Earnings call transcript Q1 2023

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Operator

Welcome to the Owens & Minor first quarter 2023 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session.

If you would like to ask any questions during this time, simply press star, one on your telephone keypad.

If you would like to withdraw your question, again press star, one.

the to turn Investor Marcus now Relations. will conference Jackie over of I go Please ahead.

Jackie Marcus

Hello welcome everyone & Operator. you Thank and quarter earnings Minor to XXXX call. first Owens the

the Relations the of XXXX, press press Investor well the on be of call both All for updated release. supplemental release as website. posted for included of the comments quarter focused The which as on are on slides our first are the financial section outlook will with XXXX, our along results today’s in

full Factors these note the quarterly during statements. those from implied uncertainties, and results including of these subject Please that will description section reports actual and here Form Please for of this make materially on risks The to today. statements risks XX-K, Risk projected refer call, forward-looking or to annual uncertainties our our we cause differ in report, SEC and XX-Q. could matters and addressed to Form a are filings

In reference and our certain about measures reconciliations GAAP to comparable press discussion measures are Information measures. financial release. most today, these in non-GAAP our the financial we included will

Vice I’m Executive Officer, Executive and joined President Chief President Chief and by Financial Bruni, Alex Today and Ed Officer. Pesicka,

call to the turn now will I Ed. Ed? over

Edward Pesicka

morning Thank on the you you call Jackie. everyone for Good today. thank and joining us

necessary and the few am our leverage our initiate with to improve through the just structure, I here quarter and first business our took steps are a execution the of pleased team’s of the start, as and cost To performance of strengths, the examples. the the overall business, year realignment we

produce innovation commercial testament promote and the operations. capital flow generated our at levels allocate that our $XXX to delivering allow execution initiatives profile. further ability This excellence. quarter will these of first and is of and million the to pursue growth, to strategy the we cash Having debt in financial us commitment towards cash strengthen on reduction our from to a One,

Next, income $XX meet program on operating detail in term these achieve confident is efforts and from to our realignment my XXXX, long little savings cost track target we in will our are more I’ll a these operating in adjusted further outline significant we improvement profit of of prepared and model remarks. million efforts. that

the strong patient our continues market accelerate; direct and Apria brands significant and debt further first the already the down and the segment expansion deliver focus strength Next, in debt aligns as and outpace to continued have on finally, and Byram quarter, with to $XXX paid throughout continue we we reduction margin expect the reduction million sheet, balance our of our year. debt which improving of

look direct patient a and Now I segment. I’ll at provide will start segment closer performance, with our our

grew pro The market outpace revenues a patient direct basis. had strong to as continued XX.X% quarter on the forma year-over-year it segment as another by

overall an Apria provider In commercial of service the three, was double brands. categories. with use nearly growth a the it one, all combination that proven be growth and by: of technology satisfaction, comprehensive product driven revenue improve in addition, should to digit major continued and payor; the strong model and on noted we of two, Byram The again patient, our powerful the achieved focus expanding and

by just expected, increasing our already our over of ago, expanding patient categories, services, improved our when completed and Apria strong footprint, payor our provider deepening relationships. the we acquisition broadening Apria additional significantly our As offering has a the product and year direct

such rapid in care treatments, for about the home company available to of growth thrilled continued in patient the execution of We with patient continue patients is these due us home. expectation to our population leaves the number to patient positive pace and of rapid future patient total aging serving in increase an demographics for fierce strength expect dynamics conditions, to that continues patient is direct rise with at the the in the momentum. acceptance and as the It a home segment prospects chronic an combined This our and the deliver grow industry direct and direct as growth growing the pace.

off mid-single Now year. in services sales our declined of significantly headwinds continued difficult to segment, impacted product This moving medical destocking global both the strong to over revenue implementation however, along services year our This growth division; healthcare our impact comps new losses. store of PPE COVID-related and division was year same for year product onto wins excluding delivered offset and digit prior the the and margin in quarter. by of of the PPE sales healthcare year-over-year and with distribution our products current in growth segment extremely previous distributed due products, primarily tailwinds the the of related coming the result

continued being with We the distribution made by progress are pleased our medical division.

