RICHMOND, Va.--(BUSINESS WIRE)--Owens & Minor, Inc. (NYSE:OMI)today reported financial results for the fourth quarter and the year ended December 31, 2020, as summarized in the table below.
“The monumental effort of the Owens & Minor teammates in 2020 along with their relentless focus on serving our customers has reinforced our position in the healthcare industry as a trusted partner,” said Edward A. Pesicka, President and Chief Executive Officer of Owens & Minor. “I am very proud of how our teammates delivered on our mission of ‘Empowering Our Customers to Advance Healthcare’ and exemplified our IDEAL values in our swift response to the Covid-19 pandemic.”
Pesicka added, “In the midst of the pandemic, we utilized the Owens & Minor disciplined business process to drive productivity and improve our customers’ experience. Specifically, we enhanced our Americas based vertically integrated manufacturing capabilities to address our customers’ current and future needs for our market leading broad-based products and services.”
“We delivered exceptional financial results for the quarter and full year through strong execution,” said Pesicka. “Our productivity gains along with favorable product mix drove our margin improvement and significant earnings growth. During the year we successfully deleveraged our balance sheet while continuing to reinvest in our businesses. We have established a solid foundation for long-term profitable growth and enhanced financial flexibility.”
| Financial Summary* | FYE | FYE | ||||||||
| ($ in millions, except per share data) | 4Q20 | 4Q19 | 2020 | 2019 | ||||||
| Revenue | $2,362 | $2,191 | $8,480 | $9,211 | ||||||
| Operating Income, GAAP** | $95.6 | $14.5 | $204.1 | $73.2 | ||||||
| Adj. Operating Income, Non-GAAP** | $124.9 | $41.1 | $283.4 | $148.7 | ||||||
| Income (Loss) from continuing operations, GAAP** | $50.7 | ($5.4 | ) | $88.1 | ($22.6 | ) | ||||
| Adj. Net Income, Non-GAAP** | $79.8 | $14.0 | $143.7 | $37.7 | ||||||
| Income (Loss) from continuing operations per share, GAAP** | $0.72 | ($0.09 | ) | $1.39 | ($0.37 | ) | ||||
| Adj. Net Income per share, Non-GAAP** | $1.14 | $0.23 | $2.26 | $0.62 | ||||||
| * Adjusted net income and Adjusted net income per share relate to continuing operations.** Reconciliations of the differences between the non-GAAP financial measures presented in this release and their most directly comparable GAAP financial measures are included in the tables below.** Full year Adjusted EPS favorably impacted by $0.08 of foreign currency translation compared to prior year | ||||||||||
Results and Highlights
- Significant increase in year-over-year fourth quarter earnings performance driven by sales growth, operating efficiencies, and product mix
- 390 basis point gross margin expansion
- 204% increase in adjusted operating income
- 396% increase in adjusted net income per share
- Total company Q4 revenue growth was driven by increased demand for PPE both through our medical distribution channel and direct to customers along with strong performance in our home healthcare business, which was partially offset by elective procedures
- Global Solutions segment revenue grew to $1.95 billion or 1% year-over-year and 5% from Q3
- Global Products segment revenue grew to $575 million or 58% year-over-year and 21% from Q3
- Balance Sheet and Cash Flow
- Total debt reduced by $303 million in the fourth quarter; and by $534 million or 34% for the full year. As a result, interest expense was reduced by 23% in the fourth quarter and by 15% for the full year
- Generated $71 million of operating cash flow in the fourth quarter
- Operating cash flow more than doubled in 2020 to $339 million when compared to 2019
- Continued to re-invest in the business across technology, infrastructure and services
- Other Achievements
- Delivered over 12 billion units of PPE to healthcare workers in the fight against Covid-19, of which approximately 5 billion units were produced with materials manufactured in our American factories or Owens & Minor owned facilities, since January 2020
- Partnered with federal and state agencies to strengthen the nation’s response to the pandemic through investment in PPE manufacturing capacity, distribution of PPE to frontline healthcare workers, and working to replenish the strategic national stockpile
- Completed the sale of Movianto, our European logistics business
- Successfully completed an upsized $200 million equity offering of 9.7 million shares
Financial Outlook
The Company’s outlook for 2021 reflects sustained growth momentum driven by reinvestment in both business segments while enhancing operating efficiencies. The Company believes these investments have created a solid foundation for continued strong performance in 2021. Subject to the key assumptions below, the Company expects adjusted net income for 2021 to be in a range of $3.00 to $3.50 per share which represents growth in the range of 33% to 55% over 2020 adjusted net income per share.
Key assumptions supporting the Company’s 2021 financial guidance:
- Increase in PPE capacity and manufacturing efficiencies during 2021
- Pass through of exam glove cost increases will contribute $300-$500 million to top line, with minimal impact to profitability
- The strength of Q4 2020 elective procedures expected to continue through 1H 2021
Although the Company does provide guidance for adjusted net income per share (which is a non-GAAP financial measure), it is not able to forecast the most directly comparable measure calculated and presented in accordance with GAAP without unreasonable effort. Certain elements of the composition of the GAAP amount are not predictable, making it impracticable for the Company to forecast. Such elements include, but are not limited to restructuring and acquisition charges. As a result, no GAAP guidance or reconciliation of the Company’s adjusted net income per share guidance is provided. For the same reasons, the Company is unable to assess the probable significance of the unavailable information, which could have a potentially significant impact on its future GAAP financial results. The outlook is based on certain assumptions that are subject to the risk factors discussed in the Company’s filings with the Securities and Exchange Commission (“SEC”).
Dividend Information
The Board of Directors approved a first quarter 2021 dividend payment of $0.0025 per share, payable on March 31, 2021, to shareholders of record as of March 15, 2021.
About Owens & Minor
Owens & Minor, Inc. (NYSE: OMI) is a global healthcare solutions company that incorporates product manufacturing, distribution support and innovative technology services to deliver significant and sustained value across the breadth of the industry – from acute care to patients in their home. Aligned to its Mission of Empowering Our Customers to Advance HealthcareTM, more than 15,000 global teammates serve over 4,000 healthcare industry customers. A vertically-integrated, predominantly Americas-based footprint enables Owens & Minor to reliably supply its self-manufactured surgical and PPE products. This seamless value chain integrates with a portfolio of products representing 1,200 branded suppliers. Operating continuously since 1882 from its headquarters in Richmond, Virginia, Owens & Minor has grown into a FORTUNE 500 company with operations located across North America, Asia, Europe and Latin America. For more information about Owens & Minor, visit owens-minor.com, follow @Owens_Minor on Twitter and connect on LinkedIn at www.linkedin.com/company/owens-&-minor.
