305,375 2028 6,000 2029 965,654 2030 552,189 Of the $195 million due in 2024, $179 million is due in December 2024. Current maturities at March 31, 2024 include $171 million in principal payments on our 2024 Notes, $25.0 million in principal payments on our Term Loan A, $6.0 million in principal payments on our Term Loan B, and $5.3 million in current portion of finance leases and other. |
Retirement Plans
Retirement Plans | 3 Months Ended |
Mar. 31, 2024 | |
Retirement Benefits [Abstract] | |
Retirement Plans | Note 6—Retirement Plans We have a frozen noncontributory, unfunded retirement plan for certain retirees in the U.S. (U.S. Retirement Plan). As of March 31, 2024 and December 31, 2023, the accumulated benefit obligation of the U.S. Retirement Plan was $33.7 million and $34.1 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, 2024 and 2023 were as follows: Three Months Ended March 31, 2024 2023 Service cost $ 458 $ 441 Interest cost 645 710 Recognized net actuarial loss 81 123 Net periodic benefit cost $ 1,184 $ 1,274 |
Derivatives
Derivatives | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Note 7—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 pay interest on our Credit Agreement which fluctuates based on changes in our benchmark interest rates. In order to mitigate the risk of increases in benchmark rates on our term loans, 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 interest rate swaps were designated as cash flow hedges. Cash flows related to the interest rate swap agreement are included in interest expense, net. We determine the fair value of our foreign currency derivatives and interest rate swaps 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. 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. The following table summarizes the terms and fair value of our outstanding derivative financial instruments as of March 31, 2024: Notional Derivative Assets Derivative Liabilities Amount Maturity Date Classification Fair Value Classification Fair Value Cash flow hedges Interest rate swaps $ 300,000 March 2027 Other assets, net $ 10,356 Other liabilities $ — Economic (non-designated) hedges Foreign currency contracts $ 69,335 April 2024 Other current assets $ 129 Other current liabilities $ 44 The following table summarizes the terms and fair value of our outstanding derivative financial instruments as of December 31, 2023: Notional Derivative Assets Derivative Liabilities Amount Maturity Date Classification Fair Value Classification Fair Value Cash flow hedges Interest rate swaps $ 350,000 March 2027 Other assets, net $ 8,447 Other liabilities $ — Economic (non-designated) hedges Foreign currency contracts $ 78,436 January 2024 Other current assets $ 1,043 Other current liabilities $ — The notional amount of the interest rate swaps represents the amount in effect at the end of the period. Based on contractual terms, the notional amount will decrease in increments of $50 million on the last business day of March of each year until the maturity date. The following table summarizes the effect of cash flow hedge accounting on our consolidated statements of operations for the three months ended March 31, 2024: Amount of Gain Recognized in Other Comprehensive Income (Loss) Location of Gain 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 Gain Reclassified from Accumulated Other Comprehensive Loss into Net Loss Interest rate swaps $ 4,557 Interest expense, net $ (35,655) $ 2,649 The amount of ineffectiveness associated with these contracts was immaterial for the period presented. The following table summarizes the effect of cash flow hedge accounting on our consolidated statements of operations for the three months ended March 31, 2023: Amount of Loss Recognized in Other Comprehensive Income (Loss) Location of Gain 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 Gain Reclassified from Accumulated Other Comprehensive Loss into Net Loss Interest rate swaps $ (2,387) Interest expense, net $ (42,198) $ 2,176 The amount of ineffectiveness associated with these contracts was immaterial for the period presented. For the three months ended March 31, 2024 and 2023, we recognized a loss of $4.2 million and no gain (loss) 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 expense, net for our foreign exchange contracts. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8—Income Taxes The effective tax rate was 19.3% for the three months ended March 31, 2024, compared to 27.7% in the same period of 2023. The change in these rates were primarily from changes in results of operations in the jurisdictions in which we operate and changes in forecasted results reflected in the tax rates. The liability for unrecognized tax benefits was $22.8 million at March 31, 2024 and $22.7 million at December 31, 2023. Included in the liability at March 31, 2024 and December 31, 2023 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 for all years subject to the NOPAs. 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. |
Net Loss per Common Share
Net Loss per Common Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Net Loss per Common Share | Note 9—Net Loss per Common Share The following summarizes the calculation of net loss per common share attributable to common shareholders for the three months ended March 31, 2024 and 2023: Three Months Ended March 31, (in thousands, except per share data) 2024 2023 Net loss $ (21,886) $ (24,418) Weighted average shares outstanding - basic 76,319 75,177 Dilutive shares — — Weighted average shares outstanding - diluted 76,319 75,177 Net loss per common share: Basic $ (0.29) $ (0.32) Diluted $ (0.29) $ (0.32) Share-based awards for the three months ended March 31, 2024 and 2023 of approximately 1.6 million and 1.7 million shares were excluded from the calculation of net loss per diluted common share as the effect would be anti-dilutive. