UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to
Commission file number 1-9810
OWENS & MINOR, INC.
(Exact name of Registrant as specified in its charter)
Virginia 54-1701843
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4800 Cox Road, Glen Allen, Virginia 23060
(Address of principalexecutive offices) (Zip Code)
Registrant's telephone number, including area code (804)
747-9794
(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check mark whether the Registrant (1) has
filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
The number of shares of the company's common stock
outstanding as of November 3, 1995 was 30,859,120 shares.
Owens & Minor, Inc. and Subsidiaries
Index
Part I. Financial Information
Consolidated Balance Sheets - September 30, 1995 and
December 31, 1994
Consolidated Statements of Income - Three Months and
Nine Months Ended September 30, 1995 and 1994
Consolidated Statements of Cash Flows - Nine Months
Ended September 30, 1995 and 1994
Notes to Consolidated Financial Statements
Management's Discussion and Analysis of Results of
Operations and Financial Condition
Part II. Other Information
Part I. Financial Information
Item 1. Financial Statements
Owens & Minor, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except per share data)
<TABLE>
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Septebmer 30, December 31,
1995 1994
Assets
Current assets
Cash and cash equivalents $ 221 $ 513
Accounts and notes receivable, net 325,018 290,240
Merchandise inventories 336,140 323,851
Other current assets 32,072 26,222
Total current assets 693,451 640,826
Property and equipment, net 41,417 38,620
Excess of purchase price over net
assets acquired, net 172,739 175,956
Other assets 20,148 13,158
Total assets $ 927,755 $ 868,560
Liabilities and Shareholders' Equity
Current liabilities
Current maturities of long-term debt $ 3,534 $ 236
Accounts payable 255,376 296,878
Accrued payroll and related liabilities 7,660 11,294
Other accrued liabilities 39,775 50,630
Total current liabilities 306,345 359,038
Long-term debt 368,156 248,427
Other liabilities 6,566 4,919
Total liabilities 681,067 612,384
Shareholders' equity
Preferred stock, par value $100 per share;
authorized - 10,000 shares
Series A; Participating Cumulative
Preferred Stock; none issued - -
Series B; Cumulative Preferred
Stock; 4 1/2%, convertible;
issued - 1,150 shares 115,000 115,000
Common stock, par value $2 per share;
authorized - 200,000 shares; issued -
30,843 shares in 1995 and 30,764 in 1994 61,686 61,528
Paid-in capital 1,905 1,207
Retained earnings 68,097 78,441
Total shareholders' equity 246,688 256,176
Total liabilities and shareholders'
equity $ 927,755 $ 868,560
</TABLE>
See Notes to Consolidated Financial Statements.
Owens & Minor, Inc. and Subsidiaries
Consolidated Statements of Income
(In thousands, except per share data)
<TABLE>
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Three Months Ended Nine Months Ended
September 30, September 30,
</TABLE>
<TABLE>
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1995 1994 1995 1994
Net sales $739,021 $693,004 $2,229,834 $1,665,561
Cost of sales 679,655 626,770 2,027,059 1,503,392
Gross margin 59,366 66,234 202,775 162,169
Selling, general and 57,229 46,797 164,864 116,882
administrative expenses
Depreciation and amortization 3,833 3,757 11,062 9,356
Interest expense, net 7,128 3,575 18,249 5,603
Nonrecurring restructuring 4,656 9,037 11,431 27,654
expenses
Total expenses 72,846 63,166 205,606 159,495
Income (loss) before income (13,480) 3,068 (2,831) 2,674
taxes
Income tax provision (benefit) (4,879) 1,582 (531) 1,557
Net income (loss) (8,601) 1,486 (2,300) 1,117
Dividends on preferred stock 1,293 1,293 3,881 2,020
Net income (loss) attributable $ (9,894) $ 193 $ (6,181) $ (903)
to common stock
Net income (loss) per common $ (0.32) $ 0.01 $ (0.20) $ (0.03)
share
Cash dividends per common share $ 0.045 $ 0.045 $ 0.135 $ 0.125
Weighted average common shares
and common share equivalents 30,839 31,191 30,804 30,981
</TABLE>
See Notes to Consolidated Financial Statements.
