Owens & Minor (OMI) 28 Feb 232022 Q4 Earnings call transcript

Good morning. My name is Chris, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Owens & Minor Fourth Quarter 2022 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Instructions] [Operator

it Jost, hand Relations. of to over will Director Alex Investor I

may You begin.

and Owens to quarter you. welcome Thank Hello the XXXX call. and earnings & full-year fourth Minor

of financial will Our along the as with website. press are in well our for slides and be today’s results outlook XXXX, for posted our the Investor all focused full-year comments supplemental of the call Relations on release on XXXX, on as press quarter fourth The section the the included release.

Please risks in subject will here projected risk SEC could refer the for matters Annual and note differ and factors today. call, forward-looking make we section which to that our during these of this these materially statements. on to The uncertainties, Please from or cause uncertainties, Form XX-K. our including to addressed a actual implied filings Report of results full are those statements description risks

today, will financial measures, our measures In GAAP release. non-GAAP in and about are comparable these financial information included and our we to most measures press discussion reconciliations the reference certain

joined by and President Chief Officer. Executive Chief Pesicka, Bruni, Executive Today, I’m Vice President Alex and Financial Ed and Officer;

call Ed. over turn now will I the to

you for this you. morning, and begin us a XXXX. everyone Thank I quick on the with Good call would call joining thank morning. the to like recap of

nearly company's at the while achieving community, history service billion. our healthcare celebrated revenue company to anniversary annual in XXXth Our the of its highest $XX

higher health the into company's industry; This acquiring strengthened a to home. further hospital ability leader the In as addition, the beyond in margin care the healthcare on Apria our we completed home XX. March and our acquisition fast-growing, history enhancing support largest position the in

have profit of this less EBITDA segment of of result though changed even Direct company business our coming with segment As this profile total we up than currently the now and XX% from a Patient of majority our the acquisition, revenue. our overall materially makes

recurring our with and Services revenue margin provides this addition, higher profiles rates in Healthcare and Products segment In growth segment.

future and of segment. We are Patient Direct trajectory the current as excited the

fourth now the to Turning quarter.

growth, segments continued mixed Our Starting our profit outstanding which two and adjusted double-digit our a segment results were to Product key more mixed they Services delivered acquisition, between record and most year. quarter out while Patient the deliver Healthcare within segment, segment. growth revenue were fourth than Apria in with with closing growth for Direct in When revenue the and product our the XX% categories. even of

by on synergy strong delivered XX% margin, basis, adjusted Direct aided market Patient an points addition nearly above realization profit growth, year-over-year In XXX and growing basis execution.

In segment, addition performance segment distribution our and medical Direct performed well. in our to division strong part the products of Patient healthcare services our

key recorded nearly segment Overall, Our driven on sequential new increased medical basis, service distribution distribution a accounts, division revenue continued wins business. leading in the levels. deliver solid by performance to retained medical and X% the

to pricing in clear become to it dynamics our division. Global and impact cost cost negatively that market. market Products company's higher and has S&IP in headwinds, Products our that and move reductions demand, products surgical customers. quarter our increases in However, all stock and be fourth we The at Division's impacted continue the our structure The particularly products align to quickly margin by that our needs Global with excess to showed evolving to significant need channels in infection continue offset prevention better

driving the and The well successful Apria, reduce Environment. at will we prospective initiated realignment have costs. Apria order transformations model company-wide his address profit successful a led will by improvement to large-scale dedicated current operating of will This program the market Dan In team team as as accelerate realities, a to utilize be and Starck, program. have integration who experience

Direct be also our segment. will efficiencies. Building better Byram Byram the Patient further and to division, customers integration the the promoted CEO serve of He his successful Bernocchi will Perry drive leadership and of upon of to Apria

are in confident continued the which proven and to built the out started place, in we success leaders in program. these model in have With the segment our the already operating teams realignment, we and work we've Patient success on Direct

Owens has that in program and & adjusted the realignment $XX drive will business The model Minor quickly operating team leadership income sustainably of expected an XXXX. resolved million

of deliver the of program million run end the by approximately of addition, $XXX In income is XXXX, rate rate approximately by run operating XXXX. expected million income $XXX adjusted adjusted operating and to

