Good day, and thank you for standing by. Welcome to the Owens & Minor Second Quarter 2022 Financial Results Conference Call. At this time, all participants are on a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, to Alex Jost, Director of Investor Relations. Please go ahead. Thank you. Hello, everyone, and welcome to the Owens & Minor Second Quarter 2022 earnings call. Our comments on the call will be focused on the financial results for the second quarter of 2022, as well as our outlook for 2022, both of which are included in today's press release. The press release, along with the supplemental slides, are posted on the investor relations section of our website. Please note that during this call, we will make forward-looking statements. The matters addressed in these statements are subject to risks and uncertainties, which could cause actual results to differ materially from those projected or implied here today. Please refer to our SEC filings for a full description of these risks and uncertainties, including the risk factor section of our annual report on Form 10-K and quarterly reports on Form 10-Q. In our discussion today, we will reference certain non-GAAP financial measures. Information about these measures and reconciliations to the most comparable GAAP financial measures are included in our press release. Today, I'm joined by Ed Pesicka, our President and CEO, and Andy Long, our Executive Vice President and CFO. I will now turn the call over to Ed. Thank you, Alex. Good morning, everyone, and thank you for joining us on the call today. Today in my prepared remarks, I will cover our second quarter performance, the current market landscape, and why I remain bullish on the long-term prospects for the company. First, I am extremely pleased with our second quarter results. Our strong performance and our ability to manage through the macroeconomic headwinds in this quarter is a result of the following. One, our Owens & Minor business system of continuous improvement, driven by our dedicated teammates that continue to deliver operating efficiencies, eliminate waste, and provide productivity improvements. Two, our unique and differentiated business model with vertical integration that limits our exposure to certain macroeconomic conditions impacting others. Three, our increased presence in the Patient Direct space, supporting patients with chronic lifelong conditions. While the external conditions have become even more challenging over the second quarter, it is clearly visible that once again, our team performed very well. We were able to report strong results with both of our businesses continuing to operate at a high level. We remain focused on providing value for our customers and service at the highest possible levels, both of which are central to our mission and are demonstrated every day as we have woven the Owens & Minor business system into the fabric of the company. Over the second quarter, our approach to provide value and service continued to pay off. Our customers value the consistency with which we provide industry-leading service, especially given the degree of unpredictability that healthcare has faced over the past two years. This was proven once again in the second quarter as our Products & Healthcare Services segment continued to take share by adding high quality wins as we work to optimize our customer base. This means we are not interested in growth for growth's sake, but are intently focused on profitable growth with reasonable returns. This will be a key benefit from putting together the medical distribution and our products businesses. We continue to get smarter about how we go to markets, our product portfolio, and what makes the most sense for our customers and the company. When combined with our embedded business system, we can begin to drive towards much more efficient and more profitable business segments. Now turning towards the higher margin, higher recurring revenue Patient Direct segments. Our Byram business continued to outpace the market with 17% organic revenue growth year-over-year. On a pro forma basis, our Patient Direct segment grew 10%, with Apria revenue growth in the mid-single digits, which is particularly impressive in consideration of the supply constraints related to sleep apnea products. We are also pleased to be off to a successful start of the Apria integration and synergy achievement. As we look to the remainder of the year, we expect Q4 to benefit from the acceleration of integration and synergies, as well as increased patient growth from the receipt and deployment of incremental sleep products from our suppliers that will fill existing orders and reduce our backlog. Now looking at Q2 from a high level, many things played out as planned and discussed in previous quarters, such as our ability to navigate the expected environment, the reduction of PPE demand, and the absence of the glove cost benefits. However, as the quarter progressed, we also experienced acceleration of macroeconomic issues and new industry-specific headwinds. The macroeconomic headwind acceleration included increased inflation, higher interest rates, and a stronger U.S. dollar. The new and accelerated industry-specific issues including staffing constraints and product