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Accumulated Other Comprehensive (Loss) Income | Note 10—Accumulated Other Comprehensive (Loss) Income The following table shows the changes in accumulated other comprehensive (loss) income by component for the three months ended March 31, 2024 and 2023: Currency Retirement Translation Plans Adjustments Derivatives Total Accumulated other comprehensive (loss) income, December 31, 2023 $ (5,115) $ (32,954) $ 6,251 $ (31,818) Other comprehensive income (loss) before reclassifications 234 (13,266) 4,557 (8,475) Income tax (59) — (1,185) (1,244) Other comprehensive income (loss) before reclassifications, net of tax 175 (13,266) 3,372 (9,719) Amounts reclassified from accumulated other comprehensive income (loss) 81 — (2,649) (2,568) Income tax (21) — 689 668 Amounts reclassified from accumulated other comprehensive income (loss), net of tax 60 — (1,960) (1,900) Other comprehensive income (loss) 235 (13,266) 1,412 (11,619) Accumulated other comprehensive (loss) income, March 31, 2024 $ (4,880) $ (46,220) $ 7,663 $ (43,437) Currency Retirement Translation Plans Adjustments Derivatives Total Accumulated other comprehensive (loss) income, December 31, 2022 $ (7,201) $ (40,095) $ 11,441 $ (35,855) Other comprehensive income (loss) before reclassifications — 5,118 (2,387) 2,731 Income tax — — 621 621 Other comprehensive income (loss) before reclassifications, net of tax — 5,118 (1,766) 3,352 Amounts reclassified from accumulated other comprehensive income (loss) 123 — (2,176) (2,053) Income tax (270) — 565 295 Amounts reclassified from accumulated other comprehensive income (loss), net of tax (147) — (1,611) (1,758) Other comprehensive (loss) income (147) 5,118 (3,377) 1,594 Accumulated other comprehensive (loss) income, March 31, 2023 $ (7,348) $ (34,977) $ 8,064 $ (34,261) We include amounts reclassified out of accumulated other comprehensive (loss) income related to defined benefit pension plans as a component of net periodic pension cost recorded in Other expense, net. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Segment Information | Note 11—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 U.S. distribution division (Medical Distribution), including our outsourced logistics and value-added services businesses, and our Global Products division which manufactures and sources medical surgical products through our production and kitting operations. The Patient Direct segment includes our home healthcare divisions (Byram and Apria). We evaluate the performance of our segments based on their operating income excluding acquisition-related charges and intangible amortization and exit and realignment charges, net, along with other adjustments, 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, 2024 2023 Net revenue: Products & Healthcare Services $ 1,974,837 $ 1,915,489 Patient Direct 637,843 607,360 Consolidated net revenue $ 2,612,680 $ 2,522,849 Operating income: Products & Healthcare Services $ 11,486 $ 1,820 Patient Direct 45,879 45,849 Acquisition-related charges and intangible amortization (20,313) (22,188) Exit and realignment charges, net (27,356) (15,674) Consolidated operating income $ 9,696 $ 9,807 Depreciation and amortization: Products & Healthcare Services $ 23,366 $ 18,566 Patient Direct 50,729 52,360 Consolidated depreciation and amortization $ 74,095 $ 70,926 Share-based compensation: Products & Healthcare Services $ 4,769 $ 4,498 Patient Direct 1,407 1,852 Other (1) 690 113 Consolidated share-based compensation $ 6,866 $ 6,463 Capital expenditures: Products & Healthcare Services $ 8,250 $ 6,332 Patient Direct 41,158 45,158 Consolidated capital expenditures $ 49,408 $ 51,490 (1) Other share-based compensation expense is captured within exit and realignment charges, net or acquisition-related charges for the three months ended March 31, 2024 and 2023. March 31, 2024 December 31, 2023 Total assets: Products & Healthcare Services $ 2,456,341 $ 2,359,825 Patient Direct 2,506,786 2,490,460 Segment assets 4,963,127 4,850,285 Cash and cash equivalents 244,866 243,037 Consolidated total assets $ 5,207,993 $ 5,093,322 For the three months ended March 31, 2024 and 2023, non-cash adjustments to merchandise inventories valued at the lower of cost or market, with the approximate cost determined by the last-in, first-out (LIFO) method for distribution inventories in the U.S. within our Products & Healthcare Services segment were $5.4 million and $4.9 million. The net book value of patient service equipment dispositions were $9.6 million and $9.0 million for the three months ended March 31, 2024 and 2023, within the Patient Direct segment. 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, 2024 2023 Net revenue: United States $ 2,550,610 $ 2,452,936 International 62,070 69,913 Consolidated net revenue $ 2,612,680 $ 2,522,849 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Note 12—Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board Accounting Standards Update Chief Operating Decision Maker (CODM), the title and position In December 2023, the FASB Issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which will require additional annual income tax disclosures, including disclosure of reconciling items by jurisdiction and nature to the extent those items exceed a specified threshold. In addition, this ASU will require disclosure of income taxes paid, net of refunds received disaggregated by federal, state, and foreign and by jurisdiction if the amount is more than 5% of total income tax payments, net of refunds received. The amendments in this ASU are effective for us in annual periods beginning after December 15, 2024. The amendments in this ASU are required to be applied on a prospective basis and retrospective adoption is permitted. We expect this ASU to only impact our disclosures with no impacts to our results of operations, financial condition and cash flows. |
Commitments, Contingent Liabili
Commitments, Contingent Liabilities, and Legal Proceedings | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingent Liabilities, and Legal Proceedings | Note 13—Commitments, Contingent Liabilities, and Legal Proceedings Commitments include $48.4 million of legally binding lease payments for the Morgantown, West Virginia center of excellence for medical supplies and logistics lease signed, but not yet commenced. Refer to our Annual Report on Form 10-K for the year ended December 31, 2023 for disclosure of other material contractual obligations. We are party to various legal claims that are ordinary and incidental to our business, including ones related to commercial disputes, employment, workers’ compensation, product liability, regulatory and other matters. We maintain insurance coverage for employment, product liability, workers’ compensation and other personal injury litigation matters, subject to policy limits, applicable deductibles and insurer solvency. We establish reserves from time to time based upon periodic assessment of the potential outcomes of pending matters. Based on current knowledge and the advice of counsel, we believe that the accrual as of March 31, 2024 for currently pending matters considered probable of loss, which is not material, is sufficient. In addition, we believe that other currently pending matters are not reasonably possible to result in a material loss, as payment of the amounts claimed is remote, the claims are immaterial, individually and in the aggregate, or the claims are expected to be adequately covered by insurance, subject to policy limits, applicable deductibles, exclusions and insurer solvency. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation The accompanying unaudited consolidated financial statements include the accounts of Owens & Minor, Inc. and the subsidiaries it controls (we, us, or our) and contain all adjustments 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. We report our business under two distinct segments: Products & Healthcare Services and Patient Direct. The Products & Healthcare Services segment includes our United States (U.S.) distribution division (Medical Distribution), including outsourced logistics and value-added services and our Global Products division which manufactures and sources medical surgical products through our production and kitting operations. The Patient Direct segment includes our home healthcare divisions (Byram and Apria). |
