RICHMOND, Va.--(BUSINESS WIRE)--Owens & Minor, Inc. (NYSE:OMI) today reported financial results for the first quarter ended March 31, 2011, including quarterly revenue of $2.12 billion, an increase of 7.8% when compared to revenue of $1.97 billion in the first quarter last year. For the first quarter of 2011, net income was $28.7 million, or $0.45 per diluted share, compared to net income of $27.8 million, or $0.44 per diluted share, for the same period last year.
“We are off to a solid start in 2011 with revenue growth resulting from both new business and increased sales to our existing customers,” said Craig R. Smith, president & chief executive officer of Owens & Minor. “We are also pleased that, as planned, OM HealthCare Logistics, our third-party logistics business, officially began in April to serve its new customer, CareFusion (NYSE- CFN), with warehousing, distribution and transportation services.”
Operating earnings for the first quarter of 2011 were $51.0 million, or 2.4% of revenues, increased 3.8% from operating earnings of $49.2 million, or 2.5% of revenues, in the same period of 2010. Operating earnings were positively affected by greater distribution and fee-for-service revenues, offset somewhat by additional expenses necessary to serve business growth, an increase in the last-in, first-out (LIFO) provision, and increased delivery costs.
Asset Management
The balance of cash and cash equivalents was $186 million at March 31, 2011, increased from $146 million at March 31, 2010, and $159 million at December 31, 2010. For the first quarter of 2011, the company reported cash provided by operating activities of approximately $50 million compared to $139 million in last year’s first quarter. Total debt, as of March 31, 2011, was approximately $211 million essentially unchanged from year-end. Days sales outstanding (DSO) were 21.1 days as of March 31, 2011, increased from DSO of 20.5 days at the end of the prior year first quarter. Inventory turns were 10.7, improved slightly when compared to inventory turns of 10.6 for the same period last year.
2011 Outlook
The company reaffirmed its financial guidance for 2011, which remains unchanged since it was provided at the company’s December 2010 Investor Day.
"At this stage in the year, we continue to target revenue growth in a range of 3% to 5% for 2011, when compared to 2010, and net income per diluted share in a range of $1.95 to $2.10," said Smith.
The 2011 outlook is based on certain assumptions that are subject to the risk factors discussed in the company’s filings with the Securities & Exchange Commission.
Highlights
- The company will hold its Annual Shareholders’ Meeting on Friday, April 29, 2011, at its Home Office in Mechanicsville, Va., at 10:00 a.m. EDT. The event will be webcast via www.owens-minor.com.
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Owens & Minor intends to participate in the following investor
conferences during the second quarter:
- Deutsche Bank Securities 36th Annual Healthcare Conference; May 4 – Boston
- Bank of America Merrill Lynch 2011 Healthcare Conference; May 11 – Las Vegas
- 32nd Annual Goldman Sachs Global Healthcare Conference; June 8 – Rancho Palos Verdes
- Jefferies 2011 Global Healthcare Conference; June 8 – New York
Investors Conference Call & Supplemental Material
Conference Call: Owens & Minor will conduct a conference call for investors on Tuesday, April 26, 2011, at 8:30 a.m. EDT. Participants may access the call at 877-748-0043 with access code #58058983. The international dial-in number is 706-758-5871 with access code #58058983. Webcast: A webcast of the call, along with supplemental information, will be available on www.owens-minor.com under “Investor Relations.” Replay: A replay of the call will be available for three weeks by dialing 800-642-1687, using access code #58058983.
Information on www.Owens-Minor.com
Owens & Minor uses its website as a channel of distribution for material company information, including news releases, investor presentations and financial information. This information is routinely posted and accessible under Investor Relations at www.owens-minor.com.
Safe Harbor Statement
Except for historical information, the matters discussed in this press release may constitute forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected. These risk factors are discussed in reports filed by the company with the Securities & Exchange Commission. All of this information is available at www.owens-minor.com. The company assumes no obligation, and expressly disclaims any such obligation, to update or alter information, whether as a result of new information, future events, or otherwise.
Owens & Minor, Inc., (NYSE: OMI) a FORTUNE 500 company headquartered in Richmond, Virginia, is a leading national distributor of name-brand medical and surgical supplies and a healthcare supply-chain management company. Owens & Minor is also a member of the Russell 2000® Index, which measures the performance of the small-cap segment of the U.S. equity universe, as well as the S&P MidCap 400, which includes companies with a market capitalization of $1 billion to $4.4 billion that meet certain financial standards. With a diverse product and service offering and distribution centers throughout the United States, the company serves hospitals, integrated healthcare systems, alternate site locations, group purchasing organizations, and the federal government. Owens & Minor provides technology and consulting programs that improve inventory management and streamline logistics across the entire medical supply chain--from origin of product to patient bedside. For news releases, or for more information about Owens & Minor, visit the company website at www.owens-minor.com.
