x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Virginia | 54-1701843 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
9120 Lockwood Boulevard, Mechanicsville, Virginia | 23116 |
(Address of principal executive offices) | (Zip Code) |
Post Office Box 27626, Richmond, Virginia | 23261-7626 |
(Mailing address of principal executive offices) | (Zip Code) |
Large accelerated filer | x | Accelerated filer | ¨ |
Non-accelerated filer | o (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
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Item 1A. | ||
Item 2. | ||
Item 6. |
Three Months Ended March 31, | ||||||||
(in thousands, except per share data) | 2014 | 2013 | ||||||
Net revenue | $ | 2,256,380 | $ | 2,246,384 | ||||
Cost of goods sold | 1,975,185 | 1,967,332 | ||||||
Gross margin | 281,195 | 279,052 | ||||||
Selling, general and administrative expenses | 225,610 | 217,721 | ||||||
Acquisition-related and exit and realignment charges | 3,262 | 2,010 | ||||||
Depreciation and amortization | 13,864 | 12,629 | ||||||
Other operating income, net | (7,825 | ) | (1,192 | ) | ||||
Operating earnings | 46,284 | 47,884 | ||||||
Interest expense, net | 3,246 | 3,199 | ||||||
Income before income taxes | 43,038 | 44,685 | ||||||
Income tax provision | 17,553 | 18,587 | ||||||
Net income | $ | 25,485 | $ | 26,098 | ||||
Net income per common share: | ||||||||
Basic | $ | 0.41 | $ | 0.41 | ||||
Diluted | $ | 0.41 | $ | 0.41 | ||||
Cash dividends per common share | $ | 0.25 | $ | 0.24 |
Three Months Ended March 31, | ||||||||
(in thousands) | 2014 | 2013 | ||||||
Net income | $ | 25,485 | $ | 26,098 | ||||
Other comprehensive income (loss), net of tax: | ||||||||
Currency translation adjustments (net of income tax benefit of $0 in 2014 and of $385 in 2013) | 467 | (7,827 | ) | |||||
Change in unrecognized net periodic pension costs (net of income tax expense of $97 in 2014 and $134 in 2013) | 107 | 208 | ||||||
Other (net of income tax benefit of $8 in 2014 and 2013) | (9 | ) | (13 | ) | ||||
Total other comprehensive income (loss), net of tax | 565 | (7,632 | ) | |||||
Comprehensive income | $ | 26,050 | $ | 18,466 |
March 31, | December 31, | ||||||
(in thousands, except per share data) | 2014 | 2013 | |||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 182,373 | $ | 101,905 | |||
Accounts and notes receivable, net of allowances of $15,330 and $15,030 | 543,214 | 572,854 | |||||
Merchandise inventories | 768,148 | 771,663 | |||||
Other current assets | 275,179 | 279,510 | |||||
Total current assets | 1,768,914 | 1,725,932 | |||||
Property and equipment, net of accumulated depreciation of $136,782 and $137,526 | 192,245 | 191,961 | |||||
Goodwill, net | 275,562 | 275,439 | |||||
Intangible assets, net | 39,437 | 40,406 | |||||
Other assets, net | 93,042 | 90,304 | |||||
Total assets | $ | 2,369,200 | $ | 2,324,042 | |||
Liabilities and equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 659,550 | $ | 643,872 | |||
Accrued payroll and related liabilities | 21,741 | 23,296 | |||||
Deferred income taxes | 41,975 | 41,613 | |||||
Other accrued liabilities | 302,244 | 280,398 | |||||
Total current liabilities | 1,025,510 | 989,179 | |||||
Long-term debt, excluding current portion | 214,826 | 213,815 | |||||
Deferred income taxes | 42,779 | 43,727 | |||||
Other liabilities | 52,918 | 52,278 | |||||
Total liabilities | 1,336,033 | 1,298,999 | |||||
Commitments and contingencies | |||||||
Equity | |||||||
Owens & Minor, Inc. shareholders’ equity: | |||||||
Preferred stock, par value $100 per share, authorized - 10,000 shares, Series A Participating Cumulative Preferred Stock; none issued | |||||||
Common stock, par value $2 per share; authorized - 200,000 shares; issued and outstanding - 63,091 shares and 63,096 shares | 126,182 | 126,193 | |||||
Paid-in capital | 199,148 | 196,605 | |||||
Retained earnings | 696,574 | 691,547 | |||||
Accumulated other comprehensive income | 10,133 | 9,568 | |||||
Total Owens & Minor, Inc. shareholders’ equity | 1,032,037 | 1,023,913 | |||||
Noncontrolling interest | 1,130 | 1,130 | |||||
Total equity | 1,033,167 | 1,025,043 | |||||
Total liabilities and equity | $ | 2,369,200 | $ | 2,324,042 |
Three Months Ended March 31, | |||||||
(in thousands) | 2014 | 2013 | |||||
Operating activities: | |||||||
Net income | $ | 25,485 | $ | 26,098 | |||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||
Depreciation and amortization | 13,864 | 12,629 | |||||
Share-based compensation expense | 2,642 | 1,910 | |||||
Provision for losses on accounts and notes receivable | 54 | 107 | |||||
Deferred income tax benefit | (822 | ) | (56 | ) | |||
Changes in operating assets and liabilities: | |||||||
Accounts and notes receivable | 29,828 | (34,575 | ) | ||||
Merchandise inventories | 3,707 | 21,784 | |||||
Accounts payable | 15,815 | 98,198 | |||||
Net change in other assets and liabilities | 3,921 | 28,981 | |||||
Other, net | (1,292 | ) | (465 | ) | |||
Cash provided by operating activities | 93,202 | 154,611 | |||||
Investing activities: | |||||||
Additions to property and equipment | (7,299 | ) | (7,513 | ) | |||
Additions to computer software and intangible assets | (6,930 | ) | (7,264 | ) | |||
