Owens & Minor (NYSE:OMI) this week announced an operating realignment as it posted mixed-bag Q4 results.
The operating model realignment program will include sourcing and demand management, organization structure redesign, network rationalization and operational excellence and commercial excellence and product profitability enhancement.
“We have initiated a company-wide operating model realignment program with a dedicated team to accelerate profit improvement and reduce costs. We expect this program to help us quickly and sustainably drive the performance and growth of the company by delivering approximately $30 million of adjusted operating income in 2023, and approximately $200 million by 2025. We believe this program will enhance our strong quality of service to our customers, increase our margins, and allow us to more rapidly reduce debt and reinvest in higher-growth and more profitable opportunities,” President and CEO Edward Pesicka said in a news release.
Shares in OMI were down more than 18% in mid-morning trading to $16.06 apiece.
How Owens & Minor performed in Q4
The Richmond, Virginia-based company reported profit losses of $57.99 million, or -77¢ per share, on sales of $2.5 billion, for the three months ended Dec. 31, 2022. It had a sales gain of 3.4% compared with Q4 2021 and profit losses compared to the same period when it reported $41.9 million in profits.
Adjusted to exclude one-time items, earnings per share were 28¢, 12¢ behind The Street, where analysts were looking for sales of $2.46 billion.
“Our Patient Direct segment capped a fantastic year with another strong quarter, and I am pleased that our medical distribution division continues to perform well, retaining and winning new business. However, overall fourth-quarter results showed that we need to move quickly to offset volume decline, cost and pricing headwinds, particularly in our global products division. It is clear that our Company’s cost structure needs to be better aligned with the evolving market,” Pesicka said.
For fiscal 2023, Owens & Minor anticipates revenue to be in the range of $10.1 billion to $10.5 billion and adjusted EPS in the range of $1.15 to $1.65.