UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For the quarterly period ended
OR
For the transition period from to
Commission file number
(Exact name of Registrant as specified in its charter)
(State or other jurisdiction of | (I.R.S. Employer | ||
(Address of principal executive offices) | (Zip Code) | ||
Post Office Box 27626, | 23261-7626 | ||
(Mailing address of principal executive | (Zip Code) |
Registrant’s telephone number, including area code (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “larger accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☒ | Accelerated filer | ☐ | |
Non-accelerated filer | ☐ | Smaller reporting company | |
Emerging growth company | |||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ | ||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The number of shares of Owens & Minor, Inc.’s common stock outstanding as of April 30, 2025 was
Owens & Minor, Inc. and Subsidiaries
Index
2
Part I. Financial Information
Item 1. Financial Statements
Owens & Minor, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(unaudited)
| Three Months Ended | |||||
March 31, | ||||||
(in thousands, except per share data) |
| 2025 |
| 2024 | ||
Net revenue | $ | | $ | | ||
Cost of goods sold |
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Gross profit |
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Distribution, selling and administrative expenses |
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Acquisition-related charges and intangible amortization |
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Exit and realignment charges, net | | | ||||
Other operating expense, net |
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Operating income |
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Interest expense, net |
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Other expense, net |
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Loss before income taxes |
| ( |
| ( | ||
Income tax benefit |
| ( |
| ( | ||
Net loss | $ | ( | $ | ( | ||
Net loss per common share |
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Basic | $ | ( | $ | ( | ||
Diluted | $ | ( | $ | ( | ||
See accompanying notes to condensed consolidated financial statements.
3
Owens & Minor, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Loss
(unaudited)
| Three Months Ended | |||||
March 31, | ||||||
(in thousands) | 2025 |
| 2024 | |||
Net loss | $ | ( | $ | ( | ||
Other comprehensive income (loss) net of tax: |
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Currency translation adjustments |
| |
| ( | ||
Change in unrecognized net periodic pension costs |
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Change in gains and losses on derivative instruments |
| ( |
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Total other comprehensive income (loss), net of tax |
| |
| ( | ||
Comprehensive loss | $ | ( | $ | ( | ||
See accompanying notes to condensed consolidated financial statements.
4
Owens & Minor, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(unaudited)
| March 31, | December 31, | ||||
(in thousands, except per share data) | 2025 |
| 2024 | |||
Assets |
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Current assets |
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Cash and cash equivalents | $ | | $ | | ||
Accounts receivable, net of allowances of $ |
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Merchandise inventories |
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Other current assets |
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Total current assets |
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Property and equipment, net of accumulated depreciation and amortization of $ |
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Operating lease assets |
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Goodwill |
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Intangible assets, net |
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Other assets, net |
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Total assets | $ | | $ | | ||
Liabilities and equity |
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Current liabilities |
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Accounts payable | $ | | $ | | ||
Accrued payroll and related liabilities |
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Current portion of long-term debt | | | ||||
Other current liabilities |
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Total current liabilities |
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Long-term debt, excluding current portion |
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Operating lease liabilities, excluding current portion |
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Deferred income taxes, net |
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Other liabilities |
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Total liabilities |
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Commitments and contingencies |
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Equity |
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Common stock, par value $ |
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Paid-in capital |
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Retained earnings |
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Accumulated other comprehensive loss |
| ( |
| ( | ||
Total equity |
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Total liabilities and equity | $ | | $ | | ||
See accompanying notes to condensed consolidated financial statements.
5
Owens & Minor, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(unaudited)
| Three Months Ended March 31, | |||||
(in thousands) | 2025 |
| 2024 | |||
Operating activities: | ||||||
Net loss | $ | ( | $ | ( | ||
Adjustments to reconcile net loss to cash provided by operating activities: |
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Depreciation and amortization |
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Share-based compensation expense |
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Deferred income tax benefit |
| ( |
| ( | ||
Changes in operating lease right-of-use assets and lease liabilities |
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Gain from sale and dispositions of patient service equipment, property and equipment |
| ( |
| ( | ||
Changes in operating assets and liabilities: |
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Accounts receivable, net |
| |
| ( | ||
Merchandise inventories |
| ( |
| ( | ||
Accounts payable |
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Net change in other assets and liabilities |
| ( |
| ( | ||
Other, net |
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Cash used for operating activities |
| ( |
| ( | ||
Investing activities: |
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Additions to property and equipment |
| ( |
| ( | ||
Proceeds from sale of property and equipment |
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Additions to computer software |
| ( |
| ( | ||
Other, net |
| ( |
| ( | ||
Cash used for investing activities |
| ( |
| ( | ||
Financing activities: |
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Borrowings under amended Receivables Financing Agreement |
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Repayments under amended Receivables Financing Agreement |
| |
| ( | ||
Borrowings under Revolving Credit Facility | | | ||||
Repayments under Revolving Credit Facility | ( | | ||||
Repayments of term loans |
| |
| ( | ||
Repurchase of common stock |
| ( |
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Other, net |
| ( |
| ( | ||
Cash provided by financing activities |
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Effect of exchange rate changes on cash, cash equivalents and restricted cash |
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| ( | ||
Net increase (decrease) in cash, cash equivalents and restricted cash |
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| ( | ||
Cash, cash equivalents and restricted cash at beginning of period |
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Cash, cash equivalents and restricted cash at end of period | $ | | $ | | ||
Supplemental disclosure of cash flow information: |
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Income taxes paid, net | $ | | $ | | ||
Interest paid | $ | | $ | | ||
Noncash investing activity: |
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Unpaid purchases of property and equipment and computer software at end of period | $ | | $ | | ||
See accompanying notes to condensed consolidated financial statements.
6
Owens & Minor, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Equity
(unaudited)
|
| Common |
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| Accumulated |
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Common | Stock | Other | |||||||||||||||
Shares | ($ | Paid-In | Retained | Comprehensive | Total | ||||||||||||
(in thousands, except per share data) | Outstanding | value) | Capital | Earnings | Loss | Equity | |||||||||||
Balance, December 31, 2024 |
| | $ | | $ | | $ | | $ | ( | $ | | |||||
Net loss |
| — |
| — |
| — |
| ( |
| — |
| ( | |||||
Other comprehensive income |
| — |
| — |
| — |
| — |
| |
| | |||||
Share-based compensation expense, exercises and other | | | | — | — | | |||||||||||
Shares repurchased and retired |
| ( | ( | — | ( | — |
| ( | |||||||||
Balance, March 31, 2025 |
| | $ | | $ | | $ | | $ | ( | $ | | |||||
Balance, December 31, 2023 |
| | $ | | $ | | $ | | $ | ( | $ | | |||||
Net loss |
| — |
| — |
| — |
| ( |
| — |
| ( | |||||
Other comprehensive loss |
| — |
| — |
| — |
| — |
| ( |
| ( | |||||
Share-based compensation expense, exercises and other |
| ( |
| ( |
| |
| — |
| — |
| | |||||
Balance, March 31, 2024 |
| | $ | | $ | | $ | | $ | ( | $ | | |||||
See accompanying notes to condensed consolidated financial statements.
7
Owens & Minor, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
(in thousands, except per share data, unless otherwise indicated)
Note 1—Summary of Significant Accounting Policies
Basis of Presentation and Consolidation. The accompanying unaudited condensed 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
Revision of Prior Period Condensed Consolidated Financial Statements. We revised our prior period financial statements to correct for a prior period accounting error that impacted our beginning retained earnings balance and total equity. The error, which was discovered during the first quarter of 2025, related to the over accrual of accounts payable that had accumulated over multiple years.