Owens & Minor, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Nine Months Ended
(In thousands) September 30,
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1995 1994
Operating Activities
Net income (loss) $ (2,300) $ 1,117
Noncash charges to income (loss)
Depreciation and amortization 11,062 9,356
Provision for losses on accounts and
notes receivable 476 837
Provision for LIFO reserve 2,912 640
Other, net 1,619 798
Cash provided by net income (loss) and noncash 13,769 12,748
charges
Change in operating assets and liabilities
Accounts and notes receivable (35,254) (123,924)
Merchandise inventories (15,201) (85,322)
Accounts payable (14,464) 21,794
Net change in other current assets
and current liabilities (18,732) 37,645
Other, net (2,421) 82
Cash used for operating activities (72,303) (136,977)
Investing Activities
Business acquisitions, net of cash acquired - (38,622)
Additions to property and equipment (9,890) (2,559)
Additions to computer software (5,721) (702)
Other, net 105 38
Cash used for investing activities (15,506) (41,845)
Financing Activities
Additions to long-term debt 122,435 214,192
Reductions of long-term debt (180) (74,967)
Other short-term financing, net (27,038) 42,079
Cash dividends paid (8,044) (4,986)
Exercise of options 344 800
Cash provided by financing activities 87,517 177,118
Net decrease in cash and cash equivalents (292) (1,704)
Cash and cash equivalents at beginning of year 513 2,048
Cash and cash equivalents at end of period $ 221 $ 344
</TABLE>
See Notes to Consolidated Financial Statements.
Owens & Minor, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
1. Accounting Policies
In the opinion of management, the accompanying unaudited
consolidated financial statements contain all
adjustments (which are comprised only of normal
recurring accruals and the use of estimates) necessary
to present fairly the consolidated financial position of
Owens & Minor, Inc. and subsidiaries (the company) as of
September 30, 1995 and the results of operations for the
three and nine month periods and cash flows for the nine
month periods ended September 30, 1995 and 1994.
Certain 1994 amounts have been reclassified to conform
with the 1995 presentation.
2. Interim Results of Operations
The results of operations for interim periods are not
necessarily indicative of the results to be expected for
the full year.
3. Interim Gross Margin Reporting
In general, the company uses estimated gross margin
rates to determine the cost of sales during interim
periods. To improve the accuracy of its estimated gross
margins for interim reporting purposes, the company
takes physical inventories at selected distribution
centers, and reported results of operations for the
quarter reflect the results of such inventories, if
materially different. Management will continue a
program of interim physical inventories at selected
distribution centers to the extent it deems appropriate
to ensure the accuracy of interim reporting and to
minimize year-end adjustments.
4. Nonrecurring Restructuring Expenses
During the third quarter and the first nine months of
1995, the company incurred $4.7 million and $11.4
million, respectively, of nonrecurring restructuring
expenses. During the third quarter and the first nine
months of 1994, the company incurred $9.0 million and
$27.7 million, respectively, of nonrecurring
restructuring expenses. These expenses were related to
the company's restructuring plan developed in connection
with the company's May 1994 combination with Stuart
Medical, Inc. and its related decision to contract out
the management and operation of its mainframe computer
system. All facility and system consolidations are
expected to be completed during 1995 with total 1995
restructuring expenses forecast to approximate $14
million. At September 30, 1995, accrued restructuring
expenses were $1.8 million.
5. Subsequent Events
On October 20, 1995, the company amended its $425
million Credit Facility. The amendment modifies certain
financial covenants of the existing agreement and, under
certain conditions, increases the pricing of the
agreement.
Item 2.