Proceeds from sale of investment | 1,937 | — | |||||
Proceeds from sale of property and equipment | 105 | 44 | |||||
Cash used for investing activities | (12,187 | ) | (14,733 | ) | |||
Financing activities: | |||||||
Change in bank overdraft | 20,578 | — | |||||
Cash dividends paid | (15,785 | ) | (15,199 | ) | |||
Repurchases of common stock | (5,000 | ) | (2,282 | ) | |||
Excess tax benefits related to share-based compensation | 346 | 207 | |||||
Proceeds from exercise of stock options | 937 | 1,792 | |||||
Other, net | (1,868 | ) | (1,958 | ) | |||
Cash used for financing activities | (792 | ) | (17,440 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 245 | (1,763 | ) | ||||
Net increase in cash and cash equivalents | 80,468 | 120,675 | |||||
Cash and cash equivalents at beginning of period | 101,905 | 97,888 | |||||
Cash and cash equivalents at end of period | $ | 182,373 | $ | 218,563 | |||
Supplemental disclosure of cash flow information: | |||||||
Income taxes paid, net | $ | 15,161 | $ | 1,540 | |||
Interest paid | $ | 539 | $ | 698 |
Owens & Minor, Inc. Shareholders’ Equity | |||||||||||||||||||||||||||
(in thousands, except per share data) | Common Shares Outstanding | Common Stock ($ 2 par value ) | Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest | Total Equity | ||||||||||||||||||||
Balance December 31, 2012 | 63,271 | $ | 126,544 | $ | 187,394 | $ | 658,994 | $ | (406 | ) | $ | 1,130 | $ | 973,656 | |||||||||||||
Net income | 26,098 | 26,098 | |||||||||||||||||||||||||
Other comprehensive income | (7,632 | ) | (7,632 | ) | |||||||||||||||||||||||
Dividends declared ($0.24 per share) | (15,176 | ) | (15,176 | ) | |||||||||||||||||||||||
Shares repurchased and retired | (74 | ) | (148 | ) | (2,134 | ) | (2,282 | ) | |||||||||||||||||||
Share-based compensation expense, exercises and other | 138 | 276 | 2,610 | 2,886 | |||||||||||||||||||||||
Balance March 31, 2013 | $ | 63,335 | $ | 126,672 | $ | 190,004 | $ | 667,782 | $ | (8,038 | ) | $ | 1,130 | $ | 977,550 | ||||||||||||
Balance December 31, 2013 | 63,096 | $ | 126,193 | $ | 196,605 | $ | 691,547 | $ | 9,568 | $ | 1,130 | $ | 1,025,043 | ||||||||||||||
Net income | 25,485 | 25,485 | |||||||||||||||||||||||||
Other comprehensive income | 565 | 565 | |||||||||||||||||||||||||
Dividends declared ($0.25 per share) | (15,744 | ) | (15,744 | ) | |||||||||||||||||||||||
Shares repurchased and retired | (143 | ) | (286 | ) | (4,714 | ) | (5,000 | ) | |||||||||||||||||||
Share-based compensation expense, exercises and other | 138 | 275 | 2,543 | 2,818 | |||||||||||||||||||||||
Balance March 31, 2014 | 63,091 | $ | 126,182 | $ | 199,148 | $ | 696,574 | $ | 10,133 | $ | 1,130 | $ | 1,033,167 |
Domestic Segment | International Segment | Total | |||||||||
Carrying amount of goodwill, December 31, 2013 | $ | 248,498 | $ | 26,941 | $ | 275,439 | |||||
Currency translation adjustments | — | 123 | 123 | ||||||||
Carrying amount of goodwill, March 31, 2014 | $ | 248,498 | $ | 27,064 | $ | 275,562 |
March 31, 2014 | December 31, 2013 | ||||||||||||||
Customer Relationships | Other Intangibles | Customer Relationships | Other Intangibles | ||||||||||||
Gross intangible assets | $ | 51,686 | $ | 3,957 | $ | 51,544 | $ | 3,933 | |||||||
Accumulated amortization | (15,461 | ) | (745 | ) | (14,281 | ) | (790 | ) | |||||||
Net intangible assets | $ | 36,225 | $ | 3,212 | $ | 37,263 | $ | 3,143 |
Lease Obligations | Severance and Other | Total | |||||||||
Accrued exit and realignment costs, December 31, 2013 | $ | 2,434 | $ | 475 | $ | 2,909 | |||||
Provision for exit and realignment activities | 532 | 807 | 1,339 | ||||||||
Cash payments, net of sublease income | (411 | ) | (327 | ) | (738 | ) | |||||
Accrued exit and realignment costs, March 31, 2014 | $ | 2,555 | $ | 955 | $ | 3,510 | |||||
Accrued exit and realignment costs, December 31, 2012 | $ | 5,098 | $ | 1,116 | $ | 6,214 | |||||
Provision for exit and realignment activities | 538 | 3 | 541 | ||||||||
Cash payments, net of sublease income | (4,844 | ) | (147 | ) | (4,991 | ) | |||||
Accrued exit and realignment costs, March 31, 2013 | $ | 792 | $ | 972 | $ | 1,764 |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
Service cost | $ | 36 | $ | 33 | |||
Interest cost | 482 | 414 | |||||
Recognized net actuarial loss | 204 | 342 | |||||
Net periodic benefit cost | $ | 722 | $ | 789 |
Three Months Ended March 31, | |||||||
(in thousands, except per share data) | 2014 | 2013 | |||||
Numerator: | |||||||
Net income | $ | 25,485 | $ | 26,098 | |||
Less: income allocated to unvested restricted shares | (188 | ) | (195 | ) | |||
Net income attributable to common shareholders - basic | 25,297 | 25,903 | |||||
Add: undistributed income attributable to unvested restricted shares - basic | 51 | 58 | |||||
Less: undistributed income attributable to unvested restricted shares - diluted | (51 | ) | (58 | ) | |||
Net income attributable to common shareholders - diluted | $ | 25,297 | $ | 25,903 | |||
Denominator: | |||||||
Weighted average shares outstanding - basic | 62,304 | 62,687 | |||||
Dilutive shares - stock options | 13 | 58 | |||||
