Owens & Minor stays on path for rapid growth

RICHMOND, Va. – Owens & Minor execs say they are “thrilled” with the growth of the company’s Patient Direct segment, led by Apria and Byram Healthcare, which continues to outpace the market. 

Revenues for the segment grew by 10.4% on a year-over-year basis, and nearly all of its major product categories saw double-digit growth, said President and CEO Edward Pesicka on a call to discuss the company’s first quarter earnings for 2023. 

“This rapid pace growth is due to demographics, such as an aging population, and the rise in the number of patients with chronic conditions, the increase in available home treatments and the growing acceptance of patient care in the home,” he said. “It is these industry dynamics, combined with our Patient Direct strength and fierce execution, that leaves us thrilled about the future prospects for Patient Direct and the expectation of continued positive momentum.” 

OM reported consolidated revenue of $2.5 billion for the quarter, with the Patient Direct segment representing $607 million. 

As the segment becomes a larger part of the overall business, OM expects to produce significant operating cash flow that it will use for debt reduction and to reinvest in the business, said Alexander Bruni, executive vice president and CFO. 

“To that end, we paid down $117 million of debt during the first quarter, bringing total debt reduction to over a quarter of a billion dollars since the finalization of the Apria acquisition,” he said. “At the end of Q1, our total debt was $2.4 billion.” 

OM’s companywide operating model realignment program, announced in March, is on pace to achieve $30 million in savings in 2023 and exit the year with approximately a $100 million run rate of profit improvement, said Pesicka. The program entails everything from improving sourcing and procurement to streamlining manufacturing and operations to expanding its product portfolio and adjusting pricing. 

“We are where we expected to be at this stage and encouraged by the path forward already identified in the quarters ahead,” he said.