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 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 North America, 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 as of March 31, 2024 and December 31, 2023 includes cash held in an escrow account as required by the Centers for Medicare & Medicaid Services in conjunction with the Bundled Payments for Care Improvement initiatives related to wind-down costs of Fusion5, as well as $9.5 million and $13.5 million of cash deposits received subject to limitations on use until remitted to a third-party financial institution (the Purchaser), pursuant to the Master Receivables Purchase Agreement (RPA). 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, 2024 December 31, 2023 Cash and cash equivalents $ 244,866 $ 243,037 Restricted cash included in Other current assets 25,928 29,887 Total cash, cash equivalents, and restricted cash $ 270,794 $ 272,924 |
Rental Revenue | Rental Revenue Within our Patient Direct segment, revenues are recognized under fee-for-service arrangements for equipment we rent to patients and sales of equipment, supplies and other items we sell to patients. Revenue that is generated from equipment that we rent to patients is primarily recognized over the noncancelable rental period, typically one month, and commences on delivery of the equipment to the patients. Revenues are recorded at amounts estimated to be received under reimbursement arrangements with third-party payors, including private insurers, prepaid health plans, Medicare, Medicaid and patients. Rental revenue, less estimated adjustments, is recognized as earned on a straight-line basis over the noncancelable lease term. We recorded $147 million and $172 million for the three months ended March 31, 2024 and 2023 in revenue related to equipment we rent to patients. |
Sales of Accounts Receivable | Sales of Accounts Receivable On March 14, 2023, we entered into the RPA, pursuant to which accounts receivable with an aggregate outstanding amount not to exceed $200 million are sold, on a limited-recourse basis, to the Purchaser in exchange for cash. As of March 31, 2024 and December 31, 2023, there were a total of $103 million and $124 million of uncollected accounts receivable, that had been sold and removed from our consolidated balance sheets. We account for these transactions as sales with the sold receivables removed from our consolidated balance sheets. Under the RPA, we provide certain servicing and collection actions on behalf of the Purchaser; however, we do not maintain any beneficial interest in the accounts receivable sold. Proceeds from the sale of accounts receivable are recorded as an increase to cash and cash equivalents and a reduction to accounts receivable, net of allowances, in the consolidated balance sheets. Cash received from the sale of accounts receivable, net of payments made to the Purchaser, is reflected as cash provided by operating activities in the consolidated statements of cash flows. Total accounts receivable sold under the RPA were $515 million for the three months ended March 31, 2024. During the three months ended March 31, 2024, we received net cash proceeds of $512 million from the sale of accounts receivable under the RPA and collected $536 million of the sold accounts receivable. No accounts receivables were sold under the RPA for the three months ended March 31, 2023. The losses on sale of accounts receivable, inclusive of professional fees incurred to establish the agreement, recorded in other operating expense, net in the consolidated statements of operations were $3.3 million and $0.8 million for the three months ended March 31, 2024 and 2023. The RPA is separate and distinct from the accounts receivable securitization program (the Receivables Financing Agreement). |
Fair Value Measurements | Fair value is determined based on assumptions that a market participant would use in pricing an asset or liability. The assumptions used are in accordance with a three-tier hierarchy, defined by GAAP, that draws a distinction between market participant assumptions based on (i) observable inputs such as quoted prices in active markets (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2) and (iii) unobservable inputs that require the use of present value and other valuation techniques in the determination of fair value (Level 3). The carrying amounts of cash and cash equivalents, restricted cash, 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 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 5 for the fair value of debt. The fair value of our derivative contracts is 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 7 for the fair value of derivatives. Our acquisitions may include contingent consideration as part of the purchase price. The fair value of contingent consideration is estimated as of the acquisition date and at the end of each subsequent reporting period based on the present value of the contingent payments to be made using a weighted probability of possible payments (Level 3). Subsequent changes in fair value are recorded as adjustments to acquisition-related charges and intangible amortization within the consolidated statements of operations. |
Recent Accounting Pronouncements | Note 12—Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board Accounting Standards Update Chief Operating Decision Maker (CODM), the title and position In December 2023, the FASB Issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which will require additional annual income tax disclosures, including disclosure of reconciling items by jurisdiction and nature to the extent those items exceed a specified threshold. In addition, this ASU will require disclosure of income taxes paid, net of refunds received disaggregated by federal, state, and foreign and by jurisdiction if the amount is more than 5% of total income tax payments, net of refunds received. The amendments in this ASU are effective for us in annual periods beginning after December 15, 2024. The amendments in this ASU are required to be applied on a prospective basis and retrospective adoption is permitted. We expect this ASU to only impact our disclosures with no impacts to our results of operations, financial condition and cash flows. |
