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OMI Owens & Minor

Participants
Jackie Marcus Investor Relations
Ed Pesicka President and Chief Executive Officer
Andy Long Executive Vice President and Chief Financial Officer
Jailendra Singh Credit Suisse
Eric Coldwell Robert W. Baird
Daniel Grosslight Citi
Michael Minchak JPMorgan
Call transcript
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Operator

Good day and thank you for standing by. Welcome to the Owens & Minor Third Quarter 2021 Financial Results 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 Investor today, would to conference Relations. I first your to Instructions] like the to over [Operator Jackie Marcus, Ms. Marcus, begin. you may

Jackie Marcus

& earnings Operator. third you, Hello, and to Thank everyone quarter call. Owens XXXX welcome Minor

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

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

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

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

Ed Pesicka

the quarter. to today. third excited you, the Thank Good year. path thank And time a third morning, record-setting continued on extremely Jackie. you on taking discuss pleased join our I'm that, I'm everyone, to today our here be call us we and in for to to quarter,

while reflects consistently of the the high-quality the to financial value of service strengthening Our results our and performance providing company. customers, position

shift of growth, pleased I'm the to as internally, to supply it talk Solutions operating inflation, healthcare we our significant in I'll with norm. about and top segment, note global nearly year-over-year. new an home pandemic, well COVID-XX clear that drivers reflect the business, our is the as it our as third on strong us outlook, combined I ability the focus quarter, rapidly that includes our the As effectively navigate enabled continuous growth to improvement the delivered crisis, which start acceleration margin to across doubling entire line Global chain on or the has with our deliver changing of markets key on while revenue

is to service paying enhance and segment, deeper more distribution and our I medical into the to we see our level customers did hard off. that a our great it is dig into at As levels the work this specifically continue during support little the business, to highest pandemic

solutions ability to these market and due to It to is customers agreements. win and balance and that becoming changing clearly has consistently renew position we our technology in competitive flexible conditions. operate and clear customer we touch improved, as continue our existing rapidly value customers, new provide between Our scalable

remained to treatments marked increasingly Direct higher meaningful this cylinders, showed as in meaningful being to recognized solidify in continue our improvement, income commonplace. already And and and operating of distribution starting Global quarter. medical Patient on revenue underlying segment, this more growth Our see as by market. in business, space, once posted Patient we the line ahead improvement. health leader the market and is hit growth customers to all leading are our Solutions a again is wins we the The becoming strong rates home really solid, Direct again home finally business rock

showed But related you focus increase to out Next, in pass-through, cost we segment, Products delivered Global glove in total. to that the growth. strip fact when price the the on we solid growth volume X% our I want you

As In infection gained we increased overall facilitated strong our fulfill our segments, capacity added is to procedures. the of share customer healthcare adoption past, have in PPE are increased sales blueprint. strong been protocols, result due our utilization our business of the the the both to that and pandemic, stated and have previously wins our during elective of prevention a clear by output growth high it continued

disciplined blueprint business that drive an financial our experience, Minor strategic customer while investments, system, & our Our continues improving business focused base and is improvement culture, enhanced which our on Owens performance. also our ultimately

profitable provides and the Our of us growth. confidence payoff, delivering long-term to business continues blueprint with

on remarks, have million, by times. down reduced debt to net balance report Moving sheet, we net $XXX on to more while to that to to I'm this our million, pleased $XX X.X our his our in will taking share leverage Andy

our context, into QX Just XXXX. was this time last was to this of put net low the leverage

make strength to profitable long-term drive across us business. the our Our investments continued opportunity growth balance strategic that sheet gives will

of include, are the But many as and prospects These to like XXXX, the begun we into have the prospects we've about I'm businesses, environment, impact. continued new four, pipeline steps proprietary opportunity future to Direct and and the and towards continued never-ending three, our Patient operational in implementation disciplined year, new two, one, capital take expansion Looking approach improvements. the think commitment the of of increasing our wins, distribution; ahead, lastly, monitoring our mitigate expansion; the continuous wins to balance and many excellence new I had. excited channel through this of inflationary to and our business; still strength and products deployments; existing customers, our the medical large

