OMI - Earnings call transcript Q4 2024

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Operator

Good day, and thank you for standing by. Welcome to the Owens & Minor Fourth Quarter and Full Year 2024 Earnings Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jackie Marcus, Investor Relations. ahead. go Please

Jacqueline Marcus

Hello, Minor operator. Call. welcome the to Thank Quarter everyone, and & Fourth Earnings Full Owens you, and Year XXXX

Our included quarter will results comments outlook for as call on of our press on financial which release. all the are well be as for today's full and focused fourth XXXX, year in XXXX the the

Minor we future cause implied section that in risks release, are addressed that current about from results financial posted our Investor subject call, uncertainties, Relations here today. slides, during statements and with note on business, materially performance Please supplemental or of actual make the events. along website. The reflect to projected The views press are statements and to & matters could which our differ forward-looking of will these those this the our Owens

expectations, Our is in faith, there and projections believe we basis expressed beliefs and them. reasonable good a are for

be quarterly of our refer to assurance can including XX-Q. XX-K annual Please filings a for report of However, that SEC section risks Form with achieved. on and description and Factors full expectations, projections result and the uncertainties, be our reports there our no on these will or Risk Form beliefs

new obligation that update forward-looking Any no today, a or statements these law. required our release events or we statements by future the in and extent earnings of to this press result undertake call information we except make applicable on of are to as as

trends. financial our are investors performance comparable financial might will to measures today, and discussion non-GAAP to of Information press believe measures understand GAAP and these help we most reconciliations our better in In about the our included release. measures our business to they refer

I Minor call & Executive to over Today, Chief Officer. Ed. and Financial the and Owens Chief joined by Ed now Officer; will turn John Pesicka, Leon, President company's I'm the

Edward Pesicka

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

we against an pleased year strategy of made Day outlined have we Minor, Owens I December progress for important Investor was & and the in am XXXX. our XXXX that with the at

we sheet and to deleveraging. Services leading through Healthcare & our balance platform building patient As optimizing our committed flexibility direct segment, a reminder, Product leveraging

continue Within the developing manufacturing a product we to capabilities. see P&HS, of distribution footprint our in and broadening enhancing momentum streamlined our portfolio, and efficient

patients with us home capabilities, we continue Those Direct, Patient leverage of home-based very broad footprint leaves support and to demographic Within of product on treatment our the options, with bullish business. the expanding and conditions. combined to care for trends future offering positive chronic millions this

provide debt [indiscernible] Finally, which we we last financial shareholder years, the repaid value. believe $XXX long-term to million which X acquisition helps of the the drive of Rotech, over will flexibility

morning, in published & along segment Healthcare we press well this mentioned discussions the of the process. As sale potential release robust Services been in and already our engaged actively we regarding in have our Product are

considered higher the to many Direct while few past to Healthcare higher-margin over the have XX months, segment. Services on our Product the past Accordingly, focused strategic growth, the work reinvestment years, Over have & Patient segment. enhance we capital we options, continuing

stronger have growth. has a future P&HS it actions well realigning positioned entity The and for on we made taken

having by and encouraged are We are process. we in the conversations excited in and the interest P&HS business ongoing strong

of comments. his release repurchase John detail that prepared will share authorized our this Board has program published $XXX also during press Directors In morning later provide of million. to up a addition, more the mentioned

in acquired plan ago customers. half we incredibly planning to nearly to We united delivering our we by operations acquisition diligent expect excited a together. planned of our Regarding of close remain first the the to of awaiting remain with a and our process service synergies decision final interface platform through are from Rotech, improve we regulators, the is our our optimization as in we X the and future the of years Apria It prospect leverage while existing XXXX.

been done further the create have the we in understand work on past the of possible, we opportunities both extent year expedite close. months and what our and time. we of previously that million already synergy have to know using the few is synergy ability to now date, cost post terms synergies conservative in the $XX value and projections we believe To discussed X Based to

