Owens & Minor Inc To Acquire Rotech Healthcare Holdings Inc Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Stephanie Davis - Barclays Capital Inc - Analyst : Hey, guys. Thank you for taking my question. I know on the presentation, you gave us some color on book leverage. But from like a standard net-debt-to-EBITDA standpoint, can you tell us how you got comfortable with these levels given they're quite a bit higher? And how are you going to approach the pace of deleveraging given some of the cash conversion headwinds this year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 23, 2024 / 12:30PM, OMI.N - Owens & Minor Inc To Acquire Rotech Healthcare Holdings Inc

Question: Stephanie Davis - Barclays Capital Inc - Analyst : And a follow-up on that for the target going to market. I was a little surprised that you decided to go deeper into the sleep space, given some of the recent challenges in that. Is that just a function of Rotech coming to market first compared to other home-care deals or should we think of more home care deals, I guess, in the pipeline than the other way of saying that?

Question: Stephanie Davis - Barclays Capital Inc - Analyst : Makes sense. Thank you much.

Question: John Stansel - J.P. Morgan Securities LLC - Analyst : Hi, guys. Thanks for taking the question. Just comparing the pro forma deck that you provided to the Investor Day deck, trying to make sure that I'm thinking about Rotech correctly. I mean, you called out here that the [SKU] moves away from commercial a little bit more towards government payers in back of the envelope. It seems like that implied Rotech, most of its revenue comes from government payers at this point. And then obviously, the move up in diabetes and respiratory, seems like a large majority of Rotech's business would be in the diabetes and respiratory space. Is that about the right way to think about their business mix? And then how do you see this pro forma go forward mix changing over time? Thank you.

Question: John Stansel - J.P. Morgan Securities LLC - Analyst : Okay, great. And then just can you give us a sense, relative to the market, how you view kind of Rotech's growth over time, back pre '23? Thank you.

Question: John Stansel - J.P. Morgan Securities LLC - Analyst : Okay, great. Thank you.

Question: Dan Clark - Leerink Partners - Analyst : Great. Thank you. This is Dan Clark on for Mike. Noticed in the deck, Rotech has about 300 account execs. How are you thinking about your current sales footprint, given you just hired 300 reps fairly recently or you've seen the 80 reps fairly recently? Do you think you had a good number there? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 23, 2024 / 12:30PM, OMI.N - Owens & Minor Inc To Acquire Rotech Healthcare Holdings Inc

Question: Dan Clark - Leerink Partners - Analyst : Great. Thank you.

Question: Allen Lutz - BofA Global Research - Analyst : Good morning and thanks for taking my questions. It seems like Rotech is somewhat similar to the patient direct business overall, but the margin profile of Rotech is materially higher. Can you talk about some of the drivers of why that margin differential exists? And is there any opportunity to close that over time? Thanks.

Question: Allen Lutz - BofA Global Research - Analyst : Thanks, Ed. I appreciate that color. And then for a quick follow-up for Jon. Can you talk about the CapEx profile of Rotech? What are they spending annually? And then are there any notable synergies from capital expenditures? Thanks.

Question: Allen Lutz - BofA Global Research - Analyst : Great. Thank you very much.