as look quarter So, shaping full-year, largely and the as we at up previously third XXXX indicated. is we

will our Andy, adjusted that of our over continued the as XXXX I'd Andy the minutes. I execution well confidence and turn emphasize EBITDA, operating a year-to-date the as gives The results previously But our was for full-year for strength both high that very XXXX. and the few will albeit strong, these strategy narrow we're and year, our of first-half comparisons, reaffirm of our at demonstrate guidance in tough a adjusted and level. EPS in before to facing very on lower still elaborate to the call to guidance range long-term like us issued back-half

business today. our a Owens of customers, I'll our & us at to that build As culture, focus our before, advance turn customers Everything our mission our is empowered for discussion financial so & Thank now, they on our and Andy? to are system, Andy I've tied allow investments we And results. Minor healthcare. the you. said our of is call Owens our over that serving of do Minor it to the to

Andy Long

morning, results good year. the for performance, our and expectations Ed, you, the key quarter third and for and I'll Today, and our everyone. I'll balance discuss financial assumptions for the review then the drivers our Thank of

for line. again, the the the Let's growth to quarter, for results billion, the top year, prior the represents $X.X was compared quarter with once $X.X This last third improvement. to begin billion over Revenue this to starting segments, contributing time year. both the third with for with XX% compared

pass in and quarter the gains, of usage through other Patient elective was share Direct performance our growth of business, third Our the elevated strong costs glove PPE. recovery from ongoing higher procedures by and driven the

quarter pass for the rates. in million, year-over-year, down from income net third of XX expenses rate third were through offset quarter pressures, XX% the $XXX was for million or our It's prior was year. which timing million were $X.XX, in record QX reduction to lower adjusted lower of and was levels higher which driven effective spending were primarily inflationary a the variable which increasing favorably for drivers. million discussed through quarter leverage partially The This EBITDA lower million, $XX to QX Interest million was of higher setting the the than was the diluted by basis, of result costs, was important was which the XXXX. quarter top interest XX% compared in resulted cost operating and expense EPS XXXX. flat the quarter was shares our administrative On adjusted year-over-year third versus unfavorable The quarter were offset in of effective million debt essentially Adjusted due productivity an investments year. operations of $X.XX on $X.XX. the yielded of to of volumes. the The pass million in million XX.X% that $X.XX for of due compared of in initiatives. growth, year-over-year last currency a million quarter quarter and outstanding by positive by XX.X%, adjusted share. was or prior $XX the and of the continuing adjusted third glove during which lower to Gross of foreign last volume, operating which QX $XX XX.X% or impact year, than quarter selling higher mainly to a Excluding GAAP inflationary tax was last in respectively $XX Distribution, pressures of The income note our $XX average year $XX quarter million $X.XX. was $X which X%. margin income line $XX or XX growth glove by and three than

momentum ongoing Solutions continue to The ago above Global attractive as procedures, the the customer Patient $X as noted business prior experienced levels. includes by productivity I million driven growth operating in We recovery Let's well at was quarter, of ongoing growth by higher recent am in million driven revenue Direct each which in or to sequential improvements million, Global year $XX strong this an wins. which billion gains in performance the was pre-pandemic primarily over our segments. of the Contributing was and which saw in growth with $XXX business. led Solutions $X.XX income or medical our distribution year, with excited XX% improvement business. contributions was higher coupled also growth, we efficiency volumes than the results. and represents our turn largely distribution quarter. which our X.X% trend continued quarterly the elective continued volumes our medical to associated in to that

impact In margin the through million, previous saw Revenue year. addition, In through, volume million compared grew to segment higher demand third our quarter million million Sequentially, $XX procedure partially volumes. in was volume investments cost in able growth expand income and glove X% of the fulfillment a passing strong Global quarter through impact The Volume by XX%. year, to increase growth which difficult excluding low the through transportation of last initiatives. revenue segment electric higher Global the stockpile or productivity $XX continued for requirements of higher last and glove was result as $XXX costs, sequentially. led $XXX prices to expansion Products S&IP compared of remain offset the of from adverse by $XXX we was were the and an of higher year-over-year Operating the commodity as million digits, million grew our in versus S&IP pass for $XXX to we comp excluding in glove products meeting including for PPE and benefit to timing capacity, usage, costs. the third a costs the the segment we impact single Products pass of increase QX. was

by compared the income pass unfavorably As to $X the through of million income glove year. impacted a prior first-half reminder, from benefit of cost during operating FX as to a timing we XXXX. net experienced the operating