We assessed the materiality of the error, both quantitatively and qualitatively, in accordance with the SEC’s Staff Accounting Bulletin No. 99, and concluded that the error was not material to any of our previously reported financial statements based upon the nature of the error, including the immaterial annual quantitative impacts to prior period condensed consolidated statements of operations. Accordingly, the error was corrected through beginning retained earnings as of the earliest balance sheet date presented.
The cumulative impact of the error correction on our retained earnings and total equity as of the earliest balance sheet date presented, was an increase $
Reclassifications. Certain prior period amounts have been reclassified to conform to current year presentation.
Use of Estimates. The preparation of condensed 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. Cash and cash equivalents include cash and marketable securities with an original maturity or maturity at acquisition of three months or less. Cash and cash equivalents are stated at cost. Nearly all of our cash and cash equivalents 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 would be classified as restricted cash. There was
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
8
earned on a straight-line basis over the noncancelable lease term. We recorded $
Receivables Purchase Agreement. On March 14, 2023, we entered into the Master Receivables Purchase Agreement (RPA), pursuant to which accounts receivable with an aggregate outstanding amount not to exceed $
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 condensed 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 condensed consolidated statements of cash flows. Total accounts receivable sold under the RPA were $
Receivables Sale Program. On October 18, 2024, O&M Funding and Owens & Minor Medical, LLC., each a wholly-owned subsidiary of the Company, entered into a Receivables Purchase Agreement (the Receivables Sale Program) with financial institutions from time to time, as Purchasers, PNC Bank, National Association, as Administrative Agent, and PNC Capital Markets LLC, as Structuring Agent, pursuant to which accounts receivable with an aggregate outstanding amount not to exceed $
Proceeds from the sales of accounts receivable are recorded as an increase to cash and cash equivalents and a reduction to accounts receivable, net of allowances in the condensed consolidated balance sheets. Cash received from the sales of accounts receivable, is reflected in the change in accounts receivable within cash provided by operating activities in the condensed consolidated statements of cash flows. Total accounts receivable sold and net cash proceeds under the Receivables Sale program were $
As of March 31, 2025 and December 31, 2024, there was a total of $
Acquisition-Related Charges and Intangible Amortization. Acquisition-related charges consist of one-time costs related to the planned acquisition of Rotech Healthcare Holdings Inc. (Rotech), which consisted primarily of legal and professional fees. For the three months ended March 31, 2025, we incurred $
9
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, accounts receivable, accounts payable, and accrued payroll and related liabilities reported in the condensed consolidated balance sheets approximate fair value due to the short-term nature of these instruments. The estimated fair value of our reporting units determined during a quantitative review of goodwill utilizes unobservable inputs (Level 3).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 condensed consolidated statements of operations.
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, 2025:
|
| Products & |
| ||||||
Healthcare | |||||||||
Patient Direct | Services | Consolidated | |||||||
Carrying amount of goodwill, December 31, 2024 | $ | | $ | | $ | | |||
Currency translation adjustments |
| |
| |
| | |||
Carrying amount of goodwill, March 31, 2025 | $ | | $ | | $ | | |||
Intangible assets subject to amortization, which exclude indefinite-lived intangible assets, at March 31, 2025 and December 31, 2024 were as follows:
March 31, 2025 | December 31, 2024 | ||||||||||||||||||
| Customer |
|
| Other |
| Customer |
|
| Other | ||||||||||
Relationships | Tradenames | Intangibles | Relationships | Tradenames | Intangibles | ||||||||||||||
Gross intangible assets | $ | | $ | | $ | | $ | | $ | | $ | | |||||||
Accumulated amortization |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( | |||||||
Net intangible assets | $ | | $ | | $ | | $ | | $ | | $ | | |||||||
Weighted average useful life |
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At March 31, 2025 and December 31, 2024, $
10
As of March 31, 2025, based on the current carrying value of intangible assets subject to amortization, estimated amortization expense were as follows:
Year |
| ||
2025 (remainder) | $ | | |
2026 |
| | |
2027 |
| | |
2028 |
| | |
2029 |
| | |
Thereafter | | ||
Total future amortization | $ | |
Note 4—Exit and Realignment Costs, Net
We 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 include professional fees, severance and other costs to streamline functions and processes. These costs are not normal, cash operating expenses necessary for the Company to operate its business on an ongoing basis and are excluded from our segments’ operating income.
Exit and realignment charges, net were $
These charges were primarily related to strategic initiatives and operational improvements to increase net revenue and lower costs as well as a provision to accounts receivable related to our Fusion5 business which is in the process of being wound down. In addition, the gain on the sale of our corporate home office in the amount of $
The following table summarizes the activity related to exit and realignment cost accruals, which are classified as other current liabilities in our condensed consolidated balance sheets, through March 31, 2025 and 2024:
| Total | ||
Accrued exit and realignment costs, December 31, 2024 | $ | | |
Provision for exit and realignment activities: |
|
| |
Severance |
| | |
Professional fees |
| | |
IT strategic initiatives | | ||
Other |
| | |
Cash payments |
| ( | |
Accrued exit and realignment costs, March 31, 2025 | $ | | |
Accrued exit and realignment costs, December 31, 2023 | $ | | |
Provision for exit and realignment activities: |
|
| |
Severance |
| | |
Professional fees | | ||
Other |
| | |
Cash payments |
| ( | |
Accrued exit and realignment costs, March 31, 2024 | $ | | |
In addition to the exit and realignment accruals in the preceding table, we also incurred $
11
of Fusion5. For the three months ended March 31, 2024, the table above excludes the $
Note 5—Debt
Debt, net of unamortized deferred financing costs, consists of the following:
| March 31, 2025 |
| December 31, 2024 | |||||||||
| Carrying |
| Estimated |
| Carrying |
| Estimated | |||||
Amount | Fair Value | Amount | Fair Value | |||||||||
Term Loan A | $ | | $ | | $ | | $ | | ||||
Revolving Credit Facility | | | — | — | ||||||||
| |
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Term Loan B |
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Finance leases and other |
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Total debt |
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Less current maturities |
| ( |
| ( |
| ( |
| ( | ||||
Long-term debt | $ | | $ | | $ | | $ | | ||||
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.
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
On March 10, 2021, we issued $
On March 29, 2022, we issued $
The 2029 Unsecured Notes and the 2030 Unsecured Notes are subordinated to any of our secured indebtedness, including indebtedness under our credit agreements.
On March 29, 2022, we entered into an amendment to our revolving credit agreement, dated as of March 10, 2021 with an administrative agent and collateral agent and a syndicate of financial institutions, as lenders (Revolving Credit Agreement). The amendment (i) increased the aggregate revolving credit commitments under the Revolving
12
Credit Agreement by $
At March 31, 2025 we had $
The Revolving Credit Agreement, the Credit Agreement, 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, 2025.