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 U.S. distribution division (Medical Distribution), including our outsourced logistics and value-added services businesses, and our Global Products division which manufactures and sources medical surgical products through our production and kitting operations. The Patient Direct segment includes our home healthcare divisions (Byram and Apria). |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | 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, 2024 December 31, 2023 Cash and cash equivalents $ 244,866 $ 243,037 Restricted cash included in Other current assets 25,928 29,887 Total cash, cash equivalents, and restricted cash $ 270,794 $ 272,924 |
Schedule restricted on cash and cash equivalents | 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, 2024 December 31, 2023 Cash and cash equivalents $ 244,866 $ 243,037 Restricted cash included in Other current assets 25,928 29,887 Total cash, cash equivalents, and restricted cash $ 270,794 $ 272,924 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table summarizes the goodwill balances by segment and the changes in the carrying amount of goodwill at March 31, 2024: Products & Healthcare Patient Direct Services Consolidated Carrying amount of goodwill, December 31, 2023 $ 1,535,252 $ 103,594 $ 1,638,846 Currency translation adjustments — (3,478) (3,478) Carrying amount of goodwill, March 31, 2024 $ 1,535,252 $ 100,116 $ 1,635,368 |
Intangible Assets | Intangible assets subject to amortization, which exclude indefinite-lived intangible assets, at March 31, 2024 and December 31, 2023 were as follows: March 31, 2024 December 31, 2023 Customer Other Customer Other Relationships Tradenames Intangibles Relationships Tradenames Intangibles Gross intangible assets $ 397,193 $ 202,000 $ 73,055 $ 433,750 $ 202,000 $ 73,958 Accumulated amortization (213,793) (74,544) (43,318) (236,791) (69,655) (41,427) Net intangible assets $ 183,400 $ 127,456 $ 29,737 $ 196,959 $ 132,345 $ 32,531 Weighted average useful life 14 years 10 years 6 years 13 years 10 years 6 years |
Schedule of estimated amortization expense | As of March 31, 2024, based on the current carrying value of intangible assets subject to amortization, estimated amortization expense were as follows: Year 2024 (remainder) $ 44,080 2025 54,389 2026 50,036 2027 41,687 2028 32,008 Thereafter 118,393 Total future amortization $ 340,593 |
Exit and Realignment Costs (Tab
Exit and Realignment Costs (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Exit and Realignment Cost Accrual Activity | The following table summarizes the activity related to exit and realignment cost accruals, which are classified as other current liabilities in our consolidated balance sheets, through March 31, 2024 and 2023: Total Accrued exit and realignment costs, December 31, 2023 $ 20,047 Provision for exit and realignment activities: Severance 184 Professional fees 25,625 Other 2,493 Cash payments (11,728) Accrued exit and realignment costs, March 31, 2024 $ 36,621 Accrued exit and realignment costs, December 31, 2022 $ 969 Provision for exit and realignment activities: Severance 4,127 Professional fees 9,012 Other 2,535 Cash payments (5,546) Accrued exit and realignment costs, March 31, 2023 $ 11,097 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt, net of unamortized deferred financing costs, consists of the following: March 31, 2024 December 31, 2023 Carrying Estimated Carrying Estimated Amount Fair Value Amount Fair Value 4.375% Senior Notes, due December 2024 $ 171,306 $ 169,816 $ 171,232 $ 168,754 Receivables Financing Agreement 64,438 65,700 — — Term Loan A 385,003 389,513 387,591 390,668 4.500% Senior Notes, due March 2029 473,162 438,337 472,869 422,647 Term Loan B 502,481 518,722 503,212 518,293 6.625% Senior Notes, due April 2030 540,947 547,661 540,445 529,472 Finance leases and other 16,326 16,326 22,153 22,153 Total debt 2,153,663 2,146,075 2,097,502 2,051,987 Less current maturities (207,658) (207,658) (206,904) (206,904) Long-term debt $ 1,946,005 $ 1,938,417 $ 1,890,598 $ 1,845,083 |
Schedule of Maturities of Long-Term Debt | As of March 31, 2024, scheduled future principal payments of debt, excluding finance leases and other, were as follows: Year 2024 (remainder) $ 194,572 2025 106,075 2026 43,500 2027 305,375 2028 6,000 2029 965,654 2030 552,189 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Retirement Benefits [Abstract] | |
Schedule of Components of Net Periodic Benefit Cost | The components of net periodic benefit cost for the three months ended March 31, 2024 and 2023 were as follows: Three Months Ended March 31, 2024 2023 Service cost $ 458 $ 441 Interest cost 645 710 Recognized net actuarial loss 81 123 Net periodic benefit cost $ 1,184 $ 1,274 |
Derivatives (Tables)
Derivatives (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The following table summarizes the terms and fair value of our outstanding derivative financial instruments as of March 31, 2024: Notional Derivative Assets Derivative Liabilities Amount Maturity Date Classification Fair Value Classification Fair Value Cash flow hedges Interest rate swaps $ 300,000 March 2027 Other assets, net $ 10,356 Other liabilities $ — Economic (non-designated) hedges Foreign currency contracts $ 69,335 April 2024 Other current assets $ 129 Other current liabilities $ 44 The following table summarizes the terms and fair value of our outstanding derivative financial instruments as of December 31, 2023: Notional Derivative Assets Derivative Liabilities Amount Maturity Date Classification Fair Value Classification Fair Value Cash flow hedges Interest rate swaps $ 350,000 March 2027 Other assets, net $ 8,447 Other liabilities $ — Economic (non-designated) hedges Foreign currency contracts $ 78,436 January 2024 Other current assets $ 1,043 Other current liabilities $ — |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The following table summarizes the effect of cash flow hedge accounting on our consolidated statements of operations for the three months ended March 31, 2024: Amount of Gain Recognized in Other Comprehensive Income (Loss) Location of Gain 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 Gain Reclassified from Accumulated Other Comprehensive Loss into Net Loss Interest rate swaps $ 4,557 Interest expense, net $ (35,655) $ 2,649 The amount of ineffectiveness associated with these contracts was immaterial for the period presented. The following table summarizes the effect of cash flow hedge accounting on our consolidated statements of operations for the three months ended March 31, 2023: Amount of Loss Recognized in Other Comprehensive Income (Loss) Location of Gain 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 Gain Reclassified from Accumulated Other Comprehensive Loss into Net Loss Interest rate swaps $ (2,387) Interest expense, net $ (42,198) $ 2,176 |
Net Loss per Common Share (Tabl
