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 March 31, 1996
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 principal
executive 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 May 1, 1996 was 31,857,560 shares.
Owens & Minor, Inc. and Subsidiaries
Index
Part I. Financial Information
Consolidated Balance Sheets - March 31, 1996 and
December 31, 1995
Consolidated Statements of Operations - Three Months
Ended March 31, 1996 and 1995
Consolidated Statements of Cash Flows - Three Months
Ended March 31, 1996 and 1995
Notes to Consolidated Financial Statements
Management's Discussion and Analysis of Financial
Condition and Results of Operations
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>
<S> <C> <C>
March 31, December 31,
1996 1995
Assets
Current assets
Cash and cash equivalents $ 295 $ 215
Accounts and notes receivable, net 269,628 265,238
Merchandise inventories 316,330 326,380
Other current assets 29,058 32,069
Total current assets 615,311 623,902
Property and equipment, net 38,014 39,049
Excess of purchase price over net
assets acquired, net 170,775 171,911
Other assets, net 24,301 22,941
Total assets $ 848,401 $ 857,803
Liabilities and shareholders' equity
Current liabilities
Current maturities of
long-term debt $ 722 $ 4,055
Accounts payable 242,678 241,048
Accrued payroll and related
liabilities 6,637 5,534
Other accrued liabilities 39,562 41,602
Total current liabilities 289,599 292,239
Long-term debt 313,206 323,308
Accrued pension and retirement plans 7,901 6,985
Total liabilities 610,706 622,532
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; 4.5%, convertible;
issued - 1,150 shares 115,000 115,000
Common stock, par value $2 per share;
authorized - 200,000 shares;
issued - 31,739 at
March 31, 1996 and 30,862 at
December 31, 1995 63,478 61,724
Paid-in capital 3,978 2,144
Retained earnings 55,239 56,403
Total shareholders' equity 237,695 235,271
Total liabilities and
shareholders' equity $ 848,401 $ 857,803
</TABLE>
See accompanying notes to consolidated financial statements.
Owens & Minor, Inc. and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data)
<TABLE>
<S> <C> <C>
Three Months Ended
March 31,
1996 1995
Net sales $ 771,312 $ 747,095
Cost of goods sold 697,133 674,187
Gross margin 74,179 72,908
Selling, general and
administrative expenses 61,040 53,561
Depreciation and amortization 3,930 3,516
Interest expense, net 5,800 5,391
Discount on accounts receivable
securitization 744 -
Nonrecurring restructuring
expenses - 2,661
Total expenses 71,514 65,129
Income before income taxes 2,665 7,779
Income tax provision 1,146 3,166
Net income 1,519 4,613
Dividends on preferred stock 1,294 1,294
Net income attributable to
common stock $ 225 $ 3,319
Net income per common share $ 0.01 $ 0.11
Cash dividends per common share $ 0.045 $ 0.045
Weighted average common shares
and common share equivalents 31,140 31,087
</TABLE>
See accompanying notes to consolidated financial statements.
Owens & Minor, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
<TABLE>
<S> <C> <C>
Three Months Ended
(In thousands) March 31,
1996 1995
Operating Activities
Net income $ 1,519 $ 4,613
Adjustments to reconcile net income to cash
provided by (used for) operating
activities
Depreciation and amortization 3,930 3,516
Provision for losses on accounts and
notes receivable 279 121
Provision for LIFO reserve 2,748 962
Other, net 566 559
Change in operating assets and
liabilities
Accounts and notes receivable (4,669) (16,202)
Merchandise inventories 7,302 (30,868)
Accounts payable (2,464) (65,174)
Net change in other current assets
and current liabilities 2,423 (4,157)
Other, net 985 (3,935)
Cash provided by (used for)
operating activities 12,619 (110,565)
Investing Activities
Additions to property and equipment (1,249) (2,363)
Additions to computer software (2,483) (2,034)
Proceeds from sale of property and
equipment 27 4
Cash used for investing activities (3,705) (4,393)
Financing Activities
Additions to long-term debt - 74,696
Reductions of long-term debt (10,362) (59)
Other short-term financing, net 4,094 42,575
Cash dividends paid (2,683) (2,680)
Exercise of stock options 117 174
Cash provided by (used for)
financing activities (8,834) 114,706
Net increase (decrease) in cash
and cash equivalents 80 (252)
Cash and cash equivalents at beginning
of year 215 513
Cash and cash equivalents at end of period $ 295 $ 261
</TABLE>
See accompanying 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 its wholly owned
subsidiaries (the Company) as of March 31, 1996 and
the results of operations and cash flows for the three
months ended March 31, 1996 and 1995.