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| Owens & Minor, Inc. | ||||||||
| Condensed Consolidated Statements of Income (unaudited) | ||||||||
| (in thousands, except per share data) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2011 | 2010 | |||||||
| Net revenue | $ | 2,123,815 | $ | 1,969,670 | ||||
| Cost of goods sold | 1,913,040 | 1,772,669 | ||||||
| Gross margin | 210,775 | 197,001 | ||||||
| Selling, general and administrative expenses | 151,631 | 141,072 | ||||||
| Pension expense | - | 641 | ||||||
| Depreciation and amortization | 8,767 | 6,789 | ||||||
| Other operating income, net | (620 | ) | (652 | ) | ||||
| Operating earnings | 50,997 | 49,151 | ||||||
| Interest expense, net | 3,717 | 3,299 | ||||||
| Income before income taxes | 47,280 | 45,852 | ||||||
| Income tax provision | 18,540 | 18,035 | ||||||
| Net income | $ | 28,740 | $ | 27,817 | ||||
| Net income per common share - basic | $ | 0.45 | $ | 0.44 | ||||
| Net income per common share - diluted | $ | 0.45 | $ | 0.44 | ||||
| Weighted average shares - basic | 62,641 | 62,089 | ||||||
| Weighted average shares - diluted | 62,861 | 62,393 | ||||||
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| Owens & Minor, Inc. | ||||||||
| Condensed Consolidated Balance Sheets (unaudited) | ||||||||
| (in thousands) | ||||||||
| March 31, | December 31, | |||||||
| 2011 | 2010 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 185,850 | $ | 159,213 | ||||
| Accounts and notes receivable, net | 520,688 | 471,661 | ||||||
| Merchandise inventories | 729,546 | 720,116 | ||||||
| Other current assets | 57,150 | 52,799 | ||||||
| Total current assets | 1,493,234 | 1,403,789 | ||||||
| Property and equipment, net | 100,672 | 101,545 | ||||||
| Goodwill, net | 247,271 | 247,271 | ||||||
| Intangible assets, net | 24,411 | 24,825 | ||||||
| Other assets, net | 45,592 | 44,609 | ||||||
| Total assets | $ | 1,911,180 | $ | 1,822,039 | ||||
| Liabilities and shareholders' equity | ||||||||
| Current liabilities | ||||||||
| Accounts and drafts payable | $ | 604,477 | $ | 531,735 | ||||
| Accrued payroll and related liabilities | 11,192 | 20,588 | ||||||
| Deferred income taxes | 37,224 | 39,082 | ||||||
| Other accrued liabilities | 107,943 | 103,076 | ||||||
| Total current liabilities | 760,836 | 694,481 | ||||||
| Long-term debt, excluding current portion | 209,007 | 209,096 | ||||||
| Deferred income taxes | 12,182 | 12,107 | ||||||
| Other liabilities | 48,469 | 48,837 | ||||||
| Total liabilities | 1,030,494 | 964,521 | ||||||
| Shareholders' equity | ||||||||
| Common stock | 127,426 | 126,867 | ||||||
| Paid-in capital | 172,028 | 165,447 | ||||||
| Retained earnings | 586,274 | 570,320 | ||||||
| Accumulated other comprehensive loss | (5,042 | ) | (5,116 | ) | ||||
| Total shareholders' equity | 880,686 | 857,518 | ||||||
| Total liabilities and shareholders' equity | $ | 1,911,180 | $ | 1,822,039 | ||||
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| Owens & Minor, Inc. | ||||||||
| Condensed Consolidated Statements of Cash Flows (unaudited) | ||||||||
| (in thousands) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2011 | 2010 | |||||||
| Operating activities: | ||||||||
| Net income | $ | 28,740 | $ | 27,817 | ||||
| Adjustments to reconcile net income to cash provided by | ||||||||
| operating activities of continuing operations: | ||||||||
| Provision for LIFO reserve | 11,265 | 8,270 | ||||||
| Depreciation and amortization | 8,767 | 6,789 | ||||||
| Share-based compensation expense | 3,021 | 2,965 | ||||||
| Provision for losses on accounts and notes receivable | 359 | 930 | ||||||
| Pension expense | - | 641 | ||||||
| Pension contributions | (543 | ) | (5,000 | ) | ||||
| Deferred income tax benefit | (1,830 | ) | (1,323 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts and notes receivable | (49,386 | ) | 18,446 | |||||