Net Loss per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Summary of Calculation of Net Loss Per Common Share | The following summarizes the calculation of net loss per common share attributable to common shareholders for the three months ended March 31, 2024 and 2023: Three Months Ended March 31, (in thousands, except per share data) 2024 2023 Net loss $ (21,886) $ (24,418) Weighted average shares outstanding - basic 76,319 75,177 Dilutive shares — — Weighted average shares outstanding - diluted 76,319 75,177 Net loss per common share: Basic $ (0.29) $ (0.32) Diluted $ (0.29) $ (0.32) |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive (Loss) Income (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive (Loss) Income | The following table shows the changes in accumulated other comprehensive (loss) income by component for the three months ended March 31, 2024 and 2023: Currency Retirement Translation Plans Adjustments Derivatives Total Accumulated other comprehensive (loss) income, December 31, 2023 $ (5,115) $ (32,954) $ 6,251 $ (31,818) Other comprehensive income (loss) before reclassifications 234 (13,266) 4,557 (8,475) Income tax (59) — (1,185) (1,244) Other comprehensive income (loss) before reclassifications, net of tax 175 (13,266) 3,372 (9,719) Amounts reclassified from accumulated other comprehensive income (loss) 81 — (2,649) (2,568) Income tax (21) — 689 668 Amounts reclassified from accumulated other comprehensive income (loss), net of tax 60 — (1,960) (1,900) Other comprehensive income (loss) 235 (13,266) 1,412 (11,619) Accumulated other comprehensive (loss) income, March 31, 2024 $ (4,880) $ (46,220) $ 7,663 $ (43,437) Currency Retirement Translation Plans Adjustments Derivatives Total Accumulated other comprehensive (loss) income, December 31, 2022 $ (7,201) $ (40,095) $ 11,441 $ (35,855) Other comprehensive income (loss) before reclassifications — 5,118 (2,387) 2,731 Income tax — — 621 621 Other comprehensive income (loss) before reclassifications, net of tax — 5,118 (1,766) 3,352 Amounts reclassified from accumulated other comprehensive income (loss) 123 — (2,176) (2,053) Income tax (270) — 565 295 Amounts reclassified from accumulated other comprehensive income (loss), net of tax (147) — (1,611) (1,758) Other comprehensive (loss) income (147) 5,118 (3,377) 1,594 Accumulated other comprehensive (loss) income, March 31, 2023 $ (7,348) $ (34,977) $ 8,064 $ (34,261) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Financial Information by Segment | The following tables present financial information by segment: Three Months Ended March 31, 2024 2023 Net revenue: Products & Healthcare Services $ 1,974,837 $ 1,915,489 Patient Direct 637,843 607,360 Consolidated net revenue $ 2,612,680 $ 2,522,849 Operating income: Products & Healthcare Services $ 11,486 $ 1,820 Patient Direct 45,879 45,849 Acquisition-related charges and intangible amortization (20,313) (22,188) Exit and realignment charges, net (27,356) (15,674) Consolidated operating income $ 9,696 $ 9,807 Depreciation and amortization: Products & Healthcare Services $ 23,366 $ 18,566 Patient Direct 50,729 52,360 Consolidated depreciation and amortization $ 74,095 $ 70,926 Share-based compensation: Products & Healthcare Services $ 4,769 $ 4,498 Patient Direct 1,407 1,852 Other (1) 690 113 Consolidated share-based compensation $ 6,866 $ 6,463 Capital expenditures: Products & Healthcare Services $ 8,250 $ 6,332 Patient Direct 41,158 45,158 Consolidated capital expenditures $ 49,408 $ 51,490 (1) Other share-based compensation expense is captured within exit and realignment charges, net or acquisition-related charges for the three months ended March 31, 2024 and 2023. |
Consolidated Total Assets | March 31, 2024 December 31, 2023 Total assets: Products & Healthcare Services $ 2,456,341 $ 2,359,825 Patient Direct 2,506,786 2,490,460 Segment assets 4,963,127 4,850,285 Cash and cash equivalents 244,866 243,037 Consolidated total assets $ 5,207,993 $ 5,093,322 |
Financial Information by Geographic Area | 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, 2024 2023 Net revenue: United States $ 2,550,610 $ 2,452,936 International 62,070 69,913 Consolidated net revenue $ 2,612,680 $ 2,522,849 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) $ in Millions | 3 Months Ended | |||
Mar. 31, 2024 USD ($) segment | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | Mar. 14, 2023 USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of operating segments | segment | 2 | |||
Rental Equipment | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Revenue related to equipment | $ 147 | $ 172 | ||
Master Receivables Purchase Agreement | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Restricted cash | 9.5 | $ 13.5 | ||
Uncollected accounts receivable | 103 | $ 124 | ||
Net cash proceeds | 515 | 0 | ||
Cash proceeds from sale of accounts receivable | 512 | |||
Cash proceeds from collection of accounts receivable | 536 | |||
Master Receivables Purchase Agreement | Other Operating Income (Expense) | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Losses on sale of accounts receivable | $ (3.3) | $ (0.8) | ||
Master Receivables Purchase Agreement | Maximum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Uncollected accounts receivable | $ 200 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Reconciliation of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 244,866 | $ 243,037 | ||
Restricted cash included in Other current assets | 25,928 | 29,887 | ||
Total cash, cash equivalents and restricted cash | $ 270,794 | $ 272,924 | $ 83,194 | $ 86,185 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, net | $ 342,593 | $ 361,835 | |
Intangible amortization | 20,300 | $ 20,900 | |
Patient Direct | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, net | 236,000 | 250,000 | |
Products & Healthcare Services | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, net | $ 107,000 | $ 112,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Goodwill Rollforward (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 1,638,846 |
Currency translation adjustments | (3,478) |
Goodwill, ending balance | 1,635,368 |
Patient Direct | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 1,535,252 |
Currency translation adjustments | 0 |
Goodwill, ending balance | 1,535,252 |
Products & Healthcare Services | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 103,594 |
Currency translation adjustments | (3,478) |
Goodwill, ending balance | $ 100,116 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Net intangible assets | $ 342,593 | $ 361,835 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | 397,193 | 433,750 |
Accumulated amortization | (213,793) | (236,791) |
Net intangible assets | $ 183,400 | $ 196,959 |
Weighted average useful life | 14 years | 13 years |
Tradenames | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | $ 202,000 | $ 202,000 |