shortages, such as critical diagnostic products due to global supply chain issues. These constraints have resulted in lower procedure volume, and we expect these constraints to continue through the year. Procedure volume is down sequentially from Q1, and our customers experienced a downward trend that progressed throughout the quarter, resulting in volume that is meaningfully lower than pre-pandemic levels. In my conversations with current and prospective customer, the main reason for this is due to the factors I mentioned a moment ago. These are driving the low procedure volume and overall reduced hospital demand. As a result, our financial outlook for the year has been adjusted. Before turning it over to Andy to take you through the specifics of the quarter and our new outlook, I would like to emphasize the following points. One, we continue to deploy the Owens & Minor business system to drive productivity and reduce costs as we work to minimize the impact of the accelerating macroeconomic headwinds. In our view, these macroeconomic headwinds will eventually ease. However, the improvements that we make with our Owens & Minor business system will remain and provide value long into the future. Next, overall healthcare is resilient and hospital procedure volumes will normalize as industry-specific headwinds ease and the existing unserved demand flows through the system. We are excited about the opportunity as we will be ready to capture this volume with our existing customers and new customer wins. Finally, our Patient Direct business is consistent and strong, driving recurring revenue as it focuses on serving patients with chronic lifelong conditions who need their products regardless of the macroeconomic conditions. As I reflect on the past three years, we have repositioned the company for success and long-term profitable growth. We have done this by deploying the Owens & Minor business system to help drive continuous improvement, productivity, and improved service. Strengthening our organization with leadership and strategy focused on our unique value chain. Consistently executing during a challenging and unpredictable time. Regaining share and delivering meaningful, high quality customer wins in our Products & Healthcare Services segment. Finally, diversifying our revenue and EBITDA base through above-market growth in Byram and the acquisition of Apria, while strategically positioning our Patient Direct segment to capitalize on the shifting preference towards home care. Simply put, we continue to demonstrate the effectiveness of our long-term strategy, operational excellence and business blueprint. I am confident in our ability to successfully manage through these challenges over time. With that, I will turn the call over to Andy for a discussion of our financial results. Andy? Thank you, Ed, and good morning, everyone. Today, I'll review our financial results and key drivers for our performance in the second quarter, and then discuss our revised expectations and assumptions related to our full year outlook. First, let me start with our second quarter results. Our reported revenue in the quarter was $2.5 billion, up slightly from the prior year. Gross margin of $533 million or 21.3% of revenue was up 520 basis points from prior year. The growth reflected the first full quarter contribution from Apria sales, which have a higher margin profile. Foreign currency translation had an unfavorable impact on gross margin of $6.9 million or 28 basis points for the quarter. Distribution, selling, and administrative expense was $453 million, driven higher primarily from the addition of Apria expenses and ongoing inflationary pressures, partially offset by stringent cost control and operating efficiencies. Interest expense was $36 million in the quarter, which was $24 million higher than the prior year, given that this was the first full quarter of higher debt related to the financing of the Apria acquisition. Given the rising rate environment, we took action in early April by entering into an interest rate swap. This increased our proportion of fixed rate debt to approximately 2/3 of our overall borrowings. The effective tax rate this quarter was 25.6%, compared to 21.8% in last year's second quarter. The change in rates resulted primarily from the nondeductibility of certain acquisition-related expenses. Our GAAP net income for the quarter was $29 million or $0.37 a share. Adjusted net income in the second quarter was $58 million compared to $80 million last year. Current quarter adjusted EPS was $0.76 compared to $1.06 in Q2 of last year. However, you need to consider the impact that foreign currency had on our second quarter results. The strengthening of the U.S. dollar in the quarter had an unfavorable impact on foreign currency translation, reducing adjusted EPS in the second quarter by $0.05, and an $0.08 reduction on a year-to-date basis. Second quarter adjusted EBITDA was $156 million with a margin of 6.2%, up 110 basis points versus the prior year. FX had an unfavorable impact of $5 million. On a segment basis, Products & Healthcare Services reported second quarter revenue of $1.93 billion versus $2.26 billion year-over-year. This was a result of lower glove cost pass-through of approximately $100 million