Midwest Owens in commend Before hurricanes and situations I fires XXXX for record-setting difficult Minor. XXXX XXXX, devastating in significant want a historic teammates heartbreaking storms flooding We our at & saw Southeast, our goals and many discuss our earlier and the to performance I and in the take moment in winter Northeast across the Angeles. this and Los year, and the the including to

incredibly care. ensure our Minor and and our needed. am at Facing the teammates that customers assembled that takes vital teammates core proud we have team these the that Owens embody they of belief extraordinary circumstances, that I patients our medical supplies & life and receive critical our

to Now XXXX. moving on

improve mid-single-digit set technology and focused XX% experience, sustainable long-term business in and expand drive we in EPS, long-term growth line customer up offering our strategy, While adjusted ourselves on to while reinvest continuing the for top we also our delivered greater operational growth. to growth efficiencies,

Direct. Starting Patient with

quarter market outpaced for growth for business and growth with Direct the mid year. single-digit the Patient Our

teammates categories. of in of deliver of $XX Journey with making our management the us progress addition, In double-digit our The year cycle million and also it and while supply growth growth helped fourth significant helped many smaller incremental which revenue delivered income for the program, strong operating deliver addition year-over-year, sales over quarter.

Direct. opportunity Byram as our Patient of in remain manage digital we the we diabetes. in continued to Finally, significant ample was advancement coach our have still but all for help as Connect, therapy made across categories, about health investments a technology well launched improvement as Overall, of we excited progress future and XXXX,

our moving on segment. now So to P&HS

continue Services growth sales solid same-store and Medical & in full segment show Distribution to Products lower glove our by partially Healthcare offset Our for division, quarter year the pricing.

progress make into and capturing driving significant our want team I subsequently that Next, improving operations. efficiencies dollars and to in recognize to more even those continues savings P&HS reinvesting the

we product proprietary advanced distribution construction of with and the our automation, the portfolio, kitting XXXX, with new progress consolidation made centers have began DC continued During our footprint. of

great made long-term we strategy progress to optimize segment. our P&HS Overall, related our to

undervalued. expanding on areas. to invest needed cash I keenly As and in look strengthen free focus should and these our flow our be team as continue it our our are balance into ahead support we business I XXXX, the stock One, on will focused sheet, to

continue of while driving Three, regulators; steps and approval, segment. all growth. into be Patient Direct gain quickly disciplined profitable to continue we upon to will will begin will Two, the integration Rotech to we the take from clearance we

And finally, will segment. work we the Healthcare & process through Services to related our Products

XXXX forward, to long-term at made progress the of XXXX. advance in in to I'm excited that look upon strategy we outlined we build I As our Investor Day December

I'll over to in discuss financial financial XXXX that, it more detail. John and in our performance John? guidance With to turn for XXXX

Jonathan Leon

and XXXX cover financial outlook our morning, drivers a detail. trends quarter key good review everyone. greater in of fourth and Ed, our will last start for of and then some the year and from I results with into dive Thanks,

measures. during found this release reconciliations to in can Please today's my All earlier non-GAAP GAAP on morning. filed be will non-GAAP call, note that press the financial remarks financial only I discuss

With let's to turn results. that, fourth quarter

year's There revenue XXXX. for compared compared accounted The was fourth the year. of & the year the fourth quarter one segment was grew to billion, overall segment's quarter selling which X.X% Healthcare this Our for $X.X the growth. quarter, to prior more day last up to Services Products compared X.X%

our While the in knock-on fluid lower offset grow to shortages of effects continued our distribution prices the The sales volume some customers. procedure and to and volume fluid sales year-over-year, the have it shortage of division the same-store was growth during quarter. Medical Distribution impacted IV by nicely IV subsequently