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 goods sold 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. Refinancing Plan
During March 1996, the Company filed a Registration
Statement on Form S-3 with the Securities and Exchange
Commission for the offering of $150 million (aggregate
principal amount) senior subordinated 10-year notes
(the Notes) in conjunction with its refinancing plan
which is expected to be completed in the second
quarter of 1996.
Concurrently with its offering of the Notes, the
Company will enter into a $225.0 million Senior Credit
Facility (the New Senior Credit Facility) and will use
borrowings under the New Senior Credit Facility,
together with the net proceeds from the offering of
the Notes, to repay in full outstanding indebtedness
under the Company's current $425.0 million Senior
Credit Facility. Following the completion of the
offering of the Notes, the Company's $75.0 million
receivables financing facility will be increased to a
maximum of $150.0 million, the proceeds of which will
be used to reduce amounts outstanding under the New
Senior Credit Facility.
To reduce the potential impact of increases in
interest rates in the period before the issuance of
the Notes, the Company entered into interest rate cap
agreements, with an aggregate notional value of $150.0
million. Under the interest rate cap agreements,
entered into from March 28, 1996 to May 3, 1996, the
Company will receive from the bank counterparties on
the determination dates amounts by which the interest
rate of the United States Government 10-Year Treasury
Note exceeds various rates ranging from 6.8% to 7.0%.
The determination dates of the transactions are May
30, 1996 and May 31, 1996. The Company is exposed to
certain losses in the event of nonperformance by the
counterparties to these agreements. However, the
Company's exposure is not material and nonperformance
is not anticipated. During the second quarter of
1996, the Company anticipates entering into further
transactions that will reduce the risk of interest
rate increases for all of its financing facilities.
Item 2.
Owens & Minor, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial
Condition and Results of Operations
First quarter of 1996 compared with first quarter of 1995
Net Sales. Net sales increased 3.2% to $771.3 million in
the first quarter of 1996 from $747.1 million in the first
quarter of 1995 and $746.7 million in the fourth quarter of 1995.
Approximately 50% of each of these increases was due to new
accounts and increased penetration of existing accounts.
The remainder was due to price increases from manufacturers
passed on to customers and the price increases implemented by the
Company during December 1995 and the first quarter of 1996.
The Company believes that sales growth from new accounts and
further penetration of existing accounts have more than
offset, and will continue to offset, any business lost as a
result of the price increases, but such growth and
penetration cannot be assured.
Gross margin. Gross margin as a percentage of net sales
declined to 9.6% in the first quarter of 1996 from 9.8% in
the first quarter of 1995, but increased from 8.7% in the
fourth quarter of 1995. The decrease from the first quarter
of 1995 to the first quarter of 1996 was the result of an
increase in sales to larger accounts that were offered
reduced pricing in return for the expectation of increased
volume, partially offset by the implementation of price
increases during the fourth quarter of 1995 and the first
quarter of 1996. The Company expects that its gross margin
will increase as a percentage of net sales as the full
impact of the price increases are realized in subsequent
quarters. During the first quarter of 1996, the Company's
LIFO (last-in, first-out) reserve increased by $2.7 million
as compared to a $1.0 million increase in the first quarter
of 1995. The increase is due primarily to higher inventory
levels and price increases from manufacturers. The
increases in the LIFO reserve did not have a significant
impact on gross margin because the Company passes through
price increases from manufacturers to its customers. The
Company also anticipates growth in gross margin and net
sales through increased utilization of an activity-based
cost system that charges incremental fees for additional
distribution and enhanced inventory management services such
as more frequent deliveries and distribution of products in
small units of measure. The Company believes the
activity-based cost system will allow the customer to make
more informed decisions about the services they choose to
purchase. There can be no assurance that the Company s
pricing methods will produce increases in net sales or gross
margin as a percentage of net sales in future periods.
