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OMI Owens & Minor

Participants
Chandrika Nigam Director, Investor Relations
Ed Pesicka President & Chief Executive Officer
Andy Long Executive Vice President & Chief Financial Officer
Michael Cherny Bank of America
Daniel Grosslight Citi
Eric Coldwell Baird
Jailendra Singh Credit Suisse
Kevin Caliendo UBS
Call transcript
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Operator

Good day, and thank you for standing by. Welcome to the Owens & Minor Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. now speaker hand Director today would to conference Investor I first your to Instructions] like the to over Relations. [Operator Chandrika Nigam, Ms. may you begin. Nigam

Chandrika Nigam

Thank Owens welcome XXXX you, call. everyone, second earnings Minor's quarter to operator. Hello & and

slides also focused the Private attention statements made are are Our statements for are to call Act financial our and performance. press forward-looking included intended this of related All Safe uncertainties. Securities and outlook in on the will and XXXX to and I'd of liability XXXX facts results and for of today's XXXX. These note on financial XXXX for Investor outlook are comments like quarter that our all Harbor include by XXXX established call your other Litigation statements, posted to from on made in which today our than anticipated statements website historical Reform the statements statements supplemental Relations operational regarding the are subject to be call second statements on risks Please qualify of section. forward-looking our call release. this certain which on forward-looking the to

represent call made. based time such this on current available statements made at statements expectations and are are management's information Forward-looking on the

by or the and quarterly any forward-looking by its annual its our implied involve Except and the uncertainties of statements listing or risks update to Stock results actual differ on explained SEC cause intent to report as the New forward-looking obligation other numerous Risk predicted expressly Exchange, York some XX-K filings, materially company may assumed XX-Q. of has Forward-looking known any these Factors that company disclaims and and unknown or Form the statements. uncertainties section in statements. factors including rules of from on Form results The law risks, any required the report

measures press in we Form Ed Officer. the and non-GAAP today turn annual Chief GAAP included and on Executive our our will information about Financial and who reference comparable now President discussion by Officer; like I measures Chief Executive financial our reconciliations to joined off. release certain and Today call Long, these would President are will most our in XX-K. Vice Pesicka, report Additionally, measures over to and Ed? to I'm Andy things the start Ed, financial and our

Ed Pesicka

time I Thank and priorities our execution Owens of recap our spoke mission call the Good one, and to the meeting high-level our and everyone, late Investor & stellar the to about I culture, and based a that business on focus leadership an the for with blueprint Chandrika. being you that is values. strategic us would by our Day thank on transformation Minor ideal today. during hard unrelenting May. in customer, morning on you while work, taking like join start focused our a on our I outlined that culture anchored on; based our team

business These that growth. laser our focused enabling in corporate profitable which Owens continuous And discipline, manner business the long-term are have achieve our DNA, elements ignite strategic blueprint, us to have of in three us our ingrained foundation to set enabled our priorities. investments, and on the our our based that is Next Minor are is disciplined improvement. & investments upon third, system a implemented

our Investor These stakeholders. Day remain periodic I Today an updates. detailing. committed with me returns the at investments, track provide and our spent which Day start of on some Investor will are As investments we time provide let during attractive on meeting, designed update our to for

to in capability our expand facility us control will allowing an in few; a and in This our one, cost for continue us me manufacturing existing to structure. Thailand. nitrile Let improved greater we of remind have advantaged put you position own gloves

new strength Two, through XXXX. our brand we is focused remain the in value on expected manufacturing leveraging early live product and portfolio. Our capacity expansion go to of our

During and end to remain later expand specialty identify new care continue also to this track we expand into opportunities line new future. products care Furthermore, to in proprietary to year. product we diversifying second markets. we our our product incontinence our product wound on higher-margin quarter, the sell we the portfolio doubled category offering are into additional Three, verticals

PUREZERO HALYARD For instance, market cleanroom under we into space expanded glove brand. the

Safeskin In consumer addition, gloves. our brand of we recently launched

our provide ability how for expand just scalable be significant our providing to continue of initiatives to a our demands. our of the customers. our with finally, leading human benefits profitable while customers automation, flexible and generate to customer long-term are that changing on and service And all investment capital, offerings examples our in continued balance best with solutions. focused investing we for between data we to technology These centers, in are invest AI which provide growth, are Next, we service few touch in actionable and technology-based through distribution

In addition Minor that Owens blueprint proud just I'm the focus place and discussed, social I the of investments business responsibility. to equally our having & in on corporate

on committed corporate financial and our delivering are both social our We responsibility to obligations.