This cash adjusted million, last Total such our balance improved year-to-date previously to driven from quarter. sheet end to working of was $XXX now quarter, the of statements, performance with expectations. and line year down a net was This capital sequentially. $XX was terms is in At glove at third due million months generated payment result was is and $XXX net the total times with XX of EBITDA. million leverage flow communicated flow improved Turning third management, part manufacturers. operations in million which as X.X $XX reduction in to debt $XX our cash the trailing million compared

lowest the adjusted I driving to now and deployed EBITDA. net infrastructure, while is emphasize in levels, leverage Our to over that working capital want point last technology, to profile customer five two leverage we've times the nearly years. invest years, down two in to our capital service support below at

Our and positioned flexibility, enhanced us we're capital structure very operational our provides growth to with implement strategy. well

to of EPS, adjusted our in the $XXX $X.XX Finally, adjusted EBITDA to and and range turning million outlook, the of range to million. expect in are for expectation the $XXX now $X.XX, XXXX. narrowing range we be in a to of We adjusted adjusted EBITDA EPS full-year

on average EPS based weighted XX million outstanding. Our adjusted guidance for is shares

these guidance. that supplemental And full-year today, like key few Web been Additionally, found and assumptions to like were investor we're can for spend walking in a the point our rationale through Form of modeling to XXXX. the reaffirming for the that our out X-K for we'd be minutes previously announced posted I'd earlier have relations filed our site. slides on with XXXX section to SEC guidance

last expect $XXX $XXX million remaining assumptions year-to-date; this supporting in include levels, sequential selling a than be flu of procedures days glove $XXX an revenue QX is expected two driver the been million, approximately that range versus revenue of one We the $X.X decline day of at through to and QX and fewer billion in realized which pass in fewer to billion. to in of the $X.X range QX, elective near will to in flat pre-pandemic season. than main Key QX cost which QX. million Note has normal have full-year year, of

margin to in the fourth sequential in segments expect with expansion this quarter. contributing expansion We the business both

QX, to of global QX to timing higher in from Specifically expected glove better saw due costs products moving the than QX. margins

This hit through with We margin in of to for pass expansion delayed the we our not change see timing expect QX. in impact the does shift, segment. to QX. glove sequential outlook Even this the issue cost expect still

carrying offset throughout on sheet our Finally, year new will by higher continue anticipate inventory customers. to the balance the typical regarding and and decline. activity be support seasonal we in inventory to segment lower the Product the levels boarding partially This flow, cash rest of as of glove levels inventory

business how normalizing to long-term conclusion, invest to higher our to in significant earlier the level we're over the also of session. have I'm delighted see spending to We we year-over-year were market our FX inflation adjusted on year-over-year, basis after an to system neutral number we segment. dynamics. growth superbly for basis. to the higher to It's expect the our year our our and in to flat a team in the due point, Solution making Global and And able the the profitable In strategic to ways this performance able CapEx expanding to to customer while with fourth sequential Q&A utilizing find our begin pricing. relationships as operator show Operator? goals. face both to quarter progress a the in continue compared third drive exciting long-term of despite growth. business hold growth a efficient of We've call in glove in execute shares to the operate turn we've At cost quarter profitable our headwinds in expansion quarter. EPS more And accelerating I'll outstanding daily for become another against continues back We been on delivered margin segments challenging of incredibly by with

Operator

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

Unidentified Analyst

for is This morning. [indiscernible] in Hi, Mike. good

growth? PR, You about customer can line these followed about and share then in growth, new up about with the market, mentioned with wins you're the and wins. are Can talking some you of top much gains to contributing how in talk you new market why X% talk winning that

