☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Virginia | 54-1701843 | ||||||||||||||||
(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
||||||||||||||||
9120 Lockwood Boulevard | Mechanicsville | Virginia | 23116 | ||||||||||||||
(Address of principal executive offices) | (Zip Code) | ||||||||||||||||
Post Office Box 27626,
Richmond, Virginia |
23261-7626 | ||||||||||||||||
(Mailing address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Common Stock, $2 par value per share | OMI | New York Stock Exchange |
Page | |||||||||||
Item 1. | |||||||||||
Item 2. | |||||||||||
Item 3. | |||||||||||
Item 4. | |||||||||||
Item 1. | |||||||||||
Item 1A. | |||||||||||
Item 2. | |||||||||||
Item 6. |
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||||||||||||||||||||||||
(in thousands, except per share data) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||
Net revenue | $ | 1,807,719 | $ | 2,376,705 | $ | 3,930,412 | $ | 4,727,544 | |||||||||||||||||||||||||||
Cost of goods sold | 1,538,312 | 2,090,187 | 3,392,445 | 4,164,407 | |||||||||||||||||||||||||||||||
Gross margin | 269,407 | 286,518 | 537,967 | 563,137 | |||||||||||||||||||||||||||||||
Distribution, selling and administrative expenses | 241,734 | 264,215 | 495,782 | 519,326 | |||||||||||||||||||||||||||||||
Acquisition-related and exit and realignment charges | 6,054 | 5,390 | 12,118 | 10,254 | |||||||||||||||||||||||||||||||
Other operating (income) expense, net | (577) | 1,014 | (2,886) | 1,056 | |||||||||||||||||||||||||||||||
Operating income | 22,196 | 15,899 | 32,953 | 32,501 | |||||||||||||||||||||||||||||||
Interest expense, net | 21,605 | 26,048 | 44,948 | 51,506 | |||||||||||||||||||||||||||||||
Other (income) expense, net | (4,552) | 731 | 294 | 3,464 | |||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | 5,143 | (10,880) | (12,289) | (22,469) | |||||||||||||||||||||||||||||||
Income tax provision (benefit) | 4,982 | (1,146) | (3,541) | (1,816) | |||||||||||||||||||||||||||||||
Income (loss) from continuing operations, net of tax | 161 | (9,734) | (8,748) | (20,653) | |||||||||||||||||||||||||||||||
Loss from discontinued operations, net of tax | (55,788) | (742) | (58,203) | (3,919) | |||||||||||||||||||||||||||||||
Net loss | $ | (55,627) | $ | (10,476) | $ | (66,951) | $ | (24,572) | |||||||||||||||||||||||||||
Income (loss) from continuing operations per common share: basic and diluted | $ | — | $ | (0.16) | $ | (0.14) | $ | (0.34) | |||||||||||||||||||||||||||
Loss from discontinued operations per common share: basic and diluted | (0.91) | (0.01) | (0.96) | (0.07) | |||||||||||||||||||||||||||||||
Net loss per common share: basic and diluted | $ | (0.91) | $ | (0.17) | $ | (1.10) | $ | (0.41) |
Three Months Ended June 30, |
Six Months Ended
June 30, |
||||||||||||||||||||||||||||||||||||||||
(in thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||||||||
Net loss | $ | (55,627) | $ | (10,476) | $ | (66,951) | $ | (24,572) | |||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||||||||||||||||||||
Currency translation adjustments (net of income tax of $0 in 2020 and 2019) | 30,008 | 7,452 | 1,830 | 3,245 | |||||||||||||||||||||||||||||||||||||
Change in unrecognized net periodic pension costs (net of income tax of $44 and $88 in 2020, and $63 and $126 in 2019) | 595 | 197 | 765 | 394 | |||||||||||||||||||||||||||||||||||||
Net unrealized loss on derivative instruments and other (net of income tax benefit of $238 and $4,064 in 2020, and $2,662 and $3,641 in 2019) | (76) | (5,262) | (11,473) | (7,675) | |||||||||||||||||||||||||||||||||||||
Total other comprehensive income (loss), net of tax | 30,527 | 2,387 | (8,878) | (4,036) | |||||||||||||||||||||||||||||||||||||
Comprehensive loss | $ | (25,100) | $ | (8,089) | $ | (75,829) | $ | (28,608) |
June 30, | December 31, | ||||||||||
(in thousands, except per share data) | 2020 | 2019 | |||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 101,276 | $ | 67,030 | |||||||
Accounts receivable, net of allowances of $23,319 and $21,015 | 633,647 | 674,706 | |||||||||
Merchandise inventories | 1,040,861 | 1,146,192 | |||||||||
Other current assets | 175,244 | 79,372 | |||||||||
Current assets of discontinued operations | — | 439,983 | |||||||||
Total current assets | 1,951,028 | 2,407,283 | |||||||||
Property and equipment, net of accumulated depreciation of $264,169 and $245,718 | 297,033 | 315,427 | |||||||||
Operating lease assets | 142,200 | 142,219 | |||||||||
Goodwill | 391,670 | 393,181 | |||||||||
Intangible assets, net | 262,539 | 285,018 | |||||||||
