Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Lisa Gill - J.P. Morgan.
Lisa Gill - J.P. Morgan
Jim, could you maybe just, on the EPS guidance of $2.55 to $2.70, understanding the economic environment, can you maybe just help us to understand a little bit better what's in the lower end of the range versus the high end of the range? Is it primarily revenue so when we think about the 8% revenue versus the 12% or are there other expenses that we need to think about in the difference in the two ranges?
And then secondly, Craig, I know we don't like to talk about specific names of who the wins were for the fourth quarter, but maybe you could talk about relative size and what gave Owens & Minor the competitive advantage to winning that business.
James L. Bierman
I think lower end of the range recognizes two potential risks that may exist, and one is a drop off in revenue and revenue in that sense, I'm speaking of across the board health care spend for the products we distribute being down.
And I think the second component, quite candidly, is the potential for a slight decrease in gross margin as there is potential greater pricing pressures for hospitals, for GPOs and for suppliers also.
Lisa Gill - J.P. Morgan
And are you seeing any bankruptcy - I think that Cardinal talked yesterday about some bankruptcies and we've heard this from some others in the supply chain, that there's been several bankruptcies by hospitals. Are you starting to see any of this? And when we see the bankruptcy, are they working through it so therefore they're still buying supplies or are you seeing hospitals outright shutdown?
James L. Bierman
I think the experience we've seen so far is - and this is consistent with, say, even last year - bankruptcy is an unfortunate part of the process, and we saw bankruptcies last year and we see some this year also, not a significant change in any trending that we've seen.
As the workout process of a bankruptcy - and I believe I've said this before - at conferences and investor groups, it also differs. Oftentimes the bankruptcy group is very keen to keep the doors of the hospital open and therefore comes to us and asks us if we can continue to provide distribution services, and on a case-by-case basis we may but with different payment terms, oftentimes with a letter of credit that guarantees us going forward. So we take different positions on a case-by-case basis.
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