recent of regarding to the protection and related FDA services Finally facial you our of communications may segment, product certain be products. from aware healthcare

transparency. the actively are with customer this and focused We process FDA safety address this on to and remain issue, we during working

program, on a update Moving been launch initiative components of about this the the It a am model and progressing of well, weeks four is eight realignment with like to the moment since program. onto I thrilled made brief key our operating to I’d ago. take the has progress provide that

and years finished management, stream to minimize The XXXX with more for and pleased am implemented and which opportunities, implemented pleased XXXX savings come. but and materials, made strategies the the I waste. demand aggressively goods, to importantly but acquisition not includes this the strategies to being direct is be First, with purchased costs for progress just the materials, am already of indirect goal reduce identify I iterative, to and work tools will beyond. sourcing deliver in

we organizational efficiency redesign throughout Second, improve are on the business. making structure and the progress to

layers We are and stands, activities. assessing structure,

to taken organization. the have of de-layer already We parts actions

resources and needed growth work this fill costs structure, evaluate the and we continues, for to deploy As where stream activities and to layers reduce further will stands, gaps.

footprint and business reductions. efforts to us the are manufacturing invested This work more a includes being carefully our is XXXX. operational to the as the the of phasing; on made for chain. is however, work the efficiently to in-year ensure manufacturing rationalization Due our operate we and service, this into excellence, parts and of management further network assessing business have greatly Third, improve as and options right-size will benefit focus to quality, move stream, output, adjustments Improving maximized. complexity the we supply team and optimization we in of capital return we already cost our which

for portfolio ensure we that enhancement twofold: is reflect expanding early value the our charge offering. component products to the its is Lastly, program and our portion provided; the our stages. one, for broaden and commercial price our product in to of profitability primary excellence two, objective product The services and this

We our adjust begun reflect have pricing to offering. the already our and value to of services

is $XX XXXX operating million in of on year model exit program run pace benefit the million realignment to with the profit and $XXX of improvement. approximately achieve Overall, rate

we expected stage where the the at identified by are encouraged be already in path this and quarters forward to We ahead.

level. about for more Alex are but outlook operating to and our our year revisions With XXXX. contributing our QX remainder our performance for of we at guidance, guidance advancement model refining the talk in these the talk to the the drivers about realignment program, I’d like a briefly in high will the of

reiterate, our outpace thus performance revisions expand patient our confidence has far guidance by To direct in are continued market growth margins. The to our our XXXX. and upward the in supported segment to

to Our medical division continues distribution strengthen.

Our operating model track. realignment is on program

be exceptional to flow nimble in We and environment. PPE generation allows macroeconomic to work us our continue will cash through de-stocking of today’s

forward look remainder I’m holds and excited the updating of for through on about the what & we progress to year. future Minor you the Owens the

our greater that, detail. turn With I’d call over financial in results the Alex? to Alex to like to discuss

Alexander Bruni

XXXX. everyone. Good results quarter our our primary the of morning Ed. first I’ll in factors financial an that by you providing performance begin and the drove of Thank overview

assumptions Following year that, the expectations full delve revised into I’ll and our outlook. for

Finally, our year. cadence key and assumptions of I’ll the for the discuss remainder guidance

which the to with business, patient solid was $X.X the medical anticipated both revenue higher from by direct in distribution results, sales than driven and and for quarter Starting Byram first to product our was was prior in but line quarter sales outperformance brands. in first COVID-related Apria the basis, pro quarter year, billion, our declined by stronger services results segment. On due from and tailwind this top healthcare our in notable forma our XXXX a largely the due of X% versus

