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OMI Owens & Minor

Participants
Truitt Allcott Director, Investor and Media Relations
Robert C. Sledd Chairman and Interim President & CEO
Robert K. Snead EVP & CFO
Edward Pesicka President and CEO
Brett Gasaway UBS
Jack Rogoff Goldman Sachs & Co.
Erin Wright Credit Suisse
Jonathan McGraw Bentley SVB Leerink Partners LLC
Evan Stover Robert W. Baird & Co.
Anne Samuel JPMorgan Securities LLC
Call transcript
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Operator

Good morning, ladies and gentlemen and welcome to the Owens & Minor's Fourth Quarter And Full-Year 2018 Financial Results Conference Call. My name is Amanda, and I will be your operator for today. At this time, all participants are in a listen-only mode.

We will be facilitating a question-and-answer session towards the end of this conference call. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. turn Ms. over to for your like call, today's now the to presentation host I'd Allcott. Trudi proceed Please Ms. Allcott.

Truitt Allcott

full-year I'm Thank welcome of Safe & and Harbor to operator. the the earnings you, Good to we Owens Minor morning, team, I'd statement fourth read on before Allcott, and Trudi everyone like and XXXX behalf call. the quarter begin.

the to an those projected. discussion our Chairman, business President who filings factors. our on Sledd, see into quarter of EVP differ this are insight we our focused XXXX, materially plan; discussion and comparable Participating the provide on Bob fourth press GAAP full-year of and and for These full which statements Our certain make risk these Interim making subject included morning in our measures. and and for release. of posted forward-looking to will will and financial who we non-GAAP release comments more are our on that uncertainty to the risk the from quarter Information measures results today, results Robert our press are overview full-year today, SEC and most measures website. actual In today call will a and release reference our Chief an about fourth business on on In financial will and our of could on CEO, may press our are and supplemental course update Please details provide be the cause information in statements. in financial the Snead, we're and reconciliations the results and progress our strategic performance. included discussion our Financial these Officer,

start I'd off morning. like this things will Bob call who to to Now, Bob? over Sledd, the turn

Robert C. Sledd

and morning. for today. joining call Trudi, our Thanks, Thanks good

but outside as exciting very and lot trends. we’ve distribution is company which of Yes, forward. discuss, growing forward, challenges we’ve morning. move optimistic There's & distribution, Owens experiencing this look opportunities business many we we we in our a I’m our will As discuss about positive Minor's future. to And

the Owens see results, Then, address the Minor. named clearly to who Robert and for been we ahead discuss opportunities pleased Snead, We but CFO, I XXXX & that the our financial has our will cover want will results. challenges I’m

related our on as we're excited join we a have First, Ed years XX our is new release President the He of pleased for & of and track team that understanding for deep a customer a and outstanding healthcare service of providing an Ed distribution, within and leader has reputation industries. service. a great will and who Thermo new report seasoned manufacturing also has being saw announced senior He record I’m will Minor exceptional join for has appointment CEO. still is we Owens you I'm we experience. forward leading of also great sure as is X driving Scientific, & at Directors. solid Owens Fisher and positive financial Pesicka, with press our in CEO Minor. results. He of to team. and a executive long-tenured operational set, March executive fit With him Board us think that reputation look to Ed he a a excellent for and the

for but change the I path challenge feel once. Looking and mirror, good was about for & year in rearview Owens of the a XXXX Minor,

service year for core former the We our quarter. fact, cost storm distribution exit network. fourth issues experience a last expectations achieve with perfect for CEO, our in In our excluding do we the

a of a acquisitions caused spate overcoming from challenges manufacturers functions Some our challenges customer We're and center. of by disasters. rapid mergers but challenges in were natural service consolidation the These included control. engagement disruptions self-inflicted, of our still client resulting customer beyond others and service were supply

we’ve tight market Finally, turnover some high and facilities. facing been a labor in

towards the service with back these we as are always work of challenges a distribution We for. sense that outstanding great been Owens known urgency providing addressing & Minor's

customers. us Our service challenges cost have some

hard existing working new ones. winning continue to and retain customers we're However,