and lower PPE volume, both as expected, along with lower procedure demand as a result of supply chain and labor shortages constraining capacity in the hospitals. Products & Healthcare Services operating income for the quarter was $61.2 million compared to $101.2 million last year. The decline versus prior year was the result of lower volumes, as I just discussed, along with accelerating inflationary pressures in the absence of glove cost benefit, partially offset by operating efficiencies generated by our continuous improvement business system. The year-over-year foreign currency impact on revenue was unfavorable by $13 million, and the FX impact on operating income was unfavorable $5 million versus Q2 of last year. Turning to the Patient Direct segment, our net revenue in the second quarter was $573 million, an increase of 145% year- over- year. Byram revenue grew organically by 17%, with strong double-digit growth across all major product categories. On a pro forma basis, Apria grew 4.4% despite the delayed customer starts from the Philips Respironics recall and other supply chain constraints. Adjusted operating income for the quarter was $52 million compared to last year's second quarter of $14 million. Acquisition-related synergies from the onboarding of Apria continue to track to our expectations. Moving now to cash flow, the balance sheet and capital structure. This quarter, we generated $90 million of cash from operations, bringing our year-to-date total to $170 million. Free cash flow, defined as adjusted EBITDA less net capital expenditures, was $107 million in the quarter and $214 million year- to-d ate. We were able to reduce debt by $67 million in Q2, in addition to completing the final planned acquisition consideration payments of $108 million in the quarter. We're on track to reduce our net leverage ratio back to our target range of two to three times in the next 18 months-24 months. As Ed mentioned in his remarks, we've updated our guidance for the year. We now expect net revenue to be in a range of $9.8 billion-$10.1 billion. Adjusted EBITDA to be in the range of $570 million-$610 million, and adjusted EPS in a range of $2.85-$3.15. The key drivers of this revised outlook reflect the accelerating industry-specific and macroeconomic headwinds that we experienced in Q2, which have negatively impacted our view for the second half of the year. Higher interest rates and the stronger U.S. dollar alone are contributing approximately $0.10 of the reduction in the midpoint of our guidance. Both the short and long-term expectations for Apria remain right on track, and we continue to expect Apria to add over $900 million of revenue and approximately $180 million of adjusted EBITDA for the partial year impact in 2022. We remain confident in our synergy expectations related to Apria and believe incremental annual revenue will be in the range of $80 million-$100 million and incremental annual adjusted EBITDA in the range of $40 million-$50 million within the next few years. Additional assumptions for 2022 guidance include a gross margin rate of approximately 20%, unchanged from prior quarter's guidance. Interest expense in the range of $130 million-$135 million, reflecting the most recent assumptions related to rising interest rates. Capital expenditures of $185 million-$195 million, up from our previous guidance due to improvements in Apria's ability to acquire growth-related patient equipment in the second half of the year. An effective tax rate of 24%-26%. FX rates as of June 30th, 2022. Fully diluted share count of 77 million, unchanged from Q1's guidance. Finally, it's important to note our projected earnings cadence in the second half of the year. Sequentially, we expect the third quarter earnings to be by far the lowest quarter of the year, with a significant rebound in Q4. In Q3, macroeconomic pressures and industry specific headwinds are assumed to continue accelerating. Additionally, in Q3, we expect Products & Healthcare Services new customer win implementation costs with the corresponding onboarding benefits beginning in Q4. Also, in Q4, we expect meaningful benefit from seasonality, accentuated by the larger percentage of profits coming from our Patient Direct segment, improved access to equipment in our Apria business, reducing our overall backlog of orders in our sleep product line, and greater realization of acquisition-related synergies. Please be aware that these key modeling assumptions have been summarized on supplemental slides filed with the SEC on Form 8-K earlier today and are posted to the investor relations section of our website. In summary, the underlying business continues to execute well despite the overarching macroeconomic headwinds and industry specific challenges that we're facing. Implementation of our Owens & Minor business system continues to gain momentum as more and more teammates become trained in our structured approach to problem-solving and continuous improvement methodologies. Our disciplined capital deployment has enabled us to remain focused on reducing debt while reinvesting in the business for long-term profitable growth. At this point, I'll turn the call back over to the operator to begin the Q&A session. Operator? Thank you, sir. As a reminder, to