Other assets, net | 93,316 | 99,956 | |||||||||
Total assets | $ | 3,137,786 | $ | 3,643,084 | |||||||
Liabilities and equity | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | 824,131 | $ | 808,035 | |||||||
Accrued payroll and related liabilities | 54,445 | 53,584 | |||||||||
Other current liabilities | 317,658 | 231,029 | |||||||||
Current liabilities of discontinued operations | — | 323,511 | |||||||||
Total current liabilities | 1,196,234 | 1,416,159 | |||||||||
Long-term debt, excluding current portion | 1,269,854 | 1,508,415 | |||||||||
Operating lease liabilities, excluding current portion | 117,800 | 117,080 | |||||||||
Deferred income taxes | 41,430 | 40,550 | |||||||||
Other liabilities | 117,306 | 98,726 | |||||||||
Total liabilities | 2,742,624 | 3,180,930 | |||||||||
Commitments and contingencies | |||||||||||
Equity | |||||||||||
Common stock, par value $2 per share; authorized - 200,000 shares; issued and outstanding - 63,737 shares and 62,843 shares | 127,474 | 125,686 | |||||||||
Paid-in capital | 258,733 | 251,401 | |||||||||
Retained earnings | 70,540 | 137,774 | |||||||||
Accumulated other comprehensive loss | (61,585) | (52,707) | |||||||||
Total equity | 395,162 | 462,154 | |||||||||
Total liabilities and equity | $ | 3,137,786 | $ | 3,643,084 |
Six Months Ended June 30, | |||||||||||||||||
(in thousands) | 2020 | 2019 | |||||||||||||||
Operating activities: | |||||||||||||||||
Net loss | $ | (66,951) | $ | (24,572) | |||||||||||||
Adjustments to reconcile net loss to cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization | 48,804 | 58,902 | |||||||||||||||
Share-based compensation expense | 7,814 | 8,093 | |||||||||||||||
Loss on divestiture | 65,472 | — | |||||||||||||||
Provision for losses on accounts receivable | 7,589 | 6,534 | |||||||||||||||
Deferred income tax expense (benefit) | 4,269 | (14,597) | |||||||||||||||
Changes in operating lease right-of-use assets and lease liabilities | (1,029) | (616) | |||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||
Accounts receivable | 37,154 | (23,346) | |||||||||||||||
Merchandise inventories | 107,083 | 52,346 | |||||||||||||||
Accounts payable | 16,395 | (71,704) | |||||||||||||||
Net change in other assets and liabilities | (76,289) | 32,226 | |||||||||||||||
Other, net | 146 | 5,748 | |||||||||||||||
Cash provided by operating activities | 150,457 | 29,014 | |||||||||||||||
Investing activities: | |||||||||||||||||
Proceeds from divestiture | 133,000 | — | |||||||||||||||
Additions to property and equipment | (8,733) | (21,020) | |||||||||||||||
Additions to computer software | (3,409) | (4,511) | |||||||||||||||
Proceeds from sale of property and equipment | 69 | 339 | |||||||||||||||
Proceeds from cash surrender value of life insurance policies | 6,032 | — | |||||||||||||||
Cash provided by (used for) investing activities | 126,959 | (25,192) | |||||||||||||||
Financing activities: | |||||||||||||||||
Proceeds from issuance of debt | 150,000 | — | |||||||||||||||
(Repayments) borrowings under revolving credit facility | (47,900) | 19,900 | |||||||||||||||
Repayments of debt | (258,005) | (24,788) | |||||||||||||||
Financing costs paid | (10,367) | (4,313) | |||||||||||||||
Cash dividends paid | (311) | (4,918) | |||||||||||||||
Other, net | (4,479) | (1,934) | |||||||||||||||
Cash used for financing activities | (171,062) | (16,053) | |||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 5,412 | 203 | |||||||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 111,766 | (12,028) | |||||||||||||||
Cash, cash equivalents and restricted cash at beginning of period | 84,687 | 103,367 | |||||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 196,453 | $ | 91,339 | |||||||||||||
Supplemental disclosure of cash flow information: | |||||||||||||||||
Income taxes paid (received), net of refunds | $ | 5,975 | $ | (13,929) | |||||||||||||
Interest paid | $ | 43,840 | $ | 53,183 |
(in thousands, except per share data) |
Common
Shares Outstanding |
Common
Stock ($2 par value ) |
Paid-In
Capital |
Retained
Earnings |
Accumulated
Other Comprehensive Loss |
Total
Equity |
|||||||||||||||||||||||||||||
Balance, December 31, 2018 | 62,294 | $ | 124,588 | $ | 238,773 | $ | 200,670 | $ | (45,612) | $ | 518,419 | ||||||||||||||||||||||||
Net loss | (14,096) | (14,096) | |||||||||||||||||||||||||||||||||
Other comprehensive loss | (6,423) | (6,423) | |||||||||||||||||||||||||||||||||
Dividends declared ($0.0025 per share) | (119) | (119) | |||||||||||||||||||||||||||||||||