Action Our Medical thinking. have with that the by right are time, to have confident this selling an do a we vendor us portfolio our is exceptional the our midyear. what we in preferred right behind realize and We we proprietary of of base. products our we our to addition a Halyard MediChoice significant addition offer issues bright At team goal is the have same future to customer products to our products. But customers service future. extensive strategy can't and more compromise on to the and products tools, is I’m focusing short-term opportunity right with believe the

a details people additional our our FusionX will our supporting Robert in As his XXXX business in includes venture. to business, strong distribution remarks. a investments technology in provide XXXX and are investing on ensure result, These solutions beyond. and our and provider which aimed at FusionX we're for

XXXX our provide for you down priorities guidance We’ve XXXX, that path for a include strong paying distribution Our operations, with and our we investments and making goals future. provided will for future. stabilizing clear debt have

We providing while service, enable customers. new will continue us will focus customers to on winning outstanding retain customer which to existing

distribution. company We that are products not a offers

and distribution do support better need to succeed our to it provide and in else. anyone than service Our provider goal is the customers

pleased Halyard with an into our excellent pleased integrated organization. been team. of the has implement provider brands unique offset the It has to work well extremely so vendor own Halyard. portfolio preferred margin our outstanding an in product pressure products will more well-established on and we our [technical team solutions. with difficulty] I’m We our motivated We're brand of highly will that telling more

the and will realize complete of the exit TSAs integration the strategies. Halyard, planned We

IDN well. has customer large and our gained great Our Byram for see IDN Last opportunity more we opportunities growth customer This is a base. positive represents customer. Healthcare performing team revenue organic growth significant produced Byram many and with new year, a

sense of financial as and We believe Byram, a addition QSight. believe we great has with new and solutions operational our all Finally, urgency. with grow business, such of is a a this in and track leaders ready who team heightened that priorities of success, leadership aligned on solutions to We’ve a seasoned a and including we will our our achievable. good have the FusionX fully strategic manufacturer place, record and the I is ahead. team mix proven new of of CEO, challenges meet We've solutions

and aggressively moving putting to what be best We business profitable are for the growth. correcting long-term fixed position the in forward, needs

call on Robert will of results. our I Now a for discussion

Robert K. Snead

forward CEO. and execution focus But Minor. I’m discuss as and the I Today the excited credit color update allocation also to team, an outlook and changes company brings Bob, & then everyone. will on full-year the our provide our experience capital look before provide recent behalf on of management to we Pesicka And to interim the partnering about Owens Bob, to our like amendment as and to agreement good like results, I I'd I I to with for you, to welcome support opportunity of he with for morning, on your strategy, and Thank you our begin, enthusiastic take fourth our quarter Ed organization, discuss forward strategy. XXXX. the of our the Ed, to move thank would

serve a Chairman. forward you as well experience quite a you impact short our made as You’ve period in positive continue and will this

results. the for Now

For an with of prior was revenue by year. compared the million. the quarter, of $XXX quarter, Halyard $X.X fourth increase driven billion, last were X.X% growth revenues primarily to consolidated contributions Consistent

compared For prior of the increase full-year, X.X% consolidated revenues year. to were $X.X billion, an

non-cash recorded goodwill per we For the million impairment a quarter, fourth $X.XX or of $XXX charge share.

of or and per charges For non-cash other share. GAAP per goodwill share. for or the fourth full-year, million $XXX $XXX the incurred was million intangibles quarter $X.XX net of impairment we loss The $X.XX

worth quarter $XXX it The annual the of or $X.X quarterly the or related quarter previously. $XX.X the is $X.XX $X.XX share adjusted in or income $X.X $X.XX our per amount, the annual expenses quarter per share the noting was included full-year, million provided for earnings severance and million It the net impairment call. included and share. not that this charges anticipated was $X.XX we during the share. share. per per fourth $X.X was guidance Adjusted results or of or results which for million net $X.XX third per million income full-year was million include mentioned fourth For Both

fourth we provided. our range within just full-year Excluding quarter was share severance, adjusted the the $X.XX net income per

revenue and to $XXX let's growth business. year, for the million distribution Now manufacturer our revenue to turn $XXX XXXX. in Solutions were unchanged essentially prior Byram compared segment by year. million a Operating segment offset million The the billion $X.X positively Global by performance income solutions revenues last favorable effects. was affected to $XXX for decreases Results were compared were of year. our in growth These