ask a question, you will need to press star one one on your touchtone telephone. Please stand by while we compile the Q&A roster. I show our first question comes from the line of Kevin Caliendo from UBS. Mr. Caliendo, your line is open. Hi. Thanks for taking my call, guys. I just wanna. I guess I want to explore a little bit the comments around the Apria business and CPAPs and the higher CapEx. Let's just talk through expectations there for that business and how they've changed a little bit. You're spending more now, you have more access to CPAP. When do you think the sort of bolus that might be out there of patients, do you see that coming through in your 4Q guidance? Or is this just you have more access to CPAPs now than you thought you were gonna have? Yeah. You know, I'll start and let Andy add some color. We really think that's gonna really impact significantly the fourth quarter. You know, the way we see it and we look at it is we look at our back orders right now. We roughly have about three to four months of normal month usage on back order right now. As the suppliers and the manufacturers start to be able to produce more products and get it out to us, you know, we're gonna be able to fill those orders. Starting filling those orders at a higher rate, you know, probably later in the third quarter and then significantly in the fourth quarter. The other benefit of it is we have seen some additional product coming through right now. The beauty of that is once those products come in, you then start to get that recurring revenue of the consumables. That's also gonna help us. You know, the products that are placed in Q3, that'll help drive that also in Q4. Then we really think about the bright side of it going into 2023, and as we get that several-month back order filled, the recurring revenue going forward. Kevin, it's Andy. Just the only thing I would add to that is another piece of good news that we received in the quarter is that the FDA did approve the Philips remediation plan on ventilators. You know, that kinda gives us confidence that you know, we will have the equipment needed for ventilation throughout the end of the year and what we need to support the fourth quarter. It's also a cash flow issue too, right? Now that we can start returning the ventilators that we have on hand to get those refurbished and put back into the field, that's gonna reduce our cash flow. We're not gonna be spending as much on ventilators because of what we have already getting refurbished. We may not have patient-related CapEx on ventilators until you know, early 2024. It'll be a cash flow benefit. If I can ask a quick follow-up. I just wanna make sure I understand the guidance change. It looks, if we're doing our math right, that the vast majority of the change is both FX and higher interest rates. Is that a fair way to characterize the reduction in guidance, just looking at the math around the FX impact and backing that up and the higher interest rates? Yeah, Kevin, it's Andy. Absolutely. The way I think of the $0.30 reduction in the midpoint of our EPS guidance, you're absolutely right. You know, as I said in my prepared remarks, the combination of FX and higher interest rates will combine to contribute about $0.10 of that $0.30. The single largest driver will relate to lower procedural volumes. You'll note that the midpoint of our revenue guidance came down about $150 million. That $150 million is 100% attributable to our Products & Healthcare Services segment. In terms of calendarization of that $150 million, I'd say some of that we saw in Q2, but the lion's share of that reduction is gonna happen in Q3. The margin impact from that, think of it, you know, because it's in the Products & Healthcare Services segment, that'll still be about a 10% pull-through contributing, you know, $15 million of bottom-line profit or $0.15 of EPS impact. That 10% pull-through, think of it as, you know, we're not gonna get really aggressive in taking variable costs out because we see this shortfall as being very temporary in nature. We're not gonna be pulling out, you know, variable costs just to only have to put them right back in in the fourth quarter. That's really not a smart move. We're not gonna get aggressive on cost-cutting, hence the pull-through on that. That leaves about $0.05 for net inflation. I stress the net because again, it's the impact of inflation, you know, very, you know, you've seen the CPI continue to climb as we've moved throughout the year. It's that inflationary pressures net of what we're gonna be able to offset that. That's gonna be hitting us in the third quarter pretty hard. Our remediation steps that we take to mitigate that through our business system take a little bit longer to gain traction. We'll see the impact of that benefit in Q4. Great. Thank you so much for all the color, guys. Thank you. Our next question comes from the line of Daniel Grosslight from Citi. Mr. Grosslight, your line is open. Hi. Thanks for taking my questions. You know, I was wondering if you could put a finer point on some of the product availability challenges in the acute care setting. I get the labor shortages that's been you know, widely reported on, but I'm a little more surprised on the product shortages. I think