Share-based compensation expense, exercises and other | 642 | 1,284 | 2,774 | 4,058 | |||||||||||||||||||||||||||||||
Balance, March 31, 2019 | 62,936 | 125,872 | 241,547 | 186,455 | (52,035) | 501,839 | |||||||||||||||||||||||||||||
Net loss | (10,476) | (10,476) | |||||||||||||||||||||||||||||||||
Other comprehensive income | 2,387 | 2,387 | |||||||||||||||||||||||||||||||||
Dividends declared ($0.0025 per share) | (114) | (114) | |||||||||||||||||||||||||||||||||
Share-based compensation expense, exercises and other | 28 | 56 | 3,209 | 3,265 | |||||||||||||||||||||||||||||||
Balance, June 30, 2019 | 62,964 | $ | 125,928 | $ | 244,756 | $ | 175,865 | $ | (49,648) | $ | 496,901 | ||||||||||||||||||||||||
Balance, December 31, 2019 | 62,843 | $ | 125,686 | $ | 251,401 | $ | 137,774 | $ | (52,707) | $ | 462,154 | ||||||||||||||||||||||||
Net loss | (11,324) | (11,324) | |||||||||||||||||||||||||||||||||
Other comprehensive loss | (39,405) | (39,405) | |||||||||||||||||||||||||||||||||
Dividends declared ($0.0025 per share) | (127) | (127) | |||||||||||||||||||||||||||||||||
Share-based compensation expense, exercises and other | 42 | 84 | 4,956 | 5,040 | |||||||||||||||||||||||||||||||
Balance, March 31, 2020 | 62,885 | 125,770 | 256,357 | 126,323 | (92,112) | 416,338 | |||||||||||||||||||||||||||||
Net loss | (55,627) | (55,627) | |||||||||||||||||||||||||||||||||
Other comprehensive income | 30,527 | 30,527 | |||||||||||||||||||||||||||||||||
Dividends declared ($0.0025 per share) | (156) | (156) | |||||||||||||||||||||||||||||||||
Share-based compensation expense, exercises and other | 852 | 1,704 | 2,376 | 4,080 | |||||||||||||||||||||||||||||||
Balance, June 30, 2020 | 63,737 | $ | 127,474 | $ | 258,733 | $ | 70,540 | $ | (61,585) | $ | 395,162 |
June 30, 2020 | December 31, 2019 | ||||||||||
Cash and cash equivalents | $ | 101,276 | $ | 67,030 | |||||||
Restricted cash included in Other current assets | 78,854 | — | |||||||||
Restricted cash included in Other assets, net | 16,323 | 16,261 | |||||||||
Cash of discontinued operations | — | 1,396 | |||||||||
Total cash, cash equivalents and restricted cash | $ | 196,453 | $ | 84,687 |
Three Months Ended June 30, |
Six Months Ended
June 30, |
|||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||||||
Net revenue | $ | 104,417 | $ | 107,495 | $ | 226,759 | $ | 218,043 | ||||||||||||||||||||||||||||||
Cost of goods sold | 21,817 | 25,585 | 53,923 | 54,330 | ||||||||||||||||||||||||||||||||||
Gross margin | 82,600 | 81,910 | 172,836 | 163,713 | ||||||||||||||||||||||||||||||||||
Distribution, selling, and administrative expenses | 76,560 | 80,954 | 157,512 | 163,997 | ||||||||||||||||||||||||||||||||||
Loss on divestiture | 56,392 | — | 65,472 | — | ||||||||||||||||||||||||||||||||||
Acquisition-related and exit and realignment charges | 4,554 | 265 | 4,825 | 391 | ||||||||||||||||||||||||||||||||||
Other operating expense (income), net | 73 | (285) | (388) | (472) | ||||||||||||||||||||||||||||||||||
Operating income (loss) | (54,979) | 976 | (54,585) | (203) | ||||||||||||||||||||||||||||||||||
Interest expense, net | 1,424 | 1,635 | 3,144 | 3,275 | ||||||||||||||||||||||||||||||||||
Loss from discontinued operations before income taxes | (56,403) | (659) | (57,729) | (3,478) | ||||||||||||||||||||||||||||||||||
Income tax (benefit) provision from discontinued operations | (615) | 83 | 474 | 441 | ||||||||||||||||||||||||||||||||||
Loss from discontinued operations, net of tax | $ | (55,788) | $ | (742) | $ | (58,203) | $ | (3,919) |
December 31, 2019 | |||||||||||
Assets of discontinued operations | |||||||||||
Cash and cash equivalents | $ | 1,396 | |||||||||
Accounts receivable, net | 78,643 | ||||||||||
Merchandise inventories | 16,058 | ||||||||||
Other current assets | 188,853 | ||||||||||
Current assets of discontinued operations | 284,950 | ||||||||||
Property and equipment, net | 65,710 | ||||||||||
Intangible assets, net | 6,579 | ||||||||||
Other assets, net | 27,431 | ||||||||||
Operating lease assets | 87,425 | ||||||||||
Valuation allowance on disposal group classified as held-for-sale | (32,112) | ||||||||||
Total assets of discontinued operations | $ | 439,983 | |||||||||
Liabilities of discontinued operations | |||||||||||
Accounts payable | $ | 53,981 | |||||||||
Other current liabilities | 182,980 | ||||||||||
Current liabilities of discontinued operations | 236,961 | ||||||||||
Long-term debt, excluding current portion | 5,523 | ||||||||||
Operating lease liabilities, excluding current portion | 76,270 | ||||||||||
Other liabilities | 4,757 | ||||||||||
Total liabilities of discontinued operations | $ | 323,511 |
