? (Anchor) 00:00.070
one joining us right now first on CNBC is medline CEO jim boyle good morning to you
Jim Boyle (CEO) 00:04.430
good morning
? (Anchor) 00:04.910
congratulations this has been a quite a road for you to get to to this point why go public now what's the what's what's the thinking in terms of where you came from and where you are right now
Jim Boyle (CEO) 00:15.710
and as you know we've been a private company for fifty eight years with fifty eight years of consecutive growth we just feel like this is the right time for us to kind of expand our voice historically we've done very little advertising and very little marketing and and this
Jim Boyle (CEO) 00:29.870
gives this a way to amplify our voice and actually expand really the the receptivity of who we are we are the largest company you've never heard of and we happen to be everywhere which is a pretty interesting thing how much
? (Anchor) 00:40.110
of this is though about an exit if you will for the for the private equity folks who've been backing this company for at least the past couple of years
Jim Boyle (CEO) 00:46.470
part of it is that right private equity invest in business to create a return on invested capital however i mean this has been a journey for fifty eight years for us to prepare for tomorrow and so it's a blend of both right it allows them to create exit and allows us to create
Jim Boyle (CEO) 01:01.630
the next step in the journey
? (Anchor) 01:03.190
for the investor class it's looking at this and saying should i be buying in now where do they see the valuation who do you think are your comps if you will you know we're the companies that from a valuation perspective
Jim Boyle (CEO) 01:17.910
i don't know that i have an N of one a comp i i consider medline an end of one my aspiration is to be the costco of healthcare and what i mean by that is if you think about costco they have a membership model that people pay to be a member of medline as a prime vendor model that
Jim Boyle (CEO) 01:32.030
both the vendor community and our customers pay to be a member of they have a kirkland brand that drives savings and value for their membership and accretive margins for costco we have the medline brand that does the exact same thing they've been extremely loyal customer base we
Jim Boyle (CEO) 01:45.190
have a ninety nine percent retention rate and when you think about the supply chain in and of itself costco is a pretty robust resilient supply chain and we have over three hundred and thirty five thousand products with twenty nine million square feet in the US that we serve
Jim Boyle (CEO) 01:58.110
customers from can i ask you
? (Anchor) 01:59.430
some we said mike johnson on the broadcast talking about healthcare costs in america what are the margins like at your company
Jim Boyle (CEO) 02:06.110
the margins at our company are built around making sure we can continue to invest in the business to serve our customers and and we have listen we sell things that cost pennies we don't sell things that cost thousands of dollars so the margin profile is is managed in a way way
Jim Boyle (CEO) 02:20.590
that delivers best in class but what
? (Anchor) 02:23.190
what's what if we we can go look in the in in in in the documents yes it's thirteen percent even margin so my question to you is given all of the pressures on the healthcare complex do you think that those margins long-term can be maintained can be expanded get pushed by the way
Jim Boyle (CEO) 02:42.550
i look at it is we are the value player and the marketplace we are best in class from a cost perspective and a price perspective so i think they can be maintained the with what with what's happening with tariffs cuts in medicaid medicare i mean we have to continue to drive down
Jim Boyle (CEO) 02:56.710
costs to deliver value for our customers hey
? (Anchor) 02:59.190
jim one of the questions has been the amount of debt that the company has because with private equity obviously there was some debt that went into it i think as of the end of september you had a net debt of about fifteen billion dollars and a net debt to ebitda ratio of four
? (Anchor) 03:14.470
point five no health care companies in the S and P five hundred have a net to ebitda net debt to ebitda ratio greater than three point eight where where will you be post IPO and how quickly can you pay down that yeah we're
Jim Boyle (CEO) 03:29.230
raising five billion in primary four billion will be used to buy down debt to get us to three and a quarter with the goal to get sub three over time which we can get to pretty quickly with free cash flow generation okay
? (Anchor) 03:42.190
where do you see this whole health care debate going and also just the the strength of the consumer in this moment right now as it relates to either your own products or what you're seeing listen
Jim Boyle (CEO) 03:51.510
healthcare is going through a crisis of complexity right you have cuts in reimbursement medicare and medicaid the affordable care act is going through some interesting kind of dynamics right now you have shifting sides of care the total hips total knees open hearts are all
Jim Boyle (CEO) 04:04.030
leaving the four walls of the hospital they're going to the surgery center space you have a challenge from a labor management perspective i mean it it is a challenging space and the way we look at it is we have to make sure we're delivering the right product to the right place
Jim Boyle (CEO) 04:16.150
at the right time at the best delivered value for our customers to ultimately give caregivers what they need to serve patients and we're in the boat with our customers our customers are struggling and our job is to deliver solutions and value that yield better outcomes