Ed Pesicka

thanks for and morning, question. [Allen] Good Sure. [Ph], the

asking, about First, have. I've doing don't go tally to me into I into get let detail. want that sheet talked or since And we wins. of you're little net look, historically, But report what new more a

conversation So, us, why. clear business. our love million customers the proven And sit you out ask -- in what height that of it's the I last from $XXX months, million doing, the of with and today, as won several at incremental in they you that, And operating new liked that's look we've I pandemic. look $XXX back our that's model. model We've we're operating wins, the between even here and

within to think wins to us are had the six, I very model, "Hey, scale XX next investments that So, the months in one flexible could We I'll medium, some days." this made ability also we're we now provide. to and have operating three, today, want really based able it for think our right are wins. say, able what quarter to past; starting liked technology be to medium that. to that's I the that's the we of those live to there, nine make that win going touch. small share see. of And get we When here balance just the we we we a what more out customer, upon not to to talked customer that also. major in wins this challenge just about moved the as I to and with ability those on this value it's to comments of to do numbers around right they really or and take wins about large now the to up level It's implement. human it's well our two They is still provide to to and can us go When but like about were And I've If larger them have other quickly, is the excited week. as is where then recently be they with

from, some Minor this signed be expectation business and system the about will leveraged that it is will So, and over flawlessly. us of thing days a make we X.X. customer all the it, call within we the the also ratio, go debt go advance to able need ago deal with we our XX about we very us, to sure the executed other capital enables implementation is flawless make working to last And that to us makes to the execution. that & ago, XX inventory the implementation, -- things implementation fast. and our -- talk the Owens together together, is Then wins, be days I'll What new tied investments have in talked different, the can does right and that in put

I'm So, on are our where going excited of extremely that stuff a business. medical about lot standpoint. great distribution we in from

comment. Allen, maybe me Let add, another

question, of didn't for to Minor. So, just with Premier opportunity a Premier significant well & more you deal. there's our recently, a we value for that, about lot for get renewed lot GPO I as -- that question renewals. times we We're reworked the where to Owens note of want ask times value And as more but this contract a five-year provide

operating really both touch. of both the And made capital to serve they and reason for and customers, it, they they you help be we and that's today, why, if market like to scale So, and ability around technology our critical. that's liked in us quickly-changing consider that circumstances looked see when ability our operating the joint regardless market. we have for model, the again, flexible the the in like of they because investments Premier another quickly And at our what

So, to of question. Allen, helps hopefully it frame answer -- that that

Unidentified Analyst

your quarter, And then, us levels. are seeing just And helpful. procedures of you back of that are 'XX update, mentioned were you to effectively remainder what kind early I you an year. really that? that's give saw you for And there? that what guess on the thoughts Yes, elected Thanks. last can into the pre-pandemic continuing

Ed Pesicka

it answer But add little levels. come at the the is, if Yes, procedures wants But it at the in the look a we think And quarter, in spikes, yes, constricted is, do have elected absolutely capital aggregate, so, we that some seen our pre-pandemic were quarter, well more continues pre-pandemic sure what and elective see see across working I'll it States ready I that's third quickly back I reality Andy that macro was, advance with across did we've where investments, COVID is they in adjust well spots an seen that to to color. the United as expectation in back U.S., where to procedures having bit. XXXX. If a making if And last to back little as the we're start, clear we prepared to level. moved. to and that into the where teammates come there's continue we

Andy Long

Andy, Yes, little a just and to more it's add Allen, color there.

where So, elective did in procedures. we are. slight improvement see to are improvement, believe but we our material, Not a levels back sequential and in results, pre-pandemic QX it a we slight was

really, Our that, a level. continue to assumes level. that or QX that We up going assume down in change forecast don't at that's

again, and dynamics, on that those to And doesn't procedures it levels would to at play our for -- prove would I think So, should would a but comments levels, maintaining now, be forecast. be I'd ready made would spike on into upside inventory XXXX, be that, we pre-pandemic based with in continue our elective there as QX, we the up XXXX that upside result. same to

Unidentified Analyst

Great, thank you.