June 30, 2020 | June 30, 2019 | ||||||||||
Operating Activities: | |||||||||||
Depreciation and amortization | $ | — | $ | 10,834 | |||||||
Loss on divestiture | 65,472 | — | |||||||||
Investing Activities: | |||||||||||
Capital expenditures | 3,027 | 14,211 |
Global Solutions | Global Products | Consolidated | |||||||||||||||
Carrying amount of goodwill, December 31, 2019 | $ | 283,905 | $ | 109,276 | $ | 393,181 | |||||||||||
Currency translation adjustments | — | (1,511) | (1,511) | ||||||||||||||
Carrying amount of goodwill, June 30, 2020 | $ | 283,905 | $ | 107,765 | $ | 391,670 |
June 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Customer
Relationships |
Tradenames |
Other
Intangibles |
Customer
Relationships |
Tradenames |
Other
Intangibles |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross intangible assets | $ | 269,090 | $ | 90,000 | $ | 43,230 | $ | 270,693 | $ | 90,000 | $ | 43,055 | |||||||||||||||||||||||||||||||||||||||||||||||
Accumulated amortization | (107,341) | (20,701) | (11,739) | (92,947) | (16,520) | (9,263) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net intangible assets | $ | 161,749 | $ | 69,299 | $ | 31,491 | $ | 177,746 | $ | 73,480 | $ | 33,792 | |||||||||||||||||||||||||||||||||||||||||||||||
Weighted average useful life | 10 years | 11 years | 8 years | 10 years | 11 years | 8 years |
Three Months Ended June 30, |
Six Months Ended
June 30, |
||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
Global Solutions segment | $ | 1,713 | $ | 1,614 | $ | 3,542 | $ | 2,180 | |||||||||||||||||||||||||||
Global Products segment | 487 | 103 | 487 | 241 | |||||||||||||||||||||||||||||||
Total exit and realignment charges | $ | 2,200 | $ | 1,717 | $ | 4,029 | $ | 2,421 |
Total | ||||||||
Accrued exit and realignment costs, December 31, 2019 | $ | 8,162 | ||||||
Provision for exit and realignment activities: | ||||||||
Severance | 1,391 | |||||||
Information system restructuring costs | 183 | |||||||
Other | 255 | |||||||
Cash payments | (5,799) | |||||||
Accrued exit and realignment costs, March 31, 2020 | 4,192 | |||||||
Provision for exit and realignment activities: | ||||||||
Severance | 809 | |||||||
Information system restructuring costs | 671 | |||||||
Other | 720 | |||||||
Cash payments | (2,072) | |||||||
Accrued exit and realignment costs, June 30, 2020 | $ | 4,320 | ||||||
Accrued exit and realignment costs, December 31, 2018 | $ | 7,477 | ||||||
Provision for exit and realignment activities: | ||||||||
Severance | 360 | |||||||
Information system restructuring costs | 261 | |||||||
Other | 83 | |||||||
Cash payments | (2,206) | |||||||
Accrued exit and realignment costs, March 31, 2019 | 5,975 | |||||||
Provision for exit and realignment activities: | ||||||||
Severance | 1,008 | |||||||
Information system restructuring costs | 705 | |||||||
Other | 4 | |||||||
Cash payments | (2,301) | |||||||
Accrued exit and realignment costs, June 30, 2019 | $ | 5,391 |
June 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||||
Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||||||||||||||||||||||
3.875% Senior Notes, due September 2021 | $ | 178,510 | $ | 175,135 | $ | 236,234 | $ | 229,356 | |||||||||||||||||||||||||||
4.375% Senior Notes, due December 2024 | 244,619 | 212,994 | 273,978 | 212,086 | |||||||||||||||||||||||||||||||
Term A Loans, due July 2022 | 207,206 | 210,763 | 377,420 | 383,050 | |||||||||||||||||||||||||||||||
Term B Loan, due April 2025 | 478,729 | 445,505 | 480,337 | 442,217 | |||||||||||||||||||||||||||||||
Revolver | 130,000 | 130,000 | 177,900 | 177,900 | |||||||||||||||||||||||||||||||
Receivables Securitization Program | 147,339 | 150,000 | — | — | |||||||||||||||||||||||||||||||
Finance leases and other | 12,251 | 12,251 | 13,783 | 13,783 | |||||||||||||||||||||||||||||||
Total debt | 1,398,654 | 1,336,648 | 1,559,652 | 1,458,392 | |||||||||||||||||||||||||||||||
Less current maturities | (128,800) | (126,656) | (51,237) | (51,237) | |||||||||||||||||||||||||||||||
Long-term debt | $ | 1,269,854 | $ | 1,209,992 | $ | 1,508,415 | $ | 1,407,155 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
Service cost | $ | 357 | $ | 330 | $ | 708 | $ | 659 | |||||||||||||||||||||||||||
Interest cost | 496 | 600 | 990 | 1,200 | |||||||||||||||||||||||||||||||
Recognized net actuarial loss | 214 | 260 | 428 | 520 | |||||||||||||||||||||||||||||||
Net periodic benefit cost | $ | 1,067 | $ | 1,190 | $ | 2,126 | $ | 2,379 |
Derivative Assets | Derivative Liabilities | ||||||||||||||||||||||||||||||||||||||||||||||