Owens & Minor, Inc. and Subsidiaries
Management's Discussion and Analysis of
Results of Operations and Financial Condition
Net Sales
During the third quarter of 1995, net sales increased 6.6% to
$739.0 million from $693.0 million in the third quarter of
1994. For the first nine months of 1995, net sales increased
33.9% to $2.2 billion from $1.7 billion in the first nine
months of 1994. Assuming the Stuart Medical, Inc. (Stuart)
combination had occurred January 1, 1994, the increase would
have been approximately 5.0% for the third quarter and 10.4%
for the first nine months. The overall increase from 1994 is
due to the additional sales volume from contracts entered into
in 1993 and 1994 with large healthcare providers such as
Columbia/HCA Healthcare Corp., the Department of Defense and
Premier Health Alliance, and the price increases from
manufacturers which are normally passed on to the customer.
During 1995, members of VHA were given the opportunity to
choose one of four medical/surgical supply distributors as
their authorized distribution agent (ADA). In addition to
Owens & Minor, the distribution choices were Shared Service
Systems of Nebraska, the Burrows Company and newly-added
Baxter distribution. Under terms of an agreement reached
between VHA and Baxter manufacturing, all ADAs are authorized
to distribute a select group of Baxter self-manufactured
products to VHA healthcare organizations. With the completion
of the selection process, the company maintained over 85% of
its previous VHA volume. The loss of volume has been
partially offset by the gain in distributing Baxter's self-
manufactured products to VHA hospitals and by increasing
market share within VHA facilities as a result of the expanded
volume commitment of non-traditional products by these
accounts. Non-traditional products, in this case, are
products that have historically been sold directly to
hospitals by manufacturers, but are now beginning to come
through distribution, or products that have been sold through
other channels of distribution that are being consolidated
through one distributor.
As a result of its recent announcement regarding price
increases, the company anticipates losing some customers.
However, the company expects to offset this with contracts
recently awarded, further penetration of existing accounts, as
well as prospects for new business.
Gross Margin
Gross margin as a percentage of net sales declined to 8.0% in
the third quarter of 1995 from 9.6% in the third quarter of
1994. Gross margin also declined to 9.1% for the first nine
months of 1995 from 9.7% in the first nine months of 1994.
The decrease was a result of the increase in sales from lower
margin/high volume contracts and the recording of reserves for
inventory and sales credits during the third quarter. To
address this issue, the company has initiated several plans to
offset the margin declines, including an across-the-board
price increase and specific actions focused on low margin/low
return contracts. Although the price increase is currently in
the process of being implemented, groups representing the
majority of the company's sales have tentatively agreed to the
price increase. Because these agreements are in their
preliminary stages, their financial impact cannot be assured.
However, the company anticipates an improved gross margin as
a result of these actions.
Selling, General and Administrative Expenses
Selling, general and administrative (SG&A) expenses as a
percentage of net sales increased from 6.8% in the third
quarter of 1994 to 7.7% in the third quarter of 1995. SG&A
expenses also increased from 7.0% for the first nine months of
1994 to 7.4% in the first nine months of 1995. The increase
in SG&A expenses was primarily a result of increased personnel
costs caused by system conversions, facility relocations and
new contracts providing for enhanced service levels and
services not previously provided by the company. The company
expects to reduce personnel levels once physical inventories
are completed.
Depreciation and Amortization
Depreciation and amortization increased by 2.0% in the third
quarter of 1995 compared to the third quarter of 1994 and
18.2% for the first nine months of 1995 compared to the first
nine months of 1994. These increases are due primarily to the
company's continued investment in improved technology and the
amortization of goodwill and depreciation associated with the
Stuart transaction.
Interest Expense, Net
Interest expense, net of interest income, increased from $3.6
million in the third quarter of 1994 to $7.1 million in the
third quarter of 1995 and from $5.6 million for the first nine
months of 1994 to $18.2 million in the first nine months of
1995. Interest expense has increased significantly due to a
combination of higher interest rates and an increase in debt
to finance excess inventory levels, the Stuart combination and
the company's related restructuring plan and technology
initiatives.