Additionally, we the levels. continued sales during on experience some to customer to pressure quarter inventory related

results line were XXXX. in top quarter Consolidated with fourth the of relatively line

to lower gross margin of compared First our was as division. PPE medical expansion power combining Apria sales global of Byram, XXXX. direct $XXX of our the or expansion XX.X% the impact patient from by of continued growth first partially The the was margin revenue XX.X% million $XXX revenue driven division or gross offset in distribution as and by million quarter quarter of sales products well margin in and

expense the the sales direct including primarily and for quarter million selling making servicing Apria increased patient $XXX growth, due acquisition. Our costs with in distribution was This up revenue. $XXX to XX.X% of quarter the by associated expense administrative million, the

for quarter adjusted a also Adjusted of margin operating million, of EBITDA of expectations at the QX. for income GAAP was was for $X.X expectations income was operating the million ahead $XX.X with ahead and million, quarter X.X%. $XXX

in discussed, the As results. just drivers these were key and achieving performance margin I revenue

efforts; achieve operating for the XXXX our In mentioned, adjusted adjusted addition, model pace Ed the our realignment which contribution from on in we’ve accordingly, later call. discuss raised as we’ll to operating for we’re guidance EBITDA, also $XX income million

expectations. expense GAAP was XX.X%, with line million $XX the quarter both rate tax was in Interest effective for the and

$X.XX per GAAP amounted a billion Adjusted for or net Our $X.X was share. or million, loss per for of the quarter $X.XX net loss to common the quarter $XX income share.

a products tailwinds XX.X% first COVID-related billion, products. a higher revenue XXXX the due to and first in sales was quarter $X.X services the from quarter versus On of which healthcare segment, decline driven prior year by represents

Patient segment, another versus saw quarter across results. patient Looking key all direct Once again, the in a revenue strong first at the XX.X% forma representing basis. of direct the million growth categories. quarter for growth we we pro during of nearly product $XXX of on quarter, accounted XXXX had

cash look and let’s structure. the gears, balance capital at our sheet, Shifting flow,

In million from quarter, operations. the cash we generated first $XXX of

strong is is Our capable of cash quarters. producing past business few results, which by evidenced flow the

will to the total and we of strengthening progress debt on QX, reduction the two times. toward We billion. At to of of of finalization focused as million billion optimize operating used and de-levering our we remain $X.X a cash reduction flow becomes during a continue business working of paid Apria and of first our overall direct acquisition. as end, that was As bringing to target leverage a three larger end the long To business. part total that the sheet the be reinvestment debt expect debt the over debt down significant we patient quarter, capital, quarter the in balance for dollars we since produce $XXX to term

to our I’d XXXX. guidance now like improved discuss for

guidance are distribution encouraging billion, at segment We versus This million billion and increase our our reflects an are we medical $XX.X currently within $XXX to direct representing of revenue previous seeing to raising the guidance. the $XX.X patient midpoint trends divisions.

range detailed reflects improved stable margins million, increasing our in also to the EBITDA modifications We’re top April adjusted of inclusive million $XX an prior the our X-K. of at XX definition, EBITDA on to reflecting to as the $XXX for $XXX which midpoint increase expectations versus line million our an the adjusted guidance,

of EPS We Finally, is outlook opportunities direct the our PPE $X.XX. performance. EPS range cautious the $X.XX patient remain we’re the of as QX increasing segment, overall products for model year. to from The adjusted the outlook and reflect healthcare the and about $X.XX well around adjusted the the in for services for to while remainder realignment the enthusiastic range as the new $X.XX remain to segment bottom for end operating

of the weighted easing the and think half As the earnings excited we’re back results traditional discussed, for our year. the it’s from reasonable and in heading. of half due and heavily with seasonality, first will in operating to be anticipated realignment to expect benefits, year, year about as year de-stocking is we back Overall, the cadence previously of company earnings XX% the about and model pleased later are of the where the quarter about the of acceleration the to

Operator for our Before to turning to in Owens service all & the thank efforts teammates enabling Minor to their for of provide highest over to the like quality of the customers. I’d Q&A, our dedicated call

I’ll that, the the now turn for over to call Operator With Operator? questions.

Edward Pesicka

and our away - start Gil I family behalf of out earlier like we this would passed Operator, personally Chairman our week. Actually this thoughts Ed Gil teammates Pesicka. on our all before of of and Gil is extend to was into to Emeritus Minor. prayers the Over a time his people, many to life, Minor. he Minor, Owens so is positive impact continue it’s will and long great future. of a CEO Gil’s the of and his on made family & that & Owens impact know namesake

With that, I’ll Operator the so we back can it begin to turn over Q&A.