As of March 31, 2025, scheduled future principal payments of debt, excluding finance leases and other, were as follows:
Year |
| ||
2025 (remainder) | $ | | |
2026 |
| | |
2027 |
| | |
2028 |
| | |
2029 |
| | |
2030 |
| |
Current maturities at March 31, 2025 include $
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, 2025 and December 31, 2024, the accumulated benefit obligation of the U.S. Retirement Plan was $
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
13
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 condensed 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, 2025:
|
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| ||||||||||||
| Notional |
|
| Derivative Assets |
| Derivative Liabilities | |||||||||
| Amount |
| Maturity Date |
| Classification |
| Fair Value |
| Classification |
| Fair Value | ||||
Cash flow hedges |
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|
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| ||||||
Interest rate swaps | $ | | March 2027 |
| Other assets, net | $ | | Other liabilities | $ | | |||||
Economic (non-designated) hedges |
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| |||||
Foreign currency contracts | $ | | April 2025 |
| Other current assets | $ | | Other current liabilities | $ | ||||||
The following table summarizes the terms and fair value of our outstanding derivative financial instruments as of December 31, 2024:
|
|
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| ||||||||||||
| Notional |
|
| Derivative Assets |
| Derivative Liabilities | |||||||||
| Amount |
| Maturity Date |
| Classification |
| Fair Value |
| Classification |
| Fair Value | ||||
Cash flow hedges |
|
|
|
|
|
| |||||||||
Interest rate swaps | $ | | March 2027 |
| Other assets, net | $ | | Other liabilities | $ | | |||||
Economic (non-designated) hedges |
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| |||||
Foreign currency contracts | $ | | January 2025 |
| Other current assets | $ | | 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 $
The following table summarizes the effect of cash flow hedge accounting on our condensed consolidated statements of operations for the three months ended March 31, 2025:
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 Condensed 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 | $ | ( |
| Interest expense, net | $ | ( | $ | | |||
The amount of ineffectiveness associated with these contracts was immaterial for the period presented.
14
The following table summarizes the effect of cash flow hedge accounting on our condensed 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 Condensed 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 | $ | |
| Interest expense, net | $ | ( | $ | |
The amount of ineffectiveness associated with these contracts was immaterial for the period presented.
For the three months ended March 31, 2025 and 2024, we recognized a gain of $
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.
Note 8—Income Taxes
The effective tax rate was
The liability for unrecognized tax benefits was $
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 U.S. in connection with our sourcing of products by our foreign subsidiaries for sale in the U.S. by our domestic subsidiaries. The transfer pricing methodology was consistently applied for all years subject to the NOPAs and 2019 into 2022, but is no longer employed.
In late June 2024, the IRS and the relevant foreign taxing authority mutually agreed to proposed adjustments to our 2015 through 2018 consolidated tax returns. As a result, we remeasured the uncertain tax position for the 2015 through 2018 tax years, as well as the affected 2019 through 2022 tax years, to the amount expected to be paid upon a final agreement with the IRS. This matter does not impact our 2023, 2024 or future tax years. As of March 31, 2025, we owed $
15
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, 2025 and 2024:
Three Months Ended | ||||||
March 31, | ||||||
(in thousands, except per share data) |
| 2025 |
| 2024 | ||
Net loss | $ | ( | $ | ( | ||
Weighted average shares outstanding - basic |
| |
| | ||
Dilutive shares |
| |
| | ||
Weighted average shares outstanding - diluted |
| |
| | ||
Net loss per common share: | ||||||
Basic | $ | ( | $ | ( | ||
Diluted | $ | ( | $ | ( | ||
Share-based awards for the three months ended March 31, 2025 and 2024 of approximately
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, 2025 and 2024:
|
| Currency |
|
| ||||||||
Retirement | Translation | |||||||||||
Plans | Adjustments | Derivatives | Total | |||||||||
Accumulated other comprehensive (loss) income, December 31, 2024 | $ | ( | $ | ( | $ | | $ | ( | ||||
Other comprehensive income (loss) before reclassifications |
| | | ( |
| | ||||||
Income tax |
| ( | | |
| | ||||||
Other comprehensive income (loss) before reclassifications, net of tax |
| |
| |
| ( |
| | ||||
Amounts reclassified from accumulated other comprehensive income (loss) |
| | | ( |
| ( | ||||||
Income tax |
| ( | | |
| | ||||||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax |
| |
| |
| ( |
| ( | ||||
Other comprehensive income (loss) |
| |
| |
| ( |
| | ||||
Accumulated other comprehensive (loss) income, March 31, 2025 | $ | ( | $ | ( | $ | | $ | ( | ||||
16
|
| Currency |
|
| ||||||||
Retirement | Translation | |||||||||||
Plans | Adjustments | Derivatives | Total | |||||||||
Accumulated other comprehensive (loss) income, December 31, 2023 | $ | ( | $ | ( | $ | | $ | ( | ||||
Other comprehensive income (loss)before reclassifications |
| |
| ( |
| |
| ( | ||||
Income tax |
| ( |
| |
| ( |
| ( | ||||
Other comprehensive income (loss) before reclassifications, net of tax |
| |
| ( |
| |
| ( | ||||
Amounts reclassified from accumulated other comprehensive income (loss) |
| |
| |
| ( |
| ( | ||||
Income tax |
| ( |
| |
| |
| | ||||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax |
| |
| |
| ( |
| ( | ||||
Other comprehensive income (loss) |
| |
| ( |
| |
| ( | ||||
Accumulated other comprehensive (loss) income, March 31, 2024 | $ | ( | $ | ( | $ | | $ | ( | ||||
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.
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
The Chief Operating Decision Maker (CODM) for both of our segments is the President, Chief Executive Officer & Director. The CODM uses segment income to evaluate performance of our segments, determine incentive compensation, and engage in financial and operational planning, including the allocation of labor, financial and capital resources. Segment income excludes acquisition-related charges and intangible amortization, exit and realignment charges, net, and goodwill impairment charges, 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, 2025 | ||||||
Products & Healthcare Services | Patient Direct | Consolidated | ||||
Net revenue | $ | | $ | | $ | |
Cost of goods sold |
| | | |||
Distribution, selling and administrative expenses | | | ||||
Other operating expense, net | | | ||||
Segment income | $ | | $ | | | |
Acquisition-related charges and intangible amortization | ( | |||||
Exit and realignment charges, net |
|
| ( | |||
Litigation and related charges (1) | ( | |||||
Operating income |
|
| $ | | ||
Capital expenditures | $ | | $ | | $ | |
17
| (1) | Litigation and related charges includes settlement costs and related fees of legal matters within our Patient Direct Segment, which do not occur in the ordinary course of our business and are inherently unpredictable in timing and amount. These charges are reported within Other operating expense, net in our Statements of Operations for the three months ended March 31, 2025. |
Three Months Ended March 31, 2024 | ||||||
Products & Healthcare Services | Patient Direct | Consolidated | ||||
Net revenue | $ | | $ | | $ | |
Cost of goods sold |
| |
| |
| |
Distribution, selling and administrative expenses | | | ||||
Other operating expense, net | | | ||||
Segment income | $ | | $ | | | |
Acquisition-related charges and intangible amortization | ( | |||||
Exit and realignment charges, net |
|
|
| ( | ||
Operating income | $ | | ||||
Capital expenditures | $ | | $ | | $ | |
Three Months Ended | ||||
March 31, | ||||
2025 | 2024 | |||
Share-based compensation: | ||||
Products & Healthcare Services | $ | | $ | |
Patient Direct | | | ||
Other (1) | | | ||
Consolidated share-based compensation: | $ | | $ | |
Depreciation and amortization: | ||||
Products & Healthcare Services | $ | | $ | |
Patient Direct | | | ||
Intangible amortization | | | ||
Other (2) | | | ||
Consolidated depreciation and amortization: | $ | | $ | |
| (1) | Other share-based compensation expense is captured within exit and realignment charges, net or acquisition-related charges and intangible amortization for the three months ended March 31, 2025 and 2024. |
| (2) | Other depreciation and amortization expense is captured within exit and realignment charges, net for the three months ended March 31, 2025 and 2024. |
| March 31, 2025 |
| December 31, 2024 | |||
Total assets: |
|
|
|
| ||
Products & Healthcare Services | $ | | $ | | ||
Patient Direct | | | ||||
Segment assets | | | ||||
Cash and cash equivalents |
| |
| | ||
Consolidated total assets | $ | | $ | | ||
Non-cash LIFO charges to merchandise inventories valued at the lower of cost or market, with the approximate cost determined by the LIFO method for distribution inventories in the U.S. within our Products & Healthcare Services segment, were $
18
Excess and obsolete inventory adjustments included in our Products & Healthcare Services segment were $
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, | ||||||
| 2025 |
| 2024 | |||
Net revenue: |
|
|
|
| ||
United States | $ | | $ | | ||
International |
| |
| | ||
Consolidated net revenue | $ | | $ | | ||
Note 12—Recent Accounting Pronouncements
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.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses which will require additional disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The amendments in this ASU are effective for us in annual periods beginning after December 15, 2026. 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.