customer being decline And positive we're The continued that previously, expenses and expenses including here impact resulted issues driver to is significant warehouse of were on of revenues. can hyper-focused and performance increased also revenues, pressure, margin pointed and related customer increased had mentioned The increases lower the fixed. this. delivery and and have As a we mentioned, on in be previously addressed retention a develop negative in these number as our the solutions a expenses, operational are from Bob new costs. factors decline severance to

and our stand have in we will show time making encouraged and where we headed. to are for it where still this we financials, do we take some in While XXXX and more progress about to feel work we are

Products the Global to Turning segment.

the million, prior in million, for Revenues revenues year. included from compared $XX.X For Halyard was Operating primarily the to $XXX Halyard. the income contributions year billion increase $XXX of $XX.X year, were million an million. $X.X of

our $XX priority first full-year. flow our over approximately the credit operating for million was In-line to other was of Turning agreement quarter of cent long-term we changes over to the S&IP closing deployment. agreement reduced recently at dividend and agreement $X.XX loans credit of term and has and cash the life flexibility cash since We greater things, the profile Halyard our years. top covenants since acquisition, be the spread our quarter with is the that, to of to The deployment. per amortization reflective with rate in acquisition. interest December a more Consolidated the amended of million us for billion have the a Deleveraging Halyard the $XXX few share among repaid next capital balance amended provide financial flow sheet, revises debt. the capital our debt Board and XX

Please review you that a outlook these my Finally, the important and assumptions materials remarks. section. guidance on XXXX XXXX, posted other These let for discussing time our supporting Investor and some outlook our encourage I of include with in is to our conjunction website spend modeling note me for materials our in summary XXXX. Relations

per we to $X.XX net For share $X.XX. adjusted of XXXX, range anticipate the income in

our into insight Now add let better some color for me XXXX. additional expectations provide to

being that interest First, From $X.XX in our is of XXXX included to I headwind distribution is in in compared for represents exit. issues overall flat share customer to compared in up our XXXX. we associated distribution the offset be XXXX. will expense credit a XXXX relatively and more and agreement timing interest rates business amendment. some by impact the recent our our step mentioned which expect to revenues year operational about declines the growth business, in outlook an perspective, cost line with XXXX, top This consolidated giving This implies of per revenues have us of our

believe in offsetting will be combined we well improve and proprietary solutions improvements our key However, our value see success includes to renewed expect revenue of from distribution going through will our revenue forward. we pipeline partially our and beyond. our which we operational This with drivers and improved expect proposition, and year, the products serve XXXX us benefits which new to

FusionX. called would touch includes to a may unfamiliar guidance many investment I which our venture, a was created FusionX of in of FusionX, moment anticipated second investment at devote that of you extensive majority-owned new shift time XXXX value-based is I so of business that back to team new in particular, many running encouraging FusionX this companies. solutions that began with we start. new that with XXXX on There to in me of the a succeed and let realize in The providers is a Our impact in has earnest care. the in the XXXX. noted will our quarter for is for area one more highlight, like prior management be the help to off healthcare fee-for-service from This in This we future. is the success priority to history in C-suite experience this and we customers.

bundled under portfolio of is space. becoming succeed the these individual During business and number is signed run had for the Medicaid and program, will has leader customers actively XXXX, discuss FusionX payments initiative, tie-in By This in customers, a and market FusionX FusionX services. IDNs due we groups, which of quickly the was program providers for in the care gaining the start a broader BPCI also to a our including Medicare points advanced centers with large practitioners by is physician engaged Advanced. of company, develops. help in the course as improvement which

As it up XXXX, see positive fourth in we relates to continue costs incur to to expect quarter FusionX contributions until we and start then. from the will

I’d to cadence discussing minutes few like of remarks, a my quarterly close earnings. the spend I XXXX anticipated Before our

provide know, quarterly we you of many don't As guidance.

