Latest news with #EdwardPesicka
Yahoo
29-06-2025
- Business
- Yahoo
5 Insightful Analyst Questions From Owens & Minor's Q1 Earnings Call
Owens & Minor experienced a challenging start to 2025, as market reaction turned negative following flat revenue and a miss versus Wall Street's top-line expectations. Management attributed the subdued results largely to external pressures, especially tariffs and adverse currency movements, which impacted the Products and Healthcare Services segment. CEO Edward Pesicka highlighted, 'We can no longer absorb these costs,' referencing the significant tariff increases on imported medical products. Meanwhile, the Patient Direct segment posted notable growth, driven by increased investments in sleep therapy and sales resources, but this was not enough to offset broader headwinds. Is now the time to buy OMI? Find out in our full research report (it's free). Revenue: $2.63 billion vs analyst estimates of $2.67 billion (flat year on year, 1.6% miss) Adjusted EPS: $0.23 vs analyst estimates of $0.20 (14.5% beat) Adjusted EBITDA: $121.9 million vs analyst estimates of $116.7 million (4.6% margin, 4.4% beat) The company reconfirmed its revenue guidance for the full year of $11 billion at the midpoint Management reiterated its full-year Adjusted EPS guidance of $1.73 at the midpoint EBITDA guidance for the full year is $575 million at the midpoint, in line with analyst expectations Operating Margin: 0%, in line with the same quarter last year Market Capitalization: $638.2 million While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. John Stansel (JPMorgan) asked how customers are responding to tariff-related price increases. CEO Edward Pesicka explained that while the company is working to find alternative products for customers, they must pass on tariff costs due to low margins and cannot sell at a loss. Michael Cherny (Leerink Partners, via Ahmed) requested clarification on the $100–$150 million tariff exposure and its treatment in guidance. Pesicka confirmed this exposure is largely in the Products and Healthcare Services segment and will be passed through via price increases. Kevin Caliendo (UBS) inquired about the impact of Rotech acquisition financing and its effect on interest expense guidance. CFO Jonathan Leon noted that interest costs will be updated once the deal closes, and that current guidance does not yet reflect these changes. Eric Coldwell (Baird) questioned how the timing of tariff implementation and price increases aligns, and what happens if customers reject price hikes. Pesicka stated price increases are timed with inventory turnover and that the company cannot absorb tariffs, so alternatives or loss of sales may result. Eric Coldwell (Baird) also asked whether Rotech's performance still aligns with acquisition expectations. Leon confirmed Rotech's results are in line with the deal model, with anticipated accretion in the second year. Looking ahead, our team will monitor (1) the effectiveness and customer acceptance of tariff-driven price increases, (2) the performance and integration of the Patient Direct segment as new therapies and revenue cycle initiatives scale, and (3) developments regarding the potential sale of the Products and Healthcare Services segment and the finalization of the Rotech acquisition. Execution on these fronts will be critical in shaping Owens & Minor's business trajectory and financial health. Owens & Minor currently trades at $7.96, up from $7.73 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it's free). The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
07-06-2025
- Business
- Yahoo
Owens & Minor and Rotech Healthcare Agree to End Previously Planned Acquisition
Owens & Minor, Inc. (NYSE:OMI) announced that it has mutually agreed with Rotech Healthcare Holdings Inc. to cancel their previously planned acquisition. A medical professional in a hospital wearing protective apparel supplied by the healthcare solutions company. As part of the agreement, Owens & Minor has paid $80 million to Rotech Healthcare. Additionally, the company will redeem $1 billion in notes issued in April 2025, which include a mandatory redemption clause, and will terminate the loan commitments from lenders that were intended to finance the acquisition. Edward A. Pesicka, President & Chief Executive Officer of Owens & Minor, Inc. (NYSE:OMI), made the following statement: 'For many months, our teammates, along with the Rotech team, have worked tirelessly in cooperation with the Federal Trade Commission to close this transaction, and while we believe there would have been ample benefits to patients, payors, and providers by adding Rotech to our Patient Direct business, the path to obtain regulatory clearance for this merger proved unviable in terms of time, expense, and opportunity.' He further stated that the company remains confident in its strategy and will continue focusing on expanding its Patient Direct business while prioritizing balance sheet strength through improved cash flow and debt reduction. He emphasized that the home-based care market is growing and dynamic, and Owens & Minor is well-positioned to support patients with chronic conditions. Pesicka also mentioned ongoing discussions with several interested parties regarding the potential sale of their Products and Healthcare Services business. Meanwhile, the company will continue efforts to strengthen this business and capitalize on its growth opportunities. Owens & Minor, Inc. (NYSE:OMI) is a Fortune 500 global healthcare solutions provider, delivering essential products and services that support care from hospitals to patients' homes. While we acknowledge the potential of OMI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: and Disclosure. None.
