About Owens & Minor

Owens & Minor, Inc. and subsidiaries operate as a global healthcare solutions company. The company incorporates product manufacturing, distribution support and innovative technology services to deliver significant and sustained value across the breadth of the industry – from acute care to patients in their home. The company’s teammates serve healthcare industry customers in approximately 80 countries. The company has production, distribution, storage, customer service and sales facilities located across the United States (U.S.), Canada, Asia, Australia, Europe, and Latin America. Segments The company operates through two segments: Products & Healthcare Services and Patient Direct. Products & Healthcare Services In its Products & Healthcare Services segment, the company offers a comprehensive portfolio of products and services to healthcare providers and manufacturers. This segment is vertically-integrated, starting with Americas-based manufacturing, using the company’s proprietary technology, teammates, and leased or owned production facilities. The company manufactures from raw material all the way to finished goods before transferring product to its distribution center network. The company’s portfolio of medical and surgical supplies includes branded products purchased from manufacturers and its own proprietary products. The company stores its products at its distribution centers and provide delivery of these products, along with related services, to healthcare providers around the world. The company’s service offerings to healthcare providers include supplier management, analytics, inventory management, and clinical supply management. These value-add services help providers improve their processes for contracting with vendors, purchasing supplies and streamlining inventory. These services include the company’s operating room-focused inventory management program that helps healthcare providers manage suture and endo-mechanical inventory, as well as its customizable surgical supply service that includes the kitting and delivery of surgical supplies in procedure-based totes to coincide with the healthcare providers’ surgical schedule. In addition to services to healthcare providers, the company offers a variety of programs dedicated to providing outsourced logistics and marketing solutions to its suppliers as well. These are designed to help manufacturers drive sales growth, increase market share and achieve operational efficiencies. The company has contractual arrangements with manufacturers participating in these programs that provide performance-based incentives to it, as well as cash discounts for prompt payment. Program incentives can be earned on a monthly, quarterly or annual basis. The company operates a network of distribution centers located throughout the U.S., which are strategically located to efficiently serve its customers. Investments in information technology support its business including warehouse management systems, customer service and ordering functions, demand forecasting programs, electronic commerce, data warehousing, decision support and supply chain management. For the products the company manufactures, it operates distribution centers located in the U.S. that ship finished products to customers, as well as other distribution sites that also have customer shipping capabilities, in order to optimize cost and customer service requirements. The company customizes product deliveries, whether the orders are just-in-time, low-unit-of-measure, pallets, or truckloads. The company also customizes delivery schedules according to customers’ needs to increase their efficiency in receiving and storing products. The company uses low-unit-of-measure automated picking modules in its larger distribution centers to maximize efficiency, and its distribution center teammates use voice-pick technology to enhance speed and accuracy in performing certain warehousing processes. The company partners with a third party company to deliver most supplies in the U.S. The company also uses contract carriers and parcel delivery services when they are more cost-effective and timely. The company’s Products & Healthcare Services segment manufactures and sources medical surgical products through its production and kitting operations. The company provides medical supplies and solutions for the prevention of healthcare-associated infections across the acute and alternate site channels. The company’s business has recognized brands across its portfolio of product offerings, including sterilization wrap, surgical drapes and gowns, facial protection, protective apparel, medical exam gloves, custom and minor procedure kits and other medical products. The company uses a wide variety of raw materials and other inputs in its production processes, with polypropylene polymers and nitrile constituting its most significant raw material purchases. The company supports customer sales through a dedicated global sales force and direct its primary sales and marketing efforts toward hospitals and other healthcare providers to highlight the unique benefits and competitive differentiation of its products. The company works directly with physicians, nurses, professional societies, hospital administrators and GPOs to collaborate and educate on emerging practices and clinical techniques that prevent infection and speed recovery. These marketing programs are delivered directly to healthcare providers. Additionally, the company provides marketing programs to its strategic distribution partners throughout the world. The company’s proprietary products are typically purchased pursuant to purchase orders or supply agreements in which the purchaser specifies whether such products are to be supplied through a distributor or directly. These products may be sold on an intercompany basis within the company’s Products & Healthcare Services segment when it is the designated distributor, to other third-party distributors or directly to healthcare providers. Patient Direct Patient Direct segment provides delivery of disposable medical supplies sold directly to patients and home health agencies and is a leading provider of integrated home healthcare equipment and related services in the U.S. The segment offers a comprehensive range of products and services for in-home care and delivery across diabetes treatment, home respiratory therapy (including home oxygen and non-invasive ventilation services), and obstructive sleep apnea treatment (including continuous positive airway pressure (CPAP) and bi-level positive airway pressure devices, and patient support services). Additionally, Patient Direct supplies a wide range of other home medical equipment, patient care product lines including ostomy, wound care (including negative pressure wound therapy), urology, incontinence and other products and services to help improve the quality of life for patients with home care needs. Revenues are generated through fee-for-service and capitation arrangements with large government and commercial payors (Payors) for equipment, supplies, services and other items rented and sold to patients. The company provides patients with a variety of clinical and administrative support services and related products and supplies, most of which are prescribed by a physician as part of a care plan. Patient Direct has a nationwide sales force, focusing on managed