In and reduction focus sustained operating margin growth. our and and healthcare line more our this products on segment of customers, provide million us strong to we growth, that XXXX. between opportunities. of this that out $XXX continue to margins by will increase margin working We in continue will $XXX X% between benefits profitable addition, the further deliver to Coming quality believe services top expected enhance and our overall deliver program program debt capital believe higher is program, and million reinvest Direct to X% expansion of service will and and to segment Patient allow

of optimization proprietary from reduction and and commercial and provide, reduced with and efficiencies. product management. SKU will Two, four, footprint look to on headcount rationalization organizational the following strategic for supplier chain and focus rationalization elimination supply indirect And at excellence, enhancement, improvements. expansion, related the in structural includes program which the profitability operating operational will work resulting of value non-value-added price and four which and work. accelerated excellence profit includes structure which portfolio utilization redesign, we direct and the material network. and savings changes detail cost of model growth network which manufacturing One, management, drive includes It how realignment includes along the Three, Now demand streams: the overhead let's reduction cost sourcing reductions

and and work Look, and evaluating reductions support improvements The we we're cost has started are streams. to process not the in already waiting. implementing program profit of four

factories just those heavy areas opportunities focus with process value; the of optimization a and and our and functions; existing headcount reduction proprietary where costs; on entire to the We to of will savings effectiveness tools, us SG&A much eliminate and greatest profitable product waste the more and back growth a enhanced are of Difficulty] entire of aggressively and [Technical overhead sourcing enhancement to a Quickly evaluating for approach. network; And DC aligned which company look and for few here structures, manufacturing sales office capacity including aligning rationalizing aggressive streamlining sales grow and our drive allow across our will compensation portfolio. procurement the areas and through opportunities; efficiencies exist.

to as and over the other We size the to will focus market we these and in achieved the address past pandemic four right did business years. with the new improvements urgency conditions operate just

We stronger take will provide forward. expect position profitable benefit will as that a that these they going us company more and work streams hold

As the to over more look lot do. years, I four we past have back a have a accomplished and lot

years, During our levels loss. stop drastically the improved of productivity the service significant distribution we four medical business and division past and have of the trend

business that medical We strength wins have deliver Minor the to & Owens deployed leveraged a of has team our distribution development new division. in

to business XXXX substantially in cash $XXX past increased Apria, years of in the million materially in improvement acquire and XXXX. to flow the full-year invest million allowed We the $XXX four pay profile operating over changing us flow has The cash company. from debt, the down have

COVID-XX to output our caregivers protect maintain continuity and the for our supply manufacturing S&IP our customers. And levels finally, to fight unprecedented we of products against in the to pandemic of expanded rapidly

XXXX by second-half this, significantly adjusted of realities market model do rapidly our realignment to pricing must demand. structure, the that now operating cost we However, the in during we addressed product program. This and address in be also increased which this will post-pandemic both

remain As EBITDA total and margin the we company Direct revenue, adjusted grow our on and creation look Patient of further diversifying segment, invest ahead, focused executing strategy leverage, we expansion. to our our

We both expand our to healthcare will our utilize and in of out relationships product customer services our channels. deeper and and sales proprietary products develop segment

in to care finally, mind home. continue cash flow home Patient to help in we are in of rapid increasingly It strengthen is to uniquely opportunities expansion acute to segment And their this to important into reduce our to keep and and are that debt reinvest growth positioned patients areas. evolution customers profit higher care moving the Direct for the free support looking service our

turn and our plan now a to operating more over discussion CFO, guidance. quarter our cost Bruni financial our new call for of Alex will savings fourth our XXXX detailed the and I Alex? financial performance,

Good segment finally level everyone. full-year provide key Thank related full-year. you, and the financial for expectations Ed. and discuss the morning, Then on and fourth assumptions Today, review and in outlook. results I'll our XXXX commentary performance performance to our our quarter drivers

