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| Tuesday, 25 October 2011, 20:42 HKT/SGT | |
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Source: Omnicare | |
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COVINGTON, Ky., Oct 25, 2011 - (ACN Newswire) - Omnicare, Inc. (NYSE:OCR) reported today financial results for its third quarter ended September 30, 2011.
- Third-Quarter Gross Profit of $346.1 Million; Gross Margin Expansion of 80 Basis Points Sequentially to 22.4%
- Quarterly Cash Flows from Continuing Operations Increase to $167.1 Million
- Adjusted Income from Continuing Operations Per Diluted Share of $0.54; 8% Growth from $0.50 in 2011 Second Quarter
- Company Provides Updated Guidance
"We are pleased with our solid third quarter results, which reflect the progress we are making to become a more operationally driven and customer-focused company," said John Figueroa, Omnicare's Chief Executive Officer. "We are executing on our operating objectives while establishing new ones, and we remain focused on continuing to drive enhanced value for our shareholders, customers and other important stakeholders."
Third-Quarter Results
Prior Year Comparison
Financial results from continuing operations for the quarter ended September 30, 2011, as compared with the same prior-year period, were as follows:
- Adjusted gross profit (see discussion below and attached supplemental information) was $346.1 million as compared with $330.6 million
- GAAP income from continuing operations per diluted share (see "per share" discussion below and attached supplemental information) was $0.33 versus a $0.08 loss
- Adjusted income from continuing operations (see discussion below and attached supplemental information) per share was $0.54 versus $0.53
- Adjusted EBITDA (see discussion below and attached supplemental information) from continuing operations was $157.2 million compared to $142.2 million
Cash flows from continuing operations for the quarter ended September 30, 2011 was $167.1 million versus $116.3 million in the comparable prior-year quarter. Included in the third quarter of 2011 was $22.7 million related to the settlement of a receivable dispute with a large customer. Included in the third quarter of 2010 was a settlement payment of approximately $21 million as well as approximately $7 million of executive separation-related payments.
Sequential Comparison
In comparison to the second quarter of 2011, financial results from continuing operations for the third quarter of 2011 were as follows:
- Gross profit was $346.1 million as compared with $336.4 million
- GAAP income from continuing operations per share was $0.33 versus $0.32
- Adjusted income from continuing operations (see discussion below and attached supplemental information) per share was $0.54 versus $0.50
- Adjusted EBITDA (see discussion below and attached supplemental information) from continuing operations was $157.2 million compared to $146.3 million
"The favorable dynamics currently present in the pharmaceutical marketplace, especially the increased availability of generic drugs, improve the economics for both Omnicare and its customers," said Mr. Figueroa. "During the quarter, we realized the advantages of the rise in generic drug utilization, which, coupled with our insourcing and other efficiency improvement initiatives, more than offset a modest deceleration in industry prescription volumes. In addition, we have seen positive results from our efforts to reaccelerate growth in our Specialty Care Group."
Financial Position
During the third quarter of 2011, Omnicare entered into a new $750 million senior unsecured credit facility, comprised of a $300 million revolving credit facility and a $450 million Term A Loan, replacing the Company's previous $400 million senior secured revolving credit facility. Omnicare used the proceeds from the Term A Loan to redeem $25 million of its 6.125% Senior Subordinated Notes due 2013 (the "6.125% Notes) and $425 million of its Senior Subordinated Notes due 2015 (the "6.875% Notes).
Also during the three-month period, Omnicare completed its offering of an additional $150 million aggregate principal amount of its 7.75% Senior Subordinated Notes due 2020. Subsequent to the end of the quarter, Omnicare used the proceeds from the offering of 7.75% Notes to redeem the remaining $50 million principal amount on the 6.125% Notes and the remaining $100 million principal amount on the 6.875% Notes.
In connection with its offering of the additional 7.75% Notes, the Company entered into two interest rate swap agreements, under which Omnicare pays a floating rate based on the London interbank offered rate, plus a weighted average spread of 5.32%.
Omnicare concluded the third quarter of 2011 with no borrowings outstanding on its revolving credit facility and $681.6 million in cash on its balance sheet. Omnicare's total debt to total capital of 36.2% at September 30, 2011, was up approximately 60 basis points from 35.6% at December 31, 2010 due to the redemption of the remaining 6.125% Notes and 6.875% Notes taking place in the fourth quarter of 2011.
With respect to its share repurchase program, Omnicare repurchased approximately 1.8 million shares of common stock during the quarter and paid an aggregate amount of $50.1 million. As of September 30, 2011, the Company had $78.9 million of availability under its current share repurchase authorization.
"During the third quarter, we maintained a high level of cash flow efficiency and working capital management while making further steps to strengthen our capital structure," said John L. Workman, Omnicare's President and Chief Financial Officer. "Our quarterly cash flows from continuing operations of $167 million brings our nine-month total to $448 million, positioning us for a record full-year performance. This elevated level of cash flow generation has enabled us to continue redeploying capital in areas we expect will create 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 at http://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.
Nine-Month Results
Financial results from continuing operations for the nine months ended September 30, 2011, as compared with the same prior-year period, were as follows:
- Net sales were $4,625.8 million as compared with $4,500.0 million
- GAAP income from continuing operations per share was $1.07 as compared with $0.61
- Adjusted income from continuing operations (see discussion below and attached supplemental information) per share was $1.55 as compared with $1.61
EBITDA from continuing operations for the first nine months of 2011, including the impact of special items and accounting changes, was $406.2 million versus $317.8 million in the comparable prior-year period. Excluding the special items, adjusted EBITDA from continuing operations in the first nine months of 2011 was $449.7 million as compared with $450.6 million in the first nine months of 2010.
Operating cash flow from continuing operations for the first nine months of 2011 totaled $447.9 million versus $269.2 million in the comparable prior-year period.
Special Items
The results for the third quarter of 2011 and 2010 include the impact of special items and accounting changes totaling approximately $39.7 million pretax ($24.5 million aftertax, or approximately $0.21 per share) and $111.5 million pretax ($71.0 million aftertax, or approximately $0.61 per share), respectively.
Results for the first nine months of 2011 and 2010 include special items totaling $82.7 million pretax ($55.1 million aftertax, or approximately $0.48 per share) and $182.5 million pretax ($116.9 million aftertax, or approximately $0.99 per share), respectively.
The special items have been described in further detail in the "Footnotes and Definitions to Financial Information" section elsewhere herein.
Outlook
Reflecting its more favorable outlook on cash flows as well as a narrower earnings guidance range, Omnicare now expects the following for full-year 2011:
- Revenues of $6.0 billion to $6.1 billion
- Income per diluted share from continuing operations of $2.09 to $2.13 (excluding special items)
- Cash flow from continuing operations increased to $500 million to $525 million (from prior guidance of $400 million to $450 million)
Webcast Today
Omnicare will hold a conference call to discuss its third-quarter 2011 financial results today, Tuesday, October 25, 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 Web site at http://ir.omnicare.com . An archived replay will be made available on the Web site 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, 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, including the proposed acquisition of PharMerica, 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; 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
+1(859) 392-3444
patrick.lee@omnicare.com
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information contained therein.
Source: Omnicare via Thomson Reuters ONE
Copyright (c) Thomson Reuters 2011. All rights reserved.
Topic: Press release summary
Source: Omnicare
https://www.acnnewswire.com
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