PharMerica Reports Results for the Second Quarter of 2013
PharMerica Reports Results for the Second Quarter of 2013
Adjusted Diluted Earnings Per Share Increases 26% to $0.44
Adjusted EBITDA Increases 26% to $33.7 Million
Adjusted EBITDA Margin Increases 200 Basis Points to 7.8%
Company Maintains Industry Leading Generic Dispensing Rate of 83.3%
Company Increases 2013 Earnings Guidance
LOUISVILLE, Ky.--(BUSINESS WIRE)-- PharMerica Corporation (NYS: PMC) , a national provider of pharmacy services, today reported its financial results for the second quarter and six months ended June 30, 2013.
Commenting on the Company's results, Greg Weishar, PharMerica Corporation's Chief Executive Officer, said, "This quarter's results continue the strong operating performance we realized last quarter. On a sequential quarter basis, the Company maintained its record setting first quarter 2013 quarterly gross margin percent of 19.2%. Adjusted EBITDA margin was equally strong at 7.8%; just shy of the 7.9% record we established last quarter. Moreover, on a year over year basis, Adjusted EBITDA increased 26% to $33.7 million and Adjusted EBITDA margin increased 200 basis points to 7.8%.
"Last quarter we indicated we were seeing improvement in sales and client retention. We see this trend continuing and expect further momentum as we head into the last half of the year. Excluding Golden Living and Kindred, bed losses have fallen significantly and the sales pipeline is growing and beginning to generate new sales. We believe our superior cost containment programs and pharmacy services are leading to improvement in client retention and firmly believe the Company is well positioned to aggressively compete in the long term care market segment.
"Amerita, the specialty home infusion company that we acquired in December 2012, saw impressive operating earnings growth on a sequential basis. Operating earnings improved 50% in the second quarter of 2013 versus the strong first quarter of 2013. Recall, Amerita was accretive to earnings last quarter and we expect continued growth as Amerita's prospects remain bright.
"Cash flow for the quarter was $26.6 million bringing our year to date cash flow to $74.3 million, an increase of 43% over the first half of 2012.
"Finally, based on the strong performance for the first six months of 2013, PharMerica now expects the following for the full year 2013:
|Previous Guidance||Current Guidance|
|Revenues||$1.567B to $1.694B||$1.625B to $1.675B|
|Adjusted diluted earnings per share||$1.39 to $1.55||$1.55 to $1.60|
|Cash flows from operations*||$85M to $95M|
*Cash flows from operations was not provided in previous guidance.
Note: The full year guidance excludes the impact of any acquisitions or restructuring charges that may be incurred by the Company.
The results for the second quarter are set forth below:
- Key Comparisons of Second Quarters Ended June 30, 2013 and 2012:
- Net income for the second quarter of 2013 was $10.2 million, or $0.34 diluted earnings per share, compared with $7.6 million, or $0.26 diluted earnings per share, for the same period in 2012. Adjusted diluted earnings per share were $0.44 in 2013 compared with $0.35 adjusted diluted earnings per share in 2012, an increase of 25.7%.
- Adjusted EBITDA for the second quarter of 2013 was $33.7 million compared with $26.7 million in the second quarter of 2012, an increase of 26.2%.
- Gross profit for the second quarter of 2013 was $82.6 million compared with $75.9 million in the second quarter of 2012. Gross margin expanded 260 basis points to 19.2% in the second quarter of 2013 compared with 16.6% in the second quarter of 2012.
- Revenues for the second quarter of 2013 were $430.8 million compared with $458.5 million for the second quarter of 2012, a decrease of 6.0%.
- Cash flows provided by operating activities for the second quarter of 2013 were $26.6 million compared with cash flows provided by operating activities of $31.9 million in the second quarter of 2012, a decrease of 16.6%.
- Key Comparisons of Six Months Ended June 30, 2013 and 2012:
- Net income for the six months ended June 30, 2013, was $20.7 million, or $0.69 diluted earnings per share, compared with $13.2 million, or $0.44 diluted earnings per share, for the same period in 2012. Adjusted diluted earnings per share were $0.90 in the first half of 2013 compared with $0.67 adjusted diluted earnings per share in the same period in 2012, an increase of 34.3%.
- Adjusted EBITDA for the first half of 2013 was $68.3 million compared with $53.5 million in the first half of 2012, an increase of 27.7%.
- Gross profit for the six months ended June 30, 2013, was $166.9 million, or 19.2% of revenue, compared with $148.5 million, or 15.5% of revenue, in the same period of 2012. Gross margin expanded 370 basis points to 19.2% in the first half of 2013 compared with 15.5% in the first half of 2012.
- Revenues for the six months ended June 30, 2013, were $870.6 million compared with $957.4 million for the same period of 2012, a decrease of 9.1%.