Patient Direct X% in once demonstrated revenue strong fourth of compared grew growth. supplies again to diabetes 'XX. quarter the by

in respiratory previous such discussed therapies and on decline a home year-over-year as quarters, basis. NIV As oxygen

encouraging XXXX, towards and we saw this these expect the late signs to to fourth turnaround therapy growth return in quarter. We categories during

or fourth and with were essentially Gross profit points as quarter XX was by inventory basis third XX XX.X% in at net fourth Margin LIFO a $XX $XXX levels year's the meaningfully benefited expanded flat million from XXXX December of and was of to XX. the last credit September quarter compared lower quarter to revenue. million compared

in Our compensation distribution, were from in revenue The selling quarter teammate benefit DS&A expenses costs. the when fourth and in increases to XX.X% workers' of primarily quarter year's at and last million, revenue. administrative of DS&A higher due XX.X% $XXX million was $XXX increase was expenses up for

the attributed third the modest growth, of and year-over-year adjusted offset higher $XX quarter, was income change DS&A an million million $XX increase to The fourth to less in fourth Adjusted was the operating income compared which by operating $XX expenses. million quarter can be XXXX. in revenue than quarter

debt for by This earned expense driven quarter. quarter. $XX change year's our was was the million the under the was versus quarter fourth Interest and down about offset prior prior fourth income million just partially reduction fourth compared to by less $X.X continuing interest

million XX.X%, for or was per tax the the $XXX versus year. compared or EBITDA the Our of Adjusted million $XX quarter during million income XXXX. was unchanged fourth per last million XX.X% was quarter $X.XX of effective largely adjusted fourth $XXX $XX the from Adjusted 'XX. share rate to in the reported $X.XX share quarter net

division. projections expect used contract charge we future million to including during net and in the were capitation extent, at impairment the pricing noncash impact This goodwill a earlier to not market in impairment far XXXX anticipated results. previously the analysis, was to fourth the the have We on financial a a changes do recorded month, a this assumed change, adverse significant quarter. primarily related As lesser financial charge $XXX contract Apria tax disclosed in of the that changes quarter

has driven more the outlook by changes because $XX changed importantly, million nothing this. in our flow primarily in about quarter, cash positive operating generated for working We of prospects fourth of Apria's And capital.

quarter working debt to million. better last often throughout As our on of day yielded flow the quarter, allowed capital represented happens, reduce the us was the management $XX that which cash by

business million, and down $XXX million capabilities last of of full reduced was our have reducing commitment flow $XXX paid leverage. we cash the the over by debt the demonstrating years, to X For and debt the year,

Now with start full XXXX. and for we up new year, of the year will provide wrapping guidance the XXXX the of

Also, Products the does of As not & expect any guidance a Healthcare any include sale not potential XXXX. include does activity. Rotech the in guidance does we repurchase still half of share of shared include any our and acquisition, from future our not potential segment which first our close impact today reminder, Services here to impact

in expect we yielding $XX.X growth million to be XXXX, EBITDA So of segment. from with in a to XX% with range percentage of XXXX. be will range revenue our midpoint a to approximately representing year the that, the Adjusted expected is in $XXX mid-single-digit for to growth billion Patient over $XXX $XX.XX $XXX of Most billion, growth the $XX.XX the full million of come even Direct billion. million midpoint

has growth. approximately XX% and EPS Adjusted of a to of per a $X.XX share $X.XX representing range midpoint guidance $X.XX,

As XXXX, about last in expect we flow see we improvement year. to marked think cash from

have We further for in million expect at available XXXX. debt least to $XXX reduction

expectation million this minus can of in and of expense on the out $XXX spent flow, cash our cash as items, as taken guidance demonstrated of Those charges. and we be gross $XXX well of to the that working EBITDA past be we a approximately less believe midpoint detailed, result are and achieve. our million items acquisition-related of million CapEx $XXX expected adjusted exit be task another believe and guidance, of the provide we $XXX is the million as can realignment reasonable $XXX midpoint of it interest a million have We in included capital, would just

come guidance. flow So to is the in from XXXX the year-over-year cash included adjusted expected our improvement largely growth EBITDA

exit cash realignment and the items charges in lower expect acquisition-related in and spend working improvement capital included anticipated and management. We on