On October 20, 1995, the company amended its $425 million
Credit Facility. The amendment modifies certain financial
covenants of the existing agreement and, under certain
conditions, increases the pricing of the agreement.
To reduce interest expense, the company has several
initiatives to reduce excess inventory levels. Inventory
levels are expected to decline as the company's new
client/server based forecasting system is implemented over the
next several months and as the company reduces excess
inventory generated from warehouse consolidations and
relocations and the start-up of new business.
Income Taxes
During the third quarter, the company's effective income tax
rate changed from an expense of 40.8% of pretax income through
the first six months of 1995 to a benefit of 18.8% through the
first nine months of 1995. This change is due to the
company's lower earnings level increasing the impact of
certain nondeductible expenses such as goodwill amortization.
Nonrecurring Restructuring Expenses
During the third quarter of 1995 and the first nine months of
1995, the company incurred $4.7 million and $11.4 million,
respectively, of nonrecurring restructuring expenses related
to the company's restructuring plan developed in connection
with the company's May 1994 combination with Stuart and its
related decision to contract out the management and operation
of its mainframe computer system. The restructuring expenses
incurred during the third quarter of 1995 relate primarily to
duplicate facilities, duplicate systems costs and expenses
related to contracting out the computer system. All
consolidations are expected to be completed during 1995, with
total 1995 restructuring expenses forecast to approximate $14
million.
Net Income (Loss)
During the third quarter of 1995, the company incurred a net
loss of $8.6 million compared to net income of $1.5 million
in 1994. During the first nine months of 1995, the company
incurred a net loss of $2.3 million compared to net income of
$1.1 million in 1994. Excluding the nonrecurring expenses and
the related tax benefit, the company recorded a net loss of
approximately $5.8 million or $.23 per common share for the
third quarter and net income of $4.6 million or $.02 per
common share for the first nine months. As previously
discussed, the losses were due to the combination of a decline
in gross margin, an increase in SG&A expenses and an increase
in interest expense. Although the initiatives previously
discussed are anticipated to improve the earnings of the
company, their impact cannot be assured.
Financial Condition
With the decrease in gross margin percentages and increases in
SG&A expenses and interest expense percentages as discussed,
return on common equity decreased. With the company's
increase in debt to finance excess inventory levels, the
Stuart combination and related restructuring plan, the current
ratio and capitalization ratio have increased and inventory
turnover has decreased. With the completion of the
consolidation of Stuart in September, the company will be able
to redirect its focus to reducing inventory levels, expenses,
and debt, and, in conjunction with its customers and
manufacturer partnerships, increasing margins.
<TABLE>
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Nine Months Twelve Months Nine Months
September 30, 1995 December 31, 1994 September 30, 1994
Return on Common 5.7% 16.2% 15.6%
Equity*
Current Ratio 2.3 1.8 1.9
Inventory Turnover 8.2 8.8 8.2
Accounts Receivable 36.5 35.9 35.6
Days Sales
Capitalization Ratio 59.9% 49.2% 49.4%
</TABLE>
* Excludes impact of nonrecurring restructuring expenses and
related tax benefit.
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(4) Second Amendment to Credit Agreement dated as
of October 20, 1995 by and among the Company,
as borrower, certain of the company's
subsidiaries, as guarantors, NationsBank,
N.A., as Agent, Chemical Bank and Crestar
Bank, as Co-Agents, and the Banks identified
therein.
(27) Financial Data Schedule
(b) Reports on Form 8-K
The company filed a Current Report on Form 8-K
dated September 15, 1995, Items 5 and 7, with
respect to the issuance of a press release relating
to preliminary third quarter and fiscal year 1995
earnings.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
OWENS & MINOR, INC.