Note 13—Commitments, Contingent Liabilities, and Legal Proceedings
On July 22, 2024, we entered into an Agreement and Plan of Merger to acquire Rotech for $
Refer to our Annual Report on Form 10-K for the year ended December 31, 2024 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
19
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, 2025 for currently pending matters considered probable of loss, 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.
Note 14—Shareholders Equity
On February 26, 2025, our Board of Directors authorized a share repurchase program of up to $
During the three months ended March 31, 2025, we repurchased in open-market transactions and retired approximately
Note 15—Subsequent Events
On April 4, 2025, we completed the sale of $
Upon consummation of the Acquisition, we intend to use the net proceeds of the Offering, together with cash on hand and expected borrowings under a new senior secured incremental term loan B facility to finance the consummation of the Acquisition and other related transactions contemplated by the merger agreement, including the repayment of Rotech debt and to pay Acquisition related fees and expenses. Any remaining net proceeds will be used for working capital and general corporate purposes.
If the Acquisition is not consummated on or prior to October 6, 2025, or upon the occurrence of certain other events, the proceeds will not be released to consummate the Acquisition and related transactions, but instead will be released for the purpose of redeeming the New Notes pursuant to a “Special Mandatory Redemption” in accordance with the procedures set forth in the indenture governing the New Notes. The Special Mandatory Redemption price will be a price equal to
20
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis describes results of operations and material changes in the financial condition of Owens & Minor, Inc. and its subsidiaries since December 31, 2024. Trends of a material nature are discussed to the extent known and considered relevant. This discussion should be read in conjunction with the consolidated financial statements, related notes thereto, and management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2024.
Overview
Owens & Minor, Inc., along with its subsidiaries, (we, us, or our) is a global healthcare solutions company. Our business has two distinct segments: Products & Healthcare Services (P&HS) and Patient Direct. The Products & Healthcare Services segment includes our 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.
Net (loss) per share was $(0.32) for the three months ended March 31, 2025 as compared to net (loss) per share of $(0.29) for the three months ended March 31, 2024. Our financial results for the three months ended March 31, 2025 as compared to the prior year period were impacted by acquisition-related charges of $16 million related to the planned acquisition of Rotech Healthcare Holdings Inc. (Rotech), a $3.9 million increase in exit and realignment charges, net, partially offset by a decrease in intangible amortization of $6.5 million.
Net (loss) per share was unfavorably impacted as compared to the prior year by foreign currency translation in the amount of $(0.03) for the three months ended March 31, 2025.
Products & Healthcare Services segment operating income was $1.2 million for the three months ended March 31, 2025, compared to $11 million for the three months ended March 31, 2024. This decrease was primarily driven by a $17 million decrease in net revenue, partially offset by a reduction in teammate benefit costs of $10 million. Patient Direct segment operating income was $60 million for the three months ended March 31, 2025, compared to $46 million for the three months ended March 31, 2024. This segment’s results reflect revenue growth of 5.7% and a reduction in teammate benefits costs of $5.9 million.
Refer to ‘Results of Operations’ for further detail of quantitative and qualitative drivers of our results.
Potential Sale of Products & Healthcare Services Segment
On February 28, 2025, we announced that we are actively engaged in discussions regarding the potential sale of our Products & Healthcare Services segment. There is no set timetable for the potential sale and there can be no assurance that we will complete a transaction.
Planned Acquisition of Rotech
On July 22, 2024, we entered into an agreement and plan of merger to acquire Rotech for $1.36 billion in cash (the Acquisition). Given anticipated tax benefits of approximately $40 million from the transaction, the net purchase price is approximately $1.32 billion. Rotech is a national leader in providing home medical equipment in the U.S. The definitive agreement contains certain termination rights for the Company and Rotech. In the event that we terminate the contract, we will be required to pay Rotech a termination fee of $70 million. The Acquisition is subject to customary closing conditions, including expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Act, and is expected to close in the first half of 2025. We have financing in place and expect to use a combination of cash and incremental borrowings to fund the purchase price. The Company and Rotech have entered into a timing agreement with the Federal Trade Commission (FTC) under which the FTC will have until June 10, 2025 to complete its review of the transaction.
21
Results of Operations
Net revenue.
| Three Months Ended |
| ||||||||||
March 31, | Change |
| ||||||||||
(Dollars in thousands) | 2025 |
| 2024 |
| $ |
| % |
| ||||
Products & Healthcare Services | $ | 1,958,164 | $ | 1,974,837 | $ | (16,673) | (0.8) | % | ||||
Patient Direct |
| 673,884 |
| 637,843 | 36,041 | 5.7 | % | |||||
Net revenue | $ | 2,632,048 | $ | 2,612,680 | $ | 19,368 | 0.7 | % | ||||
Net revenue for the three months ended March 31, 2025, was negatively impacted by approximately $41 million as a result of one less sales day during the period compared to the same period in 2024. The Products & Healthcare Services net revenue decrease was primarily driven by one less sales day along with a decline in our Global Products division due to competitive pricing pressures, including glove pricing. The increase in our Patient Direct segment net revenue for the three months ended March 31, 2025 was driven primarily by growth across a number of product categories, including diabetes and sleep supplies.
Foreign currency translation had an unfavorable impact on net revenue of $1.7 million for the three months ended March 31, 2025 as compared to the prior year period.
Cost of goods sold.
| Three Months Ended |
| ||||||||||
March 31, | Change |
| ||||||||||
(Dollars in thousands) | 2025 |
| 2024 |
| $ |
| % |
| ||||
Cost of goods sold | $ | 2,106,035 | $ | 2,077,151 | $ | 28,884 | 1.4 | % | ||||
The increase in cost of goods sold for the three months ended March 31, 2025 reflects the increased cost associated with net revenue growth of 0.7% and a rise in commodity input costs, partially offset by cost avoidance associated with certain procurement activities.
Foreign currency translation had an unfavorable impact on cost of goods sold of $1.6 million for the three months ended March 31, 2025 as compared to the prior year period.
Gross profit.
| Three Months Ended |
|
| |||||||||
March 31, | Change |
| ||||||||||
(Dollars in thousands) | 2025 |
| 2024 |
| $ | % |
| |||||
Gross profit | $ | 526,013 | $ | 535,529 | $ | (9,516) | (1.8) | % | ||||
As a % of net revenue |
| 19.98 | % |
| 20.50 | % |
|
|
| |||
The changes in gross profit for the three months ended March 31, 2025 were driven by the same factors impacting net revenue and cost of goods sold.
Foreign currency translation had an unfavorable impact on gross profit of $3.3 million for the three months ended March 31, 2025 as compared to the prior year period.
22
Operating expenses.
| Three Months Ended |
|
| |||||||||
March 31, | Change |
| ||||||||||
(Dollars in thousands) | 2025 |
| 2024 | $ |
| % |
| |||||
Distribution, selling and administrative expenses | $ | 462,352 | $ | 477,613 | $ | (15,261) | (3.2) | % | ||||
As a % of net revenue |
| 17.57 | % |
| 18.28 | % |
|
|
| |||
Acquisition-related charges and intangible amortization | $ | 29,674 | $ | 20,313 | $ | 9,361 | 46.1 | % | ||||
Exit and realignment charges, net | $ | 31,226 | $ | 27,356 | $ | 3,870 | 14.1 | % | ||||
Other operating expense, net | $ | 2,637 | $ | 551 | $ | 2,086 | 378.6 | % | ||||
The decrease in Distribution, selling and administrative expenses (DS&A) expenses for the three months ended March 31, 2025 was driven primarily by a reduction in teammate benefits costs of $16 million and expense savings from operating efficiencies, partially offset by inflationary expense increases.