And levels bring our There no so. close in work to use incremental after quickly debt and of flow the debt-to-EBITDA the diligent reduce we levels. remain efforts Xx between do free cash leverage maintaining to of will to our We intend down Xx. debt to Rotech will and goal to change acquisition, is

has of program repurchase Ed Board to a our of $XXX Directors As up share million. mentioned, authorized

debt for share manage objective, prudently our cash will remains repurchase We between flow activity. leading using reduction, which and

cash the use with my of currently repurchase undervalued However, and flow. shares we so sound very weeks, believe all so is especially a last in share few

will trend business, increasingly flow X guidance of least When with year, our the earnings occur and we the full the cash and our given at thinking being the quarter expect the over year is course the how quarters the in as about XX% last year of nature to of of strongest. the typical fourth

also pattern a usual quarter net We first as the quarter. lowest first we the often see, of earning we And to being the expect be borrower our during quarter. expect

and were this on X-K Relations our As a filed information reside morning key reminder, of and our modeling guidance the under Form section website. assumptions other Investor

I will now the to the call operator Operator? questions. back turn for

Operator

[Operator Instructions].

Caliendo question first Kevin with Your comes from UBS.

Kevin Caliendo

in some deal know is first the with surprising when a you out, Rotech. Because the knowing trends And Rotech the want think results was people out, the year-or-so? Rotech? to I to knew I now bit what versus announced, think I guess why the were of just you anything deck we you, when X-K the I don't start over there last at alarmed little see knowing what ask came came

just I of at that that there's that the and could anything when appreciate, sooner. the business, could be the is you growth making surprising, that's I the But looking come at there Ed, -- million of cost different margins are and all? there comment the $XX greater business than synergies --

Jonathan Leon

had we've leaving question on The John. no. people no of XXXX what the of all us, I that it's a saw to and of XXXX people impact for seen. all XX-XX legislation versus lot us. impacted is forget surprises Kevin, of significant that the answer a But think -- There's

do I think we a stated government exposure Rotech little it's bit than been to has reimbursement. more

impact maybe So there. a greater

very overall, more healthy say is got and we up would active I that's a surprise model. clarity, no we've dialogue the Rotech But deal our and how that really now with their little team, whatsoever have we with ending know a consistent year

Kevin Caliendo

back flow. we a should is how repurchase. share And over of on free repayment. have about can Like ask a Okay. that also you the Is That's the we conjunction? about that thinking can helpful. for of appreciate expected first If priority you time? be follow-up the redeploy million the in I that cash I million $XXX million or $XXX $XXX it course think Should buyback? something those that debt

should pay buyback about the understand this million just what you're opportunistic? flow down debt more $XXX of year. and Just how the goes And thinking to capital deploying to we million me assume $XXX is free cash that help --

Edward Pesicka

Yes.

I pay objective to continue So also first throughout that opportunistic business we think in the important. the be extremely on stock undervalued the of be should primary But same to is to down debt. year. continue meaningfully sense, That's would the

to that's think it. the I about way think

Operator

Michael next Leerink with question Cherny comes from The Partners.

Michael Cherny

versus to parse start you expect course talked Patient Direct Maybe on, a expectations in underlying of growth on you try if what and position market see outgrowing you just John, you on gains, and gains? evolving see sense of in share organic we to some on can rest market terms XQ Can over commentary to 'XX? to mid-single-digit roughly about bit the the this given the your the about speaking, the year. an business and get volume a I the versus that of little want market itself basis where trends. continuing out of price

