Omnicare Reports Fourth-Quarter and Full-Year 2011 Financial Results, Additional 2012 Guidance
(Thomson Reuters ONE) -
COVINGTON, Ky., February 23, 2012 - Omnicare, Inc. (NYSE:OCR) reported today
financial results for its fourth quarter and full year ended December 31, 2011.
Fourth-Quarter Highlights:
* Gross profit of $359.7 million; 69 basis point increase in gross margin to
23.10%
* Adjusted income from continuing operations per diluted share increased 7%
sequentially to $0.58, GAAP income per diluted share of $0.34
* Cash flows from continuing operations of $101.5 million
Full-Year Highlights:
* Gross profit increased 3.1% to $1,377.1 million
* Adjusted income from continuing operations per diluted share of $2.13, GAAP
income per diluted share of $1.41
* Cash flows from continuing operations increased 49% to $549.4 million
"We are very pleased with our solid fourth quarter results, which validate the
continuing progress our organization is making in becoming more operationally
driven and customer-focused," said John Figueroa, Omnicare's Chief Executive
Officer. "We exited the year as a much stronger company, and we are now
realizing the benefit from the investments we made throughout 2011. As we look
to 2012 and beyond, we believe Omnicare is well-positioned to generate long-term
profitable growth in both core businesses, Long-Term Care and Specialty Care,
while continuing to make a positive difference for our many stakeholders."
Fourth-Quarter Results
Prior Year Comparison
Financial results from continuing operations for the quarter ended December
31, 2011, as compared with the same prior-year period, were as follows:
* Adjusted gross profit was $359.7 million as compared with $334.3 million
* GAAP income from continuing operations per diluted share was $0.34 versus a
$0.50 loss
* Adjusted income from continuing operations (see "per share" discussion below
and attached supplemental information) per share was $0.58 versus $0.51
* Adjusted EBITDA from continuing operations was $162.9 million versus $147.6
million
Cash flows from continuing operations for the quarter ended December 31, 2011
were $101.5 million versus $99.7 million in the comparable prior-year quarter.
Sequential Comparison
In comparison to the third quarter of 2011, financial results from continuing
operations for the fourth quarter of 2011 were as follows:
* Gross profit was $359.7 million as compared with $346.1 million
* GAAP income from continuing operations per share was $0.34 versus $0.33
* Adjusted income from continuing operations (see discussion below and
attached supplemental information) per share was $0.58 versus $0.54
* Adjusted EBITDA from continuing operations was $162.9 million compared to
$157.2 million
"During the fourth quarter, we benefited from the introduction of new generic
drugs, which lower the cost of pharmaceutical care for both Omnicare and its
customers," said Mr. Figueroa. "This pharmaceutical market dynamic, coupled
with the continued rapid growth of our Specialty Care Group, contributed to our
4% sequential increase in gross profit and supported further investments in the
business."
Financial Position
During the fourth quarter of 2011, Omnicare used the proceeds from its offering
of an additional $150 million aggregate principal amount of its 7.75% Senior
Subordinated Notes due 2020 to redeem the remaining $50 million principal amount
on its 6.125% Senior Subordinated Notes due 2013 (the "6.125% Notes") and the
remaining $100 million principal amount on its 6.875% Senior Subordinated Notes
due 2015 (the "6.875% Notes").
Omnicare ended the year with $582.6 million in cash on its balance sheet and a
34.5% total debt to total capital ratio at December 31, 2011, which was down
approximately 110 basis points from 35.6% at December 31, 2010.
With respect to its share repurchase program, Omnicare repurchased approximately
0.7 million shares of common stock during the quarter and paid an aggregate
amount of $20 million. As of December 31, 2011, the Company had $58.9 million
of availability under its current share repurchase authorization.
"We continue to be very pleased with our ability to convert earnings into cash
flows," said John L. Workman, Omnicare's President and Chief Financial Officer.
"Our fourth-quarter cash flows from continuing operations of $101 million bring
our 2011 total to $549 million, representing the highest annual output in
Omnicare's 30-year history. These robust cash flows have enabled us to maintain
an opportunistic yet disciplined approach to capital deployment with the
underlying objective of deploying cash toward those opportunities that we
believe generate the most value for our shareholders."
