Accendra Health, Inc. · NYSE:ACH
Accendra Health — Owens & Minor — Barclays Global Healthcare Conference 2022
30 slides from Accendra Health's conference presentation, Mar 15, 2022
Slide 1: Barclays Global Healthcare Conference March 15, 2022
1 Confidential & Proprietary to Owens & Minor, Inc. Barclays Global Healthcare Conference March 15, 2022
Slide 2: Safe Harbor
2 Confidential & Proprietary to Owens & Minor, Inc. Safe Harbor This presentation contains certain “forward looking” statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements regarding
Slide 3: OMI Overview: Leading Healthcare Solutions Provider
3 Confidential & Proprietary to Owens & Minor, Inc. 140 years of legacy service Large North American manufacturing footprint that helps serve PPE needs Extensive medical distribution platform and network of trusted relationships Supported by value-added services and technology solutions that
Slide 4: Our Value Chain is a Key Differentiator
4 Confidential & Proprietary to Owens & Minor, Inc. Our Value Chain is a Key Differentiator How Our Businesses Work Together Today RAW MATERIALS DESIGN MANUFACTURING DISTRIBUTION DELIVERY HOSPITAL/IDN HOME HEALTH CHRONIC CARE AT HOME P A T I E N T D I R E C T S E G M E N TP R O D U C T S & H E A L T
Slide 5: Alternate Care Market Overview
5 Confidential & Proprietary to Owens & Minor, Inc. Chronic Care at Home (DME Soft Goods) DME (Respiratory Equipment) Cash / Retail Medications/ Pharmacy mHealth / Remote Monitoring LTC / SNFs / Rehabs / Sub- Acute Care Facilities Home Health & Hospice Byram and Apria also compete in the Home Health
Slide 6: Byram - A Leader in Fast Growing Home Health Sector
6 Confidential & Proprietary to Owens & Minor, Inc. Byram - A Leader in Fast Growing Home Health Sector • Direct-to-patient distributor of medical supplies to U.S. patients with chronic diseases • Specializes in diabetes, urology, ostomy, wound care, incontinence, and breast pumps • In network provi
Slide 7: Apria Builds on OMI's Success in the Patient Direct Segment
7 Confidential & Proprietary to Owens & Minor, Inc. Apria Builds on OMI’s Success in the Patient Direct Segment • Leading provider of integrated home healthcare equipment and related services in the U.S. • Offers a comprehensive range of products and services for in-home care and delivery across: •
Slide 8: Patient Direct Product Lines
8 Confidential & Proprietary to Owens & Minor, Inc. Patient Direct Product Lines Well-positioned across key product categories exposed to strong underlying growth drivers Expands offerings across chronic and acute conditions, with opportunities to treat overlapping conditions for patients Enhanced g
Slide 9: Annualized Financial Impact (Pre-Synergies)
9 Confidential & Proprietary to Owens & Minor, Inc. Annualized Financial Impact (Pre-Synergies) Adding approximately $1.2 billion of annual net revenue Adds in excess of $230 million in incremental adjusted EBITDA, implying ~20% margin Annual capex requirements of ~$100 million FCF generatio
Slide 10: Owens & Minor (OMI) - Investment Thesis
10 Confidential & Proprietary to Owens & Minor, Inc. Owens & Minor (OMI) - Investment Thesis 1 Favorable trends driving robust demand 5 Strong cash flow profile provides ability to significantly reduce debt 4 Diverse earnings profile across customers, payors, products and geographies 2 One of the ma
Slide 11: Favorable Trends Driving Robust Demand
11 Confidential & Proprietary to Owens & Minor, Inc. Favorable Trends Driving Robust Demand Source: CMS, United States Census Bureau, Medicare Payment Advisory Commission, HME News, and Henry J. Kaiser Family Foundation 1 The latest projections were published in 2018 and are shown from 2021 through
Slide 12: Favorable Trends Driving Robust Demand (cont'd)
12 Confidential & Proprietary to Owens & Minor, Inc. Favorable Trends Driving Robust Demand (cont’d) Market Opportunity is Much Greater Than Pre-Pandemic Opportunities for growth exist beyond COVID-enhanced levels with the return of elective procedures and demand for PPE in new industries PPE Impact
Slide 13: U.S. Market Size and Growth (Addressable Market)
13 Confidential & Proprietary to Owens & Minor, Inc. U.S. Market Size and Growth (Addressable Market) Segment Market Size ($mm)2 Market CAGR (‘21-23) Ostomy 800 2% Wound Care 635 4% Urology 1,300 4% Diabetes 3,700 9% Incontinence 800 5% Respiratory Devices 6,200 6%1 Obstructive Sleep Apnea 2,200 8%1
Slide 14: Vertical Integration Creates Stability and Competitive Advantage (cont'd)
14 Confidential & Proprietary to Owens & Minor, Inc. Key Takeaways: • OMI controls the design, raw materials, strict quality standards, and product specifications in its own facilities with its own teammates • Proprietary branded products are self manufactured, many in the Americas • 44 distribution
Slide 15: Vertical Integration Creates Stability and Competitive Advantage
15 Confidential & Proprietary to Owens & Minor, Inc. Vertical Integration Creates Stability and Competitive Advantage Financial Strength Drivers OMI is fully vertically integrated, having manufacturing capabilities, delivery capabilities and a presence in home health Vertical integration provi