Edward Pesicka

sorry, op that, the year And full income. well growth the thought the I think over actually I can as we business $XX business Maybe Look, mean the John million strong it. year we to about add start, it, commentary then fourth quarter. single-digit Yes. I'm -- I'll of had some not and a again, double-digit really year. entire for I only in Direct mid Patient had if as increased

good the about we've had as where If supplies. we've really I well nice diabetes pretty had in some of areas think continuing some growth success, success with in as

double-digit saw I area in bit smaller and some other categories, added some resources. was did those smaller where in of a close The little add we've we we my to the on resources touched categories in comment growth

it home I to -- which be whole and look as us, make and one standpoint. organic business space. going focus category NIV in and of The an that area respiratory would the an it's area It's continue say, the a where this, we're on really still, to direct XXXX we're oxygen underperforming growth on then entire in and for to could help to a from lift actually completely

additional think some the as to again, we where I if the market John, pockets our some add starting you the the as of added. seeing know more like we've for But that. we've are off, we're and believe, look strong, made any growth mid-single-digit want Sleep I at the of people quarter, of and year strong relatively compared Journey to to to pay color some the investments where you well don't

Jonathan Leon

I Mike, strokes demographic the thing entire strong tailwinds your comment, would the us add, of Yes, at look the the broad to only for The picture big space. in remain very industry.

that think us heard regardless and and of others, we services. the good as keep and therapies out, really supplies seen our from for see still demand coming I you

plenty and I demographics years across just overwhelmingly share again for to tailwinds there's positive broad-based, are of So to yet be come from think gained and us. for the

Michael Cherny

performance year a maybe cash work of obviously a instituting to buyback. you of the talked Rotech on Kevin's a term regarding as Very the the closes, deployment assuming, amount That buyback dynamic And about as the of that component, stock. capital much that pay taking of appreciate a follow-up be said, of said use beginning deal the meaningful being you'll down. you've near debt and given that. Appreciate the new at being to the question you recent

right it's of and currently? think dislocation the buyback in is should the flow we why the see in your stock against given cash where the I needs, guidance about $XXX potential? you million How number the know not cadence

Jonathan Leon

Yes. think we perspective, right a Ed Mike, as now. it, From we just is way way, cadence's all think believe about I undervalued said, stock the one,

with back enough there's than our a so And better out ROI buying shares. own there

So being the debtor through QX doesn't QX, we more a net as bother get much. net a -- flow be the to year. throughout we We're we little debtor of a as cash tend in that mentioned, confident

couldn't all necessarily buyback stock the be if aggressive Keeping stock around rules wanted get just oversold. that So But our for be we'll we through we how trading us. it And remains daily performs. would so the a in anyway. the volume, mind average given see to and that quickly problem

$XXX certainly then again, we overall million, million, to see should why capital believe And the as and market as given today, future we obviously, get remains right. think will if But isn't Ed Board value. unfortunately, we of greater about of priority $XXX we market we cadence where flow, the as the rise. revisit million stock And we given just cap felt the will what think consideration $XXX and repayment given where a said, debt are stock it cash the a the be, we

Operator

question comes next from with JPMorgan. John The Stansel

John Stansel

want touch, I I can it by Mexico-based help tariffs, framed but completely, potentially but anything day, you is you just impact if know appreciate Just the quickly there size tariffs? on to don't from the commentary changes

Edward Pesicka

Yes.

at John additional the can So I'll add and start comment end. again, then some

tariffs about So players significant industry. for us as aren't the as they may tariffs, in be so for you if other think

to we increase tariffs on product and of come that customers. to to going to as be pass first all, we're in clear our those have the think, I However, got costs,

If on as will Because as that pass in in segment of made tight those on. we is, our business, our a not with about the are are to costs products China. majority overall margin we the impact P&HS have think business vast profile it

had with year as gloves highest off So let's this that coming as because on table year on with last XXX% take the that close combined tariff to through over year, first significant increases the well facial protection. next

and Asia an make as our products, do products not that's Mexico So We make of Honduras. well us. in as do U.S. in Southeast impact we the our and some to

our low I think footprint is we our P&HS digits we about of that But we what that's single pretty through Mexican a products think really if sell fluid segment. in our situation. in make it,

don't know I anything there's John, else... if

Jonathan Leon

Yes. on color put a of lot that.