Accumulated amortization | (74,544) | (69,655) |
Net intangible assets | $ 127,456 | $ 132,345 |
Weighted average useful life | 10 years | 10 years |
Other Intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross intangible assets | $ 73,055 | $ 73,958 |
Accumulated amortization | (43,318) | (41,427) |
Net intangible assets | $ 29,737 | $ 32,531 |
Weighted average useful life | 6 years | 6 years |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Estimated future amortization expense (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Estimated future amortization expense | |
2024 (remainder) | $ 44,080 |
2025 | 54,389 |
2026 | 50,036 |
2027 | 41,687 |
2028 | 32,008 |
Thereafter | 118,393 |
Total future amortization | $ 340,593 |
Exit and Realignment Costs - Na
Exit and Realignment Costs - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Restructuring Cost and Reserve [Line Items] | ||
Exit and realignment charges, net | $ 27,356 | $ 15,674 |
Gain of associated with the sale | $ 7,400 | |
Restructuring Incurred Cost Statement Of Income Or Comprehensive Income Extensible Enumeration Not Disclosed Flag | costs that were expensed as incurred | |
Products & Healthcare Services | ||
Restructuring Cost and Reserve [Line Items] | ||
Incurred expensed costs | $ 6,500 | |
Operating Model Realignment Program and IT strategic initiatives | ||
Restructuring Cost and Reserve [Line Items] | ||
Expenses changes | $ 34,700 |
Exit and Realignment Costs - Ac
Exit and Realignment Costs - Accrual for Exit and Realignment Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Restructuring Reserve [Roll Forward] | ||
Accrued exit and realignment charges, beginning balance | $ 20,047 | $ 969 |
Cash payments | (11,728) | (5,546) |
Accrued exit and realignment charges, ending balance | 36,621 | 11,097 |
Severance | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring charges | 184 | 4,127 |
Professional fees | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring charges | 25,625 | 9,012 |
Other | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring charges | $ 2,493 | $ 2,535 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 29, 2022 | Mar. 10, 2021 |
Debt Instrument [Line Items] | ||||
Long-term debt | $ 1,946,005 | $ 1,890,598 | ||
Senior Notes | 4.375% Senior Notes, due December 2024 | ||||
Debt Instrument [Line Items] | ||||
Interest rate of debt | 4.375% | |||
Senior Notes | 4.500% Senior Notes, due March 2029 | ||||
Debt Instrument [Line Items] | ||||
Interest rate of debt | 4.50% | 4.50% | ||
Senior Notes | 6.625% Senior Notes, due April 2030 | ||||
Debt Instrument [Line Items] | ||||
Interest rate of debt | 6.625% | 6.625% | ||
Carrying Amount | ||||
Debt Instrument [Line Items] | ||||
Total debt | $ 2,153,663 | 2,097,502 | ||
Less current maturities | (207,658) | (206,904) | ||
Long-term debt | 1,946,005 | 1,890,598 | ||
Carrying Amount | Receivables Financing Agreement | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 64,438 | |||
Carrying Amount | Finance leases and other | ||||
Debt Instrument [Line Items] | ||||
Finance leases and other | 16,326 | 22,153 | ||
Carrying Amount | Senior Notes | 4.375% Senior Notes, due December 2024 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 171,306 | 171,232 | ||
Carrying Amount | Senior Notes | 4.500% Senior Notes, due March 2029 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 473,162 | 472,869 | ||
Carrying Amount | Senior Notes | 6.625% Senior Notes, due April 2030 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 540,947 | 540,445 | ||
Carrying Amount | Secured Debt | Term Loan A | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 385,003 | 387,591 | ||
Carrying Amount | Secured Debt | Term Loan B | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 502,481 | 503,212 | ||
Estimated Fair Value | ||||
Debt Instrument [Line Items] | ||||
Total debt | 2,146,075 | 2,051,987 | ||
Less current maturities | (207,658) | (206,904) | ||
Long-term debt | 1,938,417 | 1,845,083 | ||
Estimated Fair Value | Receivables Financing Agreement | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 65,700 | |||
Estimated Fair Value | Finance leases and other | ||||
Debt Instrument [Line Items] | ||||
Finance leases and other | 16,326 | 22,153 | ||
Estimated Fair Value | Senior Notes | 4.375% Senior Notes, due December 2024 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 169,816 | 168,754 | ||
Estimated Fair Value | Senior Notes | 4.500% Senior Notes, due March 2029 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 438,337 | 422,647 | ||
Estimated Fair Value | Senior Notes | 6.625% Senior Notes, due April 2030 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 547,661 | 529,472 | ||
Estimated Fair Value | Secured Debt | Term Loan A | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 389,513 | 390,668 | ||
Estimated Fair Value | Secured Debt | Term Loan B | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 518,722 | $ 518,293 |
Debt - Narrative (Details)
Debt - Narrative (Details) $ in Thousands | 3 Months Ended | |||
Mar. 29, 2022 USD ($) item | Mar. 10, 2021 USD ($) | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | |
Debt Instrument [Line Items] | ||||
Number of credit facilities | item | 2 | |||
Due in 2024 | $ 194,572 | |||
Principal payments | 207,658 | $ 206,904 | ||
Revolving Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 450,000 | |||
Letter of Credit | ||||
Debt Instrument [Line Items] | ||||
Letters of credit outstanding, amount | 3,000 | 3,000 | ||
Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, remaining borrowing capacity | 423,000 | 423,000 | ||
Due in 2024 | 195,000 | |||
Line of Credit | Payments due in December related to the 2024 Notes, Term Loan A, and Term Loan B | ||||
Debt Instrument [Line Items] | ||||
Due in 2024 | 179,000 | |||
Line of Credit | Letter of Credit | ||||
Debt Instrument [Line Items] | ||||
Letters of credit outstanding, amount | 26,700 | 27,400 | ||
4.375% Senior Notes, due December 2024 | ||||
Debt Instrument [Line Items] | ||||
Principal payments | 171,000 | |||
4.375% Senior Notes, due December 2024 | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 171,000 | |||
Interest rate of debt | 4.375% | |||
Debt issued, percent of par | 99.60% | |||
Effective yield percentage | 4.422% | |||
Senior notes redemption price, percentage | 100% | |||
Rate of interest discounted | 0.30% | |||
Receivables Financing Agreement | ||||
Debt Instrument [Line Items] | ||||
Current borrowing capacity | $ 450,000 | |||
Borrowings outstanding | $ 65,700 | 0 | ||
Receivables Financing Agreement | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, remaining borrowing capacity | 384,000 | $ 450,000 | ||
Term Loan A | ||||
Debt Instrument [Line Items] | ||||
Face amount | 500,000 | |||
Principal payments | 25,000 | |||