our Owens sustainability So Owens operate that and pilot released made the in Foundation, initiative. reducing we has report, to Minor our ESG. Two, our And in have we electric step first year, & first the detailing communities our advancement footprint, Minor we fleet in far which with undertook a which this carbon is live. three, & launched improving committed we

is our Our like ESG our values. corporate and to of blueprint, are efforts, who and are business just mission we citizenship good part that fundamental

me meet extremely year quarter help customers ability momentum performance. the from performance strong the to to continues nation of am the due solid pleased our the to and that is Let ago, I to XXXX. the quarter build another to report in were A upon second be uncharted shift to we now establish gears critical waters into pandemic, quarter. needs second adjust our carried but and to our that flexible

productive, driving more to to be ways Additionally, form. begin return to efficiency as and to pre-pandemic markets keep we continue find

Now the much performed the medical segment, segments and segment. you improved and business results. Within posted let me update this with will start distribution our Solutions on I Global well

We market-leading bring continue service, our as trust gained pandemic. the we a wins, combined with positive net result in the to during of

ongoing an with new long-term patient to return Global volumes addition, saw levels to we In in elective during in Solutions And pre-pandemic continue quarter. capture outlook. patient associated direct segment business, finally, procedures our through are direct we the attractive rapidly provide growth in our to this to second grow Related continued markets. expected our investments growing patient

top infection capacity and prevention segment. sales including of our elective gains surgical Global the strong and to produced output line PPE, usage, on continued procedures. our as Moving a Products This growth, fulfill increased strong. high made of are The added the to fulfillment products, share of remained during pandemic, increased previously result significant segment stockpile sales

gloves favorable cost pass-through on line to timing saw we top addition, for growth. In adding the

remains our addition times net less total latitude growth. the $X to gives at well make performance In and in investments and the net operations thought-out our us X.X balance to debt drive This to strong, solid to our of with two segments, leverage improve continue sheet reporting than billion.

of second from looking XXXX the to rest Moving and the quarter and beyond.

are We about the excited long-term future.

opportunity S&IP to elective business. year rest continued the the utilization, by driven direct of procedures, be expect and our strength pipeline We patient of

on S&IP. this, addition will improvements. a tenacious continue with continuous and Starting operational focus to have excellence we to In

said, products, the will new healthcare As the by we PPE, we in industry. the new including be usage have that the believe for normal; defined normal S&IP

of the peak many a stockpile settle We for of result the continue share somewhere obtained the below and of during as excess will the pandemic. to categories protocols, believe COVID-XX pre-pandemic healthcare established PPE that but requirements in our usage outbreak, gains levels

PPE markets clean consumer In to provide and opportunity. we room addition, into the incremental of expect expansion like new our

expect the as both for However, we and our PPE. forget which consider. But of will elimination opportunity use That emergency authorization pricing factor PPE. moderation not the PPE demand progresses, create is Americas-based, manufactured year for another to medical-grade let's in

Let few me give you a examples.

disposable use FDA care recently these prohibit revoked which devices emergency the in use will authorization setting. the for health non-NIOSH-approved respirators, most the First, of

supplies. return conventional revoked. use healthcare capacity Decontamination has and practices, that no recommended grade been for Bioburden CDC and like System third, EUA Second, strategies facilities non-medical And Reduction the crisis bringing has in to longer the

these the the significance setting. agencies of federal in care by the light authorized health medical-grade actions PPE bring All to of

will Our and for government current unique value a chain distinct continue footprint chain for manufacturing help remain the advantage to requirements. us, address future of and as we supply vertically needs and integrated PPE with Americas-based closely industry work the to

worse markedly the second consistent by the outlook expect procedures, of to elective elective half procedures with on COVID the continue don't second rates expectation and the And customers' to year. through we assumes pre-pandemic country. we quarter This levels. return end the Next, get this is our of saw across

together best-in-class backed our suite products distribution to our industry-leading one Moving continues customers. our by best medical services. offering on to is to pipeline, provide These of serve and provide complete the our of service and

We capturing will a business, to referral supply need of patient business for distribution customers' our market-leading presence provide operational And large a that Again, pipeline new supports of advance enjoys choice and while as for patient our continue performance continues the net opportunity, and our lastly, direct direct with to our resiliency. sources. medical national wins. continuity supply leading stability, partner chain

health to space. fast-growing the positioned meet home needs of customers uniquely are our We in this