To facilitate comparisons and to enhance the understanding of core operating
performance, the discussion which follows includes financial measures that are
adjusted from the comparable amount under GAAP to exclude the impact of the
special items discussed elsewhere herein, and to present results on a continuing
operations basis. For a detailed presentation of reconciling items and related
definitions and components, please refer to the attached schedules or to
reconciliation schedules posted at the Investor Relations section of Omnicare's
Web site athttp://ir.omnicare.com. Additionally, the Company will make
supplemental slides available in the same section on its Web site today that
will include the number of scripts dispensed, beds served, and other information
relevant to Omnicare's operations.
Full-Year Results
Financial results from continuing operations for the year ended December
31, 2011, as compared with the same prior-year period, were as follows:
* Net sales were $6,182.9 million as compared with $6,030.7 million
* GAAP income from continuing operations per share was $1.41 as compared with
$0.13
* Adjusted income from continuing operations (see discussion below and
attached supplemental information) per share was $2.13 as compared with
$2.12
* Adjusted EBITDA from continuing operations was $612.6 million versus $598.2
million
Cash flow from continuing operations for the full-year 2011 totaled $549.4
million, which includes a $22.7 million benefit related to the settlement of a
receivable dispute with a customer and a $23.3 million refund for federal tax
overpayments. Cash flows from continuing operations for the full-year 2010 were
$368.9 million.
Segment Information
Consistent with the Company's efforts to increase transparency and reflect the
recent reorganization of operations, Omnicare now has two operating segments
referred to as the Long-Term Care Group and Specialty Care Group.
Financial results for the Long-Term Care Group for the year ended December
31, 2011, as compared with the same prior-year period, were as follows:
* Net sales were $5,123.5 million as compared with $5,175.7 million
* Adjusted operating income was $546.9 million compared with $549.6
Financial results for the Specialty Care Group for the year ended December
31, 2011, as compared with the same prior-year period, were as follows:
* Net sales were $1,044.2 million as compared with $838.8 million
* Adjusted operating income was $99.6 million compared with $89.6 million
Special Items
The results for the fourth quarter of 2011 and 2010 include the impact of
special items totaling approximately $38.7 million pretax ($27.5 million
aftertax, or approximately $0.24 per diluted share) and $167.2 million pretax
($115.9 million aftertax, or approximately $1.01 per diluted share),
respectively.
The results for the full-years 2011 and 2010 include special items totaling
approximately $121.5 million pretax ($82.6 million aftertax, or approximately
$0.72 per diluted share) and $349.7 million pretax ($232.9 million aftertax, or
approximately $1.99 per diluted share), respectively.
The special items have been described in further detail in the "Footnotes and
Definitions to Financial Information" section elsewhere herein.
Outlook
For the full-year 2012, Omnicare expects the following:
* Revenues of $6.1 billion to $6.2 billion
* Adjusted cash-based income per diluted share from continuing operations of
$3.10 to $3.20, excluding special items ($2.37 to $2.47 using its previous
reporting methodology)
* Cash flow from continuing operations of $400 million to $500 million
Beginning in the first-quarter of fiscal year 2012, Omnicare will report
adjusted cash-based income per diluted share (excluding special items and
discontinued operations). A reconciliation of prior period adjusted income to
adjusted cash-based income per diluted share is available on Omnicare's website
under 'Supplemental Financial Information' from the 'Investors' page.
"In 2011, we accomplished what we set out to achieve; we invested in the
business to become a stronger, more operationally driven and customer-focused
company that is well-positioned for the future," said Mr. Figueroa. "As we
consider our expectations for 2012, our focus is on capitalizing on the
foundation we have built for profitable growth."
Webcast Today
Omnicare will hold a conference call to discuss its fourth-quarter and full-year
2011 financial results today, Thursday, February 23, at 8:00 a.m. ET. A live
webcast of the conference call and supplemental slides will be accessible from
the Investor Relations section of Omnicare's website athttp://ir.omnicare.com.
An archived replay will be made available on the website following the
conclusion of the conference call.