First, start quarter with full-year fourth and let results. our me

up the X.X% was nearly $X.X quarter up the year in QX. revenue prior from and sequentially X.X% Our from billion,

gross margin quarter up For year's points revenue, XX% fourth revenue was billion, $XXX the last $XX XXX X.X%. up or Fourth basis full-year million from was quarter. of

points XXX offset year. billion and driven margin was by the reduced gross Full-year basis quarter stockpiles. mix was gross for by included in from up pressures customer reliance or the partially which inflationary S&IP of $X.X sales of and prior for the demand The Apria in XX.X% and the margin full-year on increase inclusion revenue, products,

goods of valuation In a to of quarter. reflects cost PPE these in relative products XXXX This the segment decline at Services as $XX utilizing our adjustment the in fell Products began million year-end addition, reserve recorded stockpiles sold result pandemic. inventory sharply The outlook. during in a during through Healthcare created back demand was for the the decrease of and excess recorded gross inventory and due margin fourth the current to in century demand the half The year-end. to to customers is demand once

selling was was pressures, of the the gross a of This and and this offset Distribution, classified inventory highly operating was incentive fourth efficiencies item, charge. our expense reduced to and full-year. non-GAAP full-year extraordinary unusual with administrative million ongoing increased which and compensation. driven the in associated valuation circumstances the the expense due quarter $X.X the Along with by as billion adjustment, by for about $XXX Apria. inventory, was quarter X% for fourth partially inflationary in The addition

XXXX. revenue for currency million operating foreign $XX by income by was million. million income fourth operating $XXX the quarter and and $X Year-over-year, impacted Adjusted negatively quarter $XX in adjusted the million full-year

income impacted and adjusted For by the $XX full-year, by million. foreign $XX currency negatively revenue operating million

was $XXX in debt was Both year. and year. Interest the which fourth for million by and driven million, was $XX than which the the million the expense increases million the associated full-year quarter, Apria the prior higher rates. full-year the than financing was for interest prior quarterly $XX of were higher acquisition Interest $XX expense rising

million Adjusted net $X.XX fourth share. income was quarter a the or $XX for

$XXX quarter EBITDA up X.X%, million of with fourth was XX income For the was quarter. Fourth up points full-year year's XX was XXXX XXXX versus XXXX, of $X.XX points a margin adjusted the basis $XXX or $XXX last basis margin X.X%, a prior a with million adjusted net adjusted share. Full-year million EBITDA versus year.

Moving now and cash sheet structure. flow, balance capital the to

year-over-year. This from quarter, cash operations, million we $XX XX% generated up of

up For April year-over-year. the at by XXXX. debt end ratio we the strong a XXX% approximately of ended very the we since reduced was debt lower leverage $XX the generated a $XXX and funded million net full-year, year quarter million, than million, the times. Total Apria we've of in third with X.X $XXX We acquisition

X important reduction It's debt the stated. continues continuation end I of leverage the than the and times Leverage will that ongoing turn the our our compliance realignment along of note X to a priority leverage almost actions times. to be book year reduction ratio our our expect program with leverage lower we to top accelerate to model was target at operating a of just

$XXX now revenue quarter, double-digit results increase increase with Net quarter. segment. an for of Direct Patient XX.X% segment XXX% product was billion, million, in basis Full-year of excel the growth most by continued This Turning our Patient $X.X fourth Apria adjusted the in the our acquisition, net fourth grew with to was beginning quarter fourth to year-over-year. year-over-year. revenue key in Direct the on categories. In revenue an an XXX% year-over-year segment

Segment $XX last compared million. fourth quarter the to year's of quarter for million, was $XX income

an in million, the million segment income and of For above impressively, Direct XXX by with margin to XX% quarter, segment full-year, operational year. by cost XX.X%. on basis $XX income acquisition, continued adjusted synergies grew was Apria discipline. fourth points Patient basis leverage to growth This last year-over-year aided and for improvement driven market by a the $XXX the fixed compared adjusted increase was More

XXXX. believe Looking will organic and market maintain outperform strong in its Direct ahead, Patient we growth the

was on Net in Moving healthcare billion, revenue quarter to products services. $X.X down fourth and XX% year-over-year. the

for destocking. in for as primarily our of demand new decrease X% billion, the earlier, So revenue Ed Net full-year driven in seasonality and a the S&IP almost sequentially and in was QX, the medical year-over-year. noted full-year net by divisions. quarter up was customer and versus revenue decrease and distribution implementation wins, reduced by retention XX% The of $X.X driven

$X $XX the was year. Segment million income for quarter million, to last compared

For the with full-year down XX%, the full-year, reductions was inflationary $XXX last was currency for by translation. quarter income year. compared and and including post-pandemic decline pressures and S&IP pricing in demand along segment for The million, foreign destocking to the and products, driven

full-year XXXX moment to our the I to program operating guidance, discussing want model as take a expand realignment Before on discussed.