I'd product an We conclude to like annuity-like by quarter. the across expect categories revenue during major we've this success business grow to achieved recurring continue model. to the our with underscoring

our us the issued well Our our to affirm as EBITDA of the adjusted and million million of quarter for adjusted $XXX $X.XX XXXX as and strong to range EPS $XXX second confidence XXXX $X.XX guidance. of gives to guidance affirm previously

to ahead. what's be excited continue about, We

to everyday the humble and our having in for to customers discussion as of deal flexibility finally, the we now values call have of on our continue our while to over turn empower to chains Andy? as appropriate. to and healthcare, And our health deliver to high the commitments ability market our our Thank advance great I'll the be with mission And exemplify teammates our along Andy, that invest care you. financial one have flexible We a value we to stakeholders. financial live solutions results. scale, the strongest

Andy Long

adjusted revenue, EBITDA XXXX. in per I'll our We're million EBITDA EPS $X.XX of provide our maintaining adjusted $XXX for million. remarks. earnings are for to be the year. my and $XXX solid and $X.XX in key in previously share. additional XXXX I'd performance. Today of report to range this later to Thank affirming color balance start we in a quarter saying I'll of And for everyone. second I'll quarterly and the drivers our you, with for financial growth the by good the for then, record our delighted morning that, discuss we're to the like assumptions our and quarter Ed review to second expectations in range Also guidance results expectations and announced a on

our by Let's higher prior points QX, prices XX% the levels the and $X.X anticipated in basis line, transportation last by recovery of gross Global quarter improved begin margin the year. XX.X%, Products procedures to second results Starting revenue to direct of glove second efficiency. line costs and the the the partially Products quarter. billion were XXX glove quarter was with higher in compared due was in $X.X growth of second basis in PPE. Global mix improvement over prior discussed in of nearly patient the the costs and by compared elective segments. points sales to the pass-through pass-through gloves This for compression offset represents business. of lower business, as quarter for and commodity higher margin with top segment due both the ongoing for of Top margin an These revenue was quarter. operating year strong with XXX was performance timing in to cost growth driven Gross billion, and across margin from Also

increase for was commodity was to and of cost The gains result compensation, funding the selling last $X.XX, year the million the operating the the and which growth, was was to operations million of the compared represents inflationary Adjusted ongoing of from higher which impact efficiency beginning the million in by $XX quarter and quarter expense million, increased adjusted same XX.X $XXX million, performance levels debt $XXX the shares improvement the fourth or the XXXX. over which XX% our continuous our quarter compensation. financial the quarter period or year, adjusted We in share. the and quarter $XX incentive In all currency in from quarter or GAAP variable $XX effective performance. last On and of by year-over-year $X.XX to quarter basis, million compared unfavorable restricted $XX also million was times year-over-year. for led the five in of year. to in lines transportation rates. million the continue of year. Adjusted quarter times equity for two performance three a lower for offering million, driven or year-over-year higher was million of current QX. a last Interest This of which interest income EPS driven $XX the across top-line expect QX for times through continuing our higher by see $XX outstanding of administrative quarter diluted business prior this to net EBITDA enterprise-wide second of shares the average income second and income support as The $XX higher a to was second impact by higher second down Distribution, were from for over coupled foreign second an quarter, $X.XX. million pressures investments the quarter began yielded quarter with $XXX was of expense

strong higher as for Now approximately second million of quarter. direct by patient was Solutions experienced elective with the higher recovery or results by by of with sales of well business. year-over-year. ongoing $X.XX I'll driven associated as procedures our revenue segment Global in growth, continued segment along $XXX XX% review volumes in The PPE continued million growth $XXX billion

particularly in elective remain year a move towards prior hotspots than quarter, $XX.X levels, operating of to Solutions million, procedures was pre-pandemic result number $XX income the recognize a country. continued of throughout that we the COVID Global XX% as million benefited business. million PPE which This while higher offset volumes transportation approximately During an was income was of elevated million net higher by $XX an leverage. prices gloves, million. was $XXX $XXX Products higher $XX passing productivity higher volume led and impact for revenue medical quarter pass-through from million, was our higher versus Products million, the second higher the in cost XX%, the initiatives fixed S&IP to Global and last expand coupled gains commodity the our with second sales, efficiency increase cost as Global capacity year. our sales In was discussed increase These in by we of $XXX quarter of costs were of on investments previous previously through to Operating segment improved driven of timing productivity last partially by favorable PPE compared distribution which and and costs. acquisition year, segment,

our top supplier review and continued second ensure let's the capital impacted terms flow, and glove delays cash the negatively by cash build flow with our inventory structure. growth, sheet in support unfavorable global investment to capital transportation Next, balance quarter, manufacturers. line In numerous payment given working was supply to issues,

the chain to issues and as of the half levels. capital return second global year working glove payment historical terms subside to as throughout manufacturers improve expect We to supply

capital put continue our be working XXXX the quarter times strong As at to times to leverage our highlight to EBITDA. to strategy. position below back us expect Still two flexibility improvements maintained leverage like EBITDA. $XXX and loaded. Total operational the capital structure enhance implement we've trailing million to made our I'd adjusted that a with we despite our us adjusted the consumption, the financial debt we a profile growth end was XX-months net net and provide flow in was total cash second half X.X of result,

month. another from regard last S&P this recently rewarded in upgrade achievement with credit was Our