(Registrant)
Date November 10, 1995 /s/ Glenn J. Dozier
Glenn J. Dozier
Senior Vice President, Finance,
Chief Financial Officer
Date November 10, 1995 /s/ Ann G. Rector
Ann G. Rector
Vice President, Controller
Exhibit Index
Exhibit # Description
4 Second Amendment to Credit Agreement dated as of
October 20, 1995 by and among the Company, as
borrower, certain of the company's subsidiaries, as
guarantors, NationsBank, N.A., as Agent, Chemical
Bank and Crestar Bank, as Co-Agents, and the Banks
identified therein.
27 Financial Data Schedule
Exhibit (4)
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT (the "Second Amendment") dated
as of October 20, 1995 is to that Credit Agreement dated as
of April 29, 1994 as amended by that First Amendment dated
as of February 28, 1995 (as amended and modified thereby and
hereby and as further amended and modified from time to time
hereafter, the "Credit Agreement"; terms used but not
otherwise defined herein shall have the meanings assigned in
the Credit Agreement), by and among OWENS & MINOR, INC., a
Virginia corporation (formerly known as O & M Holding, Inc.)
(the "Borrower"), CERTAIN OF ITS SUBSIDIARIES identified as
a "Guarantor" in the definition thereof and on the signature
pages hereof (hereinafter sometimes referred to individually
as a "Guarantor" and collectively as the "Guarantors"), the
various banks and lending institutions identified on the
signature pages hereto (each a "Bank" and collectively, the
"Banks"), NATIONSBANK, N.A. (formerly known as NationsBank
of North Carolina, N.A.) as agent (in such capacity, the
"Agent"), CHEMICAL BANK and CRESTAR BANK as co-agents (in
such capacity, the "Co-Agents") and NATIONSBANK, N.A.
(formerly known as NationsBank of North Carolina, N.A.) as
administrative agent for the Banks (in such capacity, the
"Administrative Agent").
W I T N E S S E T H
WHEREAS, the Banks have established a $425,000,000
credit facility for the benefit of the Borrower pursuant to
the terms of the Credit Agreement;
WHEREAS, the Borrower has requested modification of
certain covenants contained in the Credit Agreement; and
WHEREAS, the Required Banks have agreed to the
requested modifications for and on behalf of the Banks on
the terms and conditions set forth herein;
NOW, THEREFORE, IN CONSIDERATION of the premises and
other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:
A. The Credit Agreement is amended in the following
respects:
1. The following definitions in Section 1.01
are amended and modified to read as follows:
"Consolidated Operating EBITDA" means, for the
applicable period ending as of a Determination Date,
the sum of Consolidated Net Income plus (to the extent
deducted in determining Consolidated Net Income)
(i) all provisions for any Federal, state
or other income taxes,
(ii) depreciation, amortization and other
non-cash charges, including without limitation
any accrual necessary for purposes of conforming
with Financial Accounting Standards Board
Statement Number 106 (as defined by generally
accepted accounting principles) to the extent
that the accrued portion thereof constitutes a
non-cash charge,
(iii) Interest Expense, and
(iv) restructuring costs taken in fiscal
year 1995,
for the Borrower and its Restricted Subsidiaries on a
consolidated basis determined in accordance with
generally accepted accounting principles.
"Eligible Inventory" means, as of any date of
determination, the aggregate book value (based on a
FIFO valuation) of all inventory of the Credit Parties
on a consolidated basis after deducting allowances or
reserves relating thereto, as shown on the books and
records of the Credit Parties.