Operator

Pesicka. Mr. you Thank

We the and answer will session. question begin instructions] [Operator

of Your first Caliendo ahead. line the Kevin from comes of question Please UBS. go

Kevin Caliendo

for business. and taking my to products It’s progression nice the I the bit progress. about see healthcare services and a thanks Hi, there little wanted talk question. the to

had line You about levels talked of where and your public last compete in some inventory utilization sight this Can sit had talk demand about the who reordering? you the geography a of from bit terms ordering on like, PPE - visibility terms companies of little the in and this it messaging and you’re sector. work sort by week of in and changing of customer, you seeing is PPE quarter or and inventory, terms of mixed we in what we’ve or

Edward Pesicka

parts Sure, is really a One question. so utilization the that there’s hospitals. on within couple to

at We portfolio our them. hospitals, are personally N-XXs, pre-pandemic Probably elevated the and is the is as conversations what it personally one across level, that where visiting I’m well utilization believe utilization the that’s is look down I those it you where as down now because not as slower--or seeing with we utilization with across checks out consistent visit if sorry, was place, seeing slowed slightly in of we’re so we of are from to not hospitals. with go do the through the our customers products if but protocols slightly, slow that board,

will with the On had as on de-stocking out believe this is I regional not Again, of that and this, fact year, outside continue to couple it. come it as we the with consistent the back it’s that. seeing is first of the half quarter, occur think half where That’s back de-stocking things. and obviously some a last side, the said we’ve getting or of year. well done we seeing some in to One some to still market really going checks through we’ve the help still regionality the this, done what is to we’re start we’re checks

the in of of the then is to the Again that’s hospitals today. the PPE through levels, the We hospital. usage de-stocking front above continuing we’re in we’re recap actually the seeing the really year, in and usage easing XXXX half and and half seeing see that’s market back year what in the

Kevin Caliendo

can us and in helpful. that’s a FDA If any you quick what’s of from risk a and Okay, follow-up, just around like impact what what’s frame this, you worst your case, case, for best the I have assumed a can it? the ask potential action, guidance

Edward Pesicka

this. we’re really with in got we’ve filed our that now the on right Yes, to we I doing we XX-K FDA have to is morning, think--obviously this and disclosure that work continuing the just we’re what continue--we’re going

work are--our fluid the that’s that the transparency, want fact address issue them safety here during we right customer primary to it aggressively, around going is we process--again, with process work them and to on with where we to are now. We’re it’s so the a focus and and

Operator

Thank you.

next question Please line the from of Michael Your ahead. comes of BoA. Cherny go

Michael Cherny

for the morning, congratulations taking on Good call, a quarter. nice thanks and

on ’XX particular the to as beyond? maybe expense where exiting of run that $XX Relative the operating unpack some and baked realignment million in and could I of that if $XX rate year the changes bit are in will into similar. in, as that EBITDA how savings in, factor get think be savings, through, you costs you contributions EPS or those think costs I you of guidance a essentially million improvement terms Maybe - and does the realignment on

Edward Pesicka

I minimum is--so think is expectation operating our a XXXX, adjusted the the have to level question we at in million actual a get income. savings high $XX to

standpoint XXXX. into nothing expect would P&L, Costs expect rate in we XXXX there’s at and that’s XXXX--I’m We be costs that, into going and this going on the it of realignment a year where be least to sorry, restructuring a in but rate. from year off to the at coming and run $XXX dollar million then exit associated with exit run

question if the know exactly. don’t that I answers

Michael Cherny

does. unpacking helpful the pieces it guide No, It’s in change. on the

in one what could first bit, in strength If direct would side, and a shining OMI’s hospital say question both up throw maybe core here, do building on patient you market, I just do of to see versus time? the opportunities a through as other you see Kevin’s well second now pick right over side as competitive have on where distribution on you the your I