Foreign currency translation had a favorable impact on DS&A of $0.4 million for the three months ended March 31, 2025 as compared to the prior year period.
Acquisition-related charges were $16 million for the three months ended March 31, 2025 and consisted of costs related to the planned acquisition of Rotech, which related primarily to legal and professional fees. We incurred no acquisition related charges for the three months ended March 31, 2024. Intangible amortization was $14 million for the three months ended March 31, 2025 and $20 million for the three months ended March 31, 2024 relating primarily to intangible assets acquired in the Apria, Halyard, and Byram acquisitions. The decrease was due to certain intangible assets that were fully amortized in 2024.
Exit and realignment charges, net were $31 million for the three months ended March 31, 2025. These charges primarily related to (1) kitting and manufacturing initiatives of $10 million (2) professional fees associated with the potential sale of our P&HS segment of $7.1 million, (3) an accounts receivable provision of $6.8 million associated with Fusion 5, which is no longer part of our core operations (4) $5.7 million in professional fees associated with Patient Direct strategic initiatives and (5) $1.5 million of other charges. Exit and realignment charges, net were $27 million for the three months ended March 31, 2024. These charges primarily related to (1) the 2023-2024 Operating Model Realignment Program of $33 million, including professional fees, severance, and other costs to streamline functions and processes and (2) costs related to IT strategic initiatives such as converting certain divisions to common IT systems of $1.2 million partially offset by (3) a $7.4 million gain on the sale of our corporate headquarters.
The change in other operating expense, net for the three months ended March 31, 2025 as compared to the prior year reflects an unfavorable change of $1.1 million in foreign currency transaction gains and losses, net of derivative adjustments, as compared to the prior year.
Interest expense, net.
Three Months Ended |
| |||||||||||
March 31, | Change |
| ||||||||||
(Dollars in thousands) |
| 2025 |
| 2024 |
| $ |
| % |
| |||
Interest expense, net | $ | 33,959 | $ | 35,655 | $ | (1,696) | (4.8) | % | ||||
Effective interest rate |
| 6.94 | % |
| 7.13 | % |
|
|
| |||
Interest expense, net for the three months ended March 31, 2025 decreased due to lower average outstanding borrowings of $169 million and a decrease in the effective interest rate of 19 basis points as compared to the three months ended March 31, 2024, partially offset by a decrease in interest income. See Note 5 of Notes to Condensed Consolidated Financial Statements.
23
Other expense, net.
Three Months Ended |
| |||||||||||
March 31, | Change |
| ||||||||||
(Dollars in thousands) |
| 2025 |
| 2024 |
| $ |
| % |
| |||
Other expense, net |
| $ | 1,239 |
| $ | 1,153 |
| $ | 86 |
| 7.5 | % |
Other expense, net for the three months ended March 31, 2025 and 2024 includes interest cost and net actuarial losses related to our retirement plans.
Income taxes.
Three Months Ended |
| |||||||||||
March 31, | Change |
| ||||||||||
(Dollars in thousands) |
| 2025 |
| 2024 |
| $ |
| % |
| |||
Income tax benefit |
| $ | (10,092) |
| $ | (5,226) |
| $ | (4,866) |
| (93.1) | % |
Effective tax rate |
| 28.8 | % | 19.3 | % | |||||||
The change in the effective tax rate for the three months ended March 31, 2025 compared to the same period in 2024 resulted primarily from changes in results of operations in the jurisdictions in which we operate and changes in forecasted results reflected in the tax rates.
Adjusted EBITDA
We use Adjusted EBITDA, a financial measure that is not in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, to analyze our financial results. In general, non-GAAP measures exclude items and charges that (i) management does not believe reflect our core business and relate more to strategic, multi-year corporate activities; or (ii) relate to activities or actions that may have occurred over multiple or in prior periods without predictable trends.
We believe Adjusted EBITDA is useful to investors as a supplemental metric to assist readers in assessing our financial performance and in comparing our performance to that of our competitors. However, this non-GAAP measure may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.
Adjusted EBITDA should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and financial results calculated in accordance with GAAP and this reconciliation to those financial statements set forth below should be carefully evaluated.
The following table presents the reconciliation of net loss to Adjusted EBITDA for the three months ended March 31, 2025 and 2024:
Three Months Ended March 31, | ||||||
| 2025 |
| 2024 | |||
Net loss, as reported (GAAP) | $ | (24,982) | $ | (21,886) | ||
Income tax benefit |
| (10,092) |
| (5,226) | ||
Interest expense, net |
| 33,959 |
| 35,655 | ||
Acquisition-related charges and intangible amortization (1) | 29,674 | 20,313 | ||||
Exit and realignment charges, net (2) | 31,226 | 27,356 | ||||
Other depreciation and amortization (3) | 46,168 | 48,014 | ||||
Stock compensation (4) | 6,598 | 6,176 | ||||
LIFO charges (5) | 8,610 | 5,438 | ||||
Litigation and related charges (6) | 270 | — | ||||
Other (7) |
| 424 |
| 430 | ||
Adjusted EBITDA (non-GAAP) | $ | 121,855 | $ | 116,270 | ||
24
| (1) | Acquisition-related charges consist primarily of one-time costs related to the planned acquisition of Rotech, which consisted primarily of legal and professional fees. For the three months ended March 31, 2025, we incurred $16 million of acquisition-related costs. We incurred no acquisition related charges for the three months ended March 31, 2024. Acquisition-related charges and intangible amortization also include amortization of intangible assets established during acquisition method of accounting for business combinations. Acquisition-related charges consist primarily of one-time costs related to acquisitions, including transaction costs necessary to consummate acquisitions, such as advisory fees and legal fees, director and officer tail insurance expense, as well as transition costs, such as severance and retention bonuses, IT integration costs and professional fees. These amounts are highly dependent on the size and frequency of acquisitions and are being excluded to allow for a more consistent comparison with forecasted, current and historical results. |
| (2) | Exit and realignment charges, net were $31 million for the three months ended March 31, 2025. These charges primarily related to (1) kitting and manufacturing initiatives of $10 million (2) professional fees associated with the potential sale of our P&HS segment of $7.1 million, (3) an accounts receivable provision of $6.8 million associated with Fusion 5, which is no longer part of our core operations (4) $5.7 million in professional fees associated with Patient Direct strategic initiatives and (5) $1.5 million of other charges. Exit and realignment charges, net were $27 million for the three months ended March 31, 2024. These charges primarily related to (1) the 2023-2024 Operating Model Realignment Program of $33 million, including professional fees, severance, and other costs to streamline functions and processes and (2) costs related to IT strategic initiatives such as converting certain divisions to common IT systems of $1.2 million partially offset by (3) a $7.4 million gain on the sale of our corporate headquarters. These costs are not normal recurring, cash operating expenses necessary for the Company to operate its business on an ongoing basis. |
| (3) | Other depreciation and amortization relates to property and equipment and capitalized computer software, excluding such amounts captured within exit and realignment charges, net or acquisition-related charges. |
| (4) | Stock compensation include share-based compensation expense related to our share-based compensation plans, excluding such amounts captured within exit and realignment charges, net or acquisition-related charges. |
| (5) | LIFO charges include 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 P&HS segment. |
| (6) | Litigation and related charges includes settlement costs and related charges of legal matters within our Patient Direct segment. These costs do not occur in the ordinary course of our business and are inherently unpredictable in timing and amount. |
| (7) | For the three months ended March 31, 2025 and 2024, other includes interest costs and net actuarial losses related to our frozen noncontributory, unfunded retirement plan for certain retirees in the U.S. |
Financial Condition, Liquidity and Capital Resources
Financial condition. We monitor operating working capital through days sales outstanding (DSO) and merchandise inventory days. We estimate a hypothetical increase (decrease) in DSO of one day would result in a decrease (increase) in our cash balances, an increase (decrease) in borrowings against our Revolving Credit Agreement, or a combination thereof of approximately $29 million.