Yahoo
06-06-2025
- Business
- Yahoo
Owens & Minor spikes $1.36B Rotech buyout over regulatory barriers
This story was originally published on MedTech Dive. To receive daily news and insights, subscribe to our free daily MedTech Dive newsletter. Owens & Minor said Thursday it has terminated the planned $1.36 billion acquisition of home medical equipment company Rotech Healthcare Holdings. The companies mutually agreed to terminate the deal after getting regulatory clearance 'proved unviable in terms of time, expense and opportunity,' Owens & Minor CEO Edward Pesicka said in a statement. Owens & Minor originally aimed to close the takeover by the end of last year. However, the deal was held up by the Federal Trade Commission's review. Owens & Minor and Rotech announced the acquisition in July 2024. Having set the goal of almost doubling patient direct sales by 2028, Owens & Minor moved to boost its position in areas including respiratory and sleep apnea products by acquiring Rotech. Privately owned Rotech reported $750 million in net revenue in 2023. The closing date was delayed by an FTC investigation. Owens & Minor and Rotech entered into a timing agreement with the FTC that gave the federal agency until June 10 to complete its review of the deal. Days from the deadline, Owens & Minor and Rotech terminated the takeover agreement. Pesicka said the merger would have provided 'ample benefits to patients, payors, and providers.' Yet, the 'path to obtain regulatory clearance' proved unviable, the CEO said, driving the companies to drop the merger. Owens & Minor paid Rotech $80 million in conjunction with the termination. The company previously said the deal included a $70 million termination fee. The $80 million termination payment brings Owens & Minor's spending on the deal above $100 million. Acquisition-related costs totaled $22 million in 2024 and $16 million in the first quarter of 2025. The termination closed off an avenue to Owens & Minor's 2028 patient direct sales target but investors reacted positively to the news. Shares in Owens & Minor jumped 14% to close at $7.61 on Thursday. Rotech's revenue fell almost 4% to $725.8 million last year. Asked about the results on an earnings call with analysts last month, Owens & Minor CFO Jonathan Leon said the declines 'were largely anticipated and largely resulted from a lot of COVID-era benefit that the industry got to realize that fell off in early 2024.' Recommended Reading Owens & Minor inks $1.36B takeover of Rotech
Yahoo
01-03-2025
- Business
- Yahoo
Owens & Minor Inc (OMI) Q4 2024 Earnings Call Highlights: Strong Revenue Growth and ...
Revenue: $2.7 billion for the fourth quarter, up 1.5% year-over-year. Patient Direct Revenue Growth: 5% increase compared to the fourth quarter of 2023. Gross Profit: $580 million, representing 21.5% of net revenue. Distribution, Selling, and Administrative Expenses: $493 million, 18.3% of revenue. Adjusted Operating Income: $95 million for the fourth quarter. Interest Expense: Just under $36 million for the fourth quarter. Adjusted Net Income: $43 million or $0.55 per share. Adjusted EBITDA: $138 million for the fourth quarter. Operating Cash Flow: $71 million generated in the fourth quarter. Debt Reduction: $31 million reduced in the fourth quarter; $244 million for the full year. 2025 Revenue Guidance: $10.85 billion to $11.15 billion. 2025 Adjusted EBITDA Guidance: $560 million to $590 million. 2025 Adjusted EPS Guidance: $1.60 to $1.85 per share. Share Repurchase Program: Authorized up to $100 million. Warning! GuruFocus has detected 2 Warning Sign with OMI. Release Date: February 28, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Owens & Minor Inc (NYSE:OMI) achieved mid-single-digit top line growth and 13% growth in adjusted EPS for 2024. The company repaid $647 million of debt over the last two years, enhancing financial flexibility. Patient Direct business outpaced market growth with mid-single-digit growth and delivered over $13 million of incremental operating income year-over-year. The company launched ByramConnect, a digital health coach to help manage diabetes, showcasing continued investment in technology. Owens & Minor Inc (NYSE:OMI) authorized a share repurchase program of up to $100 million, indicating confidence in the company's valuation. The Products & Healthcare Services segment experienced lower glove pricing, impacting overall sales growth. Distribution, selling, and administrative expenses increased, primarily due to higher teammate benefit expenses and workers' compensation costs. The company recorded a $305 million net of tax goodwill impairment charge in the fourth quarter, affecting financial results. Interest expense remains a concern, although it decreased slightly due to debt reduction. The company faces uncertainties related to the potential sale of its Product & Healthcare Services segment and the pending acquisition of Rotech. Q: Can you provide insights on the Rotech acquisition and any surprises in its performance? A: Jonathan Leon, Executive Vice President, Chief Financial Officer, stated that there were no surprises in Rotech's performance. The impact of the 75-25 legislation affected everyone, with Rotech having more exposure to government reimbursement. However, the results were consistent with the deal model, and cost synergies could exceed the $50 million initially projected. Q: How do you plan to deploy the expected $200 million in free cash flow and the $100 million share repurchase program? A: Edward Pesicka, President, Chief Executive Officer, Director, emphasized that the primary objective is to continue paying down debt. However, if the stock remains undervalued, they will be opportunistic with share repurchases throughout the year. Q: What are the growth expectations for the Patient Direct segment in 2025? A: Edward Pesicka highlighted that the Patient Direct segment had mid-single-digit growth in 2024, with significant success in diabetes and supply categories. The focus for 2025 will be on improving home respiratory and NIV and oxygen spaces, which are currently underperforming. Q: Why is now the right time to consider selling the Products & Healthcare Services (P&HS) segment? A: Edward Pesicka explained that there was significant inbound interest in the P&HS segment, prompting a broader process with advisors and the Board. The decision allows for open dialogue with stakeholders and aims to reach a decision quickly. Q: What is the impact of tariffs on Owens & Minor's business? A: Edward Pesicka noted that tariffs are not as significant for Owens & Minor compared to others in the industry. Most products are not made in China, and the Mexican footprint is minimal. Any increased costs due to tariffs will be passed on to customers. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