About Omnicare
Omnicare, Inc., a Fortune 400 company based in Covington, Kentucky, provides
comprehensive pharmaceutical services to patients and providers across North
America. As the market-leader in professional pharmacy, related consulting and
data management services for skilled nursing, assisted living and other chronic
care institutions, Omnicare leverages its unparalleled clinical insight into the
geriatric market along with some of the industry's most innovative technological
capabilities to the benefit of its long-term care customers. Omnicare also
provides key commercialization services for the bio-pharmaceutical industry and
end-of-life disease management through its Specialty Care Group. For more
information, visitwww.omnicare.com.
Forward-looking Statements
In addition to historical information, this report contains certain statements
that constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements
include, but are not limited to, all statements regarding the intent, belief or
current expectations regarding the matters discussed or incorporated by
reference in this document (including statements as to "beliefs,"
"expectations," "anticipations," "intentions" or similar words) and all
statements which are not statements of historical fact. Such forward-looking
statements, together with other statements that are not historical, are based on
management's current expectations and involve known and unknown risks,
uncertainties, contingencies and other factors that could cause results,
performance or achievements to differ materially from those stated. The most
significant of these risks and uncertainties are described in the Company's Form
10-K, Form 10-Q and Form 8-K reports filed with the Securities and Exchange
Commission and include, but are not limited to: overall economic, financial,
political and business conditions; trends in the long-term healthcare and
pharmaceutical industries; the ability to attract new clients and service
contracts and retain existing clients and service contracts; the ability to
consummate pending acquisitions on favorable terms or at all; trends for the
continued growth of the Company's businesses; trends in drug pricing; delays and
reductions in reimbursement by the government and other payors to customers and
to the Company; the overall financial condition of the Company's customers and
the ability of the Company to assess and react to such financial condition of
its customers; the ability of vendors and business partners to continue to
provide products and services to the Company; the successful integration of
acquired companies and realization of contemplated synergies; the continued
availability of suitable acquisition candidates; the ability to attract and
retain needed management; competition for qualified staff in the healthcare
industry; variations in demand for the Company's products and services;
variations in costs or expenses; the ability to implement productivity,
consolidation and cost reduction efforts and to realize anticipated benefits;
the potential impact of legislation, government regulations, and other
government action and/or executive orders, including those relating to Medicare
Part D, including its implementing regulations and any subregulatory guidance,
reimbursement and drug pricing policies and changes in the interpretation and
application of such policies, including changes in calculation of average
wholesale price; discontinuation of reporting average wholesale price, and/or
implementation of new pricing benchmarks; legislative and regulatory changes
impacting long term care pharmacies; government budgetary pressures and shifting
priorities; federal and state budget shortfalls; efforts by payors to control
costs; changes to or termination of the Company's contracts with pharmaceutical
benefit managers, Medicare Part D Plan sponsors and/or commercial health
insurers or to the proportion of the Company's business covered by specific
contracts; the outcome of disputes and litigation; potential liability for
losses not covered by, or in excess of, insurance; the impact of executive
separations; the impact of benefit plan terminations; the impact of differences
in actuarial assumptions and estimates as compared to eventual outcomes; events
or circumstances which result in an impairment of assets, including but not
