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, Chair of the Board of Directors of Owens & Minor. Mr. Beck, the floor is yours.

Thank you, operator, and 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. 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 in our company and most importantly, your support of Owens & Minor. After we conduct the annual meeting and voting on proposals, Ed Pesicka, President and CEO, will share some comments with you before we conclude this morning. Also, I encourage you to listen to the company's first quarter earnings call on Wednesday, May 4, where the company will discuss first quarter results, our recently completed acquisition of Apria and ways we continue to empower our customers to advance health care. 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. Before I begin, just one correction, that earnings call is actually on Tuesday, May 3 aftermarket.

Thank you.

Yes. Sure, Mark. I have an affidavit certifying that the notice of meeting and availability of proxy materials were mailed on March 17, 2022, to all shareholders of record as of March 4, 2022. A certified list of the shareholders entitled to vote 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 election that immediately prior to the commencement of the meeting, proxies have been received for 69,595,593 shares of the company's common stock representing 90.76% of the outstanding shares of the company. Based on this more'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 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.

Thank you, Mark. As described in the proxy, there are 4 proposals before the shareholders today for approval. Proposal 1 is the election of Directors. There are 7 Directors standing for election today to serve a 1-year term until the 2023 Annual Meeting of Shareholders. Each nominee is listed in the proxy with a brief summary of his or her professional pursuits, qualifications and corporate activities. The nominees are Mark A. Beck; Gwendolyn M. Bingham; Kenneth Gardner Smith; Robert J. Henkel; Steven W. Klemash, Mark F. McGettrick and Edward A. Pesicka. No other nominees were received prior to the deadline established in the company's bylaws. Therefore, no additional nominations 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, 2022. The company's Audit Committee and Board of Directors have approved this appointment subject to the shareholders' ratification at this meeting. Proposal 3 is an advisory vote to approve the compensation of our named executive officers as described in our proxy statement. Proposal 4 and the final item of business is an advisory vote on the frequency of the shareholder vote on the compensation of our named executive officers as described in the proxy statement. Those are all 4 of the proposals to be considered at this meeting.

Thank you. 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 4 proposals.

Thank you, Mark. The preliminary report of the Inspector of Election covering the proposals at this time -- at this meeting are as follows: Proposal 1, election of Directors. The 7 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 2022 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 a majority of the shares cast. And proposal 4, the proposal to approve on an advisory basis, the frequency of the shareholder vote on the compensation of named executive officers received a permanent vote of the majority of shares cast for vote to occur every year. Based on 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 Shareholders' Meeting. At this time, Ed Pesicka, President and CEO of Owens & Minor, will share a few remarks to close out 2021, review our Owens & Minor blueprint. And our value chain. Ed?

Thank you, Mark. Well, good morning, everyone. Just quickly on the slide titled 2021 summary highlights. 2021, we had an excellent year. We delivered on our guidance, and we showed record EPS and EBITDA. So really strong performance by all of the teammates at Owens & Minor. Really what drove that growth is our vertically integrated business model that really enabled us to offset some of the macroeconomic pressures as well as continue to capture growth, both in PPE and S&IP sales. We also, during 2021, did a tremendous job paying down debt, which enabled us to continue to invest in the business and in early this year, announcing the acquisition of Apria. And then finally, we delivered on our commitments, our guidance, we -- as well as reaffirming 2022 adjusted EBITDA and EPS on the earnings call at the end of the year. So 2021 was really a strong year for Owens & Minor. We're excited of where it's carrying us into the future. Moving on to our foundation. I think this is critical for everyone to understand is the fact that it's really our culture, which is our mission and values, our discipline, our investments that have delivered on the results. I'll walk you through a few of these on the next several slides. So starting with our culture. It's really based and grounded on our humble mission. Our mission is to serve. Our mission is to serve our customers. It's really -- we're here to empower our customers to advance health care. And the foundation for how we do that is our ideal values, starting with the letter I in integrity and ending with the letter L for listening. And listening with the intent to understand and help and serve. Moving from that on to the second phase of the Owens & Minor business of -- business blueprint is our business system. So the Owens & Minor business system, in simplest terms, it's a systems around continuous improvement. Finding a way to get a little bit better every single day and then taking those learnings and implementing them across the company. Those -- that combined with our mission and our values really leads us to what else makes us different, which is our value chain or our unique business model. And that is really focused on -- that business model, it starts with manufacturing. We are a manufacturer. We manufacture a tremendous amount of our proprietary S&IP products. Those products then go through our distribution centers with the ability to serve most of the country very, very quickly and then serve those customers within the hospital. After the patient leaves the hospital with our Byram business and now with the acquisition of Apria, we're better able to serve the patient as they leave the hospital and then they answer the home. Let me talk a little bit about the acquisition of Apria and why we're so excited about the future. So if I move to the slide that talks about the Apria acquisition and the strategic rationale, there are several things we really like about it. First and foremost, this acquisition expands our Patient Direct platform. So it expands our geographic reach and our payer relationships. We like it because it has market expansion through a broader Patient Direct portfolio of products, as you can see on the right side of the slide. Those products are well positioned across complementary product categories. We like it because the opportunity it creates in cross-selling to drive increased revenue growth and the opportunity for us specifically to treat overlapping conditions for patients as well as bundle those that brought a product portfolio together. And we also are excited about it because it creates access to approximately 90% of insured health care customers in the United States. So that's how we're going to be able to leverage this to continue to drive long-term organic growth in our product direct segment. So with that, as you can see, we had an excellent 2021. We're excited about what makes us different, which is our value chain and that core foundation of our company based on the Owens & Minor blueprints of our culture as the basis, to focus on continuous improvement with our business system and then making the right investments like we did with Apria. So with that, thank you.

Thank you, Ed. This year, 2022 marks Owens & Minor's 140th anniversary in business, and we are grateful to our shareholders and teammates for supporting our mission to continue to empower our customers to advance health care. A special thank you to all of our Owens & Minor teammates who helped during the past 2 years to combat COVID-19. We are extremely appreciative of their commitment and efforts to service the front lines throughout the fight against COVID-19 and to maintain the vital supply chain of products to health care providers and patients. Before we close, I would like to remind you that the company will release earnings on Tuesday, May 3, and hold a call to discuss the company's first quarter results at 4:30 p.m. Eastern Time on that day. I'd encourage you to join and listen in. Information can be found on the Investor Relations page of our website at owen-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 at this time.

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