the So you about and revenue of is the what X.X% back the comes think Mexican about of segment. into our P&HS U.S. facilities total

and that's to a looking Mexico small exposure So China. both and really

John Stansel

-- you up the percent SG&A margins sales about and kind kind if looks adjusted out of year? slide how relatively can for is and gross thinking as Great. guidance of like based I a you're anything EBITDA roughly there should your more And next just on stepping for one flat 'XX in. spend of [indiscernible] The call SG&A proportionately. investment about with Is

Edward Pesicka

Yes.

we look an impact our going I costs from to at we're can continue customer to think -- out. to ways our optimize it, to ways base. continue to But SG&A it's standpoint, look service take to obviously,

thought we it to get how that's as we going in So XXXX. about

Operator

comes question next with Grosslight from The Daniel Citigroup.

Daniel Grosslight

as few on to P&HS then dedicated yet one into? Direct. Patient now be think process, But completely Just sale are to Patient a to or may to I'm higher high-level areas this? time line, to And you the do the Direct that the of are growth years capital about you right higher is look other there margin, we down redeploying capital deploy curious XXX% a you're going why

Edward Pesicka

comes it now? inbound question, multiple our had interest, why interest the guess to, the asset on on I of really segment. mean received so inbound now why P&HS back I we

with if In much process, we've at broader let's addition we've made we undertaken. got was okay, well decision a is interest, as . say, our -- that what the that, as done advisers inbound to then we've to worked and Board this which look

what we're of process, expanded to again, broaden interest it. and And significant interest, of are important -- it actually as now. that, it was stage disclose now in process move we in is that forward And the sure we make we that where fact the we that the through thought inbound we moving because this one, this

to internal our reach move forward our dialogue decision able own to frank versus within and open trying supplier and we with our communities, way, it, teammates -- that customers, this slow have with quickly about could continue be So this. to walk within conversations

Daniel Grosslight

kind And then of deploy the of as getting potentially medium will to are do think be XXX% term, so dedicated thinking about into? you capital you or where in Patient Direct areas you other about next more you

Edward Pesicka

we near I continue will transaction as Well, think we term, down Direct the -- should with focused Should to with through paying paying will debt. Rotech, segment, the on in on that focus segment, Patient down, that be business optimizing happen debt the P&HS we our that it get our regulators move forward.

I think we $X as yet disclosed through business think growth XXXX areas, revenue PD we be that XXXX strategy, be determined. out organic business that's about expand our Whether in into we expect both by to other longer to was billion we and December, acquisition. in a through

Daniel Grosslight

Got it.

And X, year there's the think cost from you're of conservative any Rotech changes if going deal to on in how accretion to how X and you change And was $X.XX commentary year years from year the said I and thinking about X. in neutral year that that? in be accretive million synergy I'm thinking being in curious you're X. then your in Any X around if pull about previously the $XX there's X year and forward X? deal in Okay. of any it

Edward Pesicka

Yes.

here's think what I we've done.

back this from I really important step this. is to think -- it's

been has process So now. obviously, months the delayed

have we together we see during these within how available the last how guidelines few information time, period can So we've can months and work those the conversations. on of to what businesses can really of that used X understand

additional Based on the actually getting that, that be them should are we speed synergies and to believe faster. that there

from period of some were that do bring during talked work that up that would a by we to Some time, time X, think been we actually we that's and closed year, we in frame is which we we forward. of have had the of originally it last done next end year light, of $XX able this can why October-November back million, of the about think

going be things, have year I made through as be some In still X impact there's of some we in to still that look there's year X, decisions -- that to X to expedite full in half But able see not we that. first when of back be start should the first months. may in X is to year that to that think

adjustments the once get regulatory I approval And we'll and impact think as on overall this, on back on as and well the financials. with synergies timing come on we it the dollars has

Operator

[Operator Instructions].