limited to, goodwill and identifiable intangible assets; the final outcome of
divestiture activities; market conditions; the outcome of audit, compliance,
administrative, regulatory, or investigatory reviews; volatility in the market
for the Company's stock and in the financial markets generally; access to
adequate capital and financing; changes in international economic and political
conditions and currency fluctuations between the U.S. dollar and other
currencies; changes in tax laws and regulations; changes in accounting rules and
standards; the impacts of potential cybersecurity risks and/or incidents; and
costs to comply with the Company's Corporate Integrity Agreements. Should one or
more of these risks or uncertainties materialize or should underlying
assumptions prove incorrect, the Company's actual results, performance or
achievements could differ materially from those expressed in, or implied by,
such forward-looking statements. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
hereof. Except as otherwise required by law, the Company does not undertake any
obligation to publicly release any revisions to these forward-looking statements
to reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events
# # #
Contact:
Patrick C. Lee
(859) 392-3444
patrick.lee(at)omnicare.com
Omnicare, Inc. and Subsidiary Companies
Summary Consolidated Statements of Income, GAAP Basis
($000s, except per share amounts)
Unaudited
Three months ended Year ended
----------------------------------------------- ------------------------------
December 31, September 30, December 31, December 31, December 31,
2011 2011 2010 2011 2010
--------------- --------------- --------------- --------------- --------------
Net sales $ 1,557,085 $ 1,544,360 $ 1,530,667 $ 6,182,922 $ 6,030,670
Cost of sales 1,197,401 1,198,299 1,196,428 4,805,825 4,694,440
--------------- --------------- --------------- --------------- --------------
Gross profit 359,684 346,061 334,239 1,377,097 1,336,230
Selling,
general and
administrative
expenses 199,902 191,293 188,173 773,835 747,608
Provision for
doubtful
accounts 25,410 24,255 71,326 98,552 136,630
Settlement,
litigation and
other related
charges 23,103 6,742 42,111 55,674 113,709
Other
miscellaneous
charges 5,154 6,718 65,297 16,093 149,129
--------------- --------------- --------------- --------------- --------------
Operating
income 106,115 117,053 (32,668 ) 432,943 189,154
Investment
income 10 21 2,745 582 9,610
Interest
expense (29,864 ) (49,840 ) (36,425 ) (136,505 ) (135,720 )
Amortization
of discount on
convertible
notes (6,226 ) (6,107 ) (7,117 ) (24,195 ) (29,536 )
--------------- --------------- --------------- --------------- --------------
Income (loss)
from
continuing
operations
before
income
taxes 70,035 61,127 (73,465 ) 272,825 33,508
Income tax
provision 31,723 23,343 (16,379 ) 111,293 19,044
--------------- --------------- --------------- --------------- --------------
Income (loss)
from
continuing
operations 38,312 37,784 (57,086 ) 161,532 14,464
Loss from
discontinued
operations (7,129 ) (9,900 ) (8,208 ) (74,608 ) (120,573 )
--------------- --------------- --------------- --------------- --------------
Net income
(loss) $ 31,183 $ 27,884 $ (65,294 ) $ 86,924 $ (106,109 )
--------------- --------------- --------------- --------------- --------------
Earnings
(loss) per
common share -
Basic:
Continuing
operations $ 0.34 $ 0.34 $ (0.50 ) $ 1.43 $ 0.12
Discontinued
operations (0.06 ) (0.09 ) (0.07 ) (0.66 ) (1.04 )
Net income
(loss) $ 0.28 $ 0.25 $ (0.57 ) $ 0.77 $ (0.91 )
--------------- --------------- ------------------------------- --------------
Earnings
(loss) per
common share -
Diluted:
Continuing
operations $ 0.34 $ 0.33 $ (0.50 ) $ 1.41 $ 0.13
Discontinued
operations (0.06 ) (0.09 ) (0.07 ) (0.65 ) (1.03 )
Net income
(loss) $ 0.27 $ 0.24 $ (0.57 ) $ 0.76 $ (0.91 )
--------------- --------------- --------------- --------------- --------------
Weighted
average number
of common
shares
outstanding:
Basic 111,687 112,729 114,685 113,000 116,348
--------------- --------------- --------------- --------------- --------------
Diluted 114,344 114,644 114,685 114,781 116,927
--------------- --------------- --------------- --------------- --------------
The footnotes and definitions presented at the separate "Footnotes and
Definitions to Financial Information" pages are an integral part of this
financial information.