XXXX. of for XXXX a XXXX the guidance into and for today, Finally, Earlier year. turning is QX our performance we the confirmation improved strong of second of half range result affirmed our our to The guidance outlook. and visibility the

on context outlook. some provide for me assumptions our Let the

financial sudden QX contributing We next installed now results previously to expect full recently been begin glove PPE-related Our deployed track of our is capacity the fully early year. expansion our to of and in on year million capacity in has announced manufacturing to projection. declines in gloves adjusted EPS market of million. in to and impact to could result unforeseen price Any our line the $XXX the glove $XXX revenue top cost downside be pass-through range of

believe our demonstrate market attractive patient and continue In capture rates. perform patient business we above and retention addition, direct will to

mentioned close year. volumes I at As very the or to to procedure-related are the of earlier, elective we levels in of expect much second pre-pandemic the country, half in and trend the continue

the commodity share headwinds, grants in targets and grants outstanding. for a outlook count from is QX, Even based by we through QX. and including results. our incremental performance in increase new confirming now elevated and The transportation experienced for are and XX.X inflationary X% shares As treatment share costs with headwind EPS the our XXXX, Guidance we expect increase certain are restricted to million to of adjusted shares is driven financial and on XXXX. this pricing related dilutive our stock in strong XXXX for continue

starting the our pass-through seasonality of with begins to from QX with year's cost The quarterly In weighted calendarization terms the to decline guidance, we towards slightly expect year. revenue, pattern ease. the of the XXXX first earnings typical to of as of most half glove of is the our contrary profitability QX revenue

pass-through. QX earnings continue be QX than softer to of the we to timing due expect glove Specifically, to cost

the Investor and key remember as today I'm soften utilization is have delighted expect due website. strong QX for year of flow the on working back to supplemental of to teammates section headwind year, capital half we efforts However, X-K discussed. been expected with of cash across that our another on posted these seasonal slides impact have in around our assumptions of improve to proud note Please summarized modeling businesses. and been with the filed the previously Also, health the SEC closing, that care world. our the quarter improve earlier of to XXXX Relations Form full In the as

embed into you. to business positioned to our deliver Q&A the turn with operator blueprint on long-term our back activities, the that, I'll Operator? As further our begin over day-to-day And Thank we objectives. be well we'll the session. call to

Operator

I [Operator of Please line you, question comes Thank ahead. from of Cherny our sir. go from Instructions] Michael Bank first show the America.

Michael Cherny

all Good morning, far. and colors thanks so the for

year-over-year you're heard quick decline a question. sure trajectory. want just to correct? on make expecting I a regarding First, the that of The terms correctly housekeeping revenue, XQ I sequential that in

Ed Pesicka

up. the repeat You you Can question? broke

Michael. Sorry,

Michael Cherny

the revenue expecting that's decline trajectory Sorry. year-over-year. sequential just The about made XQ you a comment you're not

not correctly. I'm heard So I that sure,

Andy Long

is this Mike, Yes. Andy. correct. That's

In terms look at guidance help of in terms but you very half year correct. you absolutely just understand, of been just back trying seasonality, our to help year trying the in to this terms of because again the you're atypical has of

On slight decline that we the be to top a QX QX line, to expect sequentially.

Michael Cherny

makes sense. That that. Okay. appreciate I

moving of taking is I variant the that of people trends would of local And where any be spike you level offset against bigger some pressures seeing so about in do the you Are there pockets those pieces backdrop any I approach how as do by we would there about business that? you're a And you're variability increased another uncertain an think if back think there increased PPE demand about guidance backdrop of the Delta infection. approach? of but where your in potential worry think delta go variant would to rollout. potential electives your assume when an hospitalizations, picture Clearly, be some against on could

Ed Pesicka

is necessary. afterwards that add one Michael, if some Ed. I'll and then Andy this take can color

So pockets it. we have of seen

drastic elevated. us already have of we've where some levels So for from in were from seen a PPE pockets in we increase even Florida, seen demand that, that

we the In electric to the here's have other there. that procedures some thing saw. seen we But on addition, tightening