Notional Amount | Maturity Date | Classification | Fair Value | Classification | Fair Value | ||||||||||||||||||||||||||||||||||||||||||
Cash flow hedges | |||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | $ | 450,000 | May 2022 and May 2025 | Other assets, net | $ | — | Other liabilities | $ | 32,974 | ||||||||||||||||||||||||||||||||||||||
Economic (non-designated) hedges | |||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency contracts | $ | 22,600 | July 2020 | Other assets, net | $ | 13 | Other liabilities | $ | — |
Derivative Assets | Derivative Liabilities | ||||||||||||||||||||||||||||||||||||||||||||||
Notional Amount | Maturity Date | Classification | Fair Value | Classification | Fair Value | ||||||||||||||||||||||||||||||||||||||||||
Cash flow hedges | |||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | $ | 450,000 | May 2022 and May 2025 | Other assets, net | $ | — | Other liabilities | $ | 17,436 |
Amount of Gain/(Loss) Recognized in Other Comprehensive Loss | Location of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | Total Amount of Income/(Expense) Line Items Presented in the Consolidated Statement of Operations in Which the Effects are Recorded | Amount of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2020 | Six Months Ended June 30, 2020 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2020 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | $ | (2,439) | $ | (19,397) | Interest expense, net | $ | (21,605) | $ | (44,948) | $ | (2,601) | $ | (3,860) |
Amount of Gain/(Loss) Recognized in Other Comprehensive Loss | Location of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | Total Amount of Income/(Expense) Line Items Presented in the Consolidated Statement of Operations in Which the Effects are Recorded | Amount of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | $ | (8,162) | $ | (12,577) | Interest expense, net | $ | (26,048) | $ | (51,506) | $ | (361) | $ | (682) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency contracts | $ | 191 | $ | 636 | Cost of goods sold | $ | (2,090,187) | $ | (4,164,407) | $ | 314 | $ | 57 |
Three Months Ended June 30, |
Six Months Ended
June 30, |
||||||||||||||||||||||||||||||||||
(in thousands, except per share data) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||
Weighted average shares outstanding - basic and diluted | 61,128 | 59,805 | 60,819 | 60,403 | |||||||||||||||||||||||||||||||
Income (loss) from continuing operations | $ | 161 | $ | (9,734) | $ | (8,748) | $ | (20,653) | |||||||||||||||||||||||||||
Basic and diluted per share | $ | — | $ | (0.16) | $ | (0.14) | $ | (0.34) | |||||||||||||||||||||||||||
Loss from discontinued operations | $ | (55,788) | $ | (742) | $ | (58,203) | $ | (3,919) | |||||||||||||||||||||||||||
Basic and diluted per share | $ | (0.91) | $ | (0.01) | $ | (0.96) | $ | (0.07) | |||||||||||||||||||||||||||
Net loss | $ | (55,627) | $ | (10,476) | $ | (66,951) | $ | (24,572) | |||||||||||||||||||||||||||
Basic and diluted per share | $ | (0.91) | $ | (0.17) | $ | (1.10) | $ | (0.41) |
Retirement Plans |
Currency
Translation Adjustments |
Derivatives and Other | Total | ||||||||||||||||||||
Accumulated other comprehensive loss, March 31, 2020 | $ | (14,521) | $ | (53,479) | $ | (24,112) | $ | (92,112) | |||||||||||||||
Other comprehensive income (loss) before reclassifications | 14,428 | (2,439) | 11,989 | ||||||||||||||||||||
Income tax | — | — | 428 | 428 | |||||||||||||||||||
Other comprehensive income (loss) before reclassifications, net of tax | — | 14,428 | (2,011) | 12,417 | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | 639 | 15,580 | 2,601 | 18,820 | |||||||||||||||||||
Income tax | (44) | — | (666) | (710) | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax | 595 | 15,580 | 1,935 | 18,110 | |||||||||||||||||||
Other comprehensive income (loss) | 595 | 30,008 | (76) | 30,527 | |||||||||||||||||||
Accumulated other comprehensive loss, June 30, 2020 | $ | (13,926) | $ | (23,471) | $ | (24,188) | $ | (61,585) |
Retirement Plans | Currency Translation Adjustments | Derivatives and Other | Total | ||||||||||||||||||||
Accumulated other comprehensive loss, March 31, 2019 | $ | (7,949) | $ | (36,758) | $ | (7,328) | $ | (52,035) | |||||||||||||||
Other comprehensive income (loss) before reclassifications | — | 7,452 | (7,971) | (519) | |||||||||||||||||||
Income tax | — | — | 2,678 | 2,678 | |||||||||||||||||||
Other comprehensive income (loss) before reclassifications, net of tax | — | 7,452 | (5,293) | 2,159 | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | 260 | — | 47 | 307 | |||||||||||||||||||