with Baird. question Your next Coldwell Eric comes from

Eric Coldwell

on the you have overly material capitated Apria on don't that John, say it you one an expect contract. heard I impact First XXXX. to

or in mix my I'm you any because aggregate? as happens much contract So of is question discussion just the the on what size well how Direct is? that provide in get it's the already change as capitated the the hoping it's that details is, more or can to impact you Patient on revenue pricing overall, that so have today anticipated later that change year, just that in of just 'XX maybe or is effect a more pricing not material

Edward Pesicka

can then Yes. little Maybe and detail. talk bit I can start about John a

think, I -- Eric So question. the I appreciate

step from this. back Let's

smaller few is today, contract, of capitated of So portion business, in industry. big this in And first Patient overall, the a of industry really the Direct we outside very all, our capitation picture-wise have contracts.

to we as think I'm not So little that's got that on saying that be John's this contract. approach to it impact to that bit I a this, is -- accept our XXXX. the talk want large to This backdrop. And comments in will small about a capitated and I about tie is contract. capitated a a

look take relatively whether business, approach through contract we contract when at And we or an disciplined retain to we or it, it go for extremely not and either So the we direction, assuming in any we've negotiations, modeled retain capitated a our speaking. contract all in factors. that matter

to at get customer? In current going we where required be the to it's we deleverage know Where serve volume, point look starts see had that's we of can go deleveraging what's we level the volume. till that is We know that having we increasing. this of business? we luxury trending the contract, to our And the the the it point and where to service a

out And may It sure where put capitated gives that about reasonable had then historically -- that's us fair we've has contracts. a this contract talk ability versus the bit capitated others and other we let me not. make to had there little a

So out did did there contract. contract, was another not group win that we win Others that with capitated came contract. and the a

X, service it they business in be, However, type they year back where state and within or on it to came fee-for-service we business it, reopened the the reopened wasn't a and regained of needed retained California, and and a model. specifically

and So of I putting take offering. I think together the our paint in because when that picture we bid go discipline through try this we our process, in

think on that I is rigor overall this thing other that we benefits within discipline business. that have the us and the

talk have look at that, have impact already say, the 'XX John, with bit numbers impact the for can a not how about 'XX baked to So that's into meaningful okay, and and we a maybe that us. you going little we it's

Jonathan Leon

No, that's right.

year as these takes a obviously, things under we're if the a Ed contract, were -- current switching months very, -- So it's the will, the costs It of Eric. into said, already time. very with high. you time -- the X older switch the contract large lot the pricing, current to and These

switch contract, actually new should it to to it, contracts them. have a capitation of quite And size lot time of the lose switch a takes So to time it a resources under long we dedicated this out. out frankly,

well customer and our known. to So is serve pretty still flex that effectively the ability

whether modeled feel we lower it, pretty feel At to can to time out. what the we change is pretty the if to lose lose good we've the we it's happy the were of to day, we pretty there if and just pricing, in our ability XXXX contract, fairly effectively. a manage that the and/or ability end So included -- take for surely cost pricing our good manage to in in this about about

Eric Coldwell

loose the enough. across framework on guidance the profile... thinking for And top give Fair segments on you margin Can segments? gross performance for us ops here. then EBITDA X on and XXXX you're line Any X ballpark what continuing any

Jonathan Leon

Yes.

top Direct to I in be line, As it you're bulk XXXX. to come guidance, we midpoint better think is revenue I Direct. from Patient of say using mentioned, I Patient expect growth of was the that going growth-wise than the

we the sales medical You back going the forward. much same-store Day, way our at distribution Eric, may recall didn't as in -- expect Investor and

pleasant surprise into XXXX. that that continue got not in nice a I'm We XXXX. on will sure

the line Direct, of come a to From significant either not for lift of see consolidated maybe an there's a that perspective, at you'll at but I segments. EBITDA of little P&HS on lift will bulk little margin both improvement bit given little Direct. a the think just both So the more segments, at basis improve Patient bit overall out grow is will be room Patient margin a EBITDA margin lift there margins in

Eric Coldwell

EBITDA. know I you credit way And the impact LIFO and charges reported has your on an treat

was, a quarter, $XX I talking... million this credit think I'm I'm what if Sorry, remembering?