Selling, general and administrative expenses. Selling,
general and administrative (SG&A) expenses as a percentage
of net sales increased to 7.9% in the first quarter of 1996
from 7.2% in the first quarter of 1995, but declined from
8.2% in the fourth quarter of 1995. The increase in SG&A
expenses as a percentage of net sales as compared to the
first quarter of 1995 was primarily a result of increased
personnel costs incurred in connection with new contracts
providing for enhanced service levels and services not
previously provided by the Company, a significant increase
in the number of Stock Keeping Units (SKUs) distributed by
the Company, system conversions, opening or expanding 11
distribution centers and reconfiguring warehouse systems.
The decline in SG&A expenses as a percentage of net sales in
the first quarter of 1996 as compared to the fourth quarter
of 1995 was a result of the completion of 22 warehouse
reconfigurations during 1995 and the continued
implementation of the following SG&A expense reduction
initiatives. The Company has reduced overtime and temporary
employee costs by improving productivity through performance
tracking systems and functional best practices training
programs. The Company expects to further reduce
distribution center costs through the closure of two and the
downsizing of five distribution centers which will be
completed during the second quarter of 1996 (which resulted
in $3.5 million of the Company's nonrecurring restructuring
charges in the fourth quarter of 1995). The distribution
center closures and downsizings should better align
distribution center size and location with customer needs,
establish operational efficiencies and reduce administrative
costs. Finally, the Company continues to improve inventory
management by completing the implementation of a new
inventory forecasting system, reconfiguring warehouse
systems and limiting the number of SKUs from multiple
manufacturers distributed by the Company through the
standardization of products. The Company intends to focus
on the standardization of SKUs during 1996 and in future
periods. Although the Company expects that limiting the
number of equivalent SKUs distributed by the Company will
enable it to reduce the handling costs of inventory, the
impact of the Company's standardization initiatives cannot
be assured.
Depreciation and amortization. Depreciation and
amortization increased by 11.8% in the first quarter of 1996
compared to the first quarter of 1995. This increase was
due primarily to the Company's continued investment in
improved Information Technology (IT). The Company
anticipates similar increases in depreciation and
amortization in 1996 associated with additional capital
investment in IT.
Interest expense, net. Interest expense, net of finance
charge income of $1.2 million and $0.5 million in the first
quarter of 1996 and the first quarter of 1995, respectively,
increased from $5.4 million in the first quarter of 1995 to
$5.8 million in the first quarter of 1996 primarily due to
higher borrowing levels to fund increased working capital
requirements and higher interest rates. Finance charge
income represents payments from customers for past due
balances on their accounts.
Management has taken, and will continue to take, action to
reduce interest expense, including (i) completing the
implementation of the Company's new inventory forecasting
system in all distribution centers by mid-1996, (ii)
limiting the number of SKUs from multiple manufacturers
distributed by the Company and (iii) reducing the Company's
effective interest rate through its refinancing plan
discussed below in the liquidity section. Total financing
costs including the discount on the receivables
securitization has declined from the fourth quarter of 1995
by $1.4 million.
Income taxes. The Company had an income tax provision of
$1.1 million in the first quarter of 1996 (representing an
effective tax rate of 43.0%) compared with an income tax
provision of $3.2 million in the first quarter of 1995
(representing an effective tax rate of 40.7%). The increase
in effective tax rate was due to the Company's lower
earnings level increasing the impact of certain
nondeductible expenses such as goodwill amortization.