Weighted average shares outstanding - diluted | 62,317 | 62,745 | |||||
Net income per share attributable to common shareholders: | |||||||
Basic | $ | 0.41 | $ | 0.41 | |||
Diluted | $ | 0.41 | $ | 0.41 |
Defined Benefit Pension Plans | Currency Translation Adjustments | Other | Total | ||||||||||||
Accumulated other comprehensive income (loss), December 31, 2013 | $ | (6,479 | ) | $ | 15,892 | $ | 155 | $ | 9,568 | ||||||
Other comprehensive income (loss) before reclassifications | — | 467 | — | 467 | |||||||||||
Income tax | — | — | — | — | |||||||||||
Other comprehensive income (loss) before reclassifications, net of tax | — | 467 | — | 467 | |||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 204 | — | (17 | ) | 187 | ||||||||||
Income tax | (97 | ) | — | 8 | (89 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 107 | — | (9 | ) | 98 | ||||||||||
Other comprehensive income (loss) | 107 | 467 | (9 | ) | 565 | ||||||||||
Accumulated other comprehensive income (loss), March 31, 2014 | $ | (6,372 | ) | $ | 16,359 | $ | 146 | $ | 10,133 |
Defined Benefit Pension Plans | Currency Translation Adjustments | Other | Total | ||||||||||||
Accumulated other comprehensive income (loss), December 31, 2012 | $ | (10,318 | ) | $ | 9,749 | $ | 163 | $ | (406 | ) | |||||
Other comprehensive income (loss) before reclassifications | — | (8,212 | ) | (8,212 | ) | ||||||||||
Income tax | — | 385 | — | 385 | |||||||||||
Other comprehensive income (loss) before reclassifications, net of tax | — | (7,827 | ) | — | (7,827 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 342 | — | (21 | ) | 321 | ||||||||||
Income tax | (134 | ) | — | 8 | (126 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 208 | — | (13 | ) | 195 | ||||||||||
Other comprehensive income (loss) | 208 | (7,827 | ) | (13 | ) | (7,632 | ) | ||||||||
Accumulated other comprehensive income (loss), March 31, 2013 | $ | (10,110 | ) | $ | 1,922 | $ | 150 | $ | (8,038 | ) |
Three Months Ended March 31, | |||||||
2014 | 2013 | ||||||
Net revenue: | |||||||
Domestic | $ | 2,148,915 | $ | 2,154,715 | |||
International | 107,465 | 91,669 | |||||
Consolidated net revenue | $ | 2,256,380 | $ | 2,246,384 | |||
Operating earnings (loss): | |||||||
Domestic | $ | 52,734 | $ | 52,907 | |||
International | (3,188 | ) | (3,013 | ) | |||
Acquisition-related and exit and realignment charges | (3,262 | ) | (2,010 | ) | |||
Consolidated operating earnings | $ | 46,284 | $ | 47,884 | |||
Depreciation and amortization: | |||||||
Domestic | $ | 8,975 | $ | 9,082 | |||
International | 4,889 | 3,547 | |||||
Consolidated depreciation and amortization | $ | 13,864 | $ | 12,629 | |||
Capital expenditures: | |||||||
Domestic | $ | 10,175 | $ | 11,602 | |||
International | 4,054 | 3,175 | |||||
Consolidated capital expenditures | $ | 14,229 | $ | 14,777 |
March 31, 2014 | December 31, 2013 | ||||||
Total assets: | |||||||
Domestic | $ | 1,712,214 | $ | 1,747,572 | |||
International | 474,613 | 474,565 | |||||
Segment assets | 2,186,827 | 2,222,137 | |||||
Cash and cash equivalents | 182,373 | 101,905 | |||||
Consolidated total assets | $ | 2,369,200 | $ | 2,324,042 |
Three Months Ended March 31, 2014 | Owens & Minor, Inc. | Guarantor Subsidiaries | Non-guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Statements of Income | ||||||||||||||||||||
Net revenue | $ | — | $ | 2,148,365 | $ | 119,873 | $ | (11,858 | ) | $ | 2,256,380 | |||||||||
Cost of goods sold | — | 1,939,464 | 47,599 | (11,878 | ) | 1,975,185 | ||||||||||||||
Gross margin | — | 208,901 | 72,274 | 20 | 281,195 | |||||||||||||||
Selling, general and administrative expenses | 47 | 154,156 | 71,407 | — | 225,610 | |||||||||||||||
Acquisition-related and exit and realignment charges | — | 1,294 | 1,968 | — | 3,262 | |||||||||||||||
Depreciation and amortization | 2 | 8,952 | 4,910 | — | 13,864 | |||||||||||||||
Other operating income, net | — | (7,062 | ) | (763 | ) | — | (7,825 | ) | ||||||||||||
Operating earnings (loss) | (49 | ) | 51,561 | (5,248 | ) | 20 | 46,284 | |||||||||||||
Interest expense (income), net | 2,472 | 1,243 | (469 | ) | — | 3,246 | ||||||||||||||
Income (loss) before income taxes | (2,521 | ) | 50,318 | (4,779 | ) | 20 | 43,038 | |||||||||||||
Income tax (benefit) provision | (952 | ) | 20,160 | (1,655 | ) | — | 17,553 | |||||||||||||
Equity in earnings of subsidiaries | 27,054 | — | — | (27,054 | ) | — | ||||||||||||||
Net income (loss) | 25,485 | 30,158 | (3,124 | ) | (27,034 | ) | 25,485 | |||||||||||||
Other comprehensive income (loss) | 565 | 106 | 467 | (573 | ) | 565 | ||||||||||||||
Comprehensive income (loss) | $ | 26,050 | $ | 30,264 | $ | (2,657 | ) | $ | (27,607 | ) | $ | 26,050 |
Three Months Ended March 31, 2013 | Owens & Minor, Inc. | Guarantor Subsidiaries | Non-guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||
Statements of Income | |||||||||||||||||||
Net revenue | $ | — | $ | 2,154,716 | $ | 101,980 | $ | (10,312 | ) | $ | 2,246,384 | ||||||||
Cost of goods sold | — | 1,936,091 | 41,282 | (10,041 | ) | 1,967,332 | |||||||||||||
Gross margin | — | 218,625 | 60,698 | (271 | ) | 279,052 | |||||||||||||
Selling, general and administrative expenses | 654 | 156,347 | 60,720 | — | 217,721 | ||||||||||||||