Income tax | (63) | — | (16) | (79) | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax | 197 | — | 31 | 228 | |||||||||||||||||||
Other comprehensive income (loss) | 197 | 7,452 | (5,262) | 2,387 | |||||||||||||||||||
Accumulated other comprehensive loss, June 30, 2019 | $ | (7,752) | $ | (29,306) | $ | (12,590) | $ | (49,648) |
Retirement Plans | Currency Translation Adjustments | Derivatives and Other | Total | ||||||||||||||||||||
Accumulated other comprehensive loss, December 31, 2019 | $ | (14,691) | $ | (25,301) | $ | (12,715) | $ | (52,707) | |||||||||||||||
Other comprehensive loss before reclassifications | — | (13,750) | (19,397) | (33,147) | |||||||||||||||||||
Income tax | — | — | 5,074 | 5,074 | |||||||||||||||||||
Other comprehensive loss before reclassifications, net of tax | — | (13,750) | (14,323) | (28,073) | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | 853 | 15,580 | 3,860 | 20,293 | |||||||||||||||||||
Income tax | (88) | — | (1,010) | (1,098) | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax | 765 | 15,580 | 2,850 | 19,195 | |||||||||||||||||||
Other comprehensive income (loss) | 765 | 1,830 | (11,473) | (8,878) | |||||||||||||||||||
Accumulated other comprehensive loss, June 30, 2020 | $ | (13,926) | $ | (23,471) | $ | (24,188) | $ | (61,585) |
Retirement Plans |
Currency
Translation Adjustments |
Derivatives and Other | Total | ||||||||||||||||||||
Accumulated other comprehensive loss, December 31, 2018 | $ | (8,146) | $ | (32,551) | $ | (4,915) | $ | (45,612) | |||||||||||||||
Other comprehensive income (loss) before reclassifications | — | 3,245 | (11,941) | (8,696) | |||||||||||||||||||
Income tax | — | — | 3,831 | 3,831 | |||||||||||||||||||
Other comprehensive income (loss) before reclassifications, net of tax | — | 3,245 | (8,110) | (4,865) | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | 520 | — | 625 | 1,145 | |||||||||||||||||||
Income tax | (126) | — | (190) | (316) | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax | 394 | — | 435 | 829 | |||||||||||||||||||
Other comprehensive income (loss) | 394 | 3,245 | (7,675) | (4,036) | |||||||||||||||||||
Accumulated other comprehensive loss, June 30, 2019 | $ | (7,752) | $ | (29,306) | $ | (12,590) | $ | (49,648) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
Net revenue: | |||||||||||||||||||||||||||||||||||
Global Solutions | $ | 1,548,639 | $ | 2,134,469 | $ | 3,396,233 | $ | 4,258,068 | |||||||||||||||||||||||||||
Global Products | 370,401 | 363,889 | 761,593 | 710,974 | |||||||||||||||||||||||||||||||
Total segment net revenue | 1,919,040 | 2,498,358 | 4,157,826 | 4,969,042 | |||||||||||||||||||||||||||||||
Inter-segment revenue | |||||||||||||||||||||||||||||||||||
Global Products | (111,321) | (121,653) | (227,414) | (241,498) | |||||||||||||||||||||||||||||||
Total inter-segment revenue | (111,321) | (121,653) | (227,414) | (241,498) | |||||||||||||||||||||||||||||||
Consolidated net revenue | $ | 1,807,719 | $ | 2,376,705 | $ | 3,930,412 | $ | 4,727,544 | |||||||||||||||||||||||||||
Operating income: | |||||||||||||||||||||||||||||||||||
Global Solutions | $ | (10,141) | $ | 17,734 | $ | (2,450) | $ | 39,375 | |||||||||||||||||||||||||||
Global Products | 51,774 | 17,949 | 70,345 | 25,673 | |||||||||||||||||||||||||||||||
Inter-segment eliminations | (2,772) | (729) | (1,603) | 1,017 | |||||||||||||||||||||||||||||||
Intangible amortization | (10,611) | (12,756) | (21,221) | (22,781) | |||||||||||||||||||||||||||||||
Acquisition-related and exit and realignment charges | (6,054) | (5,390) | (12,118) | (10,254) | |||||||||||||||||||||||||||||||
Other (1)
|
— | (909) | — | (529) | |||||||||||||||||||||||||||||||
Consolidated operating income | $ | 22,196 | $ | 15,899 | $ | 32,953 | $ | 32,501 | |||||||||||||||||||||||||||
Depreciation and amortization: | |||||||||||||||||||||||||||||||||||
Global Solutions | $ | 11,065 | $ | 9,715 | $ | 21,701 | $ | 20,215 | |||||||||||||||||||||||||||
Global Products | 13,826 | 15,246 | 27,103 | 27,853 | |||||||||||||||||||||||||||||||
Discontinued operations | — | 5,221 | — | 10,834 | |||||||||||||||||||||||||||||||
Consolidated depreciation and amortization | $ | 24,891 | $ | 30,182 | $ | 48,804 | $ | 58,902 | |||||||||||||||||||||||||||
Capital expenditures: | |||||||||||||||||||||||||||||||||||
Global Solutions | $ | 2,931 | $ | 1,196 | $ | 3,963 | $ | 4,537 | |||||||||||||||||||||||||||
Global Products | 2,135 | 3,880 | 5,152 | 6,783 | |||||||||||||||||||||||||||||||