care and key referral sources, along with centers of excellence strategically located in the U.S. aligned with specific mail order product categories and a nationwide network with over 300 locations to optimize shipping distance and time, to serve patients. Customers The Products & Healthcare Services segment provides products and services to thousands of healthcare providers, along with certain retailers either directly or indirectly through third-party distributors. The company’s Patient Direct segment provides delivery of disposable medical supplies and equipment rented and sold directly to patients and home health agencies, for which payments are received from managed care plans, the U.S. federal government under the Medicare program, state governments under their respective Medicaid or similar programs, private insurers, home health agencies, and directly from patients. The company’s customers include multi-facility networks of healthcare providers offering a broad spectrum of healthcare services to a particular market or markets as well as smaller, independent hospitals. In addition to contracting directly with healthcare providers at the Integrated Delivery Network (IDN) level, the company also contracts with GPOs as well as other types of healthcare providers including surgery centers, physicians’ practices and smaller networks of hospitals that have joined together to negotiate terms. The company has contracts to provide distribution services to the members of a number of national GPOs, including Vizient, Premier, Inc. (Premier) and HealthTrust Purchasing Group (HPG). Below is a summary of these agreements: The company has its own independent relationships with most of its hospital customers through separate contractual commitments. Intellectual Property Patents, trademarks and other proprietary rights are very important to the growth of the company’s Products & Healthcare Services segment. The company has approximately 825 patents and patent applications pending in the U.S. and other countries that relate to the technology used in many of its products. The company utilizes patents in its surgical and infection protection products and currently have approximately 580 issued patents. These patents generally expire between 2024 and 2044. In order to protect its ongoing research & development investments, the company has approximately 110 pending patent applications. With respect to trademarks, the company has approximately 1,280 trademarks and trademark applications pending in the U.S. and other countries that are used to designate or identify the company or products. The company has approximately 1,100 registered trademarks and approximately 175 pending trademark applications. The company manufactures and distributes products bearing the well-known Halyard brand. Other well-known registered trademarks the company uses include Aero Blue, Apria, Byram Healthcare, Quick Check, Smart-Fold, Orange, One Step, Purple, Purple Nitrile, Purple Nitrile-Xtra, Lavender, Sterling, and Safeskin. Regulation As part of the provision of, and billing for, healthcare equipment and services, the company’s Patient Direct segment is required to collect and maintain PHI and as such, are subject to HIPAA as a covered entity. Failure of the company’s business associates to comply with HIPAA requirements can adversely impact its business. Numerous other federal and state laws that protect the confidentiality, privacy, availability, integrity and security of PHI and healthcare related data also apply to the company. In many cases, these laws are more restrictive than, and not preempted by, the HIPAA and HITECH rules and requirements, and may be subject to varying interpretation by courts and government agencies, creating complex compliance issues for the company and potentially exposing it to additional expenses, adverse publicity and liability. The company is also subject to privacy laws outside the U.S. The company must also comply with laws and regulations governing operations, storage, transportation, manufacturing, sales, safety and security standards for each of its manufacturing and distribution centers. This includes oversight by the FDA, the Centers for Medicare and Medicaid Services, the Drug Enforcement Agency, the Department of Transportation, the Environmental Protection Agency, the Department of Homeland Security (DHS), the Occupational Safety and Health Administration, the Department of Labor, the Equal Employment Opportunity Commission, and state boards of pharmacy, or similar state licensing boards and regulatory agencies. The company’s locations that fill and distribute medical oxygen containers must register with the FDA as a medical gas manufacturer, and these registered locations are subject to extensive regulation. The FDA and state authorities conduct periodic, unannounced inspections at the company’s facilities to assess compliance with cGMPs and other regulations. The company’s operations are subject to local, country and regional regulations, such as those promulgated by the European Medicines Agency and the Medical Devices Directive. The company is subject to laws and regulations that seek to prevent corruption and bribery in the marketplace, including the U.S. Foreign Corrupt Practices Act (FCPA) and the U.K. Bribery Act. A violation of the FCPA or other similar laws by the company and/or its agents or representatives could result in, among other things, the imposition of fines and penalties, changes to its business practices, the termination of or other adverse impacts under its contracts or debarment from bidding on contracts, and/or harm to its reputation. The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, ACA), the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), the Deficit Reduction Act of 2005 (DRA) and the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), each contain provisions that have directly impacted reimbursement for the products the company provides. Some of the company’s operations may be subject to compliance with certain provisions of the Fair Debt Collection Practices Act (FDCPA) and comparable statutes in many states. Under the FDCPA, a third-party collection company is restricted in the methods it uses to contact consumer debtors and elicit payments with respect to placed accounts. Requirements under state collection agency statutes vary, with most requiring compliance similar to that required under the FDCPA. Research and Development The company incurred research and development costs of $13.2 million for the year ended 2023. Competition Products & Healthcare Services competitors include two major nationwide manufacturers who also provide distribution services, Cardinal Health, Inc. and Medline Industries, Inc. The company also competes against other product manufacturers, including Hogy Medical, Multigate Medical Products, Mölnlycke Health Care, and the HARTMANN Group. In the company’s Patient Direct segment, the company competes against national providers that deliver products and services to patients' homes, including AdaptHealth Corp., Lincare, Rotech, Aerocare, Inogen, Viemed Healthcare, Inc., as well as regional and local providers. In addition, pharmacy benefit managers, such as CVS Health Corporation, compete with the company in the home healthcare market. History Owens & Minor, Inc. was founded in 1882. The company was incorporated in 1926.