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Thursday, 26 April 2012, 19:50 HKT/SGT
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Source: Omnicare
Omnicare Reports First-Quarter 2012 Financial Results

CINCINNATI, OH, Apr 26, 2012 - (ACN Newswire) - Omnicare, Inc. (NYSE:OCR) reported today financial results for its first quarter ended March 31, 2012.

Year-Over-Year Highlights:
- Gross profit increase of 9.9% to $368.1 million; 115 basis-point expansion in gross margin
- Long-Term Care Group adjusted operating profit up 18.3%
- Specialty Care Group operating profit increase of 41.3%
- Adjusted diluted cash earnings per share from continuing operations 17.4% higher to $0.81; GAAP earnings per diluted share of $0.48

"We are pleased with our first-quarter financial results, which reflect a continuation of our recently established earnings momentum," said John Figueroa, Omnicare's Chief Executive Officer. "Our focus on becoming more operationally driven has enabled us to become more efficient as an organization while concurrently benefiting from pharmaceutical market trends. With our solid first-quarter results, I believe we have begun a successful 2012 by elevating Omnicare's growth profile and positioning our shareholders for value enhancement."

First-Quarter Results

Prior Year Comparison
Financial results from continuing operations for the quarter ended March 31, 2012, as compared with the same prior-year period, were as follows:
- Gross profit was $368.1 million as compared with $335.0 million
- GAAP income from continuing operations per diluted share was $0.48 versus $0.43
- Adjusted diluted cash earnings per share from continuing operations (see "per share" discussion below and attached supplemental information) was $0.81 versus $0.69
- Adjusted EBITDA from continuing operations was $169.7 million versus $146.2 million

Cash flows from continuing operations for the quarter ended March 31, 2012 were $100.4 million versus $143.9 million in the comparable prior-year quarter.

Sequential Comparison
In comparison to the fourth quarter of 2011, financial results from continuing operations for the first quarter of 2012 were as follows:
- Gross profit was $368.1 million as compared with $359.7 million
- GAAP earnings per diluted share was $0.48 versus $0.34
- Adjusted diluted cash earnings per share from continuing operations (see discussion below and attached supplemental information) was $0.81 versus $0.78
- Adjusted EBITDA from continuing operations was $169.7 million compared to $162.9 million

"During the quarter, we generated strong double-digit growth from both of our core businesses," said Mr. Figueroa. "Utilization was slightly higher sequentially within our Long-Term Care business, while margin expansion was primarily the result of improved operating efficiencies and the benefit from the introduction of new generic drugs, which lower costs for Omnicare, its customers and payors. The outperformance of our Specialty Care Group, in comparison to the prior year, was driven by robust growth across all operating platforms."

Financial Position

Omnicare concluded the first quarter of 2012 with no borrowings outstanding on its revolving credit facility and $624.0 million in cash on its balance sheet. Omnicare's total debt to total capital ratio of 34.2% at March 31, 2012, was approximately 30 basis points lower from 34.5% at December 31, 2011.

On March 29, 2012, Omnicare announced it had entered into separate, privately negotiated exchange agreements under which it retired $256.9 million in aggregate amount of its outstanding 3.75% Convertible Senior Subordinated Notes due 2025 (the "Existing Notes") in exchange for its issuance of $390 million in aggregate principal amount of new 3.75% Convertible Senior Subordinated Notes due 2042. These transactions closed on April 3, 2012, following which, $318.1 million in principal amount of the Existing Notes remain outstanding.

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 $22 million. As of March 31, 2012, the Company had approximately $237 million of availability under its current share repurchase authorization.

"We generated over $100 million in cash flows from continuing operations during the first quarter, enabling us to continue our disciplined and balanced approach to capital allocation," said John L. Workman, Omnicare's President and Chief Financial Officer. "Through share repurchases and dividends, we exceeded our 25% target of capital returned to shareholders. Additionally, we enhanced our financial position while continuing to invest in capital initiatives that we believe support Omnicare's long-term growth prospects"

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.

Segment Information

Financial results for the Long-Term Care Group for the first quarter ended March 31, 2012 were as follows:
- Net sales of $1,296.3 million were up 1.5% from $1,277.4 million sequentially and up 0.5% from $1,290.1 million over the same prior-year period
- Adjusted operating income of $154.2 million was up 5.4% from $146.3 million sequentially and up 18.3% from $130.4 million over the same prior-year period

Financial results for the Specialty Care Group for the first quarter ended March 31, 2012 were as follows:
- Net sales of $293.3 million were up 6.2% from $276.2 million sequentially and up 26.8% from $231.3 million over the same prior-year period
- Adjusted operating income of $30.1 million was up 10.3% from $27.3 million sequentially and up 41.3% from $21.3 million over the same prior-year period

Special Items

The results for the first quarter of 2012 and 2011 include the impact of special items totaling approximately $25.1 million pretax ($17.7 million aftertax, or approximately $0.15 per diluted share) and $14.9 million pretax ($9.3 million aftertax, or approximately $0.08 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 reaffirmed its previous expectations and continues to expect 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
- Cash flow from continuing operations of $400 million to $500 million

"We believe we are well on-track to achieve our previously stated full-year outlook," said Mr. Workman. "Upon concluding our second quarter, we anticipate reassessing our financial guidance and providing any necessary update accordingly."

Webcast Today

Omnicare will hold a conference call to discuss its first-quarter 2012 financial results today, Thursday, April 26, 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 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 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
+1-859-392-3444
patrick.lee@omnicare.com


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

Copyright (c) Thomson Reuters 2012. All rights reserved.

Topic: Press release summary
Source: Omnicare


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