Omnicare Reports First-Quarter 2013 Financial Results
(Thomson Reuters ONE) -
CINCINNATI, April 24, 2013 - Omnicare, Inc. (NYSE:OCR) reported today financial
results for its first quarter ended March 31, 2013.
First-Quarter Highlights:
* Gross profit of $371 million; 121 basis-point expansion in gross margin
rate
* Adjusted cash earnings per diluted share 11.1% higher to $0.90; GAAP
earnings per diluted share of $0.51
* Cash flows from operations of $109 million
"We are pleased to begin 2013 with a solid quarter," said John L. Workman,
Omnicare's Chief Executive Officer. "As we made further progress toward our
goal of achieving sustainable net organic growth within Long-Term Care, we
continued to reduce costs, largely through the utilization of low-cost generic
alternatives. These cost improvements, coupled with another strong quarterly
performance from our Specialty Care Group and the ongoing benefits of our
efficient allocation of capital, helped drive our double-digit adjusted cash
earnings per diluted share increase."
First-Quarter Results
Financial results for the quarter ended March 31, 2013, as compared with the
same prior-year period, were as follows:
* Net sales was $1,525 million versus $1,593 million
* Gross profit was $371 million as compared with $368 million
* GAAP earnings per diluted share was $0.51 versus $0.48
* Adjusted cash earnings per diluted share (see "per share" discussion below
and attached supplemental information) was $0.90 versus $0.81
* Adjusted EBITDA was $172 million versus $170 million
Cash flows from operations for the quarter ended March 31, 2013 were $109
million versus $100 million in the comparable prior-year quarter.
"We remain encouraged by the steps we have taken operationally," said Nitin
Sahney, Omnicare's President and Chief Operating Officer. "As we continue to
make refinements designed to optimize our Long-Term Care platforms, we have
begun to generate some early benefits, particularly as a result of our sales
transformational strategy and structural modifications to account management.
Within our Specialty Care Group, we continue to see favorable client responses
to our commercialization services for specialty products, with each of these
platforms generating double-digit first-quarter growth."
Financial Position
Omnicare concluded the first quarter of 2013 with no borrowings outstanding on
its revolving credit facility and $510 million in cash on its balance sheet.
As of March 31, 2013, the Company had approximately $220 million of availability
under its current share repurchase authorization. Omnicare was unable to
repurchase shares in the open market during the first quarter of 2013 due to the
ongoing Accelerated Share Repurchase (ASR) agreement. The ASR is expected to
reach final settlement during the second quarter of 2013.
"The first quarter was another period of strong cash flows," said Rocky Kraft,
Omnicare's Chief Financial Officer. "While our ability to return capital to
stockholders was limited in the first quarter due to the ongoing ASR agreement,
we made additional investments in the business while improving our financial
position. We expect to remain opportunistic with respect to capital allocation,
redeploying our cash flows in a manner we believe is most aligned with enhancing
stockholder value."
To facilitate comparisons and to enhance the understanding of core operating
performance, discussions in this news release include financial measures that
are adjusted from the comparable amounts 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
website at http://ir.omnicare.com. Additionally, the Company will make
supplemental slides available in the same section on its website today that will
include the number of scripts dispensed, beds served, and other information
relevant to Omnicare's operations.
Segment Information
Financial results for the Long-Term Care Group for the first quarter ended March
31, 2013 were as follows:
* Net sales of $1,155 million were 10.9% lower than $1,296 million in the same
prior-year period
* Adjusted operating income of $155 million increased 0.6% from $154 million
in the same prior-year period
Financial results for the Specialty Care Group for the first quarter ended March
31, 2013 were as follows:
* Net sales of $369 million were 25.9% higher than $293 million in the same
prior-year period
* Adjusted operating income of $38 million increased 26.0% from $30 million in
the same prior-year period
Special Items
The results for the first quarter of 2013 and 2012 include the impact of special
items and cash EPS adjustments as follows:
+------------------------------------------------------------------------------+
| Three months ended |
| |
| March 31, 2013 March 31, 2012 |
| |
| After-tax Per diluted After-tax Per diluted |
| impact share impact share |
+------------------------------------------------------------------------------+
|Special Items |
|Adj. $20.1M $0.19 $17.7M $0.15 |
| |
|Cash EPS Adj. $22.0M $0.20 $20.9M $0.18 |
+------------------------------------------------------------------------------+
The special items and cash EPS adjustments have been described in further detail
in the "Footnotes and Definitions to Financial Information" section elsewhere
herein.