2. The table in Section 2.05, regarding the
Applicable Margin, is amended and modified to read as
follows:
Applicable Margin
<TABLE>
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Eurodollar Loans and Base Rate
Consolidated Total Fed Fund Swingline Loan Loan
Debt to Consolidated
Capitalization Fixed Charge Coverage Ratio:
Ratings Ratio <1.0:1.0 =>1.0:1.0
>=60% 1.125% 1.125% .25%
BB/Ba2 <60% but >=55% 1.000% 1.000% .25%
BB+/Ba1 <55% but >=50% 1.000% .875% 0%
BBB-/Baa3 <50% but >=45% 1.000% .750% 0%
BBB/Baa2 <45% but >=40% 1.000% .625% 0%
BBB+/Baa1 <40% 1.000% .500% 0%
3. Subsections (d) and (e) of Section 6.11,
regarding the Leverage Ratio and Fixed Charge Coverage
Ratio, are amended and modified and a new subsection (f) is
added to Section 6.11, regarding Operating EBITDA,to read as
follows:
(d) Leverage Ratio. On each Determination Date the
ratio of Consolidated Total Debt to Consolidated Total
Capitalization will not exceed:
Leverage Ratio
From the Closing Date through
and including the fiscal
quarter ending on
June 30, 1996 .65 to 1.0
Thereafter .60 to 1.0
(e) Fixed Charge Coverage Ratio. As of each
Determination Date for the Applicable Period set forth
below, the Fixed Charge Coverage Ratio will not be less
than:
Fixed Charge
Coverage Ratio
For the fiscal quarter ending
on September 30, 1995 1.0 to 1.0
For the fiscal quarter ending
on December 31, 1995 .80 to 1.0
For the fiscal quarter ending
on March 31, 1996 .75 to 1.0
For the fiscal quarter ending
on June 30, 1996 .70 to 1.0
For the fiscal quarter ending
on September 30, 1996 .90 to 1.0
For the fiscal quarter ending
on December 31, 1996 through
and including the fiscal
quarter ending on June 30, 1997 1.15 to 1.0
For the fiscal quarter ending
on September 30, 1997 and
thereafter 1.25 to 1.0
The Applicable Period for which the Fixed Charge Coverage
Ratio shall be determined shall be for the period of four
consecutive fiscal quarters ending as of the Determination
Date, except that determination of current maturities of
Funded Debt and current maturities of Capitalized Leases
under subsection (iii) of the definition of Consolidated
Fixed Charges shall be for a period of four consecutive
quarters beginning on the Determination Date.
(f) Consolidated Operating EBITDA. As of each
Determination Date to occur during the period from October
20, 1995 (being the date of the Second Amendment to Credit
Agreement) through December 31, 1996 (being the last day of
the Borrower's fiscal year 1996), Consolidated Operating
EBITDA for the fiscal quarter then ending will not be less
than:
For the Fiscal Quarter
Ending
December 31, 1995 $ 9,500,000
March 31, 1996 $17,000,000
June 30, 1996 $17,500,000
September 30, 1996 $18,000,000
December 31, 1996 $19,000,000
B. The Borrower agrees to pay in connection with
this Second Amendment a non-refundable fee of $425,000
(representing 10 b.p. on the aggregate amount of the
Revolving Commitments) to the Agent for the ratable benefit
of the Banks.
C. The Borrower hereby represents and warrants that:
(i) any and all representations and warranties
made by the Borrower and contained in the Credit
Agreement (other than those which expressly relate to
a prior period) are true and correct in all material
respects as of the date of this Second Amendment; and
(ii) No Default or Event of Default currently
exists and is continuing under the Credit Agreement as
of the date of (after giving effect to) this Second
Amendment.
D. This Second Amendment shall not be effective
until receipt by the Administrative Agent of the following
in form and substance satisfactory to the Banks:
1. Executed Documents. Executed copies of
this Second Amendment and related documentation by the
Borrower, the Guarantors and the Required Banks.
2. Legal Opinions. Legal opinions of Drew
St.J. Carneal, Esq., Senior Vice President and
Corporate Counsel of the Borrower, and Hunton &
Williams, special counsel to the Borrower and the
Guarantors, addressed to the Administrative Agent and
the Banks in form acceptable to the Administrative
Agent and the Required Banks.