Operator

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

Jailendra Singh

the well 'XX, as on I'm that what lightly some too. gross but for margin, terms where of Thank you assuming business? guys inflationary like of And a bit impact inflationary called times that across Can more and flesh you, And guys accelerating You everyone. are your I year? little next SG&A seeing be there out you you morning, out magnitude, pressure are pressures pressure? reminder sure in on understand the medical must the and good as

do $XX in sequential million the that of with I So, in SG&A expense quarter? reconcile decline the how

Ed Pesicka

can it, cover and some on color I'll so, it. Yes, Andy add

So, right. Jailendra, you're absolutely

inflation So, of all. let's quarter, first in look third the just at

tell So, or productivity quarter But we that that offset the and we really, you, neutralize the to inflation saw incredible quarter. third the volume the team leverage an virtually and will impact third incremental progressed. did quarter. our inflation leveraged ramp job both I in of on fixed as in cost the And

impact as So, the fourth team job quarter, did around But when about fourth I a that. quarter, is really guidance. fourth on expectation it we it we expectation SG&A. good margin of an the fourth the in caution, the reality going right, If quarter; inflation levers. the see in had abundance and we third as knows of again, you're is productivity the really caution. We the we well to on an third wanted continue and to our our full-year, at we the We're in Because that. make looked not inflation Again, at the have in prospectively, the had in in quarter, would both sure abundance to continue quarter. we we in the saw into to looked the team quarter, productivity. going focused is, And think frankly, that the to drive raised

will I not prospectively, to look 'XX, but continue at use And XXXX, to that productivity If at to maybe expectation from to a needed XXXX in continue and volume drive early the mitigate to at look to to continue as the continues integrate drive also price continue the further inflation time addition look short-term business. that at traditional appropriate, have the as we to appropriate, additional can broader-scale And to lastly, is the just where of risk pull standpoint, that. now our volume, levers, the into We're leverage. inflation. cost offset will and and to and levers. also the And between we fixed those We XXXX. positive to look pull into productivity time going volume it is to then that ways help

today. process what in that's So,

in QX, mitigation, inflation well about expectation levers to pull. broader So, to as that's and we the how we'll and in go, where we XXXX, continuing that as for the we're pull and inflation thought of into going expect levels the QX

you Andy, want that, anything please if add with to feel free. So, additional,

Andy Long

volumes, end Yes, up is drivers thing and And but I whatnot, think QX only mentioned. continue add again, question efficiencies we sequential at to Jailendra, you that, productivity, I of were there talk in inflationary did the would I'd the as But decline say, the to your I some would QX clearly, the about in pressures, the driving from [indiscernible] quarter, SG&A drive productivity. in and SG&A.

that And business. investments of say, also timing lumpiness of the just, or decline sequentially the some is in

Jailendra Singh

Any in color can a of like growth the coming expanding Got it. months? customers, in And then by you understand you Can of triggered mix growth quick be out us hospitals products. preparing there? provide you growth so, how and of year-over-year PPE for from the that follow-up, volume number guys called winter And category expansion? both terms much that the might sequential help

Ed Pesicka

this entire with PPE. makes volume also of of that is place, past us reason then, we One, to in PPE manufacturer level, all broad the just much we about see talked is, we've a then guess, across goes what base grade. continue a again, customers. wrap, And across strength. macro different next know, really, it is on at why everything I respirators, of categories, base gowns, broad scale. from the we Yes, pretty our saw we to PPE are of in And isolation NXXs you to back continuing drapes, surgical And customers gowns, protocols people coming and the use the it PPE. masks, other the do the medical what emergency are to the to authorization is, associated The and back elimination has that are one the buying use the