- Cash flows provided by operating activities were $74.3 million compared with $51.8 million in the same period of 2012, an increase of 43.4%.
Management will hold a conference call to review the financial results for the second quarter on August 2, 2013, at 10:00 a.m. Eastern Time. To access the live webcast, visit the Investor Relations section of the Company's website at www.pharmerica.com. To access a telephonic replay of the call, which will be available one hour after the conclusion of the call through August 16, 2013, please dial 1-888-286-8010 (617-801-6888 if calling from outside the U.S.) and use passcode 78855441.
PharMerica Corporation is a leading institutional pharmacy services company that services healthcare facilities in the United States, provides pharmacy management services to hospitals, and also provides specialty infusion services to patients outside a hospital setting. As of June 30, 2013, PharMerica operated 90 institutional pharmacies and 12 specialty infusion centers in 45 states. PharMerica's customers are institutional healthcare providers, such as skilled nursing facilities, nursing centers, assisted living facilities, hospitals, individuals receiving in-home care and other long-term alternative care providers.
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect the Company's current estimates, expectations and projections about its future results, performance, prospects and opportunities.Forward-looking statements include, among other matters, the information concerning the Company's "guidance" and possible future results of operations, the strength of the Company's financial and operational performance during 2013, the impact of the brand to generic drug conversions on the Company, the Company's ability to identify and consummate future acquisitions, the Company's ability to deliver outstanding value to its shareholders, the Company's continued pursuit of its strategic initiatives including those focused on client retention and operating margins, the Company's ability to grow the Amerita specialty infusion business, and the Company's ability to achieve organic growth.Forward-looking statements include statements that are not historical facts and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "plan," "may," "should," "will," "would," "project" and similar expressions.These forward-looking statements are based upon information currently available to us and are subject to a number of risks, uncertainties and other factors that could cause the Company's actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.Important factors that could cause the Company's actual results to differ materially from the results referred to in the forward-looking statements we make in this press release are included in the Risk Factors section set forth in the Company's Annual Report on Form 10-K filed with the SEC and in other reports, including Quarterly Reports on Form 10-Q filed with the SEC by the Company.
You are cautioned not to place undue reliance on any forward-looking statements, all of which speak only as of the date of this press release.Except as required by law, we undertake no obligation to publicly update or release any revisions to these forward-looking statements to reflect any events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.All subsequent written and oral forward-looking statements attributable to us or any person acting on the Company's behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this press release and in the Risk Factors section set forth in the Company's Annual Report on Form 10-K filed with the SEC and in other reports filed with the SEC by the Company.
|Three Months Ended June 30,||Six Months Ended June 30,|
|Cost of goods sold||382.6||83.4||348.2||80.8||808.9||84.5||703.7||80.8|
|Selling, general and administrative expenses||54.9||12.0||55.5||12.9||107.3||11.2||112.2||12.9|
|Merger, acquisition, integration costs and other charges||2.8||0.6||2.8||0.6||8.2||0.9||5.7||0.7|
|Hurricane Sandy disaster costs||-||-||(0.9||)||(0.2||)||-||-|
|Interest expense, net||2.5||0.5||2.9||0.7||5.2||0.5||5.5||0.6|
|Income before income taxes||12.7||2.8||18.4||4.3||22.0||2.3||35.8||4.1|
Provision for income taxes
|Three Months Ended|
|Six Months Ended|
|Earnings per common share:|
|Basic||$||0.26||$ 0.34||$||0.45||$ 0.70|
|Diluted||$||0.26||$ 0.34||$||0.44||$ 0.69|
|Shares used in computing earnings per common share:|
|Cash and cash equivalents||$||12.3||$||12.3|
|Accounts receivable, net||206.6||195.3|
|Deferred tax assets, net||36.7||35.4|
|Prepaids and other assets||38.8||40.8|
|Equipment and leasehold improvements||158.8||169.7|
|Intangible assets, net||121.9||116.3|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Salaries, wages and other compensation||35.8||35.5|
|Current portion of long-term debt||12.5||12.5|
|Income taxes payable||1.5||7.4|
|Other accrued liabilities||7.6||7.7|
|Other long-term liabilities||22.5||23.1|
|Deferred tax liabilities||11.1||12.7|
|Commitments and contingencies|
Preferred stock, $0.01 par value per share; 1,000,000 shares authorized and no shares issued at December 31, 2012 and June 30, 2013
|Common stock, $0.01 par value per share; 175,000,000 shares authorized; 30,943,748 and 31,355,900 shares issued as of December 31, 2012 and June 30, 2013, respectively||0.3||0.3|
|Capital in excess of par value||363.0||367.0|
Treasury stock at cost, 1,456,293 shares and 1,585,366 shares at December 31, 2012 and June 30, 2013, respectively
|Three Months Ended|
|Six Months Ended|
|Cash flows provided by (used in) operating activities:|
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