Outlook
For the full year 2013, Omnicare reaffirmed its previous expectations as the
following:
+------------------------------------------------------------------------------+
| Current Guidance|
+------------------------------------------------------------------------------+
|Revenue $6.1B to $6.2B |
| |
|Adjusted cash earnings per diluted share (excluding special |
|items) $3.47 to $3.57 |
| |
|Cash flows from operations $450M to $500M |
+------------------------------------------------------------------------------+
Webcast Today
Omnicare will hold a conference call to discuss its first-quarter 2013 financial
results today, Wednesday, April 24, at 9:00 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 at http://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 Cincinnati, Ohio, 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, visit www.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 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
Agreement. 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
(513) 719-1507
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
------------------------------
March 31, March 31,
2013 2012
-------------------------------
Net sales $ 1,525,003 $ 1,593,068
Cost of sales 1,154,179 1,224,968
--------------- ---------------
Gross profit 370,824 368,100
Selling, general and administrative expenses 201,826 200,124
Provision for doubtful accounts 24,226 24,431
Settlement, litigation and other related
charges 22,619 7,203
Other charges 4,006 11,512
--------------- ---------------
Operating income 118,147 124,830
Interest expense, net of investment income (29,459 ) (30,834 )
--------------- ---------------
Income from continuing operations before income
taxes 88,688 93,996
Income tax provision 34,334 38,257
--------------- ---------------
Net income 54,354 55,739
--------------- ---------------
Earnings (loss) per common share - Diluted: $ 0.51 $ 0.48
Weighted average number of common shares
outstanding:
Diluted 107,466 116,500
--------------- ---------------
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
Consolidated Balance Sheets
(000s)
Unaudited
March 31, December 31,
2013 2012
-------------- ---------------
ASSETS
Current assets:
Cash and cash equivalents $ 509,818 $ 454,213
Restricted cash 5 1,066
Accounts receivable, less allowances 840,383 857,052
Inventories 382,658 385,698
Deferred income tax benefits 115,785 136,186
Other current assets 279,476 254,644
--------------- ---------------
Total current assets 2,128,125 2,088,859
Properties and equipment, at cost less
accumulated depreciation
292,794 282,660
Goodwill 4,256,959 4,256,959
Identifiable intangible assets, less
accumulated amortization 187,263 196,873
Other noncurrent assets 147,211 163,913
--------------- ---------------
Total noncurrent assets 4,884,227 4,900,405
--------------- ---------------
Total assets $ 7,012,352 $ 6,989,264
--------------- ---------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 186,710 $ 200,125
Accrued employee compensation 47,707 73,791
Current debt 233,919 27,713
Other current liabilities 203,839 180,385
--------------- ---------------
Total current liabilities 672,175 482,014
Long-term debt, notes and convertible
debentures 1,817,991 2,030,030
Deferred income tax liabilities 910,040 914,660
Other noncurrent liabilities 61,909 56,848
--------------- ---------------
Total noncurrent liabilities 2,789,940 3,001,538
--------------- ---------------
Total liabilities 3,462,115 3,483,552
--------------- ---------------
Stockholders' equity 3,550,237 3,505,712
--------------- ---------------
Total liabilities and stockholders' equity $ 7,012,352 $ 6,989,264
--------------- ---------------
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
Condensed Consolidated Statements of Cash Flows, GAAP Basis
(000s)
Unaudited
March 31, 2013
----------------
Three months
ended
----------------
Cash flows from operating activities:
Net income $ 54,354
Adjustments to reconcile net income to net cash flows from
operating activities:
Depreciation 13,807
Amortization 19,915
Changes in certain assets and liabilities, net of effects
from acquisition and divestiture of businesses:
Accounts receivable, net of provision for doubtful accounts 16,666
Inventories 3,040
Current and noncurrent assets (13,218 )
Accounts payable (3,642 )
Accrued employee compensation (26,073 )
Current and noncurrent liabilities 44,046
-----------------
Net cash flows from operating activities 108,895
Cash flows from investing activities:
Capital expenditures (23,129 )
Other 854
-----------------
Net cash flows used in investing activities (22,275 )
Cash flows from financing activities:
Payments on term loans (5,313 )
Payments on long-term borrowings and obligations (1,684 )
Decrease in cash overdraft balance (9,774 )
Payments for Omnicare common stock repurchases (302 )
Proceeds for stock awards and exercise of stock options, net
of stock tendered in payment 445
Dividends paid (14,479 )
Other 92
-----------------
Net cash flows used in financing activities (31,015 )
-----------------
Net increase in cash and cash equivalents 55,605
Cash and cash equivalents at beginning of period 454,213
-----------------
Cash and cash equivalents at end of period $ 509,818
-----------------
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
--------------------------
March 31, March 31,
2013 2012
------------ -------------
