Owens & Minor’s patient direct segment starts strong

RICHMOND, Va. – The fast growth of Owens & Minor’s patient direct platform, which posted 25% revenue growth during the first quarter of 2022, is an indicator of the company’s strength in the home health market, company officials said during a recent earnings call. 

And officials expect to see that double-digit growth rate continue for the platform, which is comprised of Byram Healthcare and the newly acquired Apria Healthcare. 

“It's a $50 billion market that is highly fragmented (and) growing fast, with over 80% recurring revenue,” said Edward Pesicka, president and CEO. “And it's the market where we have been winning consistently since 2017, as our Byram business has grown at multiples of the market rates, recording organic revenue growth in the high teens on a compounded annual basis.” 

In the first quarter, Byram, with its portfolio of diabetes, ostomy, incontinence and wound care supplies, saw its strongest quarter of growth in two years, helping the platform to net revenues of $273 million. 

In the five weeks that Apria has been part of Owens & Minor, officials have been encouraged by the early traction they are seeing from integrating the Byram and Apria teams. 

“They're already working leads together, they've already closed some new business, which to me is extremely encouraging,” said Andy Long, executive vice president and CFO. “The team is starting to deliver on some of the revenue synergies, albeit small, but they're starting to get traction with that already. And the expectation is that continues to ramp as we move through the year.” 

Long-term, officials expect synergies from Apria of $80 million to $100 million in revenue and $40 million to $50 million in adjusted EBITDA, with an eye toward the fourth quarter when challenges related to a large CPAP recall are expected to ease up. 

“We do see that situation improving in the fourth quarter,” said Long. “And there's a significant amount of backlog that's been created from this, so we're going to start to see that backlog coming down in the fourth quarter. And quite frankly, we expect that to continue strong into 2023.”