We are ending of year to $XXX XXXX, a $XX today flow. deliver in to again, benefit million fundamental annualized adjusted improve of key approximately the cash committed challenges approximately will approximately The the end and and but run in of improve expect Once to we many business. $XXX XXXX. by manner targets operating we and to set metrics focused P&L a with addressing our profit urgent rate income million thoughtful, out million the of the

streams $XXX the laid best we working to of the model four expect in position to of course We’ve $XXX in work out and the current Ed realignment Furthermore, capital future in million necessary this to are expected over operating win environment. million company recognize the put the program. benefit the

team committed here. change and to past scale executed initiatives the large Our leadership in successfully are so doing hit successfully

Now at let's guidance. full-year look our XXXX

EPS net a in million of to to a $XXX billion. to billion adjusted a $X.XX revenue to Adjusted $XX.X We be of $X.XX. in expect range be $XXX to range be and million to of EBITDA in range $XX.X

throughout commentary have Given I cadence the program this to our XXXX realignment morning our some discussed backdrop year. the related underway, operating model is now and of Ed and would I earnings and what to expectations added for the guidance color that of like some around the provide

on segment, we be the price to from our volume in QX along expect sequentially down X%. continued products, in consolidated we revenue the S&IP and seeing pressure seasonality With are normal with Patient Direct our approximately by QX

across could take as in that adjusted and the half year first quarter expect of negative our be our of We as volumes begin earnings operating will product up as EPS majority model our vast occur believe the business. normal our the the realignment to benefits in recover ramps hold $X.XX. back We low S&IP program seasonality

operating expected XX.X%, $XXX rate million million of capital of include benefit in million, income Our expense rates commodity of diluted subside range to XX/XX/XXXX. to to approximately Destocking back tax key of assumptions model begins $XXX of of XX.X to rate operating program. gross of realignment $XX shares XXXX. for half interest XX% the FX the million, expenditures and to million XXXX realization adjusted margin from million stable the A approximately average of and adjusted of improving $XXX prices, XX%, effective in as $XXX weighted

section with filed the Investor X-K posted Relations refer our also of the Form we've slides the SEC which to supplemental today, earlier to Please on website.

point modifying peer quarter XXXX, be a LIFO provide earnings and the first To provision, with include non-cash adjusted inventory to with a at of companies both few administrative like items the non-GAAP to company's of of as we In which the to reconciling compensation in cleaner EBITDA. to stock our arrive items be cash are will more reporting addition, matters. aligned beginning view I'd investors out and

the statement to break which and our will intangible selling reporting results, a XXXX quarterly be of an in from file acquisition-related reflect Ahead presentation changes. out will our separate these to quarter distribution, amortization with line-item charges. item the change results expense, we first in will we Additionally, recast operations line combined to X-K of administrative

statement. a coming self-registration Universal we the be will filing weeks, in Finally,

current a any is this will solely Our plans three-year matter not good have and statement. life a file of new as issue registration we do approaching we At governance time, self-registration securities. to this

this call At to begin the I'll the session. back operator Q&A turn to Operator? point, the over

with Thank Instructions] Michael Bank Cherny of [Operator America. from you. first is question The

open. is line Your

and question. morning Good you taking thank the for

you to management hit on $XX million can and the this into that with on the how [‘XX] that that I yourselves business, Andy obviously streams How gone us make the bigger (ph). well. around are as you're the a making? about pursuing. Maybe Obviously, progress you in the are you of comfort work are measuring restructuring about and guess, some And back the along So that business steps as give Ed what being targets going you're if yourself give I in number thinking taking much year? process moving to are completed? those having on you're think start sure the

morning. for Well, the thanks the this Mike, Yes. and time for thanks question,

quarterly and work the $XX them four well run each first million, wave that, to our addition actions rate started, foremost, we And million already. place. the of The the So first as the year. $XXX already reporting has against as this are progress plan dedicated in leaders in on the to for streams we've so