Adjusted earnings per share ("EPS") from continuing
operations:
Diluted earnings per share from continuing
operations $ 0.51 $ 0.48
Special Items: (a)
Settlement, litigation and other related charges 0.13 0.04
Other charges 0.02 0.08
Amortization of discount on convertible notes 0.03 0.03
------------- -------------
Total Special Items 0.19 0.15
Cash EPS Adjustments 0.20 0.18
Adjusted cash earnings per diluted share from
continuing operations $ 0.90 $ 0.81
------------- -------------
Adjusted earnings before interest, income taxes
("EBIT", "Operating income"), depreciation and
amortization ("EBITDA") from continuing operations:
EBIT from continuing operations $ 118,147 $ 124,830
Depreciation and amortization 33,722 32,461
Amortization of discount on convertible notes (6,069 ) (6,350 )
------------- -------------
EBITDA from continuing operations 145,800 150,941
Special items (a) 26,625 18,715
------------- -------------
Adjusted EBITDA from continuing operations 172,425 169,656
EBITDA from continuing operations to net cash flows
from operating activities:
EBITDA from continuing operations 145,800 150,941
(Subtract)/Add:
Interest expense, net of investment income and
amortization of discount on convertible notes (23,390 ) (24,484 )
Income tax provision (34,334 ) (38,257 )
Write off of debt issuance costs, net - 103
Changes in certain assets and liabilities, net of
effects from acquisition and
divestitures of businesses 20,819 12,114
------------- -------------
Net cash flows from operating activities of
continuing operations $ 108,895 $ 100,417
------------- -------------
Segment Reconciliations - Long-Term Care Group
("LTC")
Adjusted Operating Income - LTC:
Operating income from continuing operations 129,699 137,979
Special items (a) 25,371 16,215
------------- -------------
Adjusted operating income from continuing
operations - LTC 155,070 154,194
Segment Reconciliations - Specialty Care Group
("SCG")
Adjusted Operating Income - SCG:
Operating income from continuing operations 37,995 30,149
Special items (a) - -
------------- -------------
Adjusted operating income from continuing
operations - SCG 37,995 30,149
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 and also
includes certain tax deduction amounts ("Special Items"), 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 included Special Items and Cash EPS adjustments as
described below:
Q1 2013 Q1 2012
---------------------- -----------------------
After Tax After Tax
Pretax ((8)) Pretax ((8))
---------------------- -----------------------
EBIT:
Settlement, litigation and
other related charges( (1)) $ 22,619 $ 13,913 $ 7,203 $ 4,430
Other charges
Acquisition and other related
costs ((2)) 537 330 3,109 1,912
Disposition of businesses
((3)) - - 5,903 5,903
Separation costs ((4)) 3,469 2,134 2,500 1,537
Subtotal - Other charges 4,006 2,464 11,512 9,352
----------------------- -----------------------
Subtotal - EBIT Special Items 26,625 16,377 18,715 13,782
Interest Expense:
Amortization of discount on
convertible notes ((5)) 6,069 3,733 6,350 3,906
----------------------- -----------------------
Subtotal - Interest Expense
Special Items 6,069 3,733 6,350 3,906
----------------------- -----------------------
Subtotal - Special Items 32,694 20,110 25,065 17,688
Cash EPS Items:
Amortization of intangibles 9,599 5,904 10,753 6,613
Goodwill amortization tax
deduction ((6)) - 9,447 - 10,859
Convertible debt tax
deduction( (7)) - 6,626 - 3,437
----------------------- -----------------------
Subtotal - Cash EPS Items 9,599 21,977 10,753 20,909
----------------------- -----------------------
Grand Total - Special Items $ 42,293 $ 42,087 $ 35,818 $ 38,597
----------------------- -----------------------
1. Operating income includes settlement, litigation and other related charges
for resolution of certain large customer disputes, regulatory matters with
various states and regulatory agencies, qui tam lawsuits and purported class
and derivative actions against the Company. 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 special item reflected in
the table.
2. Operating income includes acquisition and other related costs primarily
related to professional fees and acquisition related restructuring costs for
acquisitions.
3. In 2012 the Company completed the disposition of its Canadian pharmacy and
the Company's pharmacy operational software business, which were not
considered, individually or in the aggregate, significant to the operations
of Omnicare. The Company recorded a charge on the disposition of these
businesses in the three months ended March 31, 2012.
4. Operating income includes separation related costs for certain former
employees.
5. The Company recorded non-cash interest expense from the amortization of debt
discount on its convertible notes.
6. The tax benefit of being able to deduct goodwill amortization.
7. The tax benefit of being able to deduct higher interest expense on our
convertible debt than what is actually paid.
8. The tax effect was calculated by multiplying the tax-deductible pretax
amounts by the appropriate effective tax rate.
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#1695495]
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Datum: 24.04.2013 - 13:00 Uhr
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News-ID 252451
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contact information:
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