Net income (loss). The Company earned net income of $1.5
million in the first quarter of 1996 compared to net income
of $4.6 million in the first quarter of 1995. As previously
discussed, the decline was due to the combination of a
decline in gross margin as a percentage of net sales, an
increase in SG&A expenses and an increase in interest
expense. Although the Company has shown improvement from
its fourth quarter 1995 net loss of $9.0 million (which loss
included a $3.4 million nonrecurring restructuring charge,
net of taxes) and the Company continues to pursue the
initiatives previously discussed in an effort to improve the
earnings of the Company, the impact of these initiatives on
net income cannot be assured.
Financial Condition, Liquidity and Capital Resources
Liquidity. The Company's liquidity position improved
significantly during the first quarter of 1996 from the
fourth quarter of 1995. The increase was the result of
improved earnings, reduced working capital requirements and
the availability of additional financing sources. During
1995, several factors unfavorably impacted the Company's
liquidity, including (i) increased working capital
requirements, (ii) decreased earnings, (iii) restructuring
expenses and (iv)increased capital expenditures. The
Company's use of cash for operating activities in prior years
reflected the significant growth of the Company during those
years. Cash was invested in additional inventory
necessary for increased sales levels and higher receivables
levels resulting therefrom. Due to the decline in growth
of the Company in the first quarter of 1996, operating
activities became a source of cash flow. Changes in trends of
the Company's cash used for operating activities are expected to
be consistent with future sales growth and acquisition
activities. The Company funded a majority of these cash
requirements through bank borrowings under its Senior Credit
Facility. At March 31, 1996, the Company had approximately
$122.0 million of unused credit under the Senior Credit
Facility.
During March 1996, the Company filed a Registration
Statement on Form S-3 with the Securities and Exchange
Commission for the offering of $150 million (aggregate
principal amount) senior subordinated 10-year notes (the
Notes) in conjunction with its refinancing plan which is
expected to be completed in the second quarter of 1996.
Concurrently with the completion of the offering of the
Notes, the Company will enter into a $225.0 million Senior
Credit Facility (the New Senior Credit Facility) and will
use borrowings under the New Senior Credit Facility,
together with the net proceeds from the offering of the
Notes, to repay in full outstanding indebtedness under the
Senior Credit Facility. Following the completion of the
offering of the Notes, the Company's $75.0 million
Receivables Financing Facility will be increased to a
maximum of $150.0 million, the proceeds of which will be
used to reduce amounts outstanding under the New Senior
Credit Facility. The Company expects that borrowings under
the New Senior Credit Facility and proceeds from the
Receivables Financing Facility will be sufficient to fund
its working capital needs and long-term strategic growth
plan, however this cannot be assured.
To reduce the potential impact of increases in interest
rates in the period before the issuance of the Notes, in
March, April and May 1996, the Company entered into interest
rate cap agreements with an aggregate notional value of
$150.0 million. Under the interest rate cap agreements, the
Company will receive from the bank counterparties on the
determination dates the amounts by which the interest rate
of the United States Government 10-Year Treasury Note
exceeds various rates ranging from 6.8% to 7.0%. The
determination dates of the transactions are May 30, 1996 and
May 31, 1996.
During 1995 and early 1996, the Company sought and obtained
waivers of non-compliance with, and amendments to, certain
financial covenants included in the Senior Credit Facility.
Prior to the Company's obtaining waivers, such
non-compliance also could have prevented further use by the
Company of the Receivables Financing Facility and certain
interest rate swap and cap agreements entered into by the
Company with respect to borrowings under the Senior Credit
Facility. As of March 31, 1996, the Company was in
compliance with all of the financial covenants included in
the Senior Credit Facility. There can be no assurance that
in the future the Company will not be required to seek
waivers of non-compliance or amendments to
the New Senior Credit Facility or other credit agreements in
effect from time to time or, if it is required to do so,
that it will be able to obtain such waivers.