Acquisition-related and exit and realignment charges | — | 862 | 1,148 | — | 2,010 | ||||||||||||||
Depreciation and amortization | 3 | 9,060 | 3,566 | — | 12,629 | ||||||||||||||
Other operating income, net | — | (643 | ) | (549 | ) | — | (1,192 | ) | |||||||||||
Operating earnings (loss) | (657 | ) | 52,999 | (4,187 | ) | (271 | ) | 47,884 | |||||||||||
Interest expense (income), net | 4,395 | (911 | ) | (285 | ) | — | 3,199 | ||||||||||||
Income (loss) before income taxes | (5,052 | ) | 53,910 | (3,902 | ) | (271 | ) | 44,685 | |||||||||||
Income tax (benefit) provision | (1,962 | ) | 21,455 | (906 | ) | — | 18,587 | ||||||||||||
Equity in earnings of subsidiaries | 29,188 | — | — | (29,188 | ) | — | |||||||||||||
Net income (loss) | 26,098 | 32,455 | (2,996 | ) | (29,459 | ) | 26,098 | ||||||||||||
Other comprehensive income (loss) | (7,632 | ) | 208 | (7,828 | ) | 7,620 | (7,632 | ) | |||||||||||
Comprehensive income (loss) | $ | 18,466 | $ | 32,663 | $ | (10,824 | ) | $ | (21,839 | ) | $ | 18,466 |
March 31, 2014 | Owens & Minor, Inc. | Guarantor Subsidiaries | Non- guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Balance Sheets | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Current assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 133,300 | $ | 25,569 | $ | 23,504 | $ | — | $ | 182,373 | ||||||||||
Accounts and notes receivable, net | — | 469,335 | 77,475 | (3,596 | ) | 543,214 | ||||||||||||||
Merchandise inventories | — | 744,219 | 25,373 | (1,444 | ) | 768,148 | ||||||||||||||
Other current assets | — | 71,141 | 203,846 | 192 | 275,179 | |||||||||||||||
Total current assets | 133,300 | 1,310,264 | 330,198 | (4,848 | ) | 1,768,914 | ||||||||||||||
Property and equipment, net | — | 95,814 | 96,431 | — | 192,245 | |||||||||||||||
Goodwill, net | — | 247,271 | 28,291 | — | 275,562 | |||||||||||||||
Intangible assets, net | — | 17,360 | 22,077 | — | 39,437 | |||||||||||||||
Due from O&M and subsidiaries | — | 453,120 | — | (453,120 | ) | — | ||||||||||||||
Advances to and investment in consolidated subsidiaries | 1,561,013 | — | — | (1,561,013 | ) | — | ||||||||||||||
Other assets, net | 363 | 66,071 | 26,608 | — | 93,042 | |||||||||||||||
Total assets | $ | 1,694,676 | $ | 2,189,900 | $ | 503,605 | $ | (2,018,981 | ) | $ | 2,369,200 | |||||||||
Liabilities and equity | ||||||||||||||||||||
Current liabilities | ||||||||||||||||||||
Accounts payable | $ | — | $ | 619,240 | $ | 43,906 | $ | (3,596 | ) | $ | 659,550 | |||||||||
Accrued payroll and related liabilities | — | 10,781 | 10,960 | — | 21,741 | |||||||||||||||
Deferred income taxes | — | 41,855 | 120 | — | 41,975 | |||||||||||||||
Other accrued liabilities | 9,747 | 101,643 | 190,854 | — | 302,244 | |||||||||||||||
Total current liabilities | 9,747 | 773,519 | 245,840 | (3,596 | ) | 1,025,510 | ||||||||||||||
Long-term debt, excluding current portion | 203,596 | 7,252 | 3,978 | — | 214,826 | |||||||||||||||
Due to O&M and subsidiaries | 449,296 | — | 2,671 | (451,967 | ) | — | ||||||||||||||
Intercompany debt | — | 138,890 | — | (138,890 | ) | — | ||||||||||||||
Deferred income taxes | — | 31,285 | 11,494 | — | 42,779 | |||||||||||||||
Other liabilities | — | 48,021 | 4,897 | — | 52,918 | |||||||||||||||
Total liabilities | 662,639 | 998,967 | 268,880 | (594,453 | ) | 1,336,033 | ||||||||||||||
Equity | ||||||||||||||||||||
Common stock | 126,182 | — | 1,500 | (1,500 | ) | 126,182 | ||||||||||||||
Paid-in capital | 199,148 | 242,024 | 259,864 | (501,888 | ) | 199,148 | ||||||||||||||
Retained earnings (deficit) | 696,574 | 955,374 | (44,267 | ) | (911,107 | ) | 696,574 | |||||||||||||
Accumulated other comprehensive income (loss) | 10,133 | (6,465 | ) | 16,498 | (10,033 | ) | 10,133 | |||||||||||||
Total O&M shareholders’ equity | 1,032,037 | 1,190,933 | 233,595 | (1,424,528 | ) | 1,032,037 | ||||||||||||||
Noncontrolling Interest | — | — | 1,130 | — | 1,130 | |||||||||||||||
Total equity | 1,032,037 | 1,190,933 | 234,725 | (1,424,528 | ) | 1,033,167 | ||||||||||||||
Total liabilities and equity | $ | 1,694,676 | $ | 2,189,900 | $ | 503,605 | $ | (2,018,981 | ) | $ | 2,369,200 |
December 31, 2013 | Owens & Minor, Inc. | Guarantor Subsidiaries | Non-guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||
Balance Sheets | |||||||||||||||||||
Assets | |||||||||||||||||||
Current assets | |||||||||||||||||||
Cash and cash equivalents | $ | 74,391 | $ | 2,012 | $ | 25,502 | $ | — | $ | 101,905 | |||||||||
Accounts and notes receivable, net | — | 496,310 | 79,722 | (3,178 | ) | 572,854 | |||||||||||||
Merchandise inventories | — | 750,999 | 22,128 | (1,464 | ) | 771,663 | |||||||||||||
Other current assets | 201 | 72,049 | 207,058 | 202 | 279,510 | ||||||||||||||
Total current assets | 74,592 | 1,321,370 | 334,410 | (4,440 | ) | 1,725,932 | |||||||||||||
Property and equipment, net | 2 | 96,500 | 95,459 | — | 191,961 | ||||||||||||||
Goodwill, net | — | 247,271 | 28,168 | — | 275,439 | ||||||||||||||
Intangible assets, net | — | 17,881 | 22,525 | — | 40,406 | ||||||||||||||
Due from O&M and subsidiaries | — | 377,786 | — | (377,786 | ) | — | |||||||||||||
Advances to and investments in consolidated subsidiaries | 1,533,294 | — | — | (1,533,294 | ) | — | |||||||||||||