For several information. is data There the to four for four-leadership operate weekly leadership streams. it expanded the it's Internally, the daily on reviews just then gathering for going company the also the stand-up review we're broader to regular and a cadence. been going the is -- weeks, how leadership last we've the with work across meetings and team

the be to forward. managed move is the going project as we that's So way

each quarter. to the as in happen achieved? well for we're again, We're achievement. provide going guidance to forward. it, around going going And and What's comfort, been your What's going turn works in on as what's to

one, the you interrelated. trajectory the a course year, just build. about the to can if of but And in of over Thanks. talked the two-part question have Relative I they're kind

any year give of there -- back does place And Are know, outstanding especially relative build You over the elements mean that the the that I the to I year? challenging structure this into into current the your what first-half see covenant model-realignment, back of you're with your forecasting? comfort other given debt, the that customer the destocking. see in of

Yes.

that seasonality nice the in have our in normal distribution the is in the normal Patient even which other also of in the half back starting seasonality the amount us has care seasonality into of help of is to continue business, the got think year. are wins And back to year. in you up. you're to Direct then one and think Those acute back you focused sure had we're Both to And in our consideration I one, front half the the year. on business. of has those the division I some half other going make to to take relative the the tremendous medical ramp we half

that So consideration. need into other those are really to I be think factors, taken

And Alex I'll on you then the on let but, covenants, color covenants, Speakers] some [Multiple the add know,

associated Thanks, Ed. savings, covenants, we a Yes, move forward. we as realignment we're like model good morning, on issues believe have any operating we we'll everyone. so and Good with don't the its and program feel our in place

next UBS. question from is The Kevin with Caliendo

Your open. line is

I'm going OMI this that Thanks to wondering and from source Distribution you about with your six competitive The manufacturer of now company Do my into competitive manufacturing and think domestically? anyways what go manufacture was What ability days, all for costs the compete? the months compete in market or with this to from to a your pre-pandemic of And because your of lot look new There a think are like of sourcing question. struggled were your to your onshore. able of do [Indiscernible] just the overseas, Solutions post now dynamics business to just anticipating most lot like. are the wins because taking inventory, fit perspective, a here of destocking with you that talked If be back higher position. I all business. you'll you and were

Yes.

there's couple question. to a So parts that

if it's back having XXXX, is to first, drastically that corrected look why retain I were the I associated poor to we at our think has -- tremendously. distribution our division, said, business and our started of XXXX, and win of was important I one XXXX, with in part really our we’ve really levels in if medical service. helped answer. you And know, look new distribution reasons improved service I business

is side at You know, what this on. I think It's of how cost on operating manufacturing model the that's it, out. really strip do looking we focused realignment partially

transparent both pay, on I as at and also resources how as that structure a but in mean, in traditional as reduce as product save and we we produce many cost done volumes and of now as scrap, well and humanly to take our that to time We to as because and great around it, costs as got sourcing haven't even do during that. time much as as it's manufacturing not We have possibly we've look yield to in make be we of of period and help come and customers there. out. down did can those XXXX at help utilization could job we Right really probably looking out hedged as sure issue, scrap at facilities. just we've our XXXX we we XXXX, pricing what a got down opportunities

And are frankly, ability as we're that -- going well making, should over hard standpoint, we our facilities. global control look sourcing what take be to both that. to the we have competitive product to a What produce be sure across and from should we as making a then, it's manufacturing the

look look sure it's finish -- -- start that at our and competitive footprint that's To to be in So make we to the really at or our really markets. it. a top from everyone very can manufacturing fresh bottom

just Can helpful. I That's follow-up. quick Okay. ask one

Sure.