| Merchandise inventories | (20,695 | ) | 11,623 | |||||
| Accounts payable | 79,642 | 67,474 | ||||||
| Net change in other assets and liabilities | (8,096 | ) | 828 | |||||
| Other, net | 175 | 10 | ||||||
| Cash provided by operating activities of continuing operations | 51,419 | 139,470 | ||||||
| Investing activities: | ||||||||
| Additions to property and equipment | (4,128 | ) | (5,848 | ) | ||||
| Additions to computer software and intangible assets | (3,010 | ) | (2,042 | ) | ||||
| Proceeds from the sale of property and equipment | 41 | 33 | ||||||
| Cash used for investing activities of continuing operations | (7,097 | ) | (7,857 | ) | ||||
| Financing activities: | ||||||||
| Cash dividends paid | (12,786 | ) | (11,138 | ) | ||||
| Decrease in drafts payable | (6,900 | ) | (72,300 | ) | ||||
| Proceeds from exercise of stock options | 3,594 | 2,981 | ||||||
| Excess tax benefits related to share-based compensation | 874 | 928 | ||||||
| Other, net | (2,366 | ) | (1,403 | ) | ||||
| Cash used for financing activities of continuing operations | (17,584 | ) | (80,932 | ) | ||||
| Discontinued operations: | ||||||||
| Operating cash flows | (101 | ) | (460 | ) | ||||
| Net cash used for discontinued operations | (101 | ) | (460 | ) | ||||
| Net increase in cash and cash equivalents | 26,637 | 50,221 | ||||||
| Cash and cash equivalents at beginning of period | 159,213 | 96,136 | ||||||
| Cash and cash equivalents at end of period | $ | 185,850 | $ | 146,357 | ||||
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| Owens & Minor, Inc. | |||||||||||||||
| Financial Statistics (unaudited) | |||||||||||||||
| Quarter Ended | |||||||||||||||
| (in thousands, except ratios and per share data) | 3/31/2011 | 12/31/2010 | 9/30/2010 | 6/30/2010 | 3/31/2010 | ||||||||||
| Operating results: | |||||||||||||||
| Net revenue | $ | 2,123,815 | $ | 2,070,166 | $ | 2,063,879 | $ | 2,019,893 | $ | 1,969,670 | |||||
| Gross margin | $ | 210,775 | $ | 207,830 | $ | 203,954 | $ | 198,940 | $ | 197,001 | |||||
| Gross margin as a percent of revenue | 9.92% | 10.04% | 9.88% | 9.85% | 10.00% | ||||||||||
| SG&A expenses | $ | 151,631 | $ | 142,340 | $ | 141,116 | $ | 139,641 | $ | 141,072 | |||||
| SG&A expenses as a percent of revenue | 7.14% | 6.88% | 6.84% | 6.91% | 7.16% | ||||||||||
| Operating earnings | $ | 50,997 | $ | 39,310 | $ | 55,313 | $ | 52,162 | $ | 49,151 | |||||
| Operating earnings as a percent of revenue | 2.40% | 1.90% | 2.68% | 2.58% | 2.50% | ||||||||||
| Net income | $ | 28,740 | $ | 21,788 | $ | 31,505 | $ | 29,469 | $ | 27,817 | |||||
| Net income per common share - basic: | $ | 0.45 | $ | 0.35 | $ | 0.50 | $ | 0.47 | $ | 0.44 | |||||
| Net income per common share - diluted: | $ | 0.45 | $ | 0.34 | $ | 0.50 | $ | 0.46 | $ | 0.44 | |||||
| Accounts receivable: | |||||||||||||||
| Accounts and notes receivable, net | $ | 520,688 | $ | 471,661 | $ | 501,270 | $ | 468,026 | $ | 478,234 | |||||
| Days sales outstanding (1) | 21.1 | 19.6 | 21.3 | 19.8 | 20.5 | ||||||||||
| Inventory: | |||||||||||||||
| Merchandise inventories | $ | 729,546 | $ | 720,116 | $ | 733,296 | $ | 712,078 | $ | 669,996 | |||||
| Average inventory turnover (1) | 10.7 | 10.2 | 10.2 | 10.6 | 10.6 | ||||||||||
| Financing: | |||||||||||||||
| Cash and cash equivalents | $ | 185,850 | $ | 159,213 | $ | 145,070 | $ | 157,638 | $ | 146,357 | |||||
| Total debt | $ | 210,801 | $ | 210,906 | $ | 210,270 | $ | 209,416 | $ | 209,632 | |||||
| Stock information: | |||||||||||||||
| Cash dividends per common share | $ | 0.200 | $ | 0.177 | $ | 0.177 | $ | 0.177 | $ | 0.177 | |||||
| Stock price at quarter-end | $ | 32.48 | $ | 29.43 | $ | 28.46 | $ | 28.38 | $ | 30.93 | |||||
| (1) Days sales outstanding (DSO) and average inventory turnover are based on three-months' sales. | |||||||||||||||
| Certain adjustments have been made to prior period amounts to conform to current year presentation. | |||||||||||||||