Other assets, net | 408 | 63,848 | 26,048 | — | 90,304 | ||||||||||||||
Total assets | $ | 1,608,296 | $ | 2,124,656 | $ | 506,610 | $ | (1,915,520 | ) | $ | 2,324,042 | ||||||||
Liabilities and equity | |||||||||||||||||||
Current liabilities | |||||||||||||||||||
Accounts payable | $ | — | $ | 595,865 | $ | 51,185 | $ | (3,178 | ) | $ | 643,872 | ||||||||
Accrued payroll and related liabilities | — | 12,792 | 10,504 | — | 23,296 | ||||||||||||||
Deferred income taxes | — | 41,464 | 149 | — | 41,613 | ||||||||||||||
Other current liabilities | 6,811 | 87,795 | 185,792 | — | 280,398 | ||||||||||||||
Total current liabilities | 6,811 | 737,916 | 247,630 | (3,178 | ) | 989,179 | |||||||||||||
Long-term debt, excluding current portion | 204,028 | 7,228 | 2,559 | — | 213,815 | ||||||||||||||
Due to O&M and subsidiaries | 373,544 | — | 2,910 | (376,454 | ) | — | |||||||||||||
Intercompany debt | — | 138,890 | — | (138,890 | ) | — | |||||||||||||
Deferred income taxes | — | 32,173 | 11,554 | — | 43,727 | ||||||||||||||
Other liabilities | — | 47,816 | 4,462 | — | 52,278 | ||||||||||||||
Total liabilities | 584,383 | 964,023 | 269,115 | (518,522 | ) | 1,298,999 | |||||||||||||
Equity | |||||||||||||||||||
Common stock | 126,193 | — | 1,500 | (1,500 | ) | 126,193 | |||||||||||||
Paid-in capital | 196,605 | 242,024 | 259,864 | (501,888 | ) | 196,605 | |||||||||||||
Retained earnings (deficit) | 691,547 | 925,184 | (41,029 | ) | (884,155 | ) | 691,547 | ||||||||||||
Accumulated other comprehensive income (loss) | 9,568 | (6,575 | ) | 16,030 | (9,455 | ) | 9,568 | ||||||||||||
Total Owens & Minor, Inc. shareholders’ equity | 1,023,913 | 1,160,633 | 236,365 | (1,396,998 | ) | 1,023,913 | |||||||||||||
Noncontrolling interest | — | — | 1,130 | — | 1,130 | ||||||||||||||
Total equity | 1,023,913 | 1,160,633 | 237,495 | (1,396,998 | ) | 1,025,043 | |||||||||||||
Total liabilities and equity | $ | 1,608,296 | $ | 2,124,656 | $ | 506,610 | $ | (1,915,520 | ) | $ | 2,324,042 |
Three Months Ended March 31, 2014 | Owens & Minor, Inc. | Guarantor Subsidiaries | Non-guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Statements of Cash Flows | ||||||||||||||||||||
Operating activities: | ||||||||||||||||||||
Net income (loss) | $ | 25,485 | $ | 30,158 | $ | (3,124 | ) | $ | (27,034 | ) | $ | 25,485 | ||||||||
Adjustments to reconcile net income to cash provided by (used for) operating activities: | ||||||||||||||||||||
Equity in earnings of subsidiaries | (27,054 | ) | — | — | 27,054 | — | ||||||||||||||
Depreciation and amortization | 2 | 8,952 | 4,910 | — | 13,864 | |||||||||||||||
Share-based compensation expense | — | 2,570 | 72 | — | 2,642 | |||||||||||||||
Provision for losses on accounts and notes receivable | — | 96 | (42 | ) | — | 54 | ||||||||||||||
Deferred income tax expense (benefit) | — | (588 | ) | (234 | ) | — | (822 | ) | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||
Accounts and notes receivable | — | 26,879 | 2,530 | 419 | 29,828 | |||||||||||||||
Merchandise inventories | — | 7,563 | (3,835 | ) | (21 | ) | 3,707 | |||||||||||||
Accounts payable | — | 23,375 | (7,142 | ) | (418 | ) | 15,815 | |||||||||||||
Net change in other assets and liabilities | 3,138 | 12,734 | (11,951 | ) | — | 3,921 | ||||||||||||||
Other, net | (388 | ) | (745 | ) | (159 | ) | — | (1,292 | ) | |||||||||||
Cash provided by (used for) operating activities | 1,183 | 110,994 | (18,975 | ) | — | 93,202 | ||||||||||||||
Investing activities: | ||||||||||||||||||||
Proceeds from the sale of investment | — | 1,937 | — | — | 1,937 | |||||||||||||||
Additions to property and equipment | — | (4,036 | ) | (3,263 | ) | — | (7,299 | ) | ||||||||||||
Additions to computer software and intangible assets | — | (6,139 | ) | (791 | ) | — | (6,930 | ) | ||||||||||||
Proceeds from the sale of property and equipment | — | 11 | 94 | — | 105 | |||||||||||||||
Cash used for investing activities | — | (8,227 | ) | (3,960 | ) | — | (12,187 | ) | ||||||||||||
Financing activities: | ||||||||||||||||||||
Change in bank overdraft | — | — | 20,578 | — | 20,578 | |||||||||||||||
Change in intercompany advances | 78,263 | (78,631 | ) | 368 | — | — | ||||||||||||||
Cash dividends paid | (15,785 | ) | — | — | — | (15,785 | ) | |||||||||||||
Repurchases of common stock | (5,000 | ) | — | — | — | (5,000 | ) | |||||||||||||
Excess tax benefits related to share-based compensation | 346 | — | — | — | 346 | |||||||||||||||
Proceeds from exercise of stock options | 937 | — | — | — | 937 | |||||||||||||||
Other, net | (1,035 | ) | (579 | ) | (254 | ) | — | (1,868 | ) | |||||||||||
Cash provided by (used for) financing activities | 57,726 | (79,210 | ) | 20,692 | — | (792 | ) | |||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | 245 | — | 245 | |||||||||||||||
Net increase (decrease) in cash and cash equivalents | 58,909 | 23,557 | (1,998 | ) | — | 80,468 | ||||||||||||||
Cash and cash equivalents at beginning of period | 74,391 | 2,012 | 25,502 | — | 101,905 | |||||||||||||||
Cash and cash equivalents at end of period | $ | 133,300 | $ | 25,569 | $ | 23,504 | $ | — | $ | 182,373 |
