Owens_Minor1Q07_EarningsReleaseSlidesvfinal

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Owens_Minor1Q07_EarningsReleaseSlidesvfinal

  1. 1. Owens & Minor 1st Quarter 2007 Financial Results
  2. 2. Safe Harbor Statement Except for the historical information contained herein, the matters discussed in this presentation may constitute forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected. These include: the ability to assimilate the operations of an acquired business, the potential loss of key personnel, intense competitive pressures, such as pricing, within the healthcare industry. They also include the success of direct marketing programs in attracting new customers, the ability to retain existing customers, changes in customer order patterns, changes in healthcare laws and regulations, changes in government, including Medicare, reimbursement guidelines and private insurer reimbursement amounts, the ability to maintain product suppliers, product price increases by suppliers and other factors discussed from time to time in the reports filed by the company with the Securities & Exchange Commission. 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.
  3. 3. 1Q-2007 Results as of 3/31/07 (GAAP, $ in millions except per share data) Net Revenues $1,686.2 incl. $282.5M of MCK Gross Margin 10.4% SG&A 8.5% Operating Margin 1.5% Net Income $ 10.8 Diluted EPS $ 0.27 1Q-07 earnings results include: • Pre-tax identifiable dilution of approx. $8.1M, or $0.12 per share, from MCK transition • Short-term impact of conversion of acquired business on gross margin • Effect of new agreements with Group Purchasing Organizations (GPO) on gross margin
  4. 4. 1Q - 2007 REVENUE $1.7 billion $1.3 billion • Strong revenue growth of 33.6% • Includes $282.5M from MCK • Excluding MCK, revenue grew 11.2% • Organic growth resulted primarily from penetration, plus new business 1Q-06 1Q-07
  5. 5. 1Q – 2007 Diluted EPS $ 0.41 Diluted EPS results were affected by the following: $ 0.27 • Approx. $8.1M, or $0.12 per share of McKesson dilution during transition phase • Short-term impact of conversion on the acquired business • Impact of new agreements with GPOs 1Q-06 1Q-07
  6. 6. Asset Management - 1Q07 • DSO was 29.7 Days − Reflects impact of MCK portfolio − Improved sequentially from 30.5 at 4Q-06 • Inventory Turns were 9.2 − Inventory reduction plan in place − Includes safety stock purchased to ensure smooth customer transition − Results were consistent with turns of 9.2 at 4Q-06 • 1Q07 operating cash flow - negative $3.3 million − Cash used to fund working capital associated with strong business growth
  7. 7. 2007 Outlook • Outlook for 2007 is unchanged • Revenue growth 15% to 20% • Diluted EPS in the range of $1.85 to $1.95 • Includes impact of acquired McKesson business • Due to timing of McKesson acquisition: • Revenue growth will be stronger in the first three quarters of 2007 • Earnings growth will accelerate in the second half of 2007
  8. 8. McKesson Acquisition • Acute-Care business acquired Sept. 30, 2006 • $168 million purchase price at 9/30/06 includes: • Approx. $122 million in net inventory • Distribution Centers • Experienced sales force • Revenues anticipated in excess of $900 million • Transition completed in 5 ½ months • O&M will retain 4 Distribution Centers from original 10 acquired • Added one facility in Chicago
  9. 9. 1Q 2007 Summary • • Very strong revenue growth (with and without McKesson) • Completed rapid transition of McKesson acute-care business • Efforts now focused on fine tuning new business • Solid outlook for 2007 • 15-20% revenue growth • Diluted EPS in a range of $1.85-$1.95, incl. MCK impact • Stronger revenue growth in first 3 quarters (due to MCK timing) • EPS growth will accelerate in 2nd half of 2007
  10. 10. Owens & Minor www.owens-minor.com 1st Quarter 2007 Investor Relations Contacts: Trudi Allcott truitt.allcott@owens-minor.com 804.723.7555 Chuck Graves chuck.graves@owens-minor.com 804.723.7556

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