25
The majority of our cash and cash equivalents are held in cash depository accounts with major banks in North America, Europe, and Asia. Changes in our working capital can vary in the normal course of business based upon the timing of inventory purchases, collections of accounts receivable and payments to suppliers.
Change |
| |||||||||||
(Dollars in thousands) |
| March 31, 2025 |
| December 31, 2024 |
| $ |
| % |
| |||
Cash and cash equivalents | $ | 59,436 | $ | 49,382 | $ | 10,054 | 20.4 | % | ||||
Accounts receivable, net | $ | 580,175 | $ | 690,241 | $ | (110,066) | (15.9) | % | ||||
DSO (1) | 19.6 | 23.3 | ||||||||||
Merchandise inventories | $ | 1,408,539 | $ | 1,131,879 | $ | 276,660 | 24.4 | % | ||||
Inventory days (2) | 60.2 | 49.2 | ||||||||||
Accounts payable |
| $ | 1,380,736 |
| $ | 1,228,691 |
| $ | 152,045 |
| 12.4 | % |
Liquidity and capital expenditures. The following table summarizes our condensed consolidated statements of cash flows for the three months ended March 31, 2025 and 2024:
Three Months Ended | ||||||
March 31, | ||||||
(Dollars in thousands) |
| 2025 |
| 2024 | ||
Net cash (used for) provided by: |
|
|
|
| ||
Operating activities | $ | (35,066) | $ | (52,962) | ||
Investing activities |
| (48,200) |
| (1,870) | ||
Financing activities |
| 92,778 |
| 53,320 | ||
Effect of exchange rate changes |
| 542 |
| (618) | ||
Net increase (decrease) in cash, cash equivalents and restricted cash | $ | 10,054 | $ | (2,130) | ||
Cash used for operating activities in the first three months of 2025 reflected unfavorable changes in working capital including an increase in inventories ahead of the opening of two new large distribution centers as well as in anticipation of tariffs and payment of accrued teammate benefits, partially offset by an increase in accounts payable primarily related to inventory purchases, a $130 million benefit from accounts receivable sold under the Receivables Sale Program and cash provided by operating income. Cash used for operating activities in the first three months of 2024 reflected unfavorable changes in working capital and cash provided by operating income. Unfavorable working capital is typical during the first quarter of the year due to the nature of our business and the annual payment of teammate incentives.
Cash used for investing activities in the first three months of 2025 included capital expenditures of $65 million, primarily for patient service equipment and our strategic and operational efficiency initiatives associated with other fixed assets and capitalized software, offset by $17 million in proceeds from sale of patient service equipment and other fixed assets. Cash used for investing activities in the first three months of 2024 included capital expenditures of $49 million, primarily for patient service equipment, other fixed assets and capitalized software, offset by $50 million in proceeds from sales of patient service equipment and other fixed assets which included $34 million in gross proceeds related to the sale of our corporate headquarters.
Cash provided by financing activities in the first three months of 2025 included net borrowings of $98 million under our Revolving Credit Facility for the first three months of 2025. Cash provided by financing activities in the first three months of 2024 included repayments of term loans of $4.6 million. We had no borrowings under our Revolving Credit Facility for the first three months of 2024 and had net borrowings of $66 million under our amended Receivables
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Financing Agreement. Payments for taxes related to the vesting of restricted stock awards, which are included in Other, net, were $2.6 million for the first three months of 2024.
Capital resources. Our primary sources of liquidity include cash and cash equivalents, our Receivables Sale Program (as defined below), and our Revolving Credit Agreement.
On October 18, 2024, O&M Funding and Owens & Minor Medical, LLC., each a wholly-owned subsidiary of the Company, entered into a Receivables Purchase Agreement (the Receivables Sale Program) with financial institutions from time to time, as Purchasers, PNC Bank, National Association, as Administrative Agent, and PNC Capital Markets LLC, as Structuring Agent, pursuant to which accounts receivable with an aggregate outstanding amount not to exceed $450 million are sold, on a limited-recourse basis, to the Purchasers in exchange for cash. The Receivables Sale Program amends and restates in its entirety, the Receivables Financing Agreement. Transactions under this agreement are accounted for as sales in accordance with ASC 860, Transfers and Servicing, with the sold receivables removed from our condensed consolidated balance sheets. Total accounts receivable sold under the Receivables Sale Program and net cash proceeds were $343 million for the three months ended March 31, 2025. We collected $209 million of the sold accounts receivable for the three months ended March 31, 2025. The losses on sales of accounts receivable are recorded in other operating expense, net in the condensed consolidated statements of operations and were $2.1 million for the three months ended March 31, 2025.
The Revolving Credit Agreement provides a revolving borrowing capacity of $450 million. We have $837 million in outstanding term loans under a term loan credit agreement (the Credit Agreement). The interest rate on our Revolving Credit Agreement is based on a spread over a benchmark rate (as described in the Revolving Credit Agreement). The Revolving Credit Agreement matures in March 2027. The interest rate on the Term Loan A is based on either the Term SOFR or the Base Rate plus an Applicable Rate which varies depending on the current Debt Ratings or Total Leverage Ratio, determined as to whichever shall result in more favorable pricing to the Borrowers (each as defined in the Credit Agreement). The interest rate on the Term Loan B is based on either the Term SOFR or the Base Rate plus an Applicable Rate. The Term Loan A matures in March 2027 and the Term Loan B matures in March 2029.
At March 31, 2025 we had $98 million in outstanding borrowings on our Revolving Credit Agreement. At December 31, 2024 our Revolving Credit Agreement was undrawn. At March 31, 2025 and December 31, 2024 we had letters of credit, which reduce Revolver availability, totaling $34 million and $31 million, leaving $318 million and $419 million available for borrowing. We also had letters of credit and bank guarantees which support certain leased facilities as well as other normal business activities in the United States and Europe that were issued outside of the Revolving Credit Agreement for $3.4 million and $2.9 million as of March 31, 2025 and December 31, 2024.
The Revolving Credit Agreement, the Credit Agreement, the Receivables Sale Program, the 4.500% senior unsecured notes due in March 2029, and the 6.625% senior unsecured notes due in April 2030 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, 2025.
On April 4, 2025, we completed the sale of $1.0 billion aggregate principal amount of 10.000% senior secured notes due 2030 (the New Notes) in a private offering (the Offering) to persons reasonably believed to be “qualified institutional buyers” in the United States, as defined in Rule 144A under the Securities Act of 1933, as amended (the Securities Act), and to certain non-U.S. persons outside the United States in offshore transactions pursuant to Regulation S under the Securities Act. The Offering was conducted in connection with the financing of the Company’s previously announced proposed acquisition of Rotech. At the closing of the Offering, the gross proceeds were placed into a segregated escrow account where they will be held for the benefit of the holders of the New Notes pending the consummation of the proposed acquisition of Rotech.