Slide 16: Diverse Earnings Profile Across Customers, Payors, Products and Geographies
16 Confidential & Proprietary to Owens & Minor, Inc. Diverse Earnings Profile Across Customers, Payors, Products and Geographies4 $1.1 billion ~90% $9.8 billion $10.9 billion ~20% + + = ~10% 100% ~80% C o m b in e d S a le s b y S e g m e n t1 Nearly 2,000 third party payor contracts More than 1
Slide 17: Strong Cash Flow Profile Provides Ability to Significantly Reduce Debt
17 Confidential & Proprietary to Owens & Minor, Inc. Strong Cash Flow Profile Provides Ability to Significantly Reduce Debt5 Debt and Leverage Profile*Financial Strength Drivers • Eliminated $700M+ of debt since Q2 2018 • Improved Credit Rating from CCC+ as of December 2018 to BB- as of February 202
Slide 18: Highly Experienced Management with Proven Track Record of Success
18 Confidential & Proprietary to Owens & Minor, Inc. Years of experience Industry experience ED PESICKA President & Chief Executive Officer 25+ ANDY LONG EVP & Chief Financial Officer 25+ JEFF JOCHIMS EVP, Chief Operating Officer & President, Products & Healthcare Services 25+ PERRY BERNOCCHI CEO, B
Slide 19: Byram and Halyard acquisitions have diversified the business
19 Confidential & Proprietary to Owens & Minor, Inc. Byram and Halyard acquisitions have diversified the business and strengthened OMI’s financial profile S&IP Business Acquired April 2018Acquired Aug 2017 A leading distributor of medical supplies focused on chronic conditions sold directly to patie
Slide 20: Conclusion
20 Confidential & Proprietary to Owens & Minor, Inc. Conclusion 1 Leading healthcare solutions company ready to drive growth through capacity and proprietary products expansion and entry into new adjacent markets 5 Strategic plan focusing on investments in high-margin, growth-focused areas of the bu
Slide 21: Appendix
21 Confidential & Proprietary to Owens & Minor, Inc. Appendix
Slide 22: OMI - 2021 Summary Highlights
22 Confidential & Proprietary to Owens & Minor, Inc. OMI - 2021 Summary Highlights • Delivered on our 2021 guidance • Showed strong revenue growth • Growth across the entire business led by Patient Direct, Global Products and Medical Distribution • Both PPE and S&IP sales were up year-over-year • Ou
Slide 23: OMI - 2022 Company Outlook
23 Confidential & Proprietary to Owens & Minor, Inc. OMI - 2022 Company Outlook • Revenue for 2022 expected to be in a range of $9.2 billion to $9.6 billion • After normalizing our revenue for the pass through of glove cost changes, the midpoint of our 2022 revenue guidance projects 1% growth vs 202
Slide 24: OMI - 2022 Modeling Assumptions
24 Confidential & Proprietary to Owens & Minor, Inc. OMI - 2022 Modeling Assumptions Modeling Assumptions* Full Year 2022 Revenue $9.2 - $9.6 billion Gross Margin ~15% Interest Expense $42 - $46 million Capital Expenditures $50 - $60 million Adj. Effective Tax Rate 24% - 26% Diluted Weighted Average
Slide 25: Glove Cost Pass-Through (GCPT) Effect on Full-Year Revenue
25 Confidential & Proprietary to Owens & Minor, Inc. Glove Cost Pass-Through (GCPT) Effect on Full-Year Revenue 2020 2021 2022 Guidance* ‘22 vs ’21 $ Variance ‘22 vs ’21 % Variance Revenue $8.5 billion $9.8 billion $9.4 billion $(0.4) billion (4)% GCPT Price Impact N/A $660 million $235 million $(42
Slide 26: Use of Non-GAAP Measures
26 Confidential & Proprietary to Owens & Minor, Inc. Use of Non-GAAP Measures This presentation contains financial measures that are not calculated in accordance with U.S. generally accepted accounting principles ("GAAP"). In general, the measures exclude items and charges that (i) management does n
Slide 27: Total Company Adjusted EBITDA Reconciliation
27 Confidential & Proprietary to Owens & Minor, Inc. Total Company Adjusted EBITDA Reconciliation $ in millions YTD YTD YTD YTD YTD YTD Adjusted EBITDA (Adj. EBITDA) Reconciliation 2021 2020 2019 2018 2017 2016 Net income (loss), as reported (GAAP) $ 221.6 $ 29.9 $ (62.4) $ (437.0) $ 72.8 $ 108.8 Lo
Slide 28: Total Company Net Debt Reconciliation
28 Confidential & Proprietary to Owens & Minor, Inc. Total Company Net Debt Reconciliation $ in millions YTD YTD YTD YTD YTD YTD Net Debt Reconciliation 2021 2020 2019 2018 2017 2016 Total Company Debt, as reported (GAAP) $ 949.6 $ 1,026.0 $ 1,563.8 $ 1,681.2 $ 917.4 $ 569.4 Cash and cash equivalent
Slide 29: Combined Adjusted EBITDA Reconciliation
29 Confidential & Proprietary to Owens & Minor, Inc. Combined Adjusted EBITDA Reconciliation Year Ended December 31, 2021 $ in millions Historical Owens & Minor, Inc. Historical Apria, Inc.* CombinedCombined Adjusted EBITDA Reconciliation Net income (loss), as reported (GAAP) $ 221.6 $ 64.9 $ 286.5
Slide 30: Definitions of Non-GAAP Reconciliation items
30 Confidential & Proprietary to Owens & Minor, Inc. Definitions of Non-GAAP Reconciliation items The following items have been excluded in our non-GAAP financial measures: Intangible amortization: Includes amortization of intangible assets established during purchase accounting for business combina
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