And have the for our customers solutions. subscription-based to we during we So they with worked some customers models, where need as it. have access pandemic, unique product

They've fulfill we what of in we've like North as can for producing model we're as example able subscription to need called producing -- well their and Lexington, that. stuff been So Texas triple ourselves, on is" since in a it said our "We in Carolina. we're use NXXs and

hospitalizations you're seeing. increase, which right. is absolutely we're variant and Delta does what So actual increase

that makes close again, We're United all increase that fabric making versus States. the finishing in Michael, delivered all seeing demand PPE be fabric-based unique relatively in are But where PPE. speaking is truck We the stuff. by it for what us can of a others the we're

has United to variant been quickly have we delta the States the product. and So certain at very locations flex this as able hit have in needed

Andy Long

And then it's Mike, Andy.

on take full-year the procedures. Just the the forecast implications regarding to second part your elective question for of

QX any an of the demand. But So or in that pandemic other terms we expected. see elective do near contemplates pre-pandemic in We a get anticipation built on level the have staying near into we really the at forecast to back year the elective not delta the And we spike did of to we've as not -- built downside balance other levels not procedures the procedures. have of hand side in due in significant of variant PPE, on levels.

pandemic we we and occur spike in adjust much those levels pretty procedures or -- forecast. see should our PPE. in assume no pre-pandemic So would at those accordingly elective But

Michael Cherny

And like remind despite question. was more Can what EPS us, It it quick moving. higher housekeeping then count not share just went one your looks guidance before? you

what today. it So was to curious just prior

Andy Long

Yes, Mike.

grants. to result million as and -- the of well guidance shares shares XX.X was XX the of restricted increase share of additional due restricted the shares. we last million is the some is that's as guidance And treatment current really the gave really So again the issuance

Ed Pesicka

shares. Performing

Andy Long

Performing shares.

Michael Cherny

the understand EPS to against helpful Now, of guidance. maintaining

So thanks so much.

Operator

I of you. show ahead. Thank Citi. go from Please the question from comes line our Grosslight next Daniel

Daniel Grosslight

the first guys. point glove half. Hi, could hoping relative a versus benefit second my year of put for I you half on this the taking and of was cadence finer Thanks the pass-through the quarterly in the question.

a for benefit from if that positive EBIT the mentioned, benefit quantify, of benefit this seeing line. net neutral expect EBIT pass-through top for the timing And quarter you the to I some quarterly remainder full-year? Can you're still year? impact expectations line the you your think still $XXX the million you and quarter this of help and

Andy Long

Daniel. take is question. that Happy Andy. This Sure, to

-- level what this you at So ground just can on just make know we're sure to at set we you a point.

It So line million. $XXX full-year used we've a we be that And We've result about fine-tuned now $XXX guidance. that top to million. to to marketplace. in the recognized And the a number about quarter, million in top higher we reminder line. about on ease And starting did QX, to million pressures $XXX as done revenue was in equivalent to $XXX cost seeing million. of $XXX as change million $XXX of pass-through cost our some that the

So top about on $XXX year-to-date seen we've million the line.

So in roughly impact of in of And roughly halfway line, midpoint we're at year, through full-year see the we did our on the a right, the bottom favorable terms so impact. guidance. QX the you're

up the albeit impact we with how would in gross of catch most decline as about, be begin that set see talked quarter margins. would is than much I way the cost their our QX the prices in you sooner say, we discussed see lower the sequentially And was at cost. impact in And favorability still a lower on into it call, a the XXX costs going but then, realized to significant rates did could QX raising much right forward have -- to in QX. basis catch level. point I much and the inventory. our And would had forecast, up those some that through work impact As costs expectation as would QX again the And we price of we

to operating decline margins margins expect would further I and in adjusted So income gross QX.

cost/price And be our that the pretty would see QX, Global get to expect the worked You'll be we really, -- I the would of segment. year, And issue the then, in we as by expectation. improvement. Products expect well That end slight through a to of dynamics. the

Daniel Grosslight

Very what on margin helpful. the to your overall think new will first Thanks. XXXX of help those have us quarter glove can gloves profile capacity the you come be relative margin as And about profile? of you products line in

Andy Long

make we facility. is expand I don't we that our done really we've will say margins again, walls by as what within product, specific and give to but that of investment four existing the that, So, gloves, guidance

again, The production because course to that capacity not cost fixed benefit facilities. from so, leverage, those gloves. we're And the additional PPE on the adding we've added expand should bringing our produce again, capacity square during XXXX gloves of some footage with to Americas-based like we're in