worth calling acquisitions compounding and XXXX, several we However, a other that's quarterly foresee for due of pattern out. the factors, newness to our

in the annual of first quarter. healthcare particularly impacted are from deductibles, we renewal First, early plan year the the in negatively

in the flu onset with positively we're impacted Second, of late the the season. year

is for year FusionX I a impact mentioned, opportunity exciting expect an in through But as positive towards quarter. moving investment us. continued having Third, the we fourth the

we're provider half second the solutions of and the customers our accelerate contribution and manufacturer is to Finally, expected the in businesses onboarding year. and

business but our closing, the result, course first our and XXXX the and an the the both per the minimal, earnings I’m the our all the bulk look of manufacturer for both adjusted potential a overall attractive is lines, share we with in across believe Provider achieved of Solutions encouraged of will year be in momentum have solutions, occurring in quarter We the pipeline Europe we line the Halyard of I As to top In over second XXXX in new and of expect for that when most U.S This business. performance FusionX. half. opportunities addition positive portfolio. improvement for to earnings including Byram date and very good

we Ed to to the Q&A our we're Operator? like and with leadership with excited to reiterate Thanks turn strategy. would to call that move the forward over I the his And Finally, session. as to look have team. back joining the operator we I'll begin that, forward

Operator

of question Thank from you. first [Operator line Your Kevin of the UBS. comes Instructions] Caliendo

Your open. line is

Brett Gasaway

or provided. Caliendo. on Kevin your I is Hey, if that’s the you Could in securitizations potential go your Gasaway doing This forward $XXX sales million similar agreement? through guys. just all asset Brett for Thanks going size of thinking you’ve credit around appreciate some you’re in color guys. any to allocation

Robert C. Sledd

Sure.

with start So the first. I part second will

that that in not to that -- or that of we something remains it's securitization As credit available, by to you we would but seen -- impact the we our have move that’s as be to we to the noted, forward do have available that, million us obviously do wanted under $XXX design an ability we're a guidance, amended are and but up that something something whether asset agreement say that so when to we included of not that’s evaluating. is I keep it's not our deal

take will Bob. -- now all sense, pieces -- all of Right of if make at disciplined is our that. think asset regularly and our making our value very with we And it goal On or our some point, first sure look how your question. of we action. we the I of it, think can the how all is in and question take strategy what terms your performing to business. we’re in we made we'd related I’m portfolio so for broader we at Thanks and does these is part this to sales, approach and part do the something those the it progress successful a in to with fit of with second business Brett, our of different

any So our any we don't of of see business. sale piece imminent

Operator

Thank you.

is Our from next of question Goldman the with Sachs. line Robert Johns

open. Your line is

Jack Rogoff

on Great. taking question. Rogoff for Thanks my for Jack This Bob. is

moving to some it expansion? pieces guidance So of comes basis margin like points through than you that the results. for around drive higher XQ walk gross Can XXX the that looks in XXXX

Robert K. Snead

of margin. business, gross pretty to about every When business Sure. of in couple distribution business accretive components our you there. think line There's our is a outside much

think solutions the been full-year as over all to full-year and the that So you business benefit of well our in growth the in when gross which is business, margin, for Halyard the outlook our mix the our we’ve accretive contemplated very time, shift about as results year. that's the in

Jack Rogoff

Got it. Thanks.

Robert K. Snead

Jack. Thanks,

Operator

Thank The of you. next Credit Erin Suisse. question from line the Wright is of

Your line is open.

Erin Wright

an the you Halyard business, Thanks. update us Great. speak visibility Thanks. Can at you can sort commodity have performance pressure on the pricing that? and give of of you some what recent on and to

Robert K. Snead

it pleased as business is that for well. last call and This both the continued quarter original Halyard think come performed fourth the our that how third has of been relative top Robert. in, has trend the we and If if we line in the about we performance business quarter Sure. headwind bottom year. the not We’ve line both in about to very exceeded our with as talking mentioned were expectations, controlling expectations commodity

So of But Bob we’re with that lot -- if included have it there pleased rates we’re not versus we average move looking, grow average is with and as for between nitro. quite in the forward for XXXX, is differences. some But in outlook have you with polypropylene the some we more going sort as basis, specifically definitely commodity about the of you when of for as we commodity the think situation a versus it do difference to it it quarter-over-quarter to our to shared There's total, we and business it the year-over-year difference. that average that’s when think big what you and take rates all two, you. as at see mentioned, XXXX, XXXX relates of there it outlook sort into between that not if it total, about some a on a for differences baked we're components, differences to timing you are look between instance some certainly in