Omnicare, Inc and Subsidiary Companies
(000s)
Unaudited
Condensed Consolidated Balance Sheets Information, GAAP Basis:
December 31, December 31,
2011 2010
--------------- --------------
Assets:
Cash and cash equivalents, including restricted
cash $ 582,598 $ 496,503
Accounts receivable, net 931,314 1,011,823
Inventories 419,378 418,965
Total current assets 2,297,371 2,457,796
Properties and equipment, net 225,257 204,717
Goodwill 4,247,286 4,182,928
Total noncurrent assets 4,895,739 4,853,724
Total assets $ 7,193,110 $ 7,311,520
--------------- --------------
Liabilities and Stockholders Equity:
Total current liabilities $ 540,067 $ 553,475
Long-term debt, notes and convertible debentures 1,968,274 2,106,758
Total noncurrent liabilities 2,857,607 2,939,284
Total liabilities 3,397,674 3,492,759
Stockholders' equity 3,795,436 3,818,761
Total liabilities and stockholders' equity $ 7,193,110 $ 7,311,520
--------------- --------------
Condensed Consolidated Statement of Cash Flows Information, GAAP Basis:
Three months
ended Year ended
December 31, December 31,
2011 2011
---------------- --------------
Cash flows from operating activities:
Net income $ 31,183 $ 86,924
Loss from discontinued operations 7,129 74,608
Adjustments to reconcile net income to net cash
flows from operating activities 63,146 387,867
---------------- --------------
Net cash flows from operating activities of
continuing operations 101,458 549,399
Net cash flows from operating activities of
discontinued operations (246 ) 623
---------------- --------------
Net cash flows from operating activities 101,212 550,022
Cash flows (used in) investing activities:
Net cash flows (used in) investing activities of
continuing operations (21,652 ) (154,789 )
Net cash flows (used in) investing activities of
discontinued operations (55 ) (622 )
---------------- --------------
Net cash flows (used in) investing activities (21,707 ) (155,411 )
Cash flows from (used in) financing activities:
Net cash flows from (used in) financing
activities of continuing operations (179,187 ) (308,832 )
---------------- --------------
Net increase in cash and cash equivalents (99,682 ) 85,779
Less increase in cash and cash equivalents of
discontinued operations (301 ) 1
---------------- --------------
Increase in cash and cash equivalents of
continuing operations $ (99,381 ) $ 85,778
---------------- --------------
The footnotes and definitions presented at the separate "Footnotes and
Definitions to Financial Information" pages are an integral part of this
financial information.
Omnicare, Inc. and Subsidiary Companies
Reconciliation Statement and Definitions, Non-GAAP Basis
($000s, except per share amounts)
Unaudited
Three months ended Year ended
--------------------------------------------- ------------------------------
December 31, September 30, December 31, December 31, December 31,
2011 2011 2010 2011 2010
-------------- --------------- -------------- --------------- --------------
Adjusted earnings per share ("EPS") from continuing operations:
Diluted
earnings (loss)
per share from
continuing
operations $ 0.34 $ 0.33 $ (0.50 ) $ 1.41 $ 0.13
Special items:
(a)
Settlement,
litigation and
other related
charges 0.16 0.04 0.33 0.37 0.73
Amortization of
discount on
convertible
notes 0.03 0.03 0.04 0.13 0.16
Debt redemption
loss and costs,
net 0.02 0.11 0.17 0.14 0.22
Other
miscellaneous
charges, net 0.03 0.04 0.47 0.09 0.88
Total - special
items (a) 0.24 0.21 1.01 0.72 1.99
Adjusted
diluted
earnings per
share from
continuing
operations $ 0.58 $ 0.54 $ 0.51 $ 2.13 $ 2.12
-------------- --------------- -------------- --------------- --------------
Adjusted gross
profit:
Gross profit
from continuing
operations $ 359,684 $ 346,061 $ 334,239 $ 1,377,097 $ 1,336,230
Special items
(b) - - 29 - (1,898 )
-------------- --------------- -------------- --------------- --------------
Adjusted gross
profit from
continuing
operations $ 359,684 $ 346,061 $ 334,268 $ 1,377,097 $ 1,334,332
-------------- --------------- -------------- --------------- --------------
Adjusted earnings before interest, income taxes ("EBIT"), depreciation and amortization
("EBITDA") from continuing operations:
EBIT from
continuing
operations $ 106,115 $ 117,053 $ (32,668 ) $ 432,943 $ 189,154
Depreciation
and
amortization 35,806 32,761 32,169 133,132 150,546
Amortization of
discount on
convertible
notes (6,226 ) (6,107 ) (7,117 ) (24,195 ) (29,536 )
-------------- --------------- -------------- --------------- --------------
EBITDA from
continuing
operations 135,695 143,707 (7,616 ) 541,880 310,164
Special items
(a) 27,213 13,460 155,239 70,723 288,065