Ed Pesicka

Dan, is this Ed.

you're gloves I'll I things. add we’re leverage think have -- make facilities. we'll able to inherently, capability Absolutely, -- chemo-rated there, different second, we're have two on Andy whether on that's fixed But your within our glove glove the right. get whether that have to the to it we of that, glove. profile just cost to that, two aspects and going surgery, more technical that's other a those covered, standard things One, also in existing a margin put because versus

Daniel Grosslight

helpful. Got it. Very guys. Thanks color, for all the

Operator

from Thank ahead. go you. I show Baird. Coldwell our Eric next question comes of from the Please line

Eric Coldwell

$XXX question, $XXX this last. much. the million very in Thanks quarter, gloves million revenue Sticking Thanks. with

still than but profit, You was said first on so it quarter. less positive

underlying mix the then, that Thanks. this being we're to down I follow-up. quarter-over-quarter, the in guess, mean margin shift to the points think Products, quarter. was versus in how the cost changes cost I most lines XX in I about absent product costs transportation commodity might Global operating more can have I then, you the your glove get on And of XX% us what one sense say, probably increase, impact? or base margin have gloves? I And the questions been, last what XX% going today is give to the think -- any What when in much related costs, pass-through pass-through the or quarter,

Andy Long

Eric, Yes. is this Andy.

address that. to try I'll So

the way through point that normalize an greater to still expected, due XX cost about gloves impact Sequentially, And I percentage those as and try QX of increase being costs higher in even right. the as So, yes, their recognized, did to with see an we Products you're sequentially the to Global see segment. work we expect drop in throughout year.

start So that would I QX. stabilize. to slightly we further go from then, QX, would in we into and are to in expect as to expect where QX I drop And margins rebound

I through its about issues. So said, guidance quarterly while hopefully working will the timing glove largely XXXX, say that going talking margin but we're not pass-through on not be that rates, system as I exact and way giving would into

Eric Coldwell

So on us a that increases give transportation could and cost you sense you cost the of the on the impact mentioned increases call? commodity

Andy Long

Sure. Yes.

we But some fourth the given items that EPS able the in as time increases, Eric, when with strength to count manufacturing again, quantify it change is end our think, easing masks. as by had that for thing our But that to that was quarter think again, -- as maintain products start key to almost we're commodity in and used to the it's commodities we to seen -- see XXXX the polypropylene double. of commodity cost but in full the to we specifically overall, the of And are the note we call guidance started enough and the and our first got I And guidance, talk freight what’s to we some quarter continue go well did inflationary And share other key experience into that see as the don't it of some I towards we mentioning. expect the referring Eric. of big the was important polypropylene. that, is in quarter. into out, worth We quarter the So end, to impact, second areas third of prices adjusted business. the we in but we this the of year

Eric Coldwell

investment May. is My of you quarter, value. valuing that question your Day PE IR consortium XXX% I'm really eight probably your times market certain by work. than respected And bit eight Medline but company certain your they're eight firms, don't times then, had off peer a not times I better the June, closest more That's times in early they in highly late Medline XX% larger billion. enterprise a received $XX survey you. isn’t I'm rank at in profitable. eight our know other

fundamental values on your just impact impact versus any get of it's I'm insights a them. sort see People I how maximizing if I'm could hopeful such you offering contrast It's a your possible. a the of wondering you don't or could I'd compare if fundamental, you about be So market to thoughts regarding might that that much if stunning and know to on do provide whether any you, mean, the competitor. that company. of quiet comparison thoughts love close OMI. shareholder your to value. deal

Ed Pesicka

Sure.

I'll take one. So that

us me think them. I makes unique what and that I let talk proven what makes out. And So us about think, the has different pandemic versus

which last spent have is I a month visit And of to to the I unique able is our because customers us different, I out been valuable shareholders. on in what's think centers. go here's the road, extremely customers, to the distribution time then our Eric, back think extremely and been tremendous amount made So, valuable and

manufacturing all the delivery on the a that's and way really different. vertical to So And the home. to integration it's little bit of from our even then product

ourselves on I think our it making products, we're versus them, others teammates. is, They PPE, our with in about our are of quality manufacturing. affairs, their our control, our with raw their regulatory bulk The the in PPE. made with and market factories and labels most themselves talk our primarily products being with you our but with our put reality overseas materials, are take then manufacture, of the

that our It's reduced great created it. recalls. at with the So substantially greater over control customers It's ability -- a greater a have we service to way, level.

