Accendra Health, Inc. (ACH) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Shareholders of Owens & Minor, Inc. Please note that today's meeting is being recorded. [Operator Instructions] It is my pleasure to turn today's meeting over to Mark Beck, Chairman of the Board of Directors of Owens & Minor. Mr. Beck, the floor is yours.

Thank you, operator. Good morning. In accordance with the notice of the meeting, I hereby call the annual meeting of the shareholders of Owens & Minor, Inc. to order. I am Mark Beck, Chair of the Board of Owens & Minor. Along with my fellow directors and the executive officers of the company who have joined our webcast, I would like to welcome you to our annual meeting. We appreciate your attendance at our virtual meeting, your interest, and most importantly, your support of Owens & Minor. After we conduct the annual meeting business and voting on proposals, Ed Pesicka, President and CEO of Owens and Minor, will share some comments with you before we conclude this meeting. Also, I encourage you to listen to the company's first quarter earnings call on Wednesday, May 5, 2021, where the company will discuss its first quarter results in ways we continue to empower our customers to advance health care. Before we proceed with the formal business of the annual meeting, I would like to recognize 2 of our directors who are retiring from service on the Board today. First, Eddie N. Moore Jr., who has served on our Board since 2005, and most recently, as Chair of the Governance and Nominating Committee; and secondly, Robert C. Sledd, served on the Board since 2007, previously serving as Chair of the Board, Chair of the Compensation and Benefits Committee and as Interim President and CEO of the company. Both Eddie and Bob have served the company and its shareholders with dedication and commitment and made meaningful contributions to the company through their leadership. We thank them for their many years of service, and we wish them all the best in the future. Participating in the annual meeting are Nick Pace, Executive Vice President, General Counsel and Corporate Secretary of the company; and Sandra Moore with Computershare, who will serve as the inspector of election. We will proceed with the formal business of the meeting as set forth in your notice of annual meeting contained in our proxy statement. The meeting will be conducted in accordance with the rules of conduct that are available on the meeting site. Shareholders may submit questions related to the proposals being considered during this meeting in the space provided on the virtual meeting screen. Nick Pace will serve as Secretary of the meeting today, and I will now turn the meeting over to him.

Thank you, Mark. I have an affidavit certifying that the notices of meeting and availability of proxy materials were mailed on March 17, 2021, to all shareholders of record as of March 5, 2021. A certified list of the shareholders entitled at this meeting is available for inspection during the meeting by any shareholder on the website used to access this meeting. At this time, I would like to introduce Sandra Moore of Computershare. Ms. Moore has been appointed to serve as the inspector of election. Ms. Moore has taken and subscribed the oath of office to execute her duties, and we will file this oath with the records of the meeting. I have been informed by the inspector of elections that immediately prior to the commencement of the meeting, proxies have been received for 67,954,517 shares of the company's common stock, representing 92.44% of the outstanding shares of the company. Mr. Chair, based on Ms. Moore's report, I can confirm a quorum is present, and the meeting is legally convened to transact business.

Thank you, Nick. The polls for voting on all matters are open. If you are a shareholder entitled to vote and have not yet voted or if you want to change your previously cast vote, please do so via the website used to access this meeting. Please remember that if you have already returned a proxy card, voted through the Internet website or by calling the toll-free voting number, you need to do nothing further to cast your vote. After voting has been completed on all matters on the agenda, we will close the polls, and the inspector of election will provide her preliminary report. The Secretary will now present the proposals for consideration.

As described in the proxy, there are 3 proposals before the shareholders today for approval. Proposal one is the election of directors. There are 8 directors standing for election today to serve a 1-year term until the 2022 annual meeting of shareholders. Each nominee is listed in the proxy with a brief summary of his or her professional pursuits, qualifications and corporate activity. The nominees are Aster Angagaw; Mark A. Beck; Gwendolyn M. Bingham; Robert J. Henkel; Stephen W. Klemash; Mark F. McGettrick; Edward A. Pesicka; and Michael C. Riordan. No other nominees were received prior to the deadline established in the company's bylaws. Therefore, no additional nominees may be made at this meeting, and I declare the nominations to be closed. Proposal 2 is the ratification of the appointment of KPMG LLP as the company's independent registered public accounting firm for the year ending December 31, 2021. The company's Audit Committee of the Board of Director -- and Board of Directors have approved disappointment, subject to the shareholders' ratification at this meeting. Proposal 3 and the final item of business is an advisory vote to approve the compensation of our named executive officers as described in the proxy statement. Those are all of the proposals to be considered at this meeting.