Americas in this, making So, is is that reason PPE I really the they to that we're impact to to products. have is us. important. The continue medical be it And with let's of grade lastly, most may I those seasonality, but all the not great high-grade chain now that's think forget in we that sell build next fabric prepared to we something of be -- their the continue Lexington, supply from there in If of about that factories, PPE the others some of those And so as think grow. then been customers make having or you expect coming fabric stockpiles, another continue in make virtually most our there, the our facility grow. versus why think we this are and right bulk about Carolina products. That's to may the the level right North

just It's footprint. that factors those It's So finished I goods. raw it's our we one to as where market vertical in helping deliver, on make Jailendra, makes from us factors category, It's us integration manufacturing it to all and the categories, scale, the the broad material the not to. think well it's ability as value we ability vertical that the different. all that are to integration, portfolio, have make our

Jailendra Singh

Great, thanks, guys.

Operator

you. Thank

of the question from from next comes Our Please Baird. Coldwell Eric go line ahead.

Eric Coldwell

to the revenue, in say very and in much. missed on XQ call. what then of the the morning. what in Thanks you wanted couple little pass impact at of I Did dig this the point? a EBIT a glove And XQ Good apologize; was the gloves specifically was I I bit. revenue through minutes

Andy Long

Andy. It's Eric. morning, Good

a So, back little yes, bit. stepping regarding just gloves, we're

aware year-to-date total the what the shifting distribution in expected those glove be of on centers on line we'll delays the we cost then we to and bottom we're top based bringing hit from now impact gloves And of of. that the transportation I about slip revised I sold shift on a And on talked that then margins based now through, to is reason the to on to on variability we quarters. QX quarterly QX, the QX. three into the saw million we think So, And that, and West really the in pass cost low through ports fair our Eric about terms the about there's there's QX, behind just line, of our really $XXX million. manufacturing, million our just of that time top to $XXX the line it impact the of is full-year million takes gave Coast and expectation in $XXX in at guidance gloves we're P&L QX congestion the total costs some the higher all to on into and amount the in get believe glove from through $XXX

and have have we QX. view So, the Global year. segment pocket some sequentially zero thing Product believe that for a our continue as the will we'll pocket, I is left that right we continue that still think to have into to margin, overall, QX, QX to I margin it important sequentially expansion from And expectation net an

Eric Coldwell

on on then Thanks, the contribution gloves positive, Andy, was quarterly What detail. the was negative. quarter for for though slightly EBIT? all itself, the neutral, the impact And

Andy Long

strongest put up recall, where where if of So you cost kind up, that impact of pricing the quarter our was to then to caught of QX cadence if place that And caught costs the is was follow QX strong was gloves, QX, quarter QX the QX. by you offset before pricing. into think

driven by the Product So, Global gloves. QX segment, terms was dynamic margins largely quarter in in that cost our of in difficult most

Ed Pesicka

in was quarter plan our favorable to but plan unfavorable versus prior-year. [Indiscernible] actually to the

Eric Coldwell

it Got suppose tempt I into quantifying could don't, I that. you and

Ed Pesicka

yes. be correct, would That

Eric Coldwell

direct continued And maybe growth try, lot of actually or patient rates about at what market think market you've the your better growth. in rate. growth think a I least or about talking is market doubled growing. above there's But to the the past, Got in talked to debate about that view, I

patient that to view? to I versus and kind that So, outperformance you're little more hoping get market what market the you detail on where seeing direct growing was a of see in

Ed Pesicka

Yes, the would we from we different a our we at so market, look I on what from that suppliers. -- hear couple use guess standpoint, you proxies

look we of competitors We from reality also the and we're are our we in customers see. growth rates what the seeing to at hear in we some market, at hear also our is, know what customers, from much greater our suppliers, look both seen are greater, historically we've market than year-to-date continue what again, we we the and on what what our our

And considering categories doctor major type of type benefit got some the diabetes, that of what to they also what are in what have procedures the you've generally care got bigger category the the wound faster some ostomy like would of ramping, in health, home, that's as we're are outpacing procedure, alone of general is then categories of it's one from growing to our of I home and Now and market that categories. remember things seeing goes the come seeing of elective also visit, are person type we when additional we other of and surgery now there. downstream line or that,

continue from what have data what seeing as why good we're than we we're points or we see hearing is to today. and better that the should that's much why So, say I

