Owens & Minor Stock Dips On Mixed Q4 Preliminary Results & $310 Million Apria Goodwill Charge: Details

Owens & Minor, Inc. OMI shares dipped premarket on Monday after the company disclosed preliminary results and financing for the previously announced Rotech Healthcare Holdings, Inc. buyout.

Edward A. Pesicka, President & Chief Executive Officer of Owens & Minor, said, “We are commencing a process to raise additional debt while the capital markets are attractive, to finance our previously announced agreement to acquire Rotech which we continue to expect will close in the first half of 2025.”

”Our healthy free cash flow provides the vehicle for this proposed financing as well as helping us achieve our deleveraging goals over the next few years.” 

Notably, in July 2024, the company announced the acquisition of Rotech Healthcare for $1.36 billion in cash.

Preliminary Results: For the fourth quarter, Owens & Minor sees revenue of $2.67 billion – $2.70 billion (vs. consensus of $2.731 billion) and adjusted EPS of $0.52 –$0.55 (compared to the street view of $0.53).

For 2024, the company stated preliminary revenue of $10.67 billion – $10.70 billion (vs. $10.736 billion estimate) and adjusted EPS of $1.50 – $1.53 (vs. consensus of $1.51).

The company expects to witness a non-cash goodwill impairment charge of around $310 million within its Apria division, or a net loss of about $4.00 per share.

This reflects financial market changes in the fourth quarter of 2024, which include a decline in Owens & Minor’s stock price, rising interest rates, and anticipated pricing changes in a capitated contract.

Pesicka added, “We are particularly excited about the full-year performance of our Patient Direct segment which posted solid mid-single digit growth, and even higher in key categories.”

”In addition, we are pleased that in a year of meaningful reinvestment in the business we were able to reduce total debt by over $240 million.”

The company plans to report its fourth-quarter and full-year 2024 financial results on February 28, 2025.

Investors can gain exposure to the stock via Invesco Exchange-Traded Fund Trust II Invesco S&P SmallCap 600 Revenue ETFRWJ.

Price Action: OMI shares are down 8.71% at $13.00 premarket at the last check Monday.

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