Working Capital Management. For the first quarter of 1996,
the Company's three-month average working capital turnover
improved to 9.4 times from 8.3 times in the fourth quarter
of 1995. This improvement was due to increased inventory
turnover. On a three-month average, inventory turnover
increased to 8.7 times from 8.2 times. This improvement was
due to the continued implementation of the Company's
client/server-based forecasting system scheduled for
completion by the middle of 1996 and the limitation of the
number of SKUs from multiple manufacturers distributed by
the Company. In an effort to reduce accounts receivable
levels, the Company has strengthened its methods of
monitoring and enforcing contract payment terms and has tied
a portion of its new sales force incentive program to
reducing days sales outstanding. In 1995, the Company
experienced a significant decline in working capital
turnover with average working capital turnover of 8.3 times
in the fourth quarter of 1995. This decline was the result
of (i) increased service levels, (ii) increases in the
number of SKUs carried by the Company, (iii) new customers,
(iv) activities associated with rationalization of
distribution centers, (v) the development and implementation
of new computer systems, (vi) negotiation of favorable
discount terms with vendors, which provide enhanced gross
margin, but shorten payment terms, and (vii) the timing of
purchasing patterns.
Capital Expenditures. Capital expenditures were
approximately $3.7 million in the first quarter of 1996, of
which approximately $3.1 million was for computer systems,
including the continued conversion of certain applications
from a mainframe computer system to client/server
technology. Approximately 75% of the Company's $25.0 million
of capital expenditures planned for 1996 will be for IT.
The Company expects to continue to make this level of
investment for the foreseeable future. These capital
expenditures are expected to be funded through cash flows
from operations.
Inflation. Inflation has not had a significant effect on
the Company s results of operations or financial condition.
Recent Accounting Pronouncements. The Financial Accounting
Standards Board (FASB) issued Statement of Financial
Accounting Standards No. 123 (SFAS 123), Accounting for
Stock-Based Compensation, in October, 1995. SFAS 123
prescribes accounting and reporting standards for all
stock-based compensation plans. The new standard allows
companies to continue to follow present accounting rules,
which often result in no compensation expense being
recorded, or to adopt the SFAS 123 fair-value-based method.
The fair-value-based method will generally result in higher
compensation expense based on the estimated fair value of
stock-based awards on the grant date. Companies electing to
continue following present accounting rules will be required
to provide pro forma disclosures of net income and earnings
per share as if the fair-value-based method had been
adopted. The Company intends to continue following present
accounting rules and to implement the new disclosure
requirements in 1996 as required. The adoption of SFAS 123,
therefore, will not impact the financial condition or
results of operations of the Company.
In March 1995, FASB issued Statement of Financial Accounting
Standards No. 121 (SFAS 121), Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be
Disposed of, which is effective for fiscal years beginning
after December 31, 1995. SFAS 121 prescribes accounting
standards for (i) the impairment of long-lived assets,
certain identifiable intangibles and goodwill related to
those assets to be held and used and (ii) long-lived assets
and certain identifiable intangibles to be disposed of.
This standard requires that long-lived assets and certain
identifiable intangibles to be held and used by an entity be
reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset
may not be recoverable. The adoption of SFAS 121 in 1996
has not had a material impact on the financial condition or
results of operations of the Company.
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit
(10) The forms of agreement with directors entered
into pursuant to (i) the Stock Option Program,
(ii) the Deferred Fee Program and (iii) the
Stock Purchase Program of the 1993 Directors
Compensation Plan (incorporated herein by
reference to the Company's Annual Report on Form
10-K, Exhibit 10 (l), for the year ended
December 31, 1993)
(27) Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K for the three months
ended March 31, 1996.