If the Acquisition is not consummated on or prior to October 6, 2025, or upon the occurrence of certain other events, the proceeds will not be released to consummate the Acquisition and related transactions, but instead will be released for the purpose of redeeming the New Notes pursuant to a “Special Mandatory Redemption” in accordance with
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the procedures set forth in the indenture governing the New Notes. The Special Mandatory Redemption price will be a price equal to 100% of the initial issue price of the New Notes plus accrued and unpaid interest to, but excluding, the special mandatory redemption date.
We regularly evaluate market conditions, our liquidity profile and various financing alternatives to enhance our capital structure. We have from time to time, entered into, and from time to time in the future, we may enter into transactions to repay, repurchase or redeem our outstanding indebtedness (including by means of open market purchases, privately negotiated repurchases, tender or exchange offers and/or repayments or redemptions pursuant to the debt’s terms). Our ability to consummate any such transaction will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. We cannot provide any assurance as to if or when we will consummate any such transactions or the terms of any such transaction.
On February 26, 2025, the Owens & Minor Board of Directors authorized a share repurchase program of up to $100 million over the next 24 months. Under the program, Owens & Minor may repurchase shares of common stock on a discretionary basis from time to time through open market repurchases, privately negotiated transactions and 10b5-1 trading plans. During the three months ended March 31, 2025, we repurchased in open-market transactions and retired approximately 0.2 million shares of our common stock for an aggregate $1.5 million, or an average price per share of $8.66.
We believe cash generated by operating activities, available financing sources, and borrowings under the Revolving Credit Agreement, as well as cash on hand, will be sufficient to fund our working capital needs, capital expenditures, long-term strategic growth, payments under long-term debt and lease arrangements, debt repurchases, share repurchases and other cash requirements. While we believe that we will have the ability to meet our financing needs in the foreseeable future, changes in economic conditions may impact (i) the ability of financial institutions to meet their contractual commitments to us, (ii) the ability of our customers and suppliers to meet their obligations to us or (iii) our cost of borrowing.
We earn a portion of our operating income in foreign jurisdictions outside the U.S. Our cash and cash equivalents held by our foreign subsidiaries subject to repatriation totaled $27 million and $22 million at March 31, 2025 and December 31, 2024. As of March 31, 2025, we are permanently reinvested in our foreign subsidiaries.
Contractual Obligations
For disclosure of material contractual obligations, see our Annual Report on Form 10-K for the year ended December 31, 2024 and Note 13 in the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q for the period ended on March 31, 2025.
Recent Accounting Pronouncements
For a discussion of recent accounting pronouncements, see our Annual Report on Form 10-K for the year ended December 31, 2024 and Note 12 in the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q for the period ended on March 31, 2025.
Forward-looking Statements
Certain statements in this discussion constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Although we believe our expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of our knowledge of our business and operations, all forward-looking statements involve risks and uncertainties and, as a result, actual results could differ materially from those projected, anticipated or implied by these statements. Such forward-looking statements involve known and unknown risks, including, but not limited to:
| ● | our ability to successfully complete a transaction related to the potential sale of our Products & Healthcare Services segment; |
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| ● | uncertainties related to trade policy and tariffs; |
| ● | increasing competitive and pricing pressures in the marketplace; |
| ● | our ability to retain existing and attract new customers and our dependence on sales to certain customers; |
| ● | our dependence on certain vendors, suppliers and third-parties for key components, raw materials, finished goods, equipment and services; |
| ● | our ability to successfully identify, close, manage or integrate acquisitions, including Rotech; |
| ● | our ability to successfully implement our strategic initiatives; |
| ● | our ability to successfully manage our international operations, including risks associated with changes in international trade regulations, foreign currency volatility, adverse tax consequences, and other risks of operating in international markets; |
| ● | uncertainties related to, and our ability to adapt to and comply with, changes in government regulations, including healthcare, tax and product licensing laws and regulations; |
| ● | risks arising from possible violations of legal, regulatory or licensing requirements of the markets in which we operate; |
| ● | uncertainties related to general economic, regulatory and business conditions, including tariffs, and our ability to adapt to changes in product pricing and other terms of purchase by suppliers of product; |
| ● | our ability to meet the terms to qualify for supplier funding programs; |
| ● | the ability of customers and suppliers to meet financial commitments due to us; |
| ● | changes in manufacturer preferences between direct sales and wholesale distribution; |
| ● | changing trends in customer profiles and ordering patterns; |
| ● | our ability to manage operating expenses and improve operational efficiencies; |
| ● | availability of, and our ability to access, special inventory buying opportunities; |
| ● | our ability to continue to obtain financing at reasonable rates and to manage financing costs and interest rate risk, and our ability to refinance, extend or repay our substantial indebtedness; |
| ● | our ability to attract and retain talented and qualified teammates; |
| ● | recalls of any of our products, or safety risks or the discovery of serious safety issues with our products; |
| ● | changes, delays and uncertainties in the reimbursement process; |
| ● | our ability to adequately establish, maintain, protect and enforce our intellectual property and proprietary rights as well as avoid infringement, misappropriation or other violations of the intellectual property and proprietary rights of third parties; |
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| ● | our ability to engage in transactions that may be limited by the restrictive covenants in our credit facilities and existing notes; |
| ● | the risk that information systems are interrupted or damaged or fail for any extended period of time, that new information systems are not successfully implemented or integrated, or that there is a data security breach in our information systems or a third party’s information systems that impacts our business; |
| ● | risks related to public health crises or future outbreaks of health crises or other adverse public health developments such as the novel coronavirus (COVID-19) global pandemic; |
| ● | the risk of an impairment to goodwill or other long-lived assets; |
| ● | our ability to timely or adequately respond to technological advances; |
| ● | our failure to adequately insure against losses, including from substantial claims and litigation; |
| ● | our ability to meet performance targets specified by customer contracts under contractual commitments; |
| ● | our capitation arrangements may prove unprofitable if actual utilization rates exceed our assumptions; |
| ● | the outcome of outstanding and any future litigation, including product and professional liability claims; |
| ● | volatility in the price of our common stock and securities; and |
| ● | other factors detailed from time to time in the reports we file with the SEC, including those described in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024. |
We undertake no obligation to update or revise any forward-looking statements, except as required by applicable law.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Certain quantitative and qualitative market risk disclosures are described in our Annual Report on Form 10-K for the year ended December 31, 2024. Through March 31, 2025, there have been no material changes in the quantitative and qualitative market risk disclosures described in such Annual Report.
Item 4. Controls and Procedures
We carried out an evaluation, with the participation of management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (pursuant to Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based upon that evaluation, the principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of March 31, 2025. There was no change in our internal control over financial reporting that occurred during the period of this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Part II. Other Information
Item 1. Legal Proceedings
Certain legal proceedings pending against us are described in our Annual Report on Form 10-K for the year ended December 31, 2024. Through March 31, 2025, there have been no material developments in any legal proceedings reported in such Annual Report.
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Item 1A. Risk Factors
Certain risk factors that we believe could affect our business and prospects are described in our Annual Report on Form 10-K for the year ended December 31, 2024. Through March 31, 2025, there have been no material changes in the risk factors described in such Annual Report, with the exception of the following added risk factors:
Significant developments or changes in national laws or policies to protect or promote domestic interests and/or address foreign competition may have a material adverse effect on our business, financial condition, results of operations, cash flows, capital resources and liquidity.