Three months ended March 31, 2013 | Owens & Minor, Inc. | Guarantor Subsidiaries | Non-guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||
Statements of Cash Flows | |||||||||||||||||||
Operating activities: | |||||||||||||||||||
Net income (loss) | $ | 26,098 | $ | 32,455 | $ | (2,996 | ) | $ | (29,459 | ) | $ | 26,098 | |||||||
Adjustments to reconcile net income to cash provided by (used for) operating activities: | — | ||||||||||||||||||
Equity in earnings of subsidiaries | (29,188 | ) | — | — | 29,188 | — | |||||||||||||
Depreciation and amortization | 3 | 9,060 | 3,566 | — | 12,629 | ||||||||||||||
Share-based compensation expense | — | 1,910 | — | — | 1,910 | ||||||||||||||
Deferred income tax expense | — | 626 | (682 | ) | — | (56 | ) | ||||||||||||
Provision for losses on accounts and notes receivable | — | 53 | 54 | — | 107 | ||||||||||||||
Changes in operating assets and liabilities: | — | ||||||||||||||||||
Accounts and notes receivable | — | (11,755 | ) | (22,344 | ) | (476 | ) | (34,575 | ) | ||||||||||
Merchandise inventories | — | 24,300 | (2,786 | ) | 270 | 21,784 | |||||||||||||
Accounts payable | — | 60,533 | 37,188 | 477 | 98,198 | ||||||||||||||
Net change in other assets and liabilities | 3,720 | 2,813 | 22,448 | 28,981 | |||||||||||||||
Other, net | (406 | ) | (39 | ) | (20 | ) | (465 | ) | |||||||||||
Cash provided by (used for) operating activities | 227 | 119,956 | 34,428 | — | 154,611 | ||||||||||||||
Investing activities: | |||||||||||||||||||
Additions to computer software and intangible assets | — | (5,786 | ) | (1,478 | ) | — | (7,264 | ) | |||||||||||
Additions to property and equipment | — | (5,816 | ) | (1,697 | ) | — | (7,513 | ) | |||||||||||
Proceeds from the sale of property and equipment | — | 45 | (1 | ) | — | 44 | |||||||||||||
Cash used for investing activities | — | (11,557 | ) | (3,176 | ) | — | (14,733 | ) | |||||||||||
Financing activities: | |||||||||||||||||||
Change in intercompany advances | 106,661 | (106,529 | ) | (132 | ) | — | — | ||||||||||||
Cash dividends paid | (15,199 | ) | — | — | — | (15,199 | ) | ||||||||||||
Repurchases of common stock | (2,282 | ) | — | — | — | (2,282 | ) | ||||||||||||
Excess tax benefits related to share-based compensation | 207 | — | — | — | 207 | ||||||||||||||
Proceeds from exercise of stock options | 1,792 | — | — | — | 1,792 | ||||||||||||||
Other, net | (985 | ) | (725 | ) | (248 | ) | — | (1,958 | ) | ||||||||||
Cash provided by (used for) financing activities | 90,194 | (107,254 | ) | (380 | ) | — | (17,440 | ) | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | (1,763 | ) | (1,763 | ) | |||||||||||||
Net (decrease) increase in cash and cash equivalents | 90,421 | 1,145 | 29,109 | — | 120,675 | ||||||||||||||
Cash and cash equivalents at beginning of period | 58,190 | 13,641 | 26,057 | — | 97,888 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 148,611 | $ | 14,786 | $ | 55,166 | $ | — | $ | 218,563 |
Three Months Ended March 31, | |||||||
(Dollars in thousands except per share data) | 2014 | 2013 | |||||
Operating earnings, as reported (GAAP) | $ | 46,284 | $ | 47,884 | |||
Acquisition-related and exit and realignment charges | 3,262 | 2,010 | |||||
Operating earnings, adjusted (non-GAAP) (Adjusted Operated Earnings) | $ | 49,546 | $ | 49,894 | |||
Adjusted Operating Earnings as a percent of revenue (non-GAAP) | 2.20 | % | 2.22 | % | |||
Net income, as reported (GAAP) | $ | 25,485 | $ | 26,098 | |||
Acquisition-related and exit and realignment charges, net of tax | 2,222 | 1,521 | |||||
Net income, adjusted (non-GAAP) (Adjusted Net Income) | $ | 27,707 | $ | 27,619 | |||
Net income per diluted common share, as reported (GAAP) | $ | 0.41 | $ | 0.41 | |||
Acquisition-related and exit and realignment charges, per diluted common share | 0.03 | 0.03 | |||||
Net income per diluted common share, adjusted (non-GAAP)(Adjusted EPS) | $ | 0.44 | $ | 0.44 |
Three Months Ended March 31, | Change | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | $ | % | ||||||||||
Domestic | $ | 2,148,915 | $ | 2,154,715 | $ | (5,800 | ) | (0.3 | )% | |||||
International | 107,465 | 91,669 | 15,796 | 17.2 | % | |||||||||
Net revenue | $ | 2,256,380 | $ | 2,246,384 | $ | 9,996 | 0.4 | % |
Three Months Ended March 31, | Change | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | $ | % | ||||||||||
Gross margin | $ | 281,195 | $ | 279,052 | $ | 2,143 | 0.8 | % | ||||||
As a % of net revenue | 12.46 | % | 12.42 | % |
Three Months Ended March 31, | Change | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | $ | % | ||||||||||
SG&A expenses | $ | 225,610 | $ | 217,721 | $ | 7,889 | 3.6 | % | ||||||
As a % of net revenue | 10.00 | % | 9.69 | % | ||||||||||
Depreciation and amortization | $ | 13,864 | $ | 12,629 | $ | 1,235 | 9.8 | % | ||||||
Other operating income, net | $ | (7,825 | ) | $ | (1,192 | ) | $ | (6,633 | ) | 556.5 | % |
Three Months Ended March 31, | Change | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | $ | % | ||||||||||
Interest expense, net | $ | 3,246 | $ | 3,199 | $ | 47 | 1.5 | % | ||||||
Effective interest rate | 6.08 | % | 5.99 | % |
Three Months Ended March 31, | Change | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | $ | % | ||||||||||