didn't we your up Mike’s And you will about at December you anything do talk point? be leverage do of XX, cash or that, you think free where Where XXXX? be know exiting -- we that flow thinking it now, that but think is on leverage when where really like about but think your about question. sort Following on will

end now the the capital we're to between debt working high Based business, as to of a in one-turn of going again achievement we At cash be well we out of the we on the pay to level, flow. it's the ability and a think that operating get lower the year. and quarter where flow, take had at continue down cash going approximately our down debt. pay as Look, strong to QX to on

to I should that expect go throughout XXXX continue say We as XXXX. ramp and we through

so much. you Thank Great.

next JPMorgan. from The Gill Instructions] Lisa is with question [Operator

line is open. Your

morning. Hi, for my good taking Thanks question.

kind And to each what's Can flow driving you when about $XX given last that I is of about of the range? that between give Just million be talk do going or else end from all the year the just big is you bottom that don't the back it it's in then is know and the the you question? million the $XX idea end on top something talked to your what of really achieve I is an upper and cash guidance bottom. us secondly, gap my you range, just question, expectation that end? you the lower for $X.XX first this top can would think maybe about the wide

is if third It I the destocking for is it and that range thanks have of reality quarters across customers, about for we're sit talked worth. several with component a when that and a there. a and Lisa, going back of I are big usage, product calling study it's worth use third studies our really other been customers a still No. destocking we does main look of And saw half question. that close some customers third and about as about the of to out is the and well to, industry, effect to a to what that year's a said I've the the they're as normal

out really is creating trying is the now feel the of from of get that range end window that's that So to to what that year. there

I think us we going conversation, the the addition this really it's upper that be of focused towards realignment, fast year as the how end destocking to on that, get range us this to range. up whole kind -- on outside the benefit to how that model of, of achieve in help the that place, move can upper to can push end much in we of operating we of

way at. that's this looking and we're broad the a it that's is So at at range it we're where why year

good And Ed. morning, Thanks, Lisa.

add on cash to this the bear earnings to mentioned expect flow we to obviously, Just be where band what does year. there, on Ed

addition In to this that as realignment model about the program. as it's much And could talked at a in looking be operating turn that, leverage in previous we early lower. days as question,

think of you how work much through generate But indication we to operating we an we realignment I flow that better that. again, as cash we'll this visibility think gives model can have year. program, the

to where And least a much think benchmark be can I be -- was, we it that. think your what is XXXX at it's going that as what of as on floor

Okay, great. Thanks for the comments.

is Stover question Evan from next with Baird. The

open. line is Your

you. thank Hey,

et settle in I'm where in you've pre-pandemic, et part changed. specifically obviously eliminated and kind you the in forecast couple customer if would kind are in I of stockpile thinking that And your and you're base. how your above in think that S&IP cetera the in I think stock, wondering demand, -- outlook mean, that's just PPE portfolio of levels of theme last the there cetera. of years has I been the thinking

to that you about trying factor the into Just think how outlook.

case. channels, companies distribution bought something seen a to our distribution it's going usage are now it Yes. Evan, we've to other important the that’s or product and about those that we tremendous customers, is we think What an of probably What doesn't the protocols and channels has that's mean short-term go just consider have think moved COVID the away. seen we is, haven't because the whether is this important down amount have clinicians seen by on, you channel that if important stock. excess

stock, because excess customers got have that You've build up. they stockpiles

hospital actual a from the stuff we have what stockpile And the in down, believe having been cash have it already it's hospitals about if in stockpiles, while right now. in PPE their is think product that their not a who's usage going flow, issues purchased. they has because they burn financial So utilizing that, saves rates of use

as long coming gap to usage It's going destocking And as now hospitals within high of that that that that don't at the to level. start both to the We to they're that's see out the level, just or there. channels it right Eventually, back the continue need protocol clinicians XXXX. wanes, as and the hospitals product. within be within from down

That's Thanks. helpful.

medical the and products firm we business. the the global On level mean, side, what Street I revenue above distribution is expected. [Indiscernible]

component and the wins? in net large I about think on in of business. distribution going a business seeing feather How out wins you to in you talk your be And and some what trends overtime? you're of medical where development? Can net that's losses stand

Yes.