Edward Pesicka

them the I’ll being segment, and costs that from technology it struggling competitive. costs, IDNs so we In We that. take can in the very a are for to and services looking Sure, ways and see they’re help customers, with be segments. and to healthcare additional continue that labor overall and financial two the standpoint do hospitals, different them product reducing help recognize reducing the place that putting

seeing also offering for We’re in more to seeing that what there they have we’re that choice potential them so looking product out more flexibility, have sense. what so and is them on that’s

our into things I do think distribution business the fit those a categories. lot within of we medical

looking account, one being to they’re I’ll different customers, the I provide prove the we the things model continue - as really that for, patient, think about focused what that and that, patient, is do looking for provider, direct the technology much continue customer easier, that business, think of see that They’re for move and we the the patient, comprehensive, the to that it’s just the ways those as the well reorder, is through it’s out, they’re our of provider, doing in value direct we looking look When make of fact In onto their commercial business easier. to payor. to and the provider, their whether - it’s patient, the aspect one that our patient we’re really around the things the technology three the business. patient life that that payor. the customers and check the a helps for looking really them, to are numbers do three

key looking thing Byram together, to, of patient all on When our commercial think think is them. now our on business again, Apria makes and together, I I have we really that’s focused entire our really, those those you what proven model, on and provider last across it for that easier things for direct patient, it one, and business. added strengthened the technology the the they’re really, which is advance that tie then the we business about, and continues the Then to that comprehensively top ways payor; and put

ultimately, care. really rapid because we growing see in marketplace the a of patient the patient really demographics, and But treatments, at pace acceptance increase of the home direct

Operator

Thank you.

question line comes Grosslight ahead. next from go Daniel Your Citi. the of of Please

Daniel Grosslight

is that The significant de-stocking could the like for as call, pretty and prior significant street’s kind of and sources you some PPE Hi the of expectations, going business the so guys, spike the thanks you than some expected, earnings taking led as going to question. quarter. services PPE it you this directional beat you the de-stocking the other had strength, on seems of if gave curious out a beat I’m relative products expected, commentary to had just of

Edward Pesicka

Sure.

about, redesign the and organization. org talked one the prepared things was aspect in came how a early in little and did of I primarily That’s and and costs segment. we healthcare that the already out and think taken quarter product the out we’ve some de-layered part it. remarks of services first about of That bit one I my

than operating the product take actually at again is--again, the which stuff done the time Two same cost services, of us while out the we’ve service same with network that operational the in primarily some digits. PPE healthcare division, product you of through to model in was store distributed signal year-over-year, and we at healthcare rationalization medical business had the in pull redesign, and focused and was revenue I’ll single that out enabled excellence at go actually some sales mid you that the better look operation the reason another when the fact anticipated. look the when grew I products tried That’s we and you why. our in to distribution

the better the expected product are couple reasons services in and Those than the the with than--you healthcare performance. associated primarily know, better

Daniel Grosslight

Got it.

Edward Pesicka

really, team. along that who team down entire strong Andy, comes And with by execution that to leads his

Daniel Grosslight

makes Yes, sense.

and look you to the around bottom If $X.XX, then at quarter, the guidance you by your the $X.XX. street, was the it amount, raising about same end Can of beat relative explain $X.XX you’re any quarter? some non-recurring the EPS that given that pull-through strength may seen? XQ not or strength raising you’ve why caused items, the this you’re have Was perhaps more of some there from this

Edward Pesicka

took it’s in bottom so it’s to year. early just just based standpoint, think costs the talked did It’s quarter on we of operating things that’s in our the the in the model realignment. in distribution seeing our raising faster very the on I medical from QX, our business, of our what out internal some one only that the We about, based comfortable I taking in, growth plan bottom up. we’re relative felt we’re we why some

to at that Frankly, quarter, tailwinds double over category of pro XX%, quarter don’t growing with patient strong in forma - fact the digit off COVID phenomenal in forma on outside of another in Look business quarter the is is want year. virtually basis. side, the the first of grew so respiratory growth just coming performance pro home of a digits direct overlook our really again every year-over-year some last double a I which

which is we lot cash benefit things, on those term talk debt interest expense implication didn’t pay an to other thing the It’s going have reduction. about longer really and our a is then so and far the flow down, operating and