-------------- --------------- -------------- --------------- --------------
Adjusted EBITDA
from continuing
operations $ 162,908 $ 157,167 $ 147,623 $ 612,603 $ 598,229
-------------- --------------- -------------- --------------- --------------
EBITDA from continuing operations to net cash flows from operating activities:
EBITDA from
continuing
operations $ 135,695 $ 143,707 $ (7,616 ) $ 541,880 $ 310,164
(Subtract)/Add:
Interest
expense, net of
investment
income (29,854 ) (49,819 ) (33,680 ) (135,923 ) (126,110 )
Income tax
provision (31,723 ) (23,343 ) 16,379 (111,293 ) (19,044 )
Write-off of
debt issuance
costs, net 752 4,994 4,576 6,012 6,636
Debt redemption
tender premium (3,438 ) (14,612 ) - (19,582 ) (7,591 )
Asset
impairment
charges - - 22,884 - 22,884
Benefit plan
termination and
related costs - - - - 25,187
Loss on debt
extinguishment - - 25,552 - 25,552
Changes in
assets and
liabilities,
net of effects
from
acquisition and
divestitures of
businesses 30,026 106,139 71,573 268,305 131,225
-------------- --------------- -------------- --------------- --------------
Net cash flows
from operating
activities of
continuing
operations 101,458 167,066 99,668 549,399 368,903
Net cash flows
from operating
activities of
discontinued
operations (246 ) 449 (1,761 ) 623 (288 )
-------------- --------------- -------------- --------------- --------------
Net cash flows
from operating
activities $ 101,212 $ 167,515 $ 97,907 $ 550,022 $ 368,615
-------------- --------------- -------------- --------------- --------------
The footnotes and definitions presented at the separate "Footnotes and
Definitions to Financial Information" pages are an integral part of this
financial information.
Year ended
------------------------------
December December
31, 2011 31, 2010
--------------- --------------
Segment Reconciliations - Long-Term Care Group
("LTC")
Adjusted EBIT - LTC:
EBIT from continuing operations $ 476,800 $ 374,110
Special items (a) 70,080 175,524
--------------- --------------
Adjusted EBIT from continuing operations - LTC $ 546,880 $ 549,634
--------------- --------------
Segment Reconciliations - Specialty Care Group
("SCG")
Adjusted EBIT - SCG:
EBIT from continuing operations $ 98,938 $ 75,039
Special items (a) 643 14,603
--------------- --------------
Adjusted EBIT from continuing operations - SCG $ 99,581 $ 89,642
--------------- --------------
The footnotes and definitions presented at the separate "Footnotes and
Definitions to Financial Information" pages are an integral part of this
financial information.
Omnicare, Inc. and Subsidiary Companies
Footnotes and Definitions to Financial Information
(000s, except per share amounts and unless otherwise stated)
Unaudited
Footnotes:
Non-GAAP Information:
Omnicare, Inc. ("Omnicare" or the "Company") management believes that presenting
certain non-GAAP financial measures, which exclude items not considered part of
the core operating results of the Company and certain non-cash charges, enhances
investors' understanding of how Omnicare management assesses the performance of
the Company's business. Omnicare management uses non-GAAP measures for
budgeting purposes, measuring actual results, allocating resources and in
determining employee incentive compensation. Omnicare's method of calculating
non-GAAP financial results may differ from those used by other companies and,
therefore, comparability may be limited.
a. Financial results from continuing operations included special item charges
of approximately $39 million, $40 million and $167 million in the three
months ended December 31 and September 30, 2011 and December 31, 2010,
respectively, as well as approximately $121 million and $350 million in the
year ended December 31, 2011 and 2010, respectively. Additional information
regarding the special item charges follows:
i. Operating income includes settlement, litigation and other related charges
(including related professional expenses) for resolution of certain
regulatory matters with various states and regulatory agencies, as well as
costs associated with certain large customer disputes, purported class and
derivative actions against the Company, and settlement of the investigation
by the United States Attorney's Office, District of Massachusetts (in the
2010 period). Additionally, Omnicare has made, and will continue to make,
disclosures to the applicable governmental agencies of amounts, if any,
determined to represent over-payments from the respective programs and,
where applicable, those amounts, as well as any amounts relating to certain
inspections, audits, inquiries and investigations activity are included in
the pretax items recognized.