in your prepared remarks, you mentioned it was really kind of the diagnostics side of things. I was wondering if you can go into a little more detail about the shortages you're seeing there, what's causing those shortages, and what's going to alleviate some of those pressures on the product side. Yeah. Dan, yeah, the product side, it really. Please continue to stand by. Your conference will resume shortly. Please remain on the line. Pardon me. Mr. Grosslight, if you're on the line, please hit star one one again to re-queue for questions. Hello? Hello, mister. Yes, you're back on line. Yes, you're back on line, sir. Great. Again, apologize about that. We had a little technical difficulty here. Lost the phone connection. You know, I'll just give you know, on the product side of it, you know, it's products that we're procuring from external manufacturers and other suppliers that we then turn around and distribute to the customer. I'll just give you one example while there's several out there. You know, a simple example would be contrast dye. Where there is a shortage of contrast dye it's impacting the ability for our customers to be able to do the diagnostic tests. You know, they're prioritizing their diagnostic tests. That's just one simple example of a diagnostic product that's unavailable. Look, our manufacturing partners and those who make these products are working hard to improve their productivity or improve their output. Excuse me, I should say, increase their output. We're seeing that happen already. We expect that to remain, you know, in several of these examples to remain low in the third quarter, but start to recover in the fourth quarter. Thank you. I show our next question comes from the line of Hanna Lee from Bank of America. Hi, this is Hanna Lee. I'm on for Mike Cherny. Thanks for taking my question. Just in light of ongoing cost pressures, can you talk about some of the pricing power you have in both lines of businesses? Yes. The way I really think about pricing power, I gotta think we think about it differently with really our different businesses. You know, pricing power, let me start with our Patient Direct business. The reality on pricing power in our Patient Direct business is really limited to our ability to work with the private payers to adjust our reimbursement rates. We sit down with them, and we have those conversations, and we explain through. You know, at times we're successful, and at times, you know, we hold off on some of those. The other aspect of it in our Patient Direct business is really CMS funding, and that's relatively locked in. You know, I think, you know, there's limited on that. You know, on the product side, you know, we've been relatively successful, I would say, with having the open, transparent conversations with our customers. I point to the glove cost pass through. You know, we were clear with our customers of what cost increases we had. You know, we laid those out to the customers. We directly explained what the drivers were. You know, and based on that, we were able to pass those costs through as they went up, but in the same sense, we brought them down as product costs came down. You know, I think that transparency model has been clear, and it shows that we've had the ability to both pass on cost increases and then quickly take the cost back down as our costs went down. You know, on the medical distribution side, you know, there's really not a lot of margin to play within that business, you know, because of the nature of the model. It's such a low margin business. You know, on certain areas, we will work with our customers. We work with our customers, not necessarily on product costs, because that's decision is between the manufacturer and the end user. We will work with them on other things like optimizing freight and looking at different ways to take those costs out to offset it. You know, I think overall in the pricing power, it's different by each of the different aspects of our business. I would say in our products business or manufacturing business, we've done a very good job of passing on those costs, but it's been because we've been open and transparent with our customers. You know, on our Patient Direct business, we've done a very good job working with our external payers to make sure they understand the dynamics and where appropriately, we have been able to get some adjustments. On the distribution side, again, it's really been focused on how do we optimize our operations and take waste out of it to offset that. Thank you. I show our next question comes from the line of Eric Coldwell from Robert W. Baird. Please go ahead. Hey, thanks. Good morning. I have a few questions here. Some of them are very technical. I'll just start off with FX. I just wanna make sure we're clear on the guidance impact across FX inflation and interest rates. Can you tell us what the original FX headwind expectation was, where it was recently in the last update, and then the incremental addition for FX in this update? Yeah. Eric, it's Andy. Good morning. Happy to take that question. You know, maybe I'll just start by describing a little bit more the nature of FX, and then we can get quantitative. You know, again, the strengthening dollar has primarily hit us in