Owens & Minor leans on services as it grows supplies biz 

RICHMOND, Va. – Diabetes continued to lead the way in growth for Owens & Minor in the third quarter of 2024, but sleep and other supply categories are also showing signs of strength due to the company’s “relentless” focus, said CEO Edward Pesicka. 

This year, the company “tore apart” its process for onboarding and managing sleep patients, for example, to make it easier and faster, he said. 

“We have to have an impeccable service,” said Pesicka on a recent call to discuss the company’s financial results. “As long as we maintain that high level of service, we'll maintain that customer base and create the opportunity to pick up additional customers. So, the relentlessness, I would say, in our Patient Direct business to not rest on our laurels – we've already accomplished (that)." 

For the third quarter, the Patient Direct business had revenue of $687 million, up 6% year over year. 

‘High-grade problem’ 

Still, the sleep category is feeling a drag from the backlog created by a cyberattack at Change Healthcare earlier in the year, says John Leon, who was named as executive vice president and CFO in September. 

“It's a high-grade problem in that we're clearing a backlog, while incremental demand comes in,” he said. “We have a queue of constant new starts every day. So, it’s something we need to manage and work through, but again, a bit of a high-grade problem to have.” 

FTC request 

Owens & Minor in July announced it had entered into a definitive agreement to acquire Rotech Healthcare for $1.36 billion in cash. In October, both companies received a second request for additional information from the Federal Trade Commission, which is reviewing the merger. That’s not uncommon for a deal of this size, said Pesicka. 

“Our team is working closely with the FTC and Rotech to respond as quickly as possible and we remain confident the deal will close in the months ahead,” he said. 

• Related: Get the rundown on Owens and Minor's second quarter financial results.