Term Loan B | ||||
Debt Instrument [Line Items] | ||||
Face amount | 600,000 | |||
Principal payments | $ 6,000 | |||
4.500% Senior Notes, due March 2029 | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 500,000 | |||
Interest rate of debt | 4.50% | 4.50% | ||
Debt issued, percent of par | 100% | |||
Effective yield percentage | 4.50% | |||
Senior notes redemption price, percentage | 100% | |||
4.500% Senior Notes, due March 2029 | Senior Notes | Debt Instrument, Redemption, Period One | ||||
Debt Instrument [Line Items] | ||||
Senior notes redemption price, percentage | 104.50% | |||
Redemption price, percentage of principal amount redeemed | 40% | |||
6.625% Senior Notes, due April 2030 | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 600,000 | |||
Interest rate of debt | 6.625% | 6.625% | ||
Debt issued, percent of par | 100% | |||
Effective yield percentage | 6.625% | |||
Senior notes redemption price, percentage | 100% | |||
6.625% Senior Notes, due April 2030 | Senior Notes | Debt Instrument, Redemption, Period One | ||||
Debt Instrument [Line Items] | ||||
Senior notes redemption price, percentage | 106.625% | |||
Redemption price, percentage of principal amount redeemed | 40% | |||
Finance leases and other | ||||
Debt Instrument [Line Items] | ||||
Principal payments | $ 5,300 |
Debt - Schedule of Future Princ
Debt - Schedule of Future Principal Payments of Debt (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Debt Disclosure [Abstract] | |
2024 (remainder) | $ 194,572 |
2025 | 106,075 |
2026 | 43,500 |
2027 | 305,375 |
2028 | 6,000 |
2029 | 965,654 |
2030 | $ 552,189 |
Retirement Plans - Narrative (D
Retirement Plans - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Type [Extensible Enumeration] | us-gaap:PensionPlansDefinedBenefitMember | us-gaap:PensionPlansDefinedBenefitMember |
United States | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Accumulated benefit obligation | $ 33.7 | $ 34.1 |
Retirement Plans - Components o
Retirement Plans - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Retirement Benefits [Abstract] | ||
Service cost | $ 458 | $ 441 |
Interest cost | 645 | 710 |
Recognized net actuarial loss | 81 | 123 |
Net periodic benefit cost | $ 1,184 | $ 1,274 |
Derivatives - Summary of the te
Derivatives - Summary of the terms and fair value of our outstanding derivative financial instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Economic (non-designated) hedges | Foreign currency contracts | ||
Derivative [Line Items] | ||
Notional Amount | $ 69,335 | $ 78,436 |
Cash flow hedges | Designated as Hedging Instrument | Interest rate swaps | ||
Derivative [Line Items] | ||
Notional Amount | 300,000 | 350,000 |
Other assets, net | Cash flow hedges | Designated as Hedging Instrument | Interest rate swaps | ||
Derivative [Line Items] | ||
Derivative Asset, Fair Value | 10,356 | 8,447 |
Other current assets | Economic (non-designated) hedges | Foreign currency contracts | ||
Derivative [Line Items] | ||
Derivative Asset, Fair Value | 129 | 1,043 |
Other liabilities | Cash flow hedges | Designated as Hedging Instrument | Interest rate swaps | ||
Derivative [Line Items] | ||
Derivative Liabilities, Fair Value | 0 | 0 |
Other current liabilities | Economic (non-designated) hedges | Foreign currency contracts | ||
Derivative [Line Items] | ||
Derivative Liabilities, Fair Value | $ 44 | $ 0 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Designated as Hedging Instrument | Interest rate swaps | |||
Derivative [Line Items] | |||
Notional amount, incremental decreases | $ 50,000 | ||
Economic (non-designated) hedges | Foreign currency contracts | |||
Derivative [Line Items] | |||
Notional Amount | 69,335 | $ 78,436 | |
Loss on derivative not designed as hedging instrument | $ 4,200 | $ 0 |
Derivatives - Summary of the ef
Derivatives - Summary of the effect of cash flow hedge (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total Amount of Expense Line Items Presented in the Consolidated Statement of Operations in Which the Effects are Recorded | $ (35,655) | $ (42,198) |
Interest rate swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) | 4,557 | (2,387) |
Interest expense, net | Interest rate swaps | Reclassification out of Accumulated Other Comprehensive Income | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain Reclassified from Accumulated Other Comprehensive Loss into Net Loss | $ 2,649 | $ 2,176 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate | 19.30% | 27.70% | |
Liability for unrecognized tax benefits | $ 22.8 | $ 22.7 | |
Unrecognized tax benefit, timing uncertainty | $ 2.7 | $ 2.7 |
Net Loss per Common Share - Sum
Net Loss per Common Share - Summary of Calculation of Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (21,886) | $ (24,418) |
Weighted average shares outstanding - basic | 76,319 | 75,177 |
Dilutive shares | 0 | 0 |
Weighted average shares outstanding - diluted | 76,319 | 75,177 |
Net loss per common share: | ||
Basic (in dollars per share) | $ (0.29) | $ (0.32) |
Diluted (in dollars per share) | $ (0.29) | $ (0.32) |
Net Loss per Common Share - Nar
Net Loss per Common Share - Narrative (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Earnings Per Share [Abstract] | ||
Shares excluded from calculation of net loss Per diluted common share | 1.6 | 1.7 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive (Loss) Income - Schedule of Accumulated Other Comprehensive (Loss) Income By Component (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | $ 924,166 | $ 945,604 |
Other comprehensive income (loss) before reclassifications | (8,475) | 2,731 |
Income tax | (1,244) | 621 |
Other comprehensive income (loss) before reclassifications, net of tax | (9,719) | 3,352 |
Amounts reclassified from accumulated other comprehensive income (loss) | (2,568) | (2,053) |
Income tax | 668 | 295 |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (1,900) | (1,758) |
Total other comprehensive (loss) income, net of tax | (11,619) | 1,594 |
Ending balance | 894,868 | 924,400 |
Retirement Plans | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (5,115) | (7,201) |
Other comprehensive income (loss) before reclassifications | 234 | 0 |
Income tax | (59) | 0 |
Other comprehensive income (loss) before reclassifications, net of tax | 175 | 0 |
Amounts reclassified from accumulated other comprehensive income (loss) | 81 | 123 |
Income tax | (21) | (270) |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 60 | (147) |
Total other comprehensive (loss) income, net of tax | 235 | (147) |
Ending balance | (4,880) | (7,348) |
Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (32,954) | (40,095) |
Other comprehensive income (loss) before reclassifications | (13,266) | 5,118 |
Income tax | 0 | 0 |
Other comprehensive income (loss) before reclassifications, net of tax | (13,266) | 5,118 |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 |