3. Other Information. Such other information
and documents as the Administrative Agent may
reasonably request.
E. The Borrower will execute such additional
documents as are reasonably requested by the Administrative
Agent to reflect the terms and conditions of this Second
Amendment.
F. Except as modified hereby, all of the terms and
provisions of the Credit Agreement (and Schedules) remain in
full force and effect.
G. The Borrower agrees to pay all reasonable costs
and expenses in connection with the preparation, execution
and delivery of this Second Amendment, including without
limitation the reasonable fees and expenses of Moore & Van
Allen, PLLC, special counsel to the Administrative Agent.
H. This Second Amendment may be executed in any
number of counterparts, each of which when so executed and
delivered shall be deemed an original and it shall not be
necessary in making proof of this Second Amendment to
produce or account for more than one such counterpart.
I. This Second Amendment and the Credit Agreement,
as amended hereby, shall be deemed to be contracts made
under, and for all purposes shall be construed in accordance
with the laws of the Commonwealth of Virginia.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, each of the parties hereto has
caused a counterpart of this Second Amendment to Credit
Agreement to be duly executed under seal and delivered as of
the date and year first above written.
BORROWER:
OWENS & MINOR, INC.,
a Virginia corporation
(formerly known as O & M
Holding, Inc.)
By____________________________
Title_________________________
GUARANTORS:
OWENS & MINOR MEDICAL, INC.
a Virginia corporation
(formerly known as Owens &
Minor, Inc.)
By____________________________
Title_________________________
NATIONAL MEDICAL SUPPLY
CORPORATION
a Delaware corporation
By____________________________
Title_________________________
OWENS & MINOR WEST, INC.
a California corporation
By____________________________
Title_________________________
KOLEY'S MEDICAL SUPPLY, INC.
a Nebraska corporation
By____________________________
Title_________________________
Signature Pages to
Owens & Minor, Inc. Second Amendment
LYONS PHYSICIAN SUPPLY COMPANY
an Ohio corporation
By____________________________
Title_________________________
A. KUHLMAN & COMPANY
a Michigan corporation
By____________________________
Title_________________________
STUART MEDICAL, INC.
a Pennsylvania corporation
By____________________________
Title_________________________
BANKS:
NATIONSBANK, N.A.,
individually in its capacity
as a Bank and in its capacity
as Agent and Administrative
Agent (formerly known as
NationsBank, N.A. (Carolinas)
which was formerly known as
NationsBank of North Carolina,
N.A.)
By____________________________
Michael B. Andry,
Vice President
CHEMICAL BANK,
individually in its capacity
as a Bank and in its capacity
as a Co-Agent
By
Title
CRESTAR BANK,
individually in its capacity
as a Bank and in its capacity
as a Co-Agent
By
Title
Signature Pages to
Owens & Minor, Inc. Second Amendment
BANK OF AMERICA NT & SA
By____________________________
Title_________________________
THE BANK OF NOVA SCOTIA
By____________________________
Title_________________________
FIRST UNION NATIONAL BANK OF
VIRGINIA
By____________________________
Title_________________________
PNC BANK, NATIONAL ASSOCIATION
By____________________________
Title_________________________
BANK OF MONTREAL
By____________________________
Title_________________________
THE BANK OF NEW YORK
By____________________________
Title_________________________
MELLON BANK, N.A.
By____________________________
Title_________________________
NATWEST BANK N.A. (formerly
known as National Westminster
Bank USA)
By____________________________
Title_________________________
Signature Pages to
Owens & Minor, Inc. Second Amendment
NBD BANK
By____________________________
Title_________________________
THE SANWA BANK LTD.
By____________________________
Title_________________________
SHAWMUT BANK CONNECTICUT N.A.
By____________________________
Title_________________________
SIGNET BANK/VIRGINIA
By____________________________
Title_________________________
WACHOVIA BANK OF NORTH
CAROLINA, N.A.
By____________________________
Title_________________________
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