Discontinued operations | 1,363 | 6,176 | 3,027 | 14,211 | |||||||||||||||||||||||||||||||
Consolidated capital expenditures | $ | 6,429 | $ | 11,252 | $ | 12,142 | $ | 25,531 |
June 30, 2020 | December 31, 2019 | ||||||||||
Total assets: | |||||||||||
Global Solutions | $ | 2,057,125 | $ | 2,205,134 | |||||||
Global Products | 979,385 | 930,937 | |||||||||
Segment assets | 3,036,510 | 3,136,071 | |||||||||
Discontinued operations | — | 439,983 | |||||||||
Cash and cash equivalents | 101,276 | 67,030 | |||||||||
Consolidated total assets | $ | 3,137,786 | $ | 3,643,084 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
Net revenue: | |||||||||||||||||||||||||||||||||||
United States | $ | 1,737,615 | $ | 2,270,768 | $ | 3,771,069 | $ | 4,574,680 | |||||||||||||||||||||||||||
International | 70,104 | 105,937 | 159,343 | 152,864 | |||||||||||||||||||||||||||||||
Consolidated net revenue | $ | 1,807,719 | $ | 2,376,705 | $ | 3,930,412 | $ | 4,727,544 |
Three Months Ended June 30, | Change | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2020 | 2019 | $ | % | |||||||||||||||||||||||||||||||
Global Solutions | $ | 1,548,639 | $ | 2,134,469 | $ | (585,830) | (27.4) | % | |||||||||||||||||||||||||||
Global Products | 370,401 | 363,889 | 6,512 | 1.8 | % | ||||||||||||||||||||||||||||||
Inter-segment | (111,321) | (121,653) | 10,332 | 8.5 | % | ||||||||||||||||||||||||||||||
Net revenue | $ | 1,807,719 | $ | 2,376,705 | $ | (568,986) | (23.9) | % |
Six Months Ended June 30, | Change | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2020 | 2019 | $ | % | |||||||||||||||||||||||||||||||
Global Solutions | $ | 3,396,233 | $ | 4,258,068 | $ | (861,835) | (20.2) | % | |||||||||||||||||||||||||||
Global Products | 761,593 | 710,974 | 50,619 | 7.1 | % | ||||||||||||||||||||||||||||||
Inter-segment | (227,414) | (241,498) | 14,084 | 5.8 | % | ||||||||||||||||||||||||||||||
Net revenue | $ | 3,930,412 | $ | 4,727,544 | $ | (797,132) | (16.9) | % |
Three Months Ended June 30, | Change | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2020 | 2019 | $ | % | |||||||||||||||||||||||||||||||
Cost of goods sold | $ | 1,538,312 | $ | 2,090,187 | $ | (551,875) | (26.4) | % |
Six Months Ended June 30, | Change | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2020 | 2019 | $ | % | |||||||||||||||||||||||||||||||
Cost of goods sold | $ | 3,392,445 | $ | 4,164,407 | $ | (771,962) | (18.5) | % |
Three Months Ended June 30, | Change | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2020 | 2019 | $ | % | |||||||||||||||||||||||||||||||
Gross margin | $ | 269,407 | $ | 286,518 | $ | (17,111) | (6.0) | % | |||||||||||||||||||||||||||
As a % of net revenue | 14.90 | % | 12.06 | % |
Six Months Ended June 30, | Change | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2020 | 2019 | $ | % | |||||||||||||||||||||||||||||||
Gross margin | $ | 537,967 | 563,137 | $ | (25,170) | (4.5) | % | ||||||||||||||||||||||||||||
As a % of net revenue | 13.69 | % | 11.91 | % |
Three Months Ended June 30, | Change | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2020 | 2019 | $ | % | |||||||||||||||||||||||||||||||
Distribution, selling and administrative expenses | $ | 241,734 | $ | 264,215 | $ | (22,481) | (8.5) | % | |||||||||||||||||||||||||||
As a % of net revenue | 13.37 | % | 11.12 | % | |||||||||||||||||||||||||||||||
Acquisition-related and exit and realignment charges | $ | 6,054 | $ | 5,390 | $ | 664 | 12.3 | % | |||||||||||||||||||||||||||
Other operating (income) expense, net | $ | (577) | $ | 1,014 | $ | (1,591) | (156.9) | % |
Six Months Ended June 30, | Change | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2020 | 2019 | $ | % | |||||||||||||||||||||||||||||||
Distribution, selling and administrative expenses | $ | 495,782 | $ | 519,326 | $ | (23,544) | (4.5) | % | |||||||||||||||||||||||||||
As a % of net revenue | 12.61 | % | 10.99 | % | |||||||||||||||||||||||||||||||
Acquisition-related and exit and realignment charges | $ | 12,118 | $ | 10,254 | $ | 1,864 | 18.2 | % | |||||||||||||||||||||||||||
Other operating (income) expense, net | $ | (2,886) | $ | 1,056 | $ | (3,942) | (373.3) | % |
Three Months Ended June 30, | Change | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2020 | 2019 | $ | % | |||||||||||||||||||||||||||||||
Interest expense, net | $ | 21,605 | $ | 26,048 | $ | (4,443) | (17.1) | % | |||||||||||||||||||||||||||
Effective interest rate | 5.63 | % | 7.20 | % |
Six Months Ended June 30, | Change | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2020 | 2019 | $ | % | |||||||||||||||||||||||||||||||
