Dive Brief:
- Healthcare logistics company Owens & Minor appointed its interim CFO Jonathan Leon to the role of permanent finance chief and EVP effective immediately, according to a Monday securities filing. The appointment comes just a few months after Leon assumed the interim role in June following the departure of the previous CFO, Alexander Bruni, who resigned at the company’s request, CFO Dive previously reported.
- At the time of the interim appointment, Owens & Minor did not respond to requests for comment regarding the resignation of their former CFO Bruni, who served as finance chief for two years before his departure. Bruni was set to stay with the business until Sept. 5 to ensure a smooth transition, before leaving “to pursue opportunities outside of the Company,” Owens & Minor said at the time. The former finance chief departed with a comprehensive severance package including a lump-sum payment comprised of 1.5 times his annual base salary, as well as his actual bonus amounts for the past three years.
- Leon, a company veteran, will be stepping into the CFO role on a permanent basis as the Richmond, Virginia-based company looks to expand revenues for key segments including its Patient Direct offerings, which offers products for at-home care including medical equipment. The company is targeting revenues of $5 billion for the segment by 2028, according to its most recent earnings call.
Dive Insight:
Leon, 58, first joined Owens & Minor in 2017 as its VP and treasurer, before taking on the role of SVP, corporate treasurer in 2018. At the time of his appointment to the interim CFO seat in June, he received a one-time equity award of restricted stock units with a value of $250,000 upon the interim appointment, the company said in a June filing.
As CFO, Leon will receive an annual base salary of $550,000 and will also be eligible for a target annual cash bonus equal to $298,431, according to the Monday filing with the Securities and Exchange Commission. Starting next year, Leon will also be eligible for an annual equity award with a target value of $1.5 million. He will also receive a one-time grant of restricted stock units with a value of $650,000.
Leon will continue his corporate treasurer responsibilities as the company searches for a successor to the role, according to a company press release.
“After a comprehensive process, the Board and I unanimously agreed that Jon is the ideal candidate to serve as Owens & Minor’s next Chief Financial Officer,” Edward Pesicka, President and CEO of Owens & Minor said in a statement included in the release. Leon’s extensive knowledge of the healthcare segment and financial acumen will be “invaluable” as the company looks to achieve its long-term goals, he said.
The permanent CFO appointment comes as Owens & Minor looks to significantly boost revenues for its Patient Direct Segment. For the quarter ended June 30, the company reported $660 million in revenue for the segment, a 4% increase year-over-year, thanks to strong growth in its diabetes and sleep supplies offerings, Pesicka said during the company’s earnings call in August, according to a Seeking Alpha transcript.
On a macro level, there are “considerable tailwinds” which could support strong growth for the segment, Pesicka said. Approximately 133 million Americans suffer from chronic conditions such as diabetes and sleep apnea, while 40% of Americans suffer from multiple chronic conditions, he said, demographic trends which “make us excited about our Patient Direct segment despite the groundswell of support for weight loss medications,” Pesicka said.
In July, Owens & Minor also announced an agreement to acquire Florida-based home care business Rotech Health Holdings for $1.36 billion in cash after an anticipated $40 million tax benefit, an acquisition which “aligns with our strategy to strengthen and expand our existing Patient Direct business as one of the premier suppliers to support home-based care,” Pesicka said during the earnings call.
Total revenues for the quarter also jumped by 4% compared to the prior year period to reach $2.7 billion. The healthcare logistics supplier also reported a net loss of $32 million for the quarter, compared to adjusted net income of $28 million, according to its earnings results.
Owens & Minor did not immediately respond to requests for comment.
