Owens & Minor, Inc.

Investor Relations. Please go ahead.

Thank you, Operator. Hello, everyone, and welcome to the Owens & Miner fourth quarter and full year 2024 earnings call. Our comments on the call will be focused on the financial results for the fourth quarter and full year 2024, as well as our outlook for 2025, all 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 that reflect our current views of Owens & Miner about our business, financial performance, and future events. 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. Our expectations, beliefs, and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that our expectations, beliefs, and projections will result or be achieved. 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. Any forward-looking statements that we make on this call or in our earnings press release are as of today, and we undertake no obligation to update these statements as a result of new information or future events, except to the extent required by applicable law. In our discussion today, we will refer to non-GAAP financial measures and believe they might help investors to better understand our performance or business trends. Information about these measures and reconciliations to the most comparable GAAP financial measures are included in our press release. Today, I am joined by Ed Pasica, Owens & Miner's President and Chief Executive Officer, and John Leon, the company's Chief Financial Officer. I will now turn the call over to Ed.

Thank you, Jackie. Good morning, everyone, and thank you for joining us on the call today. 2024 was an important year for Owens & Miner, and I am pleased with the progress that we have made against the strategy we outlined at our investor day in December of 2023. As a reminder, we committed to optimizing our product and healthcare services segment, leveraging our leading patient direct platform, and building balance sheet flexibility through deleveraging. Within P&HS, we continue to see momentum in the broadening of our product portfolio, developing a streamlined and efficient manufacturing footprint, and enhancing our distribution capabilities. Within PatientDirect, we continue to leverage our footprint and broad product offering to support home-based care for millions of patients with chronic conditions. Those capabilities combined with the positive demographic trends and expanding home treatment options leaves us very bullish on the future of this business. Finally, we repaid $647 million of debt over the last two years. which helps provide the financial flexibility to pursue the acquisition of Rotech, which we believe will drive long-term shareholder value. As we mentioned in our press release published this morning, we have been actively engaged in robust discussions regarding the potential sale of our product and healthcare services segment and are already well along in the process. Over the past few years, we have focused our capital reinvestment on the higher growth, higher margin patient direct segment. Accordingly, over the past 18 months, we have considered many strategic options while continuing to work to enhance the product and healthcare services segment. The actions we have taken on realigning PNHS has made it a stronger entity and well-positioned for future growth. We are excited and encouraged by the strong interest in PNHS business and ongoing conversations we are having in the process. In addition, the press release published this morning also mentioned that our Board of Directors has authorized the share repurchase program of up to $100 million. John will provide more detail later during his prepared comments. Regarding our planned acquisition of Rotech, we are awaiting a final decision from the regulators and we remain diligent in our planning process as we expect to close in the first half of 2025. We remain incredibly excited by the prospect of a united future together. It is our plan to leverage the existing AFRIA platform we acquired nearly three years ago to improve service while delivering synergies through the optimization of our operations and interface with our customers. To the extent possible, we have been using the past few months to further understand the synergy opportunities and create the ability to expedite synergies post-close. Based on what we already know and the work we have done to date, we now believe that our previously discussed cost synergy projections of $50 million in year three is conservative in both terms of value and time. Before I discuss our performance in 2024 and our goals for 2025, I want to take a moment to commend our teammates at Owens & Miner. We saw many difficult and heartbreaking situations in 2024 and earlier this year. including the record-setting hurricanes and historic flooding in the Southeast, the significant winter storms across the Midwest and Northeast, and the devastating fires in Los Angeles. Facing these extraordinary circumstances, our teammates ensure that our customers and patients receive the critical and vital medical supplies they needed. I am incredibly proud of the team that we have assembled at Owens & Miner. and that our teammates embody our core belief that life takes care. Now moving on to 2024. While we focused on our long-term strategy, we also delivered mid-single-digit top-line growth and 13% growth in adjusted EPS, while continuing to reinvest in the business to drive greater operational efficiencies, improve customer experience, expand our technology offering, and set ourselves up for long-term sustainable growth. starting with PatientDirect. Our PatientDirect business outpaced market growth with mid single digit growth for the quarter and for the year. In addition, it delivered over $13 million of incremental operating income year over year, while making significant progress with revenue cycle management and our sleep journey program, which helped deliver strong sleep supply growth for the year and the fourth quarter. The addition of sales teammates also helped us deliver double-digit growth in many of our smaller categories. Finally, our investments in technology continued as we launched Byram Connect, a digital health coach to help manage diabetes. Overall, significant progress was made in 2024, but we still have ample opportunity for advancement as well as improvement across all of our therapy categories. And we remain excited about the future of PatientDirect. So now moving on to our P&HS segment. Our products and healthcare services segment for the full year and quarter continue to show solid same-store sales growth in our medical distribution division, partially offset by lower glove pricing. Next, I want to recognize that the P&HS team continues to make significant progress in capturing savings and subsequently reinvesting those dollars into driving even more efficiencies and improving our operations. During 2024, we have advanced our proprietary product portfolio, made progress with DC automation, continued with the construction of new distribution centers, and began the consolidation of our kitting footprint. Overall, we made great progress related to our long-term strategy to optimize our PNHS segments. As I look ahead into 2025, the team and I are keenly focused on these areas. One, We will focus on expanding our free cash flow to strengthen our balance sheet, invest in our business, and support our stock as needed should it continue to be undervalued. Two, we will continue to be disciplined while driving profitable growth. Three, we will continue to take all steps to gain clearance from regulators. And upon approval, we will quickly begin the integration of Rotech into the patient direct segment. And finally, we will work through the process related to our products and healthcare services segments. As I look forward, I'm excited to build upon the progress we made in 2024 to advance our long-term strategy that we outlined at Investor Day in December of 2023. With that, I'll turn it over to John to discuss our financial performance in 2024 and financial guidance for 2025 in more detail. John?