Operator

press telephone one if a ask keypad. your Again star, on to you. Thank like you question, would

Please the comes go Your of Eric Coldwell next from Baird. question of ahead. line

Eric Coldwell

a this be Thank allow plan you. I me. greedy and if actually have bit you’ll to few morning, a

pretty XX% category double growing respiratory home wrong, double but Could math for with great, direction that is there bit and comment I is last don’t the is what me struggle at category on possibly size the was? to had respiratory, us up--I segment if is you’re digits yet the and on of the every get low. because patient Ed, mean, what be every digits remind a but XX, with direct, First you home that

Edward Pesicka

think I from is think categories way the so going the digits, have down and mid to to high about Eric, just that’s to north that teens, the are all say it, Yes, if other we one XX to anywhere XX%. category down, double to in, you of bring the overall

Eric Coldwell

Right, a trying respiratory basis, have just percent to and as your get on sense sense-- of a pro much last just home a of is I’m a mix year to how forma

Edward Pesicka

we haven’t Yes, something what makes up out each and out direct and patient disclosed, revenue. of category total the is that’s gone

Eric Coldwell

you call, or the your at heard Then looks on comment amount loss possible reasonably unable of XX-Q. Okay. like didn’t to on estimate are went and there’s I the the that there, portfolio, and the losses. any FDA comments range of it a numbers looked see any in possible

size I’m potential recall, curious by for question losses. categories are treated and I twofold, the your possibly how again the think communications; guidance these guidance, you if that with is one, you could then could: two, affected you FDA but not maybe a

in but the what You them say in if you you’ve curious can’t XX-Q, I’m embedded outlook, anything. the quantify

Edward Pesicka

to that’s FDA we’re and to address little issue. and This to let and with a it, the just Yes, process been going work continue, so continue has to bit talk are obviously about going continuing transparency. the me focus safety on a we to

status revenues that to N-XXs, from talked I about, reality low. way back currently, will XXXX very one the the we which that. and current very, levels, I historical revenue of That’s a areas which probably mean, was say even about a we earlier, is as prospective the are those think status--I are from stated the

it’s testing, there’s something continuing or it zero us not on is range be could it work the to and else. a could be with them Again, reason

to with we work with end up depends continuing on where kind just it them, of this. We’re and

continue continues we forward are--we to a to we But products, going know, get guidance, guidance products, products the our FDA assume with we our they’re continue--our can’t on with it put all timeline even working we’re behind that and the them. move next--I through sure yet. to Regarding our that over again, closely we’re don’t great stand make this of to

Operator

Thank you.

comes the from line Lisa go question from Please of next ahead. Your Morgan. Gill JP

John Stansel

Lisa. is good morning. Hi, for on This John Stansel

maybe quick, going changed question. know a forward. granular EBITDA more you’re a I methodology calculating you’ve your how around bit Just

I all? following think looking then the guidance for kind have at about and comp little first there’s you and for or changes of incremental increased your through the much at Can quarter, million is how in methodology, LIFO. how the stock you. a size around to bit, expectations margins Thank elsewhere, $XX that just raised of adjustments not of guidance changed

Alexander Bruni

Thank this you. Good morning, is Alex Bruni.

missed question from that? the you the our Yes, so sorry, your of second there. repeat and--I’m million kind of benefit part definition change, in I guidance, we’ve assumed of about $XX Can

John Stansel

through or guidance just the seems stable, them relatively flows increases. maintaining notable? sure, anything It you’re like given margin that probably Yes, to other assumptions, how the else

Alexander Bruni

the change guidance QX the that the beat. just of mean, EBITDA as well I as change pull-through definition really--for reflects Yes, adjusted

John Stansel

Okay, great. you very much. Thank

Operator

you. Thank

from go from of Please question next Baird. Coldwell the Your comes Eric line ahead.