Thank you, Nick. Have we received any questions related to the proposals presented?

Mr. Chair, no questions have been received.

Thank you, Nick. We will allow a brief pause of 30 seconds for final voting to be completed on the virtual website. [Voting]

I now declare the voting closed. I will ask that Mr. Pace report on the preliminary voting results for the 3 proposals.

The preliminary report of the inspector of elections covering the proposals at this meeting are as follows: Proposal One, the election of directors, the 8 Director nominees listed in the Owens & Minor Inc. proxy statement each received the majority of affirmative votes cast. Proposal 2, the proposal to ratify the appointment of KPMG LLP as the company's independent registered public accounting firm for the audit year 2021 received the majority of votes cast. Proposal 3, the proposal to approve on an advisory basis, the compensation of the named executive officers received the affirmative vote of the majority of shares cast. Based on the preliminary vote counts, all of the matters voted upon have been approved by the necessary number of shares. A final report of the voting results will be filed by the company on Form 8-K within 4 business days.

Thank you, Nick. That concludes the business portion of the Annual Shareholder meeting. At this time, Ed Pesicka, President and CEO of Owens & Minor, will share a few remarks regarding the past year. Ed?

Thank you, Mark. I'll just start with 2020, and just reflect -- as we reflect back on the year. I really want to open this up by thanking all of our teammates for their dedication, their intensity, their focus, really on delivering on our mission of empowering our customers to advance health care. In addition to that, I would also like to thank the frontline workers who charged -- head first into the battle and continue to do so today. So thank you to the frontline workers as well as thank you to our own teammates. As I reflect back on 2020 from a financial standpoint, really, you look at it from the income statement, balance sheet and other aspects. From an income statement standpoint, we had just an excellent year. We saw substantial increases in our adjusted net income per share as well as margin expansion of over 290 basis points. From a balance sheet and operating standpoint, we really did an excellent job deleveraging the balance sheet last year with over $0.5 billion of debt pay down and significant operating cash flow. And then finally, we invested in the business. We continue to invest in the business in infrastructure, service and technology, all of which, we expect to continue into 2021. As I move ahead and look at it, it wasn't just 2020 where we had this strong performance, this strong performance is really a continuation of what we started in 2019. And as you can see, in 2019 through 2020, we had multiple consecutive quarters of adjusted net income per share improvement, gross margin expansion, positive operating cash flow and nearly $700 million of debt paid down over the last 7 quarters, starting in 2019 and ending in 2020. So let me move along and talk a little bit about how we maintain this and continue to leverage this foundation. It's really around the Owens & Minor blueprint. It's focused on what we do from a culture, our vision and mission, it's a focus on our discipline, our business system, it's continued to invest for growth into the future. And the results of that culture, that discipline and those investments will continue to show positive results, both financial results as well as strong service results to continue to service our customers. So now let's move on to 2021. What you will see from us is that strong leveraging of that foundation that was built in 2019 and 2021 -- I'm sorry, 2019 and 2020. In addition to that, we will use that Owens & Minor business blueprint to grow the business going forward. And we expect that momentum to continue into '21. You'll see us invest focused on portfolio expansion, both within and outside of our BP portfolio. You'll see us growing in new verticals. You'll see us investing in technology and data to provide what our customers need, so that they can continue to optimize their operations, and we can continue to serve them well. You'll see us harness and focus around the enterprise solution, tying all the different components and parts of Owens & Minor together to provide fantastic solutions for our customers. And just the relentless focus on continuous improvement, and the fact that we recognize we have to get better every single day. And finally, our continued investment in infrastructure, technology and operational effectiveness. So with that, I thank you for the opportunity to talk, and I look forward next week during our earnings call, to provide more insights related to Q1 and 2021. Thank you.

Thank you, Ed. And on behalf of the Board and our shareholders, we are grateful for your leadership. This time, I would also like to thank all of our Owens & Minor teammates who have been helping throughout the past year to combat COVID-19. We are extremely proud and appreciative of their commitment and efforts to serve these frontlines throughout the fight against COVID-19 and to maintain this vital supply of critical products to health care providers and to patients. Before we close, I would like to remind you that the company will release earnings on Wednesday, May 5, 2021, and hold a call to discuss the company's first quarter results. I would encourage you to join and listen in. Information can be found on the Investor Relations page of our website at owens-minor.com. Thank you all for your confidence and investment in Owens & Minor. I declare the meeting adjourned and turn the meeting back to the operator now.

Thank you, Mr. Beck. This concludes the meeting. You may now disconnect.