Andy Long

And Andy. Eric, it's

just we've force in in that business, the little where in where Just to is about a in the and both an to clearly don't color into organic expanding reinvesting of terms we maybe this well, currently. add new moving area geographies we the business, talk occupy the sales technology investments the investments as put

we're that's of result as and So, investments. of growth investing evidence a another just we're where seeing those where a

Eric Coldwell

recently headlines issues, -- working of for terms one just to to topic, share there's are gloves driver and get when labor be in your quality of If significant conditions, long-term them used them my I incredible back two, have And there's could and Owens actually a on is of can Asia kind in that the on only would I'd to be that. in new and where spot that But to product then the not give in more and would What taking some that trying be and it one impact your actually the marketplace on of quality, as company pricing off glove criminal marketplace? seem thoughts an pan on negative your Minor you of ask would organizations but love trust new. recycling in higher a like effectively that now been from more goodwill, capacity. assumption competition headlines & help people as having that rollout confident

Ed Pesicka

Sure.

Okay.

confidence making own facilities. our all I percentage of a what factors is and different. the gloves in see we're our think those customer that are we good gives we And absolutely

So, it's that from level China. some of operating control is vastly different and going glove into sourcing in company a

the foremost. that's and So, first

billion that the year, more about over a next we're all, lag process source suppliers beyond we disciplined rigorous of gloves that. us is to half we're, we gloves a incremental capacity that really, and talked continuing then do have Eric the a have gloves what very validate control we incremental to at gives which our and Second And that between in process making billion provide that a when put a past, factory.

manufacturers they're what's won't So, and regardless just offering the there. I has of we And what with and frankly lot what both or our that translate of has or and they're do in seen seeing there's think out been from because suppliers, that a business of that market. been customers recognized

that and yet. in pricing, it haven't product the it drastically issue seeing China, aspect delays, pricing amount made the are And of the creating coming because is market seen that products. change a But the Thailand. chain is ours in bit Regarding supply make we of shipping from is ours on we're we a other of China not

being about but labor read articles which helped We've do, recently you're route for the different We've So, the little issues. absolutely bit us it's gloves -- all that about us, has the a shipping different used right. are repacked. all a articles saw of

others. And other you be you that when selective much by leverage the so, whereas portion just can manufacturers a we that. make you And capacity different can can more gives again, control against having -- you of good a also yourself, than manufacturing be

the I we're So, that's strategy why actually from strategy think is that. right seeing benefit and our

Eric Coldwell

guys. much, very Thanks

Operator

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

Daniel Grosslight

Thanks renewed on contract, another strong comes renewal on taking of question It's here. the which for the the and year. quarter heels Premier earlier this you that great Vivian that congrats

with provide year a big you would of that large that in are any on before other any upcoming one, re-procurements update outstanding mentioned GPO so? think if be next Can the you and for renewal. of Trust I Health the other terms kind there or

Ed Pesicka

pandemic. Health Trust, during we're a that actively relationship them. working And relationship Yes. great the and got expanded with We've

ways So, process both. we're that's Premier trying just and Vivian going that be to going find and can dialogue, having through transparent open beneficial dialogue, where to to very through similar the

normal cycle just we that's the process a what one. we're So, of part are going of It's on for. that, that

that's So, out major the really last there. one that's

Daniel Grosslight

Got it.

a throwing now, free off continued and capital the Okay. your share pretty deployment year, debt the investments your you flow next And and healthy. priorities amount fair perhaps an pay Can rank business repurchase for in ratio you're leverage dividend, is down? cash increased