Income tax | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 0 | 0 |
Total other comprehensive (loss) income, net of tax | (13,266) | 5,118 |
Ending balance | (46,220) | (34,977) |
Derivatives | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | 6,251 | 11,441 |
Other comprehensive income (loss) before reclassifications | 4,557 | (2,387) |
Income tax | (1,185) | 621 |
Other comprehensive income (loss) before reclassifications, net of tax | 3,372 | (1,766) |
Amounts reclassified from accumulated other comprehensive income (loss) | (2,649) | (2,176) |
Income tax | 689 | 565 |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (1,960) | (1,611) |
Total other comprehensive (loss) income, net of tax | 1,412 | (3,377) |
Ending balance | 7,663 | 8,064 |
Total | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (31,818) | (35,855) |
Total other comprehensive (loss) income, net of tax | (11,619) | 1,594 |
Ending balance | $ (43,437) | $ (34,261) |
Segment Information - Financial
Segment Information - Financial Information by Segment (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) segment | Mar. 31, 2023 USD ($) | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Net revenue | $ 2,612,680 | $ 2,522,849 |
Operating income | 9,696 | 9,807 |
Acquisition-related charges and intangible amortization | 20,313 | 22,188 |
Exit and realignment charges, net | (27,356) | (15,674) |
Depreciation and amortization | 74,095 | 70,926 |
Share-based compensation | 6,866 | 6,463 |
Capital expenditures | $ 49,408 | 51,490 |
Number of Reportable Segments | segment | 2 | |
Operating Segments | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Net revenue | $ 2,612,680 | 2,522,849 |
Operating Segments | Products & Healthcare Services | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Net revenue | 1,974,837 | 1,915,489 |
Operating income | 11,486 | 1,820 |
Depreciation and amortization | 23,366 | 18,566 |
Share-based compensation | 4,769 | 4,498 |
Capital expenditures | 8,250 | 6,332 |
Operating Segments | Patient Direct | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Net revenue | 637,843 | 607,360 |
Operating income | 45,879 | 45,849 |
Depreciation and amortization | 50,729 | 52,360 |
Share-based compensation | 1,407 | 1,852 |
Capital expenditures | 41,158 | 45,158 |
Segment Reconciling Items | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Acquisition-related charges and intangible amortization | (20,313) | (22,188) |
Exit and realignment charges, net | (27,356) | (15,674) |
Share-based compensation | $ 690 | $ 113 |
Segment Information - Consolida
Segment Information - Consolidated Total Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | $ 5,207,993 | $ 5,093,322 |
Cash and cash equivalents | 244,866 | 243,037 |
Operating Segments | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 4,963,127 | 4,850,285 |
Operating Segments | Products & Healthcare Services | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 2,456,341 | 2,359,825 |
Operating Segments | Patient Direct | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | $ 2,506,786 | $ 2,490,460 |
Segment Information - Narrative
Segment Information - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Products & Healthcare Services | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Non-cash adjustments to merchandise inventory | $ 5.4 | $ 4.9 |
Patient Direct | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Net book value of dispositions | $ 9.6 | $ 9 |
Segment Information - Financi_2
Segment Information - Financial Information by Geographical Area (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenue | $ 2,612,680 | $ 2,522,849 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenue | 2,550,610 | 2,452,936 |
International | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenue | $ 62,070 | $ 69,913 |
Commitments, Contingent Liabi_2
Commitments, Contingent Liabilities, and Legal Proceedings (Details) $ in Millions | Mar. 31, 2024 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments of legally binding lease payments | $ 48.4 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (21,886) | $ (24,418) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 shares | |
Alexander Bruni [Member] | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | On March 1, 2024, Alexander Bruni, Executive Vice President & CFO, adopted a trading plan intended to satisfy Rule 10b5-1(c) to sell up to 16,812 shares of Owens & Minor, Inc. common stock between June 3, 2024 and August 30, 2024, subject to certain conditions. |
Name | Alexander Bruni |
Title | Executive Vice President & CFO |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | Mar. 01, 2024 |
Aggregate Available | 16,812 |
Mark Beck [Member] | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | On March 4, 2024, Mark Beck, a Director of the Company, adopted a trading plan intended to satisfy Rule 10b5-1(c) to sell up to 9,344 shares of Owens & Minor, Inc. common stock between June 5, 2024 and June 28, 2024, subject to certain conditions. |
Name | Mark Beck |
Title | Director |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | Mar. 04, 2024 |
Aggregate Available | 9,344 |
Perry Bernocchi [Member] | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | On March 4, 2024, Perry Bernocchi, Chief Executive Officer, Patient Direct, adopted a trading plan intended to satisfy Rule 10b5-1(c) to sell up to 40,977 shares of Owens & Minor, Inc. common stock between June 6, 2024 and June 28, 2024, subject to certain conditions. |
Name | Perry Bernocchi |
Title | Chief Executive Officer, Patient Direct |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | Mar. 04, 2024 |
Aggregate Available | 40,977 |
Michael Lowry [Member] | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | On March 4, 2024, Michael Lowry, Senior Vice President, Corporate Controller & Chief Accounting Officer, adopted a trading plan intended to satisfy Rule 10b5-1(c) to sell up to 57,148 shares of Owens & Minor, Inc. common stock between June 4, 2024 and June 2, 2025, subject to certain conditions. |
Name | Michael Lowry |
Title | Senior Vice President, Corporate Controller & Chief Accounting Officer |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | Mar. 04, 2024 |
Aggregate Available | 57,148 |
Snehashish Sarkar [Member] | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | On March 4, 2024, Snehashish Sarkar, Executive Vice President, Chief Information Officer, adopted a trading plan intended to satisfy Rule 10b5-1(c) to sell up to 17,553 shares of Owens & Minor, Inc. common stock between June 4, 2024 and November 29, 2024, subject to certain conditions. |
Name | Snehashish Sarkar |
Title | Executive Vice President, Chief Information Officer |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | Mar. 04, 2024 |
Aggregate Available | 17,553 |