(ii) Financial results from continuing operations for the three months ended
December 31 and September 30, 2011 and December 31, 2010, and the year ended
December 31, 2011 and 2010 included the following special item charges which are
included in the cost of sales, other miscellaneous charges and interest expense
captions of the income statement:
i. Operating income for the three months ended December 31 and September
30, 2011 and December 31, 2010 included acquisition and other related costs
of approximately $14.6 million, $6.7 million and $1.3 million, respectively.
These expenses were primarily related to professional fees and acquisition
related restructuring costs for acquisitions, offset by reductions in the
Company's purchase accounting reserves in 2011 and the original estimate of
contingent consideration payable for acquisitions in the 2010 period. The
years ended December 31, 2011 and 2010 included similar expenses of
approximately $25.5 million and $5.3 million, respectively.
ii. Financial results from continuing operations for the three months ended
December 31, 2011 and September 30, 2011 and year ended December
31, 2011include charges of approximately $4.2 million, $20.2 million and $25.5
million, respectively, primarily due to net debt redemption costs for the early
redemption of $525 million of the 6.875% Senior Subordinated Notes, due 2015,
and costs related to the termination of the Company's old revolving credit
agreement and the early redemption of $250 million of 6.125% Senior Subordinated
Notes, due 2013. The three months and year ended December 31, 2010 includes
approximately $31.5 million and $41.6 million, respectively, for debt redemption
loss and costs related to the Company's 2010 refinancing transactions.
iii. Operating income for the three months and year ended December 31, 2011
and year ended December 31, 2010 included separation, benefit plan termination
and related costs of approximately $1 million and $65 million, respectively,
which was comprised of the following:
a. A charge of approximately $1.0 million in the three months and year ended
December 31, 2011 for restricted stock amortization to a former executive.
b. A charge of approximately $40 million in the year ended December 31, 2010
for separation costs with three former Omnicare executives. These amounts
primarily relate to the accelerated vesting of restricted stock awards, stock
options, severance, interest, and employer payroll taxes on these items.
c. On September 30, 2010, the Company terminated the defined benefit portion
of its Excess Benefit Plan. As a result of the Plan termination, the Company
recognized a one-time charge to expense of approximately $25 million for benefit
plan termination and related costs in the year ended December 31, 2010.
iv. For the three months and year ended December 31, 2011, operating income
includes a special (credit) of approximately $(10.5) million for insurance
recoveries related to the quality control, product recall and fire issues at one
of the Company's repackaging locations ("Repack Matters"). The three months and
year ended December 31, 2010 includes a special (credit) of approximately $(0.1)
million and $(1.2) million, respectively, for similar recoveries, partially
offset by additional costs precipitated by the Repack Matters.
v. Operating income includes restructuring and other related charges of
approximately $6.8 million and $17.2 million for the three months and year ended
December 31, 2010, respectively, in connection with the "Omnicare Full
Potential" Plan and "Company-Wide Reorganization" Program.
vi. In the three months and year ended December 31, 2010, the Company recorded
a charge of approximately $13 million for an impairment of a trade name
intangible asset based on the results of the Company's annual assessment, as
well as an other asset impairment charge of approximately $10 million primarily
to write-off software assets that were abandoned.
vii. Operating income includes charges of approximately $0.7 million and $4.2
million for the three months and year ended December 31, 2010, respectively,
relating to the accounting for share-based payments, which primarily relates to
non-cash stock option expense.
viii. In connection with funding the benefit payments to certain former
executives in the three months and year ended December 31, 2010, the Company
recognized a gain, recorded in investment income, of approximately $0.4 million
and $3.6 million, respectively, on rabbi trust assets liquidated to make these
benefit payments.
ix. The three months and year ended December 31, 2010 include a charge of
approximately $6.8 million relating to the termination of the Company's prior
aircraft lease.