Ed Pesicka

the we've say want to don't just job we just last would but add the over made I done debt, and operating down has start the efficiency. paid two that, some while haven't that an debt, I'll Sure. team Andy drive can there. color I on excellent in focus debt, down paying initiatives more we additional because down investments years, in substantial site paid business to

nearly capital from continue the opportunities but business very one in profitable five that. profitable have standpoint. been We're about the going now be past standpoint. we what going been we that just yes, in to completely we well I we years. years. debt, provides business look it So, at operational could deployment deployment forward, investments, best our as to an of it and I disciplined below. at believe right ability as shared as we're think today to in operations. could to internal fungible long-term growth as to at the on have that we the wasn't reinvested Andy reinvest focused on well right, made debt, But If invest paid look going be investments, capital increases. going be still We're to provide inorganic we like shareholders, -- capital versus has as growth a for in or about long-term throughout to This continuing we in the seven, organic you're comments down yet as CapEx And we're from But the dividend think. in significant long-term we've buybacks this talked to

Andy Long

I thing strategy it's would and I that And nicely. to only covers very as, our a The really answer Andy. add think that's thorough Daniel,

This reading week another get upgraded the upgrade us think just levels, the did I it add from just debt weeks two, Moody's thing agencies. mention a of only couple is the the time, recognition in within I was last would of a ago. or we lower to

I that. to mention just So, wanted

Daniel Grosslight

Got it, very guys. helpful. Thanks,

Operator

last JPMorgan. our go comes of show I question Minchak Michael the you. from line Thank from Please ahead.

Michael Minchak

for thanks And the taking morning. question. Good

should puts margin pricing various think we XXXX. and business, and normalize of your How the As with has are gloves, we dynamics in some year, sort of drivers there past a around think the quite do on pests baseline about other business, months? takes that products we over bounced that right about XX you've unique bit some margin this the of profile global the for experienced if the obviously

Andy Long

morning. Yes, for question. good Michael, And the thanks

this right. absolutely of lot movement year. a has So, you're been There

much the quite in a really business cadence is year has even XXXX XXXX, in the to see the not of than been think we frankly, of the the cadence the applied seasonality disrupted back over year last going I typical them, And quarter very the where in certainly that global XXXX XX There a the you business by would is distortion no glove annualize cost months. right. just to caused our pricing. be quarter take too XX would want and within products to

XXXX QX be. Again, talked about when glove say as those said see starting to we talked planning to QX the contained moving being QX the delays thought with I'll costs, to that and which is normalization that XXXX, QX, we of year I that it as referenced, QX, were relatively we is shift would clean. clean I some with that cost exit is have we I originally, once think into in would back So, from good. to due slippage not transportation in in

at total of run kind would not You exiting where saw any business. year place the the year. for impact the doesn't take that outlook But rate in I our we're a

to level for products just to that have will global at annualize going expansion, sequentially QX want where expectation you'd won't be QX but we So, from of at our margin I think XXXX. into still QX

Michael Minchak

the this some markets, international you And healthcare, consumer talked either healthcare, you're progress any homes to efforts the both through mentioned clean sell on opportunity and products making Got PB then, room, about it, within point? at outside update previously you nursing retail, dental appreciate color that. of around the on those newer verticals, or into

Ed Pesicka

cost products. you And added the earlier another those, driving. are are of the launching healthcare Yes. been ancillary continued into really That those that their other as all retail, the markets our I factor global well of market. past of the When just exclude products into that's impact, have should as factors glove the global growth

driving another that's is that factor So, that growth.

Michael Minchak

it. Got the color. Appreciate

Operator

turn Thank Ed the go you. closing our this This over time. to Please concludes like Q&A to Mr. session back call I'd at for ahead. Pesicka comments.

Ed Pesicka

I'll for me. So, with just joining thanks everyone this. close

that integration that to we for sharing look And in XXXX. customers and customers the year think high have company that sure a while that And flexibility the fact extremely on insight could a supply. the this of they for profit our I'm path strengthen end continue that our the you this record pleased continuity lot financial to at position, value vertical then with onto the appreciate want and setting model the business I As I forward. know, providing and to looking which lastly, quality was our to quarter, gives into is that miss conversation if we've And that are really call make and focus service us of fourth from performance our tremendous then I standpoint. and the quarter, more quarter, the how performed a and don't in going the third about after a continuation forward really still of it exceptional it's the

you So, thank everyone.

Operator

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

now may You disconnect.