Interest expense, net | $ | 44,948 | $ | 51,506 | $ | (6,558) | (12.7) | % | |||||||||||||||||||||||||||
Effective interest rate | 6.50 | % | 6.86 | % |
Three Months Ended June 30, | Change | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2020 | 2019 | $ | % | |||||||||||||||||||||||||||||||
Other (income) expense, net | $ | (4,552) | $ | 731 | $ | (5,283) | (722.7) | % |
Six Months Ended June 30, | Change | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2020 | 2019 | $ | % | |||||||||||||||||||||||||||||||
Other expense, net | $ | 294 | $ | 3,464 | $ | (3,170) | (91.5) | % |
Three Months Ended June 30, | Change | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2020 | 2019 | $ | % | |||||||||||||||||||||||||||||||
Income tax provision (benefit) | $ | 4,982 | $ | (1,146) | $ | 6,128 | 534.7 | % | |||||||||||||||||||||||||||
Effective tax rate | 96.9 | % | 10.5 | % |
Six Months Ended June 30, | Change | ||||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2020 | 2019 | $ | % | |||||||||||||||||||||||||||||||
Income tax benefit | $ | (3,541) | (1,816) | $ | (1,725) | (95.0) | % | ||||||||||||||||||||||||||||
Effective tax rate | 28.8 | % | 8.1 | % |
June 30, 2020 | December 31, 2019 | Change | |||||||||||||||||||||||||||
(Dollars in thousands) | $ | % | |||||||||||||||||||||||||||
Cash and cash equivalents | $ | 101,276 | $ | 67,030 | $ | 34,246 | 51.1 | % | |||||||||||||||||||||
Accounts receivable, net of allowances | $ | 633,647 | $ | 674,706 | $ | (41,059) | (6.1) | % | |||||||||||||||||||||
Consolidated DSO (1)
|
29.0 | 27.1 | |||||||||||||||||||||||||||
Merchandise inventories | $ | 1,040,861 | $ | 1,146,192 | $ | (105,331) | (9.2) | % | |||||||||||||||||||||
Consolidated inventory turnover (2)
|
5.7 | 6.6 | |||||||||||||||||||||||||||
Accounts payable | $ | 824,131 | $ | 808,035 | $ | 16,096 | 2.0 | % |
(Dollars in thousands) | 2020 | 2019 | |||||||||
Net cash provided by (used for): | |||||||||||
Operating activities | $ | 150,457 | $ | 29,014 | |||||||
Investing activities | 126,959 | (25,192) | |||||||||
Financing activities | (171,062) | (16,053) | |||||||||
Effect of exchange rate changes | 5,412 | 203 | |||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | $ | 111,766 | $ | (12,028) |
Owens & Minor, Inc. | |||||||||||
(Registrant) | |||||||||||
Date: | August 4, 2020 | /s/ Edward A. Pesicka | |||||||||
Edward A. Pesicka | |||||||||||
President & Chief Executive Officer | |||||||||||
Date: | August 4, 2020 | /s/ Andrew G. Long | |||||||||
Andrew G. Long | |||||||||||
Executive Vice President & Chief Financial Officer |
2
|
3
|
4
|
O&M FUNDING LLC,
as Borrower
By:
Name:
Title:
|
|||||
|
|||||
OWENS & MINOR MEDICAL, INC.,
as the Servicer
By:
Name:
Title:
|
|||||
PNC BANK, NATIONAL ASSOCIATION,
as Administrative Agent
By:
Name:
Title:
|
|||||
PNC BANK, NATIONAL ASSOCIATION,
as Lender
By:
Name:
Title:
|
Collection Account Bank | Account Number | Lockbox | ||||||
Bank of America | 180533554 | Lockbox - Dallas (subaccount) | ||||||
Bank of America | 3750239306 | Lockbox - Atlanta (subaccount) | ||||||
Bank of America | 1233712796 | Lockbox - Los Angeles (subaccount) | ||||||
Bank of America | 3756557820 | Lockbox - Chicago (subaccount) | ||||||
Bank of America | 3756597534 | Lockbox - Boston (subaccount) | ||||||
Bank of America | 4427140044 | N/A | ||||||
Truist Bank | 201143739 | Lockbox - Baltimore | ||||||
Truist Bank | 201652315 | Lockbox - Custom | ||||||
Truist Bank | 1000025408195 | N/A | ||||||
Truist Bank | 1000162128028 | N/A | ||||||
PNC Bank | 5303777012 | Lockbox – Pittsburgh | ||||||
PNC Bank | 5303676502 | Lockbox – Pittsburgh | ||||||
PNC Bank | 5303676529 | Lockbox - Pittsburgh | ||||||
PNC Bank | 5303676537 | Lockbox – Pittsburgh |
2
|
3
|
4
|
O&M FUNDING LLC,
as Borrower
By:
Name:
Title:
|
|||||
|
|||||
OWENS & MINOR MEDICAL, INC.,
as the Servicer
By:
Name:
Title:
|
|||||
PNC BANK, NATIONAL ASSOCIATION,
as Administrative Agent
By:
Name:
Title:
|
|||||
PNC BANK, NATIONAL ASSOCIATION,
as Lender
By:
Name:
Title:
|
|||||
Date: | August 4, 2020 | |||||||
/s/ Edward A. Pesicka | ||||||||
Edward A. Pesicka | ||||||||
President & Chief Executive Officer |
Date: | August 4, 2020 | |||||||
/s/ Andrew G. Long | ||||||||
Andrew G. Long | ||||||||
Executive Vice President & Chief Financial Officer
|
/s/ Edward A. Pesicka | ||
Edward A. Pesicka | ||
President & Chief Executive Officer | ||
Owens & Minor, Inc. | ||
August 4, 2020 | ||
/s/ Andrew G. Long | ||
Andrew G. Long | ||
Executive Vice President & Chief Financial Officer | ||
Owens & Minor, Inc. | ||
August 4, 2020 | ||