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 May 13, 1996 /s/ Glenn J. Dozier
Glenn J. Dozier
Senior Vice President, Finance,
Chief Financial Officer
Date May 13, 1996 /s/ Ann Greer Rector
Ann Greer Rector
Vice President, Controller
Exhibit Index
Exhibit #
(10) The forms of agreement with directors entered into
pursuant to (i) the Stock Option Program, (ii)
the Deferred Fee Program and (iii) the Stock Purchase
Program of the 1993 Directors Compensation Plan
(incorporated herein by reference to the Company's
Annual Report on Form 10-K, Exhibit 10 (l), for the
year ended December 31, 1993)
(27) Financial Data Schedule
Exhibit 10
OWENS & MINOR, INC.
Non-Qualified Stock Option Agreement
Issued Pursuant to the
1993 Directors' Compensation Plan
THIS AGREEMENT, dated the ____ day of ___________, 19 __
between OWENS & MINOR, INC., a Virginia corporation (the
"Company"), and ______________ ("Participant"), is made
pursuant and subject to the provisions of the 1993 Directors'
Compensation Plan (the "Plan"); and all terms used herein that
are defined in the Plan shall have the same meaning given them
in the Plan:
W I T N E S S E T H:
1. Grant Option. Pursuant to the provisions of the
Plan, on _______________, the Company granted to Participant,
subject to the terms and conditions of the Plan and subject
further to the terms and conditions herein set forth, the right
and option to purchase from the Company all or any part of an
aggregate of ______ shares of Common Stock at the purchase
price of $_________ per share (the "Option Price"), being not
less than the Fair Market Value per share of the Common Stock
on the date hereof, such option to be exercisable as
hereinafter provided.
2. Terms and Conditions. The option evidenced hereby
is subject to the following terms and conditions:
(a) Expiration Date. Subject to the provisions
of paragraph 3, this option shall expire five (5) years from
the date hereof.
(b) Exercise. Subject to the provisions of
paragraph 3, this option may be exercised in whole at any time
or in part from time to time from the date of grant. Such
shares may be exercised until the termination of the option as
provided in the Plan. This option may be exercised with
respect to any number of whole shares less than the full number
for which the option could be exercised. Such partial exercise
of an option shall not affect the right to exercise the option
from time to time in accordance with this Plan with respect to
shares remaining subject to the option.
(c) Method of Exercising and Payment of Shares.
This option may only be exercised by written notice delivered
to the attention of the Corporate Secretary at the Company's
principal office. The exercise date shall be (i) in the case
of notice by mail, the date of postmark, (ii) if delivered in
person, the date of delivery or (iii) if delivered by
facsimile, the date of transmission. The original copy of any
notice delivered by facsimile must also be delivered to the
Company. The above notices shall be accompanied by payment of
the Option Price in full, in cash, or cash equivalent
acceptable to the Company, or by the surrender of shares of
Common Stock, duly endorsed for transfer, having a fair market
value (determined as of the day preceding the date of exercise)
which is not less than the Option Price or part thereof. For
purposes of this option, the cash proceeds of a loan, whether
guaranteed or otherwise arranged by the Company, may be
surrendered in payment of the Option Price.
(d) Nontransferability. This option is nontransferable
except by will or by the law of descent and distribution.
During Participant's lifetime, this option may be exercised
only by Participant. No right or interest of the Participant
in any option shall be liable for, or subject to, any lien,
obligation, or liability of the Participant.
3. Maximum Option Period. The maximum period for this
option to be exercised shall be five years from the date of
grant; provided, however, that if the Participant ceases to be
a member of the Board, the option may be exercised for one year
following the date he or she ceases to be a member of the
Board, or until the expiration of the option period, whichever
is shorter. In the event of the Participant's death while he
or she is a member of the Board, this option may be exercised
by the Participant's estate or by such person or persons who
succeed to Participant's rights by will or law of descent and
distribution for one year following the Participant's date of
death, or until the expiration of the option period, whichever
is shorter.
4. Governing Law. This Agreement shall be governed
by the laws of the Commonwealth of Virginia.