Income tax provision | $ | 17,553 | $ | 18,587 | $ | (1,034 | ) | (5.6 | )% | |||||
Effective tax rate | 40.8 | % | 41.6 | % |
March 31, 2014 | December 31, 2013 | Change | ||||||||||||
(Dollars in thousands) | $ | % | ||||||||||||
Cash and cash equivalents | $ | 182,373 | $ | 101,905 | $ | 80,468 | 79.0 | % | ||||||
Accounts and notes receivable, net of allowances | $ | 543,214 | $ | 572,854 | $ | (29,640 | ) | (5.2 | )% | |||||
Consolidated DSO (1) | 20.5 | 22.1 | ||||||||||||
Merchandise inventories | $ | 768,148 | $ | 771,663 | $ | (3,515 | ) | (0.5 | )% | |||||
Consolidated inventory turnover (2) | 10.4 | 10.4 | ||||||||||||
Accounts payable | $ | 659,550 | $ | 643,872 | $ | 15,678 | 2.4 | % |
(Dollars in thousands) | 2014 | 2013 | |||||
Net cash provided by (used for): | |||||||
Operating activities | $ | 93,202 | $ | 154,611 | |||
Investing activities | (12,187 | ) | (14,733 | ) | |||
Financing activities | (792 | ) | (17,440 | ) | |||
Effect of exchange rate changes | 245 | (1,763 | ) | ||||
Increase in cash and cash equivalents | $ | 80,468 | $ | 120,675 |
• | competitive pressures in the marketplace, including intense pricing pressure; |
• | our ability to retain existing and attract new customers in a market characterized by significant customer consolidation and intense cost-containment initiatives; |
• | our dependence on sales to certain customers or the loss or material reduction in purchases by key customers; |
• | our dependence on distribution of product of certain suppliers; |
• | our ability to successfully identify, manage or integrate acquisitions, including the management and integration of our acquisition of Movianto; |
• | our ability to successfully manage our international operations, including risks associated with changes in international trade regulations, foreign currency volatility, changes in regulatory conditions, deteriorating economic conditions, adverse tax consequences, and other risks of operating in international markets; |
• | uncertainties related to and our ability to adapt to changes in government regulations, including healthcare laws and regulations (including the Affordable Care Act); |
• | risks arising from possible violations of legal, regulatory or licensing requirements of the markets in which we operate; |
• | uncertainties related to general economic, regulatory and business conditions; |
• | our ability to successfully implement our strategic initiatives; |
• | the availability of and modifications to existing supplier funding programs and our ability to meet the terms to qualify for certain of these programs; |
• | our ability to adapt to changes in product pricing and other terms of purchase by suppliers of product; |
• | the ability of customers and suppliers to meet financial commitments due to us; |
• | changes in manufacturer preferences between direct sales and wholesale distribution; |
• | changing trends in customer profiles and ordering patterns and our ability to meet customer demand for additional value-added services; |
• | our ability to manage operating expenses and improve operational efficiencies in response to changing customer profiles; |
• | our ability to meet performance targets specified by customer contracts under contractual commitments; |
• | availability of and our ability to access special inventory buying opportunities; |
• | the ability of business partners and financial institutions to perform their contractual responsibilities; |
• | the effect of price volatility in the commodities markets, including fuel price fluctuations, on our operating costs and supplier product prices; |
• | our ability to continue to obtain financing at reasonable rates and to manage financing costs and interest rate risk; |
• | the risk that information systems are interrupted or damaged or fail for any extended period of time or that there is a data security breach; |
• | the risk that a decline in business volume or profitability could result in an impairment of goodwill or other long-lived assets; |
• | our ability to timely or adequately respond to technological advances in the medical supply industry; |
• | the costs associated with and outcome of outstanding and any future litigation, including product and professional liability claims; |
• | adverse changes in U.S. and foreign tax laws and the outcome of outstanding tax contingencies and legislative and tax proposals; and |
• | other factors described in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2013. |
Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of a publicly announced program | Maximum dollar value of shares that may yet be purchased under the program | |||||||||
January 2014 | — | $ | — | — | $ | — | |||||||
February 2014 | 50,000 | $ | 34.93 | 50,000 | $ | 98,253,402 | |||||||
March 2014 | 92,904 | $ | 35.02 | 92,904 | $ | 95,000,018 | |||||||
Total | 142,904 | 142,904 |
Owens & Minor, Inc. | |||
(Registrant) | |||
Date: | May 1, 2014 | /s/ Craig R. Smith | |
Craig R. Smith | |||
Chairman & Chief Executive Officer | |||
Date: | May 1, 2014 | /s/ Richard A. Meier | |
Richard A. Meier | |||
Executive Vice President & Chief Financial Officer |