Jonathan Leon

charge XXXX. basically it -- and charge the for flat in are credit we relatively million $XX expecting was for $X quarter, year million the small a

Eric Coldwell

Okay. keep going? Can . I

Edward Pesicka

Sure.

mic. got the You

Eric Coldwell

All right.

mean I press estimate, in apologies some Sorry, we've clearly P&HS to you et others. your the give to between what's filings in in are allocations but to tried what releases your XX-month adjusted last certain of EBITDA an and Would share expenses, segment? versus uncertainties the cetera. reported there willing ballpark be you

EBITDA what curious give in So just LTM was could your us if P&HS? of framework I'm you

Jonathan Leon

of was framing EBITDA. between is that P&HS XX%, consolidated the I XX%

Eric Coldwell

line. is on how that's in what anticipating were last financing And for talk you Okay. was one Has And for Rotech? me you're set about that that to . willing last -- changed now July of your went, what yes, from expectations then about roadshow debt debt in cost the it year? for

Jonathan Leon

Yes.

benefits of So truck the market. into all morning is out of release we this the that this news one get the full that information was of

market. more that well. efficient conversations remain have to will with us going fulsome went right now, we're very But the ahead. debt think the effort That help in very premarketing I flexible weeks

that's I still line think as a and in get very different actually begin basically the But market, debt receptivity. and open with expect overall ahead cost deal the good into to remain we we of Rotech got weeks model. to we'll structures

Operator

comes next of America. Allen The with question from Lutz Bank

Allen Lutz

signs did encouraging around And get needs quarter you growth? to XXXX? seeing or the NIV in what oxygen. what you to What a John, early unpack some XQ, you are in and those bit? to in see little fourth back categories happen you mentioned that Can

Jonathan Leon

the saw we the -- in vents up begin did we pick Allen, starts late. noninvasive to Yes. both oxygen and

the got pretty categories well. for before as up obviously, we of up dramatically geared the for talked ourselves caught publicly year, those requirements footed all start think the changed I a flat space flat getting little reimbursement at the the [indiscernible] that around be I've pandemic post and and footed really

important really now I good a in we're that. spot that us took begin And to a growth. So it adjust that's to And growth. think capture to to while

margin about talked categories those very products. margin that business, gross are high we As across

growth. We like it, that We're good want we them a and to at see lot.

will didn't our just -- to that into categories, we expectations. more XXXX the of improvement build it we accelerate I that this growth you, of can be tell some will those But So X we us. upside built

Allen Lutz

guess Lower me. point glove guide what's the embedded obviously last cycle has today? focal years. over in for in been that a few then glove where XXXX? the And question for pricing I past pricing are in we And

Edward Pesicka

top a prices a that, we realignment at significant seen and and operating portion have reduce offset still direction. it the prices we other model -- our I and level, seeing macro of a structure to lot with cost helping the see did did some of what go down is Allen, we're come the hit with but to effect think our portion yes, did of we're starting what in have now the right pull-through some market line

related is that that. tariffs of that portion to are good A driving

based an factors. forward and that costs I So low at input proceed opportunity there price to would things actually be may we've out to somewhat say look those depending those on adjust on as on pricing, leveled

Operator

I'll call This for turn question-and-answer remarks. concludes closing the Ed session. to Pesicka the

Edward Pesicka

Yes.

everyone the First an for look organization. I incredible I year for we of And in our joining I'm we everyone our this with an into some thank as to today. year. rest to for of want be XXXX is call XXXX. organizations call look the and teammates exciting spring. accomplishments forward XXXX, great on later to going the as all, progress forward to also want the our sharing move on excited I through the thank

So everyone. thank you,

Operator

for This you Thank concludes today's joining. conference call.

disconnect. now may You

Owens & Minor (OMI) 28 Feb 252024 Q4 Earnings call transcript