Owens & Minor Inc Q3 2024 Earnings Call Transcript

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

Question: Kevin Caliendo - UBS Group AG - Analyst : Great. Thanks for taking my question guys. First one, I guess, just, Jonathan, you made a comment that your guidance was affected by manufacturing supply chains, procedural volumes and patient eligibility timing around Patient Direct. Can you maybe talk about the impact of each of those, how meaningful each of those was when we think about the EBITDA guidance like what changed in essence, give us maybe some magnitude of that?

Question: Kevin Caliendo - UBS Group AG - Analyst : Got it. If I can ask a quick follow-up. So was there any impact of this on 3Q and if we didn't have the weather and this Patient Direct issue, would your guidance have been the same, higher or lower? Just trying to understand sort of the magnitude of what did this impact 3Q? And was there anything else? Like what would your guidance have been ex the weather procedural volume and patient eligibility issues?

Question: Kevin Caliendo - UBS Group AG - Analyst : Got it. Thanks guys.

Question: Michael Cherny - Leerink Partners LLC - Analyst : Good morning and thanks for taking the question. A lot of moving pieces, as you mentioned. I appreciate the color regarding 4Q. How should we think about how those will set up in the jumping off point to 2025 as you sit here today, especially ahead of the Rotech acquisition closing, any more detail you can give us on where you see any potential macro puts and takes, operational puts and takes into '25.

Question: Michael Cherny - Leerink Partners LLC - Analyst : And then if I could just ask one more. You mentioned in the press release the dynamics of some of your recent share pickup. I know the dynamics of share gain has been base point recently across the market. Can you give a little sense on where you're seeing your best opportunities for incremental share gains, especially Ed, as you had previously commented about walking away from some of the lower-margin business. And on that latter point, do you feel like your customer base is at a point now where that low margin exit at least on the product healthcare services side is done?

Question: Michael Cherny - Leerink Partners LLC - Analyst : Great. Thank you.

Question: Allen Lutz - BofA Securities Inc - Analyst : Good morning and thanks for taking the question. Really nice margin performance in Patient Direct. Can you talk about the sustainability of this margin moving forward? I know that you talked about moving through backlog and there's still some work to go, and you're still investing in the commercial part of that, just trying to think through margins in the quarter were really strong. How should we think about the trend from here? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 04, 2024 / 1:30PM, OMI.N - Q3 2024 Owens & Minor Inc Earnings Call

Question: Allen Lutz - BofA Securities Inc - Analyst : Great. Thanks, Ed.

Question: John Stansel - JPMorgan Chase & Co - Analyst : Great. Thanks for taking my question. Just wanted to think through Products and Healthcare Services growth on the top line. I think you called out kind of the 170 basis points from the extra working day. Positive commentary about the new wins contributing as well as medical distribution same-store sales. Can you just kind of give some color as to how global products contributed in the quarter? And then kind of how you're thinking about that growth going forward as we kind of jump off into '25? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 04, 2024 / 1:30PM, OMI.N - Q3 2024 Owens & Minor Inc Earnings Call

Question: John Stansel - JPMorgan Chase & Co - Analyst : Great. And then just one quick one. Within the operating profit contribution for PHS, step down from 2Q on a margin basis. Is there just anything to note there, particularly or just kind of normal course?

Question: John Stansel - JPMorgan Chase & Co - Analyst : Great. Thanks.

Question: Stephanie Davis - Barclays - Analyst : Hey, guys. Thank you for taking my question. And Jonathan, congrats on making it official. I was hoping we could call out some of the puts and takes of free cash flow this quarter, just given some of the moving pieces with weather and macro. And with that in mind, are you still expecting positive free cash flow for the year? or that moderated a bit?

Question: Stephanie Davis - Barclays - Analyst : So I guess, following up on that, you did call out a bunch of initiatives to improve cash flows last quarter, right? You talked about like managing inventory ramps, improving AP and AR terms. Is there any updates you can give us on that?

Question: Stephanie Davis - Barclays - Analyst : Super helpful. Thank you.

Question: Daniel Grosslight - Citigroup Inc - Analyst : Hi, guys. Thanks for taking the question. As you think about perhaps taking advantage of some of the tariffs that are coming into effect in 2025, with your current manufacturing footprint. I'm curious if there are any additional investments that you need to make, whether it's a whole new plant or increasing the lines at current plants, just anything that you'll need to do in terms of CapEx to be in a good position to perhaps take share once those tariffs are in effect.

Question: Daniel Grosslight - Citigroup Inc - Analyst : Got it. Okay. And John, you mentioned that there were some increase in transportation costs this quarter unexpectedly. Is that the cost of shipping? Or maybe if you can just dig in a little bit deeper into where you're seeing the biggest increase in transportation costs and how you're handling that for the next year or so?

Question: Daniel Grosslight - Citigroup Inc - Analyst : Got it. Thank you.