they it, pandemic. they able the our we here's during accuracy were service what is me told on-time customers at XX.X%. Again, several during last surprised XX.X%, they for to they XX.X% level to needed, the at XX.X% had was year customers we’ve what need the were So last products pandemic the that, and over core month. average our And when get on delivery

during with all to way focus of XXXX. changed So and this that with XXXX different. weren't We on we that our the full we that's blueprint our That that's business And operate. improve goodwill. XXXX what's in been in XXXX has made way really around tremendous then result of capitalizing and work pandemic. hard the the and here, improvement a transparency And strengths created us continuous

a you Solutions both in this quarter, and a business. That's You've XX% XX% patient in direct of medical profitability growth distribution the in year-over-year. see seen standpoint, improvement From our a business. our Global growth, --

they trajectory is. -- of going. their all the really where look, is their what that has And changed got we're valuation valuation of So

do going what how from I think, clear with we is we're company, operate our do standpoint our we We and mission to is unique, do of a what values and different. it. great

We're some differentiators manufacturer. a So of those really, are we're the is a distributor.

great -- the some business played reduce versus that it sense, have just We mitigate really But health and do risk. home same company. of risk We out. in to this do primarily sourcing more being sourcing. that and We

most significantly pandemic. were levels than Our service during the stronger

multiple together, an I'm as have, somebody But on making decisions future Day. pieces for think those bright I'm not our I grow. investment those this us the extremely to about valuable. we we there's in well a as continue So not who's We to tremendous opportunities is for to talked pay what company. company And Investor put banker.

my we heard probably about do. voice. you'd it. excited So I I'm about passionate what get

are these about valuable, think but are tremendously the today, team’s passionate -- just Our long I why term. reasons it. we And those the not are for

Eric Coldwell

Thanks, Ed.

Operator

Jailendra show Thank from Please, the our Singh from Credit you. comes of ahead. question I line go next Suisse.

Jailendra Singh

Yes. Thank you.

decline better to trying half second Global in half half the of you're your first you to on margins majority and is understand in saw continue numbers. Solutions second in expecting in versus you half in reported business but first and revenue implying revenue Are profitability Just first or trends I around half, the comments understand that Global outlook comment. business? versus margins I Products sure, second want in make half

Andy Long

question. It's morning, Jailendra. Andy. that take Good I'll

estimated quarter a you million dropped year-over-year talked a of elective So procedures you in increase. And XX% when recall decline quarter saw significant when that about talked second about significantly. I you last year as is that. of Global result Solutions, a last And to we $XXX growth as

that that $XXX year-over-year, shortfall top almost for increase made with to up So, happy on continue million we've say grow to of that. really and

strong top the line. performance on real So,

obviously -- off. expect But the to I would year, going continue, get certainly, our because of to that in XX% level we're half that grow tougher not but the second comps So you're correct. absolutely

Global the profitability, in In Products terms yes. of the second half year of

cost business, is driven So largely first to atypical going towards fact but our the it's is very the of weighted this been of the then little a being favorability the with more QX recognized the and unwinding pass-through in in and that timing which glove in the by particular, of the QX half the with more profit seasonality QX bit year, of QX. that be in

the you of the can So, driven by point low is which the margins QX. products to expect global occur in for business,

Jailendra Singh

now. Solutions you respect to going numbers to are on willingness your any And your the having understand now? delta right out terms Global seeing I business But potential with anything in implications not to impact, variant then, come you're RFPs or the in right their Okay. customers back customers of with

Andy Long

we No, that variant at the delta impact not have seen all.

Jailendra Singh

last the a you in I the there Byram your like trend any one Okay. that quarter? second And the contributor business, one the what And margin color was expectations can provide then, on half? are to mean for significant

Ed Pesicka

say Yes. our strong. to continues comment earlier. patient the I'd be direct business I made

business. Global growth direct The I question Solutions, came of of patient very, that segment is, bulk at growth the Solutions very but our a portion think also from from from XX%, saw segment. very, came strong significant grow Global another Eric's strong very we

segment performing those perform relationships other that you well. without a to direct XX% business. They've extremely post suppliers expanded businesses That business the better in growth both in to patient of we up as well. well with new as continue So continues the business relationships, don't win

growing at rates market rate today So in that is well frankly, growing the space. I they're above believe what

future So, too. of really the about that business excited

Jailendra Singh

lot. a Thanks Great.

Operator

you. Kevin show of from from UBS. Please the next question our ahead. Caliendo go comes Thank line I

Kevin Caliendo

Thanks. remarks RFP I'm it you At customer do is the Can you in this in Global mentioned completed. what that little And anticipate of in probably XXXX? showing wins most activity guessing you prepared bit point, Solutions. -- Is net your about talk up XXXX? a briefly for

Ed Pesicka

Yes.