5. Fractional Shares. Fractional shares shall not be
issuable hereunder, and when any provision hereof may entitle
Participant to a fractional share, such fraction shall be
disregarded.
6. Change in Capital Structure. The terms of this
option shall be adjusted as the Committee determines is
equitably required in the event the Company effects one or more
stock dividends, stock split-ups, subdivisions or
consolidations of shares or other similar changes in
capitalization.
7. Conflicts. In the event of any conflict between
the provision of the Plan as in effect on the date hereof and
provisions of this Agreement, the provisions of the Plan shall
govern. All references herein to the Plan shall mean the Plan
as in effect on the date hereof.
8. Participant Bound by Plan. Participant hereby
acknowledges receipt of a copy of the Plan and agrees to be
bound by all the terms and provisions thereof.
9. Binding Effect. Subject to the limitations stated
above and in the Plan, this Agreement shall be binding upon and
inure to the benefit of the legatees, distributees and personal
representatives of Participant and the successors of the
Company.
IN WITNESS WHEREOF, OWENS & MINOR, INC. has caused this
Agreement to be signed by an officer and attested by its
Secretary or Assistant Secretary, thereunto duly authorized,
and Participant has affixed his signature hereto.
OWENS & MINOR, INC.
By:
Chairman, President
and Chief Executive Officer
ATTEST:
By:
Assistant Secretary
By:
Participant
_____Initial Election
_____Change in Election
FEE DEFERRAL ELECTION FORM
FOR
DEFERRED FEE PROGRAM
OF THE OWENS & MINOR, INC.
1993 DIRECTORS' COMPENSATION PLAN
I acknowledge that I have received and am familiar with the
Owens & Minor, Inc. 1993 Directors' Compensation Plan (the
"Plan"). I elect to be a Participant ("Participant") in the
Deferred Fee Program under the terms and conditions of the Plan
and the elections below. Capitalized terms used herein and not
otherwise defined shall have the meanings assigned to them in
the Plan.
A. DEFERRAL ELECTION
1. Retainer Fee Deferral
a. Please defer 100%/ 75%/ 50%/ 25% (circle
one) of my Retainer Fee in accordance with
the Plan.
b. I do not wish to defer my Retainer Fee.
2. Meeting Fees Deferral
a. Please defer 100%/ 75%/ 50%/ 25% (circle
one) of my Meeting Fees in accordance with
the Plan.
b. I do not wish to defer my Meeting Fees.
This deferral election shall become effective as
provided in the Plan and will remain in effect with
respect to all future Compensation until a new deferral
election made by me becomes effective pursuant to the
terms of the Plan.
B. DISTRIBUTION ELECTION
Distribute my income payments under this Fee Deferral
Election Form as follows:
1. Commencement of Benefit Payments
a. The first day of the calendar month
following Participant's death.
b. The first day of the calendar month
following Participant's Disability.
c. The first day of the calendar month
following the date of termination of the
Participant's service as a member of the
Board.
d. The first day of
[state month and year which is at least six
months after the date this election is made
and delivered to the Secretary of Owens &
Minor, Inc.].
e. The earliest to occur of a, b, c and d
above.
A Distribution Date election shall become effective on
the Election Date with respect to Compensation accruing after
the Election Date.
2. Number of Benefit Payments
a. In [not more than 180]
monthly installments
b. In [not more than 60]
quarterly installments
c. In [not more than 15]
annual installments
d. In a single sum
e. In the following combination of lump
sum and installments provided above:
C. SUBACCOUNTS ELECTION
The amounts deferred pursuant to Section A above shall
be allocated for investment in the following subaccounts
[must be in integral multiples of 10%]:
a. % Owens & Minor Stock Fund
b. % Fixed Income Fund
100%
Investment directions and any changes thereto will become
effective as provided in the Plan.