Erin Wright

And FusionX. it. the how we of incremental then systems, got some IT customer investments be solutions, quarterly about the with Okay, should progression thinking in

Thanks. we a quarterly you think us on of As a about help give could perspective, sort from of modeling progression? little the bit this I guess,

Robert C. Sledd

our Before to we Robert more little follow-up look, a who that of time, me take brands question brands. the proprietary do service. you let more of distributor preferred point second get is when more modeling, I is talk had first, At into bit our that to a of to and that, about you we've this more -- things understand selling as Halyard original with products, a are vendor your that our so, of the issues your is Erin, one need think

focused really are on We that.

us provides months to in sales progress, couple to making just our are said, starting now That but our our Halyard work that go. and being we get our with customers our recent just the great developing of -- our are to we strategy just vehicle. really now and had haven't to with products. that. folks get products with vehicle with to have get coordination strategy customers our We with start get ways to a we product a They really do Historically, -- distributors. into implement starting are more in still in to customers

XXXX. so, think over be the building And it be just we momentum. strategy of relates that to to it will We are as going course implementing Halyard, really

force, had proprietary We will never we’ve never the on the had brands. to sales been ability contracts. a -- We’ve are our we’ve GPO never confident expand again, really that it

think more momentum build, gain that a half and we as Halyard the the think year have gradual with strategy. the into will of do we that’s course we second XXXX, over now implement So be but of that that to going we it

it to So Robert the with rest talk will turn that, your about I over of to question.

Robert K. Snead

and pan put reasons and will is Bob a our impacting for Well, to guide guidance good factor ever help profile sequence. in the how more that’s needed the I out my the in year. shared you the and I you to at I remarks, we've before. we But When the throughout a to think, looked have results what Bob, we and And forecast year, a saw add expectations business of prepared had prepared just the another remarks cited in we quarterly my four our out seasonality fifth. guys manage than gave yet

in it first fourth plans being Our strongest. calendar the we always layer healthcare, weakest their and But the that’s basis, instance, just being most Byram quarter. same weakest the you for and a with quarter on business. their year but so so make a the a quarter legacy forth, fourth Byram and with healthcare businesses quarter and in have and are folks had the reached seasonality and the quarter strong of deductibles when see for as the definitely fourth so looking is reasons to phenomenon on year fourth the really reset quarter particularly purchases that throughout And

that The we other heavy products our affects with and impacts piece vaccines related other the focused facemask is the etcetera. flu business flu pharma from flu gloves prevention of season. business we're where that Europe, the were Halyard the perspective to infection in and nature That involved

on be past. the that’s synergies as So first than for we profile for but creating profile quarter fourth that’s a we’ve Halyard, year. contributing then expect the kind going then piece the just new is had part on business a the of of FusionX of our mentioned the also more was we to drag general a investments. results the And that touched mentioned, of year. to ramping you in Bob in it winning just year, revenue -- a last have the And the seasonality towards the factor and

share the we regarding to quarterly those thought was So for information all of the it we progression. factors, get important

Erin Wright

Thank helpful. very you. That’s

Robert K. Snead

Erin. you, Thank

Operator

you. Thank

is line Larsen of of SVB Our David next from the question Leerink.

is Your open. line

Jonathan McGraw Bentley

markets I’m you’re on to more Jonathan trying on do hoping to some tight is labor exactly you what This you’re Dave. facing? can specifics Hi. employee provide and adjust for turnover

Robert K. Snead

and business in. Bob We've we things in frankly. cuts of that is will make I talked of field things and about Sure. add our can quite number one that some done in a probably against did with works that the before the us, Bob start

business to related back made in it having benefit. investments which already the XXXX, is As managing in a that positive we've turnover,

keep of filling we're and quickly. how comes doing in time has people on to putting reliance to issue certain investing and and we're that place from incentives And our even every in and positions is better reduce parts pockets that It say and them we’ve Some do an the in I that various temporary is process buildings country. the not would this help HR to area. in it our addressed in and that with areas. wages of is more and training in every location, really recruiting over it's

to through on so XXXX. the we even we've progress deployed that approach and the in a SWAT as further situations in focused those them metrics and front go get ball type under improvements fourth And are lot moving control. a after and of bring the we've team on monitor quarter, And seen that we