Significant developments or changes in national laws or policies to protect or promote domestic interests and/or address foreign competition, including laws and policies in areas such as trade, manufacturing, government purchasing, healthcare, intellectual property, regulatory enforcement and investment/development, may adversely affect our business and financial statements. The U.S. has announced and/or implemented significant new tariffs on imports from a wide range of countries, which has prompted retaliatory tariffs by a number of countries and a cycle of retaliatory tariffs by both the U.S. and other countries. In early April 2025, actions were taken by the U.S. and certain other countries to delay the effective date of certain of these tariffs, but as of the date of this report a number of new tariffs remain in effect, including significant tariffs between the U.S. and China. Collectively, these tariffs increase the cost to us of products we import, which in turn has required us to increase the price of certain of our products in our Products & Healthcare Services segment and may require us to make additional price increases on our products, which together with the surcharges and price increases may adversely impact demand for our products and our competitive positioning; could adversely impact the availability to us of certain products in certain countries and disrupt our supply chains, with related impacts to our operations; could exacerbate inflation, diminish investment and result in broader negative impacts, economic instability and capital markets dislocation that may adversely impact demand for our products; and could hinder collection efforts in our Products & Healthcare Services segment. In addition, whenever we are unable to fully recover higher costs, or whenever there is a time delay between the increase in costs and our ability to recover these costs, our margins and profitability may decline. The U.S. may implement additional tariffs and other measures, further retaliatory tariffs and other retaliatory actions may follow and the risks and adverse effects noted above may increase. Though the risks identified above in certain cases have already adversely impacted part of our business, the full impact of these tariffs and other actions on us and on our business partners remains highly uncertain and subject to rapid change. In addition, certain governments have implemented policies to induce re-shoring of supply chains, reduce reliance on imported supplies and promote national production.
Risks Related to a Sale of Our Products & Healthcare Services Segment
We may sell our Product & Healthcare Services segment, and there may be negative impacts on our business, financial results, and operations.
On February 28, 2025, we announced that we are actively engaged in discussions regarding the potential sale of our Products & Healthcare Services segment.
Although we are actively engaged in discussions regarding the potential sale of the Products & Healthcare Services segment, there is no set timetable for the potential sale, and we have not entered into any definitive documentation with respect to any such sale. Unanticipated developments, including disruptions to our business due to macro-economic factors or otherwise, market conditions, negotiating challenges, the uncertainty of the financial markets, changes in the law, and challenges in negotiation and consummation of a sale, could delay or prevent a sale of the Products & Healthcare Services segment. There can be no assurance that any current or future discussions will lead to a sale of the Products & Healthcare Services segment, or as to the timing, structure or terms of any such sale.
If we are able to negotiate and consummate a sale of the Products & Healthcare Services segment, then following any such sale, we will be a smaller, less diversified company with a single segment, Patient Direct. If we complete the sale of our Products & Healthcare Services segment, we may be more vulnerable to changing market conditions, which could have a material adverse effect on our business, results of operations, financial condition and cash flows. In addition, the diversification of revenue, costs, and cash flows will diminish, such that our results of
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operations, cash flows, working capital, effective tax rate, and financing requirements may be subject to increased volatility and our ability to fund capital expenditures and investments and service debt may be diminished.
Even if we are able to consummate a sale of the Products & Healthcare Services segment, we may be unable to achieve the full strategic and financial benefits that we believe we may be able to achieve through a sale of our Products & Healthcare Services segment, or such benefits may be delayed or may never occur at all. For example, we believe a sale could provide the following benefits, among others:
| ● | directing capital toward the higher growth and higher margin Patient Direct segment; |
| ● | applying proceeds from any such sale to repay certain of our indebtedness; and |
| ● | deleveraging the business from any such sale to repay certain of our indebtedness. |
We may not achieve these or other anticipated benefits for a variety of reasons, including, among others: (i) the possibility that the sale process will be abandoned, or will otherwise not be completed, (ii) the proceeds that we receive for our Products & Healthcare Services segment are less than we expected, (iii) the possibility that we may not benefit as expected from the increased focus on our Patient Direct segment and simpler business model made possible by the sale, (iv) the risk of litigation, injunctions or other legal proceedings relating to the sale, (v) unforeseen costs and expenses that will be incurred in connection with the sale process and (vi) the sale will require significant amounts of management time and effort, which may divert management attention from operating and growing the Patient Direct segment. If we fail to achieve some or all of the benefits we expect to achieve as a result of the sale of our Products & Healthcare Services segment, or if such benefits are delayed, our business, results of operations, financial condition and cash flows could be materially and adversely affected.
We have already incurred expenses in connection with exploring a sale of the Products & Healthcare Services segment and expect that the process of negotiating and ultimately consummating any ultimate sale will be time-consuming and involve significant additional costs and expenses. Furthermore, we expect that any sale of Products & Healthcare Services segment will result in division costs, which may be greater than we anticipate and/or may be significant.
Furthermore, the sale process could cause disruptions and create uncertainty surrounding our business and affect our relationships with our customers, suppliers and teammates. Although we intend to take actions to reduce any adverse effects, these uncertainties could cause customers, suppliers and others that deal with us to seek to change existing business relationships. In addition, teammate retention could be negatively impacted. If key teammates depart because of concerns relating to the uncertainty, our business could be harmed. Investor perceptions about the announcement could have a negative impact on the trading prices of our debt.
In connection with any sale of the Products & Healthcare Services segment, we may be required to provide certain transitional services which may divert management’s attention and harm our business.
In connection with any sale of the Products & Healthcare Services segment, we anticipate that we may be required to provide certain services to a buyer for a transitional period. Any such transitional services arrangements may be in exchange for fees that do not fully compensate us for the cost of providing such transitional services and may also divert management’s attention and resources, any of which could harm our business.
Certain contracts used in our business may need to be replaced in connection with any sale of the Products & Healthcare Services segment and failure to obtain such replacement contracts could increase our expenses or otherwise adversely affect our results of operations.
In connection with any sale of Products & Healthcare Services segment, we may be required to replace certain shared contracts. It is possible that, in connection with the replacement process, some parties may seek more favorable contractual terms from us. If we are unable to obtain such replacement contracts, the loss of these contracts could increase our expenses or otherwise materially adversely affect our business, results of operations and financial condition.
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Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities
The following table summarizes share repurchase activity by month during the three months ended March 31, 2025.
(in thousands, except per share data) | ||||||||||
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Program (1) | Approximate Dollar Value of Shares That May Yet be Purchased Under the Program (2) | ||||||
February 26-February 28, 2025 | — | $ | — | — | $ | 100,000 | ||||
March 1-March 31, 2025 | 173 | $ | 8.66 | 173 | $ | 98,500 | ||||
Total | 173 | 173 |
| (1) | On February 26, 2025, our Board of Directors authorized a share repurchase program of up to $100 million over the next 24 months. Under the program, we may repurchase shares of common stock on a discretionary basis from time to time through open market repurchases, privately negotiated transactions and 10b5-1 trading plans. |
| (2) | During the three months ended March 31, 2025, we repurchased and retired approximately 0.2 million shares of our common stock in open market transactions for an aggregate of $1.5 million. |
Item 5. Other Information.
During the three months ended March 31, 2025, none of our directors or officers informed us of the
Item 6. Exhibits
| (a) | Exhibits |
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31.1 |
| |
31.2 |
| |
32.1 |
| |
32.2 |
| |
101.INS |
| Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
101.SCH |
| Inline XBRL Taxonomy Extension Schema Document |
101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF |
| Inline XBRL Taxonomy Definition Linkbase Document |
101.LAB |
| Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 | Cover Page Interactive Data File (formatted as iXBRL and contained in Exhibit 101) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Owens & Minor, Inc. | |
(Registrant) | |
Date: May 8, 2025 | /s/ Edward A. Pesicka |
Edward A. Pesicka | |
President, Chief Executive Officer & Director | |
Date: May 8, 2025 | /s/ Jonathan A. Leon |
Jonathan A. Leon | |
Executive Vice President & Chief Financial Officer |
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