(a) | Exhibits |
3.1 | Amended and Restated Bylaws of Owens & Minor, Inc. (incorporated herein by reference to our Current Report on Form 8-K, Exhibit 3.1, dated November 5, 2013). | |
10.1 | Form of Performance Share Award Agreement | |
10.2 | Form of Annual Executive Incentive Program | |
31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
(a) | The Participant will earn Performance Shares based on achievement by the Company of the Performance Metrics (defined below) for fiscal years [20__] and [20__]. The number of Performance Shares earned by the Participant will be determined based upon the following formula, the terms of which are further defined below: |
Performance Metrics * | Weight | Metric Target | Interval |
Change in Consolidated Operating Earnings | 50% | $ | $ |
Change in Domestic Operating Earnings | 30% | $ | $ |
Change in International Operating Earnings | 20% | $ | $ |
Position | Cash Target as a Percentage of Base Salary |
Chairman and CEO | 75% |
President & COO and Executive Vice President (Grade X2) or Senior Vice President (Grade X3) | 50% |
Senior Vice President (Grade X4) | 40% |
Vice President (Grade X5) | 35% |
[20__] Company Diluted EPS (1) | Award Amount (2) |
$ | 2X (Cash Target x Base Salary) |
(1) | No awards shall be made under this program if the Primary Performance Goal is not achieved. |
(2) | The Award Amount is subject to reduction based on the level of actual achievement by the Participant of the Secondary Performance Goals described below. |
Position | [20__] Company Net Revenue | [20__] Company Net Income | [20__] Company Return on Average Assets | Qualitative Performance Factor |
All above positions | 20% | 40% | 20% | 20% |
Achievement Level (1) | [20__] Company Net Revenue (thousands) | [20__] Company Net Income (thousands) | [20__] Company Return on Average Assets (%) | Qualitative Performance Factor |
200% (Maximum) | $ | $ | % | Based on qualitative assessment of performance by Committee |
100% (Target) | $ | $ | % | Based on qualitative assessment of performance by Committee |
25% ( Threshold ) | $ | $ | % | Based on qualitative assessment of performance by Committee |
(1) | If a [20__] Performance Goal (other than the Qualitative Performance Factor) is achieved at a level between Threshold and Target or Target and Maximum, then the amount of the Award will be determined based on a straight line interpolation of achievement levels between the Threshold and Target or the Target and Maximum, as applicable. Achievement levels of the Qualitative Performance Factor shall be determined for each Participant by the Committee in its sole discretion. |
1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, of Owens & Minor, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | May 1, 2014 |
/s/ Craig R. Smith | |
Craig R. Smith | |
Chairman & Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, of Owens & Minor, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | May 1, 2014 |
/s/ Richard A. Meier | |
Richard A. Meier | |
Executive Vice President & Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Craig R. Smith |
Craig R. Smith |
Chairman & Chief Executive Officer |
Owens & Minor, Inc. |
May 1, 2014 |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Richard A. Meier |
Richard A. Meier |
Executive Vice President & Chief Financial Officer |
Owens & Minor, Inc. |
May 1, 2014 |
Accrual for Exit and Realignment Costs (Detail) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2014
|
Mar. 31, 2013
|
|
Restructuring Reserve [Roll Forward] | ||
Accrued exit and realignment costs, beginning of period | $ 2,909 | $ 6,214 |
Provision for exit and realignment activities | 1,339 | 541 |
Cash payments, net of sublease income | (738) | (4,991) |
Accrued exit and realignment costs, end of period | 3,510 | 1,764 |
Lease Obligations
|
||
Restructuring Reserve [Roll Forward] | ||
Accrued exit and realignment costs, beginning of period | 2,434 | 5,098 |
Provision for exit and realignment activities | 532 | 538 |
Cash payments, net of sublease income | (411) | (4,844) |
Accrued exit and realignment costs, end of period | 2,555 | 792 |
Severance and Other
|
||
Restructuring Reserve [Roll Forward] | ||
Accrued exit and realignment costs, beginning of period | 475 | 1,116 |
Provision for exit and realignment activities | 807 | 3 |
Cash payments, net of sublease income | (327) | (147) |
Accrued exit and realignment costs, end of period | $ 955 | $ 972 |
Commitments and Contingencies - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended |
---|---|
Mar. 31, 2014
|
|
Commitments and Contingencies Disclosure [Abstract] | |
Contractual obligations, repayment term | 36 months |
Total contingent obligations due if contractual performance targets are not achieved | $ 1.0 |
Total contingent obligations due in 2015 if contractual performance targets are not achieved | 0.2 |
Total contingent obligations due in 2016 if contractual performance targets are not achieved | 0.8 |
Deferred revenue related to outstanding contractual performance targets | $ 0.9 |
Audit reimbursement period (in years), maximum | 7 years |
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