Robert C. Sledd

that make done of to we've offering competitive analysis our sure and Yes, the the in competitiveness we're marketplace wages.

quickly. hadn't Another we so tools as thing much there training is voice have they as we getting that But effective a quickly. we very better has now, we Number and before, turnover pick, to it we turnover, talk -- are that people doing can positions the speed such just be trained of the happens its and job and more had up understandable. And it just are is, one, to distributors, gotten filling other better. is if look,

languages where to to product deals pick, and pick go them it So SWAT with tells with in it the amount. voice [ph], the really a different

I so a think better doing we’re And job -- it much there.

Our where historically. been productivity has has it not It's improved.

over can that it there improve But important of actually is good it having operations. opportunities us course a we think a critically that's have bit we because So XXXX. and we quite effective question, to the

Jonathan McGraw Bentley

you. Thank great. Okay,

Robert C. Sledd

Thank you.

Operator

Thank you.

of question of comes the Evan Baird. from Stover next Robert W. line Our

open. Your is line

Evan Stover

as that Hi. the go January why driving in the then net maybe didn't Are Thank approach of a conservative talked a the customer my as for back losses service just customer confidence customer losses more that that levels is annualize year? 'XX? we and and the integration My center end flesh are is the are that challenging have and the net bit model today to of for question. well, client you net Thank Bob, some out about the of do some quite assuming half essentially taking So would engagement taking question little assuming of been in guidance going anything second losses bad, in and in -- we losses XXXX. your we -- you the throughout the some we and XQ have continued helpful. to move why you. gives then what out That can you trend be you change? XXXX,

Robert K. Snead

may impact losses business. you the in that of Sure, we have we will the you have customer that as And -- in an have also both occur, -- the outlook any we can occurred add was don't have start year losses 'XX. that a Evan. that know part Bob into that's forecast that built and 'XX customer -- part. provision customer we so It's Robert. have just will I then on and how for on in typically about our engagement center We that have do

have also are and wins, We in customer wins unknown coming that that known, we we that some in. put are have

we’ve point have we quite typical good in the a have recent higher we history. I would of frankly wins on had a number forecast. than had out businesses One that approach of of wins, in is, number kind thing to So XXXX

where about encouraging going and value our an company and XXXX. that’s into encouraging prop an sign is so And sign the move as we

that a huge and look going the we on throughout stabilization And & is into to on as 'XX. standard from we the difference -- that occurred to in of Minor fronts going 'XX operations as getting make back factored 'XX equation the we in the XXXX said, all headwinds So Bob the that think Owens is passport into forward.

we we’re move off we So as that us something on more beyond. see priority it. while why XXXX into for that's -- that and we we’re a take as the being And is that and table focused top

the maybe So of CDC can comment side Bob it. on

Robert C. Sledd

still Yes, the of some but to much making are the we going so good I over of We be really have by the year. go. rolled year. investing we to that’s the think out progress, be we course will first -- which customer middle would better are we completed software, give it in half the ways the think, we of mean, experience

we -- made deep are a We cut. too -- still we

a cuts I to we we deep made you too deep but with going are it, with think, a on relationships too certain cut had I’ve people that told made in customers. stepped operations, we our the

so, And it even I would a back. them We're of getting some of got a get but just customers think -- we get we all are to getting happy a progress. to But feedback go were and -- XXX% ago. I I with from lot are, back to still made we're than wouldn't a of lot still we to be ways say our a of couple us. better to months reputation -- say, majority together. where -- we've of got We’ve think, customers them still need

for a that in reason. still So work progress it's

work would just for we approach think numbers, I was gains. than do. that thing fairly we that’s -- projected we and a up as conservative right I our more think losses -- XXXX took to the so

service customers. our get the our back way we get reputation all with we our So back and

are. we that's where So

to a but We our are expectations. XXXX there, conservative have approach we get optimistic. somewhat taken We'll