D. BENEFICIARY DESIGNATION
I designate
as my primary Beneficiary
of any benefits that become payable under the Deferred
Fee Program of the Owens & Minor, Inc. 1993 Directors'
Compensation Plan as a result of my death.
If the person I have just named predeceases me (or, if
I named a trust, if the trust is not in existence at the
time of my death) I designate
as my
contingent Beneficiary of any benefits that become
payable under the Plan as a result of my death.
If a designated Beneficiary survives me but dies (or, if
a trust, terminates) before all benefits have been paid
to the Beneficiary, the remainder of the payments must
be made as the Beneficiary designates or, if the
Beneficiary fails to properly execute a Beneficiary
designation, to the Beneficiary's estate, or, if a
trust, to the Beneficiaries in distribution of the
trust.
This designation revokes and rescinds any prior
Beneficiary designation made by me and applies to all
deferrals under the Plan. I understand that this
Beneficiary designation applies until revoked by my
written request. I also understand that, in executing
this Beneficiary designation, I agree to be bound by the
terms and conditions of the Plan and agree that such
terms and conditions are binding upon my Beneficiary,
distributee, and personal representative.
By signing this election form, I acknowledge that I have no
interest in any asset Owens & Minor, Inc. may acquire to assist
it in meeting its obligations under the Deferred Fee Program
and I confirm that, as a general creditor, I must look solely
to Owens & Minor, Inc. for the payment of any amounts due me
under the Plan.
Date Participant's Signature
Print Name
Social Security Number
ELECTION FORM
FOR
STOCK PURCHASE PROGRAM
OF
THE OWENS & MINOR, INC.
1993 DIRECTORS' COMPENSATION PLAN
I acknowledge that I have received and am familiar with
the Owens & Minor, Inc. 1993 Directors' Compensation Plan. I
elect to be a Participant ("Participant") in the Stock Purchase
Program under the terms and conditions of the Plan and the
elections below.
Capitalized terms used herein and not otherwise defined
shall have the meanings assigned to them in the Plan.
A. STOCK PURCHASE ELECTION
1. Retainer Fee
Please apply 100%/ 75%/ 50%/ 25% (circle one) of
my Retainer Fee to purchase Common Stock in
accordance with the Plan.
2. Meeting Fees
Please apply 100%/ 75%/ 50%/ 25% (circle one) of
my Meeting Fees to purchase Common Stock in
accordance with the Plan.
B. EFFECTIVE DATE ELECTION
The above election shall become effective with respect
to the Retainer Fees and Meeting Fees payable on and
after:
a. The first day of the calendar month that is
six months after the Election Date.
b. (insert date which
is at least six months after the Election
Date).
C. The Common Stock issued pursuant to the Stock Purchase
Program shall be registered in the name of (check one):
Participant
Participant and his or her spouse, jointly
I acknowledge that this Stock Purchase Election Form will
remain in effect with respect to all future Compensation until
I make a new Stock Purchase Election pursuant to the terms of
the Plan.
Date Participant's Signature
Print Name
Social Security Number
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000075252
<NAME> OWENS & MINOR, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 295
<SECURITIES> 0
<RECEIVABLES> 275,789
<ALLOWANCES> 6,161
<INVENTORY> 316,330
<CURRENT-ASSETS> 615,311
<PP&E> 70,817
<DEPRECIATION> 32,803
<TOTAL-ASSETS> 848,401
<CURRENT-LIABILITIES> 289,599
<BONDS> 0
0
115,000
<COMMON> 63,478
<OTHER-SE> 59,217
<TOTAL-LIABILITY-AND-EQUITY> 848,401
<SALES> 771,312
<TOTAL-REVENUES> 771,312
<CGS> 697,133
<TOTAL-COSTS> 761,824
<OTHER-EXPENSES> 744
<LOSS-PROVISION> 279
<INTEREST-EXPENSE> 5,800
<INCOME-PRETAX> 2,665
<INCOME-TAX> 1,146
<INCOME-CONTINUING> 1,519
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,519
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