majority talk retention do wins. me contract from aspects, able to haven't our both in was And multiple been there been focus that's our and team. Let -- got vast new a we our past. now keen on for the And years. under top XX customers of the We've about something both

In of some about disclose have think taking $XXX wins, would the be another million taking million channels having that's won't XXX that's business. it out we addition and I of product the get a top that one worth about and customer of win. customers, of additional about for XX us to is that, million through where if top new example $XXX an our manage decided but of and bring customer that's of revenue, them, bringing our I that That's customer, self-distribution to additional $XXX in $XXX customer million, our the

a in robust is time. it's the and been long pipeline period then of So as as probably

we're kind So that's of the cadence on.

IDNs have looking too. of care. broader is about the for to a hospitals that's talked because business that, the in our actually addition little the Because side the relationships gaining and Patient and this. merit as we bit that home, we synergies, we're helping Direct business, those support with are into there acute actually of And of synergy side In grow

between our So products looking it's customers acute then our where, and starting also going and you. put they cross and of, the are ways competition. we're from identifying a for Two, what locking in one our Direct segments. channels. customers And at tremendous finding wins, takeaways them stability other self-distribution of about true and taking care Patient over doing mix for a our up amount and creates existing it's hey, which it's ways aggressively through multiple and that like to new It's years after our

here, to you. to non-GAAP Okay. I Thank how that have add like to does from what got it are I EPS in doing correct, just the here? backs be details new but $X.XX there's might for affected I'm $X.XX under XXXX. Alex, that apples-to-apples wondering to miss the me. If sounds Final old method, guidance like lower. treatments going more GAAP the you're presumably non-GAAP look one the

reporting no Evan. changes. change Thanks, this Yes. the time for There's at

won't reporting EPS. know, changes You the affect

Okay.

about you. Sorry thank confusion the and

There over are Pesicka time. it further comments. Ed closing to this questions I'll at any no turn for

And Thank company. you. about the the Apria, And three the walk our and of profit performance call putting business. Byram changed strong our that acquisition I our the from segment. Patient Really comes majority fact the fact starts we've Direct that profile with Excuse our really think me. the away to points, is on two business now our what of want of together, it Direct first with materially Thank EBITDA that of everyone really -- Patient you. with key and I really that with division, those the

not grow we not key did double-digits, XX% one I XX%, there. Patient in that also growth that to it. product a basis, grew talked it's categories at our quarter And segment. only we majority quarter in I as Direct On category pro grew of so important seeing form recognize in the than it's segment, the about more this we're And that incredible a think driving that

segment. other The growth this not just thing in is

If strong expansion. the because pro XX% a XXX-basis form nearly we're expected That's strong form market and profit be synergy relative ahead industry, pro we on we're in we to you a basis, point where would realization the and execution. at at a that's year-over-year far where on growth margin of basis, look others it the a that in

to and Here's seeing customer in year-over-year. performing distribution, stabilized. of has key business in addition XXXX both We've and well. that the in of thing, losses struggled we're wins amount business medical and second sequentially business got to significant with our that service is business that's extremely a the XXXX account nice retention The growth

operating us of a We've of down working worth year incredible going realignment. our expected total over million, we're pay got products $XXX the that well do business. million a to the $XXX and by realignment and high as address long-term at thing as help rate to finally, of is urgency between of then that the $XXX company S&IP we company. well we and to And that the a several a as debt, to end million that we're model XXXX, run million recognize in cost a $XXX sense And capital years profile structure is going last north have were and deliver us going third the with to And with the as really issue million of as the $XX change as aggressiveness. aggressively

services things to growing the addition cash that allow I leverage to enable our all is enable just healthcare to to which invest continue help in help Direct to that are us sales segment, in of to to drive, reinvest that tremendous to going going to and three and us to business. is to look continue to about for It's forward. segment us expand amount to Patient of grow enable going drive grow down free relationships pay products Direct going and Patient the proprietary flow really Those to talked product to continue debt that leverage and in us at diversify our us going to

you. talking So Thank again, morning to time and appreciate look in this the forward everybody future. the

today's and Thank this now concludes gentlemen, and conference you participating Ladies you call. may disconnect. for