Evan Stover

Thank for you responses. those

Robert C. Sledd

bet. You

Operator

from JPMorgan. you. line of question Our is Samuel [Operator Anne the Instructions] of Thank next

Your is open. line

Anne Samuel

in you announced overall speak January. expecting you the Scripps contribution opportunity? And to Thanks. What’s you’re Could in kind partnership the -- Hi. then XXXX? of what that for

Robert C. Sledd

and specific for we public. I us to the customers. and This individual made call customer So that thought win interesting sense one think make us both out was don’t on contribution

the a for with it is good about services, And as so, good a It's do to a and customer we're company the programs opportunity our other the part base win and known that them we strong and we excited we’re do deploy distribution and just us. opportunity. the values but not best what of business, so distributor have to for what for

Anne Samuel

Thanks. helpful. very That’s

Robert C. Sledd

competitive a was it obviously And win.

Anne Samuel

you ramp going -- we of about and think How guess, just I then, quickly think as back as are we you should and driver. proprietary margin targeting to how And percentage can target? what about okay. products a that the to a mix Right, revenue, as as growth

Robert K. Snead

say So would like. a sort is during really were that what when at with to of quarter, sizing that lot What of of of a granular we what at on transaction. what back were deal, acquisition out and as I that haven't we look a pull do we originally specific up the thought is the and we than is north opportunity time we And we able the on what higher more together opportunity and that put size say data looking Halyard opportunity the there. the a we the I'd number we had thesis and could thought fourth

company. we -- were we're and that the timeframe outcome and of about for that opportunity fuel we're So I size the think earnings the quite encouraged provides for which by the excited

counts thing existing existing the that take within in we perceive have products to channels to they aren't just today. right being opportunity as an we But got go existing SKUs sizable, the and we away. currently that's also so, in after And

There's opportunity presence historically, halyard our the in into channel to product a take then where that’s the acute only So their that and has channel. all an an other marketplaces into into sold the that sell the And there's products. globally non-acute MediChoice to U.S. opportunity take it was

business existing about products, excited revenue build presents. opportunities said, we're and focus the we'll then just existing So forward. the as from And channels near-term I is synergy that there

Robert C. Sledd

just bit to maybe so refresh to little Yes, that, to everybody's memory. add a

So are product a really and distribution products. gotten has into company industry that have We're into competition distribution. that our gotten our never companies we're -- what

contracts number money say, So products substantial customers of improvement. will give they what yes, and than read margin Carry improvement, as with is make they product the our rather the happens money a margin will we our companies products you will we on on distribution. do, a will our what want we our

preferred at can the it, in now time industry, our money as compression customers with with our the on as we brands. which products so got provide our a product own them extensive margin been can and those make work [indiscernible] well money same we own we’ve save vendors more being tool has -- them there's our and that So and

customer. and us the win-win So it's a for

we that with of customers so the And contract as a is that of what number will forward. more be rebids move involved in

the themselves. how up, depends say for on to rebids in kind So what the ramp looking that we quickly are of customers

Anne Samuel

Great. Thanks very much.

Robert C. Sledd

Thank you.

Operator

Thank you. Mr. to And time. closing there's like over no at this for his remarks. I’d further back questions to the turn Sledd call

Robert C. Sledd

some of Ed really for couple Okay. is I'm about the Pesicka today actually really ask going us us. teams he he for within people Ed company getting improving really he very earnings and period with him distribution I’m margins similar healthcare pleased a He is a Ed size the customer to joining a and had of to time proven did and number and of the actually it way. -- and things his words, that great and is had focused, that and related job that is your years. Thanks with faced a say company situation in through what very questions. he good we're really has great back, of the a to call building dramatic where really short a came a good going with of are getting but very experience I'm declining of joining excited person, with for today service almost in good the that earnings in

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Edward Pesicka

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Robert C. Sledd

the meantime, he is already And All right. in. digging in

is we here. So happy are he

So we see to and Thanks a investor at day. have events. you hope on the year road this great various

Operator

your the for in you participation conference. This call. today’s Thank concludes

You Good day. may now disconnect.