our selling currencies, right? The euro, the pound, the Japanese yen. Where we're converting local currency into U.S. dollars, we're taking the hit there. We're not seeing, you know, the strengthening dollar help us much on the cost side because, again, most of our manufacturing footprint is in North America. Quite frankly, where we have production outside the U.S., Honduras, and Mexico, the dollar's been relatively stable, so we're not seeing as much of a corresponding benefit on the cost side. In the current forecast and what's changed from where we were last time we talked at the Q1 earnings call, with that dollar strengthening sharply during Q2, we expect that to be probably contributing about $0.05 of FX headwind from where we were the last time we talked. We're using the June 30th FX rates as the basis of our guidance for this time, this forecast. I know that FX rates have eased a little bit here in July, and if that continues, then that could provide us with a little bit of lift. At this point in time, we're using the June 30th rates. The original guidance, when we came out in the fourth quarter, was based on December 31st FX rates. Okay. That original guidance, can you remind us what the original expectation was? Eric, I would actually have to get back to you on that. I don't recall- No. How much FX was made. No, no problem. Could we get the Apria EBITDA in 2Q? What I'll say is, you know, we haven't given quarterly amounts, but what we have confirmed is our expectation for the year, and that, you know, I've made earlier comments that on a full year basis, I expect when I say full year, I mean, like, a pro forma 12-month basis, we expect Apria to contribute $240 million of EBITDA. For the period of ownership, you know, post-March 29th of this year, we do expect to have in excess of $180 million of EBITDA contribution and, under our definition, and that is right on track. You know, I feel very good about that forecast. Okay, great. On the glove passthroughs, $100 million in the quarter, can you remind us how that stacked up versus your expectation? I don't think we saw a specific update on the $400 million-$450 million range for the year. Yes. I would say that the $100 million of headwind was probably a little bit slightly less than what we had expected. In terms of the update on the full year, we haven't changed our guidance, but I would say we're at the lower end of that range. Okay. Final one from me, and thank you for all of this. With the revenue headwind in distribution and products the here in the quarter and then as well as the outlook, it sounds like the vast majority is really related to distribution, but I want you to clarify that or quantify that if you can, making sure that we're not missing something on products. We've all expected an easing of demand through the year, but it feels like the majority of this guidance reduction is related to the volume situation as opposed to products being materially lower than you expected. Is that correct? Yeah, Eric, it's Andy. No, I think you hit the nail on the head. I think, you know, the $150 million reduction in guidance, as I mentioned earlier, is all Products & Healthcare Services. And although it's, you know, hospital utilization driven, which is primarily medical distribution, I don't want our audience to forget that we do have a portion of our product portfolio that's non-PPE. There is a portion of elective procedure related products in our proprietary portfolio, albeit smaller than the overall PPE. There is a little bit of impact on the proprietary product side, but you're absolutely correct, the lion's share of that is gonna be in medical distribution. Okay. Thank you very much. Thank you. I'm showing no further questions in the queue at this time. I'd like to turn the call back over to Ed Pesicka, President and CEO, for closing remarks. Thank you, everyone. Thanks for joining on this call this morning. Really, there's a couple areas I wanna cover. Obviously, you know, I'm really pleased with how our second quarter turned out. As I stated in my prepared remarks, we continue to gain share and win some meaningful high-quality customers. I think the other thing that's important to note is that the fact that within our Patient Direct business, you know, we really continue to diversify the total company revenue and EBITDA, and we're doing that really in two ways. One is the strong growth from our Byram business, again, in the high teens of growth, as well as the Apria acquisition that will continue to expand and help diversify the total company revenue and EBITDA. Again, we saw, you know, great growth in Apria for the quarter in the mid-single digits, so continuing to see the beginning of our synergies and the integration work very, very well. You know, and ultimately, I think historically, the last three years, we've shown our ability to demonstrate, you know, as well as the effectiveness of our long-term strategy, our operational excellence and our business challenge. We're really looking forward to the back half of this year and really continuing our strength going forward. Thank you, everyone, and look forward to talking again next quarter. Thank you for attending today's conference. This concludes the program. You may all disconnect.