(iii) The provision for doubtful accounts includes an incremental charge
recognized in the fourth quarter of 2010 relating to the Company's Senior
Management team taking a different strategic approach for the resolution of past
due accounts which are disputed and/or currently in litigation.
(iv) The Company recorded non-cash interest expense from the amortization of
debt discount on its convertible notes of approximately $6 million in the three
months ended December 31 and September 30, 2011, respectively. These costs
totaled approximately $7 million for the three months ended December 31, 2010,
and $24 million and $30 million for the years ended December 31, 2011 and 2010,
respectively.
Discontinued Operations:
In 2009, the Company commenced activities to divest certain home healthcare and
related ancillary businesses ("the Disposal Group") that are non-strategic in
nature. Also, in connection with the reallocation of resources started in the
second half of 2010 and the previously disclosed unfavorable market conditions
experienced by its Contract Research Services organization ("CRO Services")
business, the Company committed to a plan to divest of its CRO Services business
in the first quarter of 2011 and completed the divestiture in April 2011. Also,
in the second quarter of 2011, the Company divested its Tidewater Group
Purchasing Organization ("Tidewater"). The Company determined that the CRO
Services and Tidewater businesses were no longer good strategic fits within the
Company's portfolio of assets. In the third quarter of 2011, the prior letter
of intent ("LOI") regarding the disposition of the remaining durable medical
equipment ("DME") portion of the Disposal Group was terminated, and a new LOI
was entered into with a separate party. The Company closed the DME transaction
in the fourth quarter of 2011. In connection with these activities, Omnicare
recorded an impairment loss in discontinued operations for the DME portion of
the Disposal Group in the three months ended December 31, 2011, September
30, 2011 and the year ended December 31, 2011. For the year ended December
31, 2011, CRO Services and Tidewater recorded impairment losses to reduce the
carrying value of the CRO Services and Tidewater operations to fair value based
on the final terms of the divestiture. The year ended December 31, 2010
includes an impairment loss to reduce the carrying value of the CRO Services
operations to fair value. The results from operations for all periods presented
have been revised to reflect the results of the Disposal Group and Tidewater
(collectively, the "Non-Core Disposal Group"), as well as CRO Services as
discontinued operations, including certain expenses of the Company related to
the divestitures.
Definitions:
GAAP:
Amounts that conform with U.S. Generally Accepted Accounting Principles
("GAAP").
Non-GAAP:
Amounts that do not conform with U.S. GAAP.
Earnings Per Share:
EPS (basic EPS; special items, net of taxes; adjusted basic EPS; diluted EPS;
and adjusted diluted EPS) is reported independently for each amount presented.
Accordingly, the sum of the individual amounts may not necessarily equal the
separately calculated amounts for the corresponding period.
EBIT:
EBIT represents earnings before interest expense (net of investment income) and
income taxes.
EBITDA:
EBITDA represents earnings before interest expense (net of investment income),
income taxes, depreciation and amortization. Omnicare uses EBITDA primarily as
an indicator of the Company's ability to service its debt, and believes that
certain investors find EBITDA to be a useful financial measure for the same
purpose. EBITDA does not represent net cash flows from operating activities, as
defined by U.S. GAAP, and should not be considered as a substitute for operating
cash flows as a measure of liquidity. Omnicare's calculation of EBITDA may
differ from the calculation of EBITDA by others. Certain special items must be
added back to (or deducted from) EBITDA and/or Adjusted EBITDA to avoid "double-
counting" in the Company's calculation of EBITDA.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Omnicare via Thomson Reuters ONE
[HUG#1588383]
Unternehmensinformation / Kurzprofil:
Datum: 23.02.2012 - 13:01 Uhr
Sprache: Deutsch
News-ID 117931
Anzahl Zeichen: 48397
contact information:
Town:
Covington, KY
Kategorie:
Business News
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Die Pressemitteilung mit dem Titel:
"Omnicare Reports Fourth-Quarter and Full-Year 2011 Financial Results, Additional 2012 Guidance"
steht unter der journalistisch-redaktionellen Verantwortung von
Omnicare (Nachricht senden)
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