Owens & Minor, Inc.

I would now like to hand the conference over to the first speaker today, Jackie Marcus, Investor Relations. You may begin.

Thank you, operator. Hello, everyone, and welcome to the Owens & Miner fourth quarter 2023 earnings call. Our comments on the call will be focused on the financial results for the fourth quarter of 2023, as well as our outlook for 2024, both of which are included in today's press release. The press release, along with the supplemental slides, are posted on the investor relations section of our website. Please note that during this call, we will make forward-looking statements. The matters addressed in these statements are subject to risks and uncertainties, which could cause actual results to differ materially from those projected or implied here today. Please refer to our SEC filings for a full description of these risks and uncertainties, including the risk factors section of our annual report on Form 10-K and quarterly reports on Form 10-Q. In our discussion today, we will reference certain non-GAAP financial measures and information about these measures and reconciliations to the most comparable GAAP financial measures, which are included in our press release. Today, I'm joined by Ed Paseka, President and Chief Executive Officer, and Alex Bruni, Executive Vice President and Chief Financial Officer. I will now turn the call over to Ed. Ed?

Thank you, Jackie. Good morning, everyone, and thank you for joining us on the call today. As you saw in our press release this morning, we closed out 2023 with strong positive momentum and we exited the year in a position of strength. Our patient direct segment continued to outpace market growth as we leveraged our proven commercial model in one of the fastest growing areas of healthcare, the home. Our products and healthcare services segment successfully pivoted as we reset our approach post-pandemic We did this by leveraging the operating model realignment program, executing at a high level, and winning new business, which collectively put our P&HS segment on a positive trajectory for revenue growth and margin expansion. We also finished the year by launching a five-year strategic plan to drive growth and enhance profitability. And we didn't wait until 2024 to begin executing on this strategy. as we began to invest in both of our segments during the fourth quarter. And finally, we launched our purpose and vision in the fourth quarter, which will continue to solidify a results-oriented culture at Owens & Miner. I'll provide additional comments on our long-term strategy later in my prepared remarks, but now let me focus on 2023. When I reflect on our performance in 2023, I'm extremely proud of how our organization continues to perform against our objectives. And the proof of that hard work and strong execution is evident across our financial results. For example, in fiscal 2023, we generated over $740 million of operating cash flow, which was an annual record for Owens & Miner. This cash flow performance helped to significantly strengthen our financial profile as we reduced debt by nearly $600 million during the year. And this strengthened balance sheet will support many of the value creation initiatives included in our five-year strategic plan. Next, during the year, we delivered more than $40 million in operating model realignment benefits, and we exited the year with more than $100 million of run rate. This program helped our product and healthcare services segment deliver meaningful revenue growth and profit improvement in the fourth quarter. Finally, we delivered significant sequential improvement in key performance areas, with adjusted EPS growing from $0.05 in Q1 to $0.69 in Q4, and adjusted operating margin improving from 1.9% in Q1 to 4.2% in Q4. While revenue declined 8% in Q1, it increased to a positive 4.1% in Q4 on a year-over-year basis. With our patient direct segment leading the way with full year 2023 organic revenue growth of nearly 10% and continues to outperform the market, while remaining well-positioned for further expansion as demand for home-based care accelerates. So as you can see, we're excited about our business right now, given the substantial flexibility we've established and the strong performance in 2023. Let me close with a quick summary of each segment. In terms of our market-leading patient direct segment, we had an outstanding year. We grew the business double digits, continued to expand the overall profit contributions, further the integration of Apria, and began investing in additional growth initiatives. As we look forward, we maintain our belief that we can continue to outpace the market and expand our position as a true leader in home-based care. In terms of our product and healthcare services segment, during 2023, we utilized our operating model realignment program to lower our cost to serve, expand our profits, and increase our cash flows, all of which have repositioned the business for long-term success. Before I share my thoughts on 2024 and the future for Owens & Miner, I would like to turn the call over to our Chief Financial Officer, Alex Bruni, to discuss our financial performance and our 2024 guidance.