Kevin, a think to hey, guys in was customers options This the to show up I where So, have we looking saying, starting during couple support some were actually and is of their business us. XXXX. won things. It that pandemic to you ability the at

move Let's the business.

I've than days. days. and our seen could this much XXXX, I The down several because size talked depending as were the that XX there where to be continue, and late is started onboard we a as expectation up down we customers year year. able into So, actually we've Probably ability to XX come that and customers we've last year as think, in add to past, do the into it for less on won that then complexity, in streamlined in momentum you more those

already see we're So, to starting that.

through we year. continue We expect as that see the to

Kevin Caliendo

about that increases in which Also, and some manufacturing in higher about into guess sort deeper us and like be what in should we means, this big set already, sort incredibly opportunity it the revenue terms the My you the you help of terms understand the and the you. your help capacity, the that and going of talk XXXX could about we potential us how think Thank not talked of incremental to for how TAM, be talked glove potential you it's that? Okay. But of a go when products when getting is, your opening excluding can capacity, little specialty remarks, about meaningful. understand modeling.

Ed Pesicka

me first example model where let it just to go a back From is.

gloves. in little unique with So, the space Investor to about margin opportunity standpoint. grow. We a it into from it's a to of We existing or It's a and about a in market. Kevin. care different talked profile other of packaging a and the going One two our the mix launched a the talked acute That consumer some standpoint actually continue I positive from into retail other what about to it products we on mix is Pop-N-Go speech the we That things Safeskin margin it's this today talked and we go Day. is industries. markets than just have provide

and boxes market the launch. also other it's products brands products private We launched, out and addition have process the retailer additional own just wound within continue a we And go with new that ability surgeon's that big with in also that to we to but And manufacturers it's earlier other we're as in to which consumer gloves we glove not mentioned have incontinence for ability and have gloves our in do a it I that. for glove to whether like care label unique we've the that today. where chemo-rated

sized We haven't the it market for yet.

publicly out gone that with haven't yet. We

to have the standpoint, way So higher about what pull-through from today. at think are is, a those we than think it just modeling incremental dollars I much

Kevin Caliendo

very you Thank much. Great.

Ed Pesicka

to be I'll that's 'XX I as included where targets. profile add our one overall further last more think -- would is little broadly our a good become as targets bit about for view into of when XXXX. a revenue think That's the developed we these or about kind and margin thing gave really involved of

Operator

comments. this no I'd showing queue Ed Mr. the to Pesicka the for back over to at time. in Please turn I'm closing you. call further go questions like Thank ahead.

Ed Pesicka

Thank you.

thing lot first Let discuss cost time me one we a pass-through. I about just spent of then I'll and close today glove talking know this.

back basis, kind a $X.XX be to $X.XX about year between level primarily adjusted we really -- favorability is and I and out still all highest had earnings is, that in the first second a half generating think that both first will way revenue pull-through. on even the of year the macro the The the and a balancing think at half half from that in positive we're offset, share. that earnings light negative in per go-forward of half in of the of

and shown our robust Global about even out context the I we've diligently over get very quickly. excited life question I there. revenue our an we strongest XXXX. -- it of to We is at what's look addition are So we chains in in look and invest I we which a it. overall to am to as X.Xx pass now Eric. that We're about I'm and driven at chain the $X.XX have going. believe distribution right talked to That's patient we direct I and ability at that only, with provide talk Investor debt-to-EBITDA have in Not sequential still still is solutions in live on But to yes our excited efficiencies, now there our to excited year Global quickly and essence the we don't the and really health and well in one where I and invest medical Products so it business as and And But had with strong time beyond $X.XX the this even the down I we're I on at why this this want be to $X.XX about sequentially care which over year have wisely the impact business that Solutions to also we and and financial overall, we've to the year. continue value quickly will strength we're where growth. my long-term would a and flexibility. had look market. proven At value $X.XX ahead is can't scale where ratio think this thinking why Global are very opportunity in netting the operational flex I we we changing still count performance. marketplace. then I I'm the of a have is Day haven't at that the us because share the where bit Solutions have is, of in little business, at from the that business. enables close to a growth. what finally we

have into we what the gives what So us really about that's excitement the future.

next today. quarter sure everybody call. the from time next and the I look in earnings for the the appreciate at forward talking over months I few to to you So,

So thank you everyone.

Operator

participating. Thank conference call. today's you. Thank This for you concludes

Good disconnect. day. You may now