Eric Coldwell

I can’t easy. off the that you let hook

Edward Pesicka

Go ahead. Eric. that, about Sorry

Eric Coldwell

losses what growth i.e. have last wins net to growth were sense product capture position Thank you. just ramping hit part parter and--I’m point, in two I’m was ex-share new The distribution. would and was wins you of there better market to wins wanted of medical recent if a that distribution your and portion natural last that what core some in your ex-PPE ex-PPE might your you this alluding just recently, curious communications great. curious have at have you wins size here are of those how on-boarded been of where been us year, the I of be on growth net fully can was if the neutral, wins give

Edward Pesicka

the single slot. store is Eric, it’s That’s mid sales, not same digit any channel just--

Eric Coldwell

Oh, okay.

Edward Pesicka

accounts It’s versus had this year. accounts year last we had we

Eric Coldwell

misunderstood. Okay, great. That’s I

Edward Pesicka

standpoint I from a clarification good it’s apologize okay. here. That’s my -

ramp. to of of Then the wins, our starting is are side other it they

last last and the just win was what final other the is year our as December but to was revenue addresses it should calendarization, be. on half March--I April year, started run the the the year, of a probably yet, in ones year in largest why which also XX% back portion of don’t to year to numbers Our in have largest that. one March, That look last our rate about of it then are we from also last generate ramping,

as pipeline, been. reality that New large is the it ever our pipeline is wins in are potentially the as has

transition moved was that it will self ability, when us examples distribution They transition now saw and was the I so that month at We and a the business and recent which and couple the does - first dedicated necessarily that self-distribution is business a win, that had little from with talking that’s on in, has resonated from quarter their taken incredible job those division their going about our what customers. customers. Owens one we they’ve already resonate we We on, ago, and actually an half the very - off one Minor another about quicker. medical it. starting the business day not did did away have to have but of customer the they they of & liked where value and a our team has brings development and and a we’ve That that a it one the of new on was are fourth facility started a for large other was in half out kicked

wallet those is is to But business we Andy’s development, customers continue share our tell continues leadership, competitive to look and base we’re forward. to would continue business - mean, protect grow I of we that, sure market doing can and drive tremendous and everything make and under have you then at our then focus around a I the to there that

Eric Coldwell

you you the one from I many queue don’t flow I at apologize; cash free last don’t in Then looking your mind? it believe - quickly, cash sounds slides it capex if missed what for aren’t to free here, outlook and but like me, year, patient guide is there with flow. If without cash this the I impact, flow

Edward Pesicka

Alex?

Alexander Bruni

Ed. Eric. thanks Yes, morning Good

on Yes, few flow, so haven’t just we while a that. comments on guided cash

QX. in pay throughout We expect pay here the and to with that down year. on did down XXXX, last debt the operating with least be line model do about operating We cash talk continue at part the to We we ability are $XXX is million expect flow pleased that. to our call significant in of realignment

We working benefits and capital will continue flow our there, a from aid efforts debt. we here cash work think perspective paying on addition in in to focus streams down the that

Operator

to John remarks. closing There are questions at time. return over no I further you. for call the this Thank

Edward Pesicka

Ed close Actually, this is I will out. it Pesicka,

of joining I call all, thank the on want for to everyone First today.

look Your forward appreciated we the there lot beyond on, things company even the excited participation is and greatly a and as and in the going your in are interest year we are that. and I forward, year in about think as company. But value that continues the of

it talk also market about with starts our within market growth, continued growth. significant but expansions that margin We segment. It patient that driven has segment, to outpace direct it’s

that, sorry, in the remarks Q&A. in In prepared our our the it we strengthen, today continues medical addition talked and to distribution as about division, to operating--I’m

Our operating gain in hold, going to back the about year it’s as the on track, we initiatives. I’m we model it’s taking half realignment, ramp It’s of extremely traction know that. the on excited already

PPE, be capital invest nimble the you to we for cash exceptional was to to continue through growth. saw quarter to of in that which what remainder continue enables expect work the in strong well to debt flow opportunities year, pay down going us and and We’re cash deploy as flow, this aggressively exceptional the both and de-stocking as through

everyone Thank talking you the the With to end forward you. next of time and to thank for today, that, at I quarter. look we call the on the

Operator

conference concludes This today’s call.

now disconnect. may You

Owens & Minor (OMI) 5 May 232023 Q1 Earnings call transcript