Delaware
|
001-33380
|
87-0792558
|
(State or Other Jurisdiction of Incorporation)
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
|
|
|
1901 Campus Place
Louisville, Kentucky
|
40299
|
|
(Address of principal executive offices)
|
(Zip Code)
|
o
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
o
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
o
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
o
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
99.1
|
|
Press Release of PharMerica Corporation dated May 1, 2014.
|
|
|
|
|
|
|
|
|
|
|
|
PHARMERICA CORPORATION
|
||
|
|
|
|
|||
Date: May 1, 2014
|
|
|
|
By:
|
|
/s/ David W. Froesel, Jr.
|
|
|
|
|
|
|
David W. Froesel, Jr.
|
|
|
|
|
|
|
Executive Vice President, Chief Financial Officer and Treasurer
|
Exhibit No.
|
|
Description
|
|
|
|
|
Press Release of PharMerica Corporation dated May 1, 2014.
|
· | Revenues of $452.2 million, an increase of 3% |
· | Adjusted EBITDA of $29.7 million, a decrease of 14% |
· | Adjusted diluted earnings per share of $0.37, a decrease of 20% |
· | Net organic sales growth in the institutional pharmacy business continues, excluding previously disclosed bed losses |
· | Strategic investment in Onco360 driving revenue growth |
· | Generic drug dispensing rate increased to industry-leading 84.5% |
· | Revenue in the range of $1.70 billion to $1.75 billion from $1.67 billion to $1.72 billion |
· | Adjusted diluted earnings per share in the range of $1.40 to $1.50 from $1.35 to $1.50 |
· | Adjusted EBITDA in the range of $117.5 million to $123.0 million from $115.0 million to $123.0 million |
Ø | Key Comparisons of First Quarters Ended March 31, 2014 and 2013: |
· | Revenues for the first quarter of 2014 were $452.2 million compared with $439.8 million for the first quarter of 2013. The increase in revenue was primarily the result of the fourth quarter 2013 acquisitions and branded drug price inflation, and was partially offset by previously disclosed bed losses as of December 31, 2013. |
· | Gross profit for the first quarter of 2014 was $80.0 million compared with $84.3 million in the first quarter of 2013. Gross profit was impacted by previously disclosed bed losses as of December 31, 2013. The decrease in gross profit was partially offset by a reduction in costs associated with the Company’s restructuring program and an improvement in the Company’s drug procurement initiatives. |
· | Selling, general and administrative expenses were $57.2 million or 12.6% of revenues for the three months ended March 31, 2014 compared to $56.7 million or 12.9% of revenues for the three months ended March 31, 2013. Selling, general and administrative expenses increased as a result of the Onco360 acquisition, without which selling, general and administrative expenses would have decreased. |
· | Adjusted EBITDA for the first quarter of 2014 was $29.7 million compared with $34.6 million in the first quarter of 2013. |
· | Net income for the first quarter of 2014 was $4.8 million, or $0.16 diluted earnings per share, compared with $10.5 million, or $0.35 diluted earnings per share, for the same period in 2013. Adjusted diluted earnings per share was $0.37 in 2014 compared with $0.46 in 2013, a decrease of 19.6%. |
· | Cash flows provided by operating activities for the first quarter of 2014 were $4.4 million compared with cash flows provided by operating activities of $47.5 million in the first quarter of 2013. The decrease in cash provided by operating activities is due to a reduction in net income, a planned change in the Company’s inventory purchasing strategies and a decrease in liabilities partially offset by a decrease in accounts receivable. |
|
Three Months Ended March 31,
|
|||||||||||||||
|
2013
|
2014
|
||||||||||||||
|
Amount
|
% of Revenues
|
Amount
|
% of Revenues
|
||||||||||||
Revenues
|
$
|
439.8
|
100.0
|
%
|
$
|
452.2
|
100.0
|
%
|
||||||||
|
||||||||||||||||
Cost of goods sold
|
355.5
|
80.8
|
372.2
|
82.3
|
||||||||||||
|
||||||||||||||||
Gross profit
|
84.3
|
19.2
|
80.0
|
17.7
|
||||||||||||
|
||||||||||||||||
Selling, general and administrative expenses
|
56.7
|
12.9
|
57.2
|
12.6
|
||||||||||||
|
||||||||||||||||
Amortization expense
|
4.1
|
1.0
|
4.4
|
1.0
|
||||||||||||
|
||||||||||||||||
Merger, acquisition, integration costs and other charges
|
2.8
|
0.6
|
5.0
|
1.1
|
||||||||||||
|
||||||||||||||||
Settlement, litigation and other related charges
|
0.1
|
-
|
1.2
|
0.3
|
||||||||||||
|
||||||||||||||||
Restructuring and impairment charges
|
-
|
-
|
1.9
|
0.4
|
||||||||||||
|
||||||||||||||||
Hurricane Sandy disaster costs
|
0.6
|
0.1
|
-
|
-
|
||||||||||||
|
||||||||||||||||
Operating income
|
20.0
|
4.6
|
10.3
|
2.3
|
||||||||||||
|
||||||||||||||||
Interest expense, net
|
2.6
|
0.6
|
2.5
|
0.6
|
||||||||||||
|
||||||||||||||||
Income before income taxes
|
17.4
|
4.0
|
7.8
|
1.7
|
||||||||||||
|
||||||||||||||||
Provision for income taxes
|
6.9
|
1.6
|
3.0
|
0.6
|
||||||||||||
|
||||||||||||||||
Net income
|
$
|
10.5
|
2.4
|
%
|
$
|
4.8
|
1.1
|
%
|
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2013
|
2014
|
||||||
Earnings per common share:
|
||||||||
Basic
|
$
|
0.36
|
$
|
0.16
|
||||
Diluted
|
$
|
0.35
|
$
|
0.16
|
||||
|
||||||||
Shares used in computing earnings per common share:
|
||||||||
Basic
|
29,566,959
|
29,753,024
|
||||||
Diluted
|
30,063,737
|
30,354,067
|
|
(As Adjusted)
|
|||||||
|
Dec. 31,
|
Mar. 31,
|
||||||
|
2013
|
2014
|
||||||
|
||||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
24.2
|
$
|
12.7
|
||||
Accounts receivable, net
|
199.9
|
186.2
|
||||||
Inventory
|
110.2
|
107.4
|
||||||
Deferred tax assets, net
|
36.9
|
32.9
|
||||||
Income taxes receivable
|
1.9
|
5.8
|
||||||
Prepaids and other assets
|
38.6
|
41.4
|
||||||
|
411.7
|
386.4
|
||||||
|
||||||||
Equipment and leasehold improvements
|
179.4
|
177.2
|
||||||
Accumulated depreciation
|
(117.6
|
)
|
(114.3
|
)
|
||||
|
61.8
|
62.9
|
||||||
|
||||||||
Goodwill
|
282.2
|
282.5
|
||||||
Intangible assets, net
|
136.3
|
131.9
|
||||||
Other
|
9.3
|
5.7
|
||||||
|
$
|
901.3
|
$
|
869.4
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
83.7
|
$
|
61.5
|
||||
Salaries, wages and other compensation
|
34.5
|
29.8
|
||||||
Current portion of long-term debt
|
12.5
|
12.5
|
||||||
Other accrued liabilities
|
20.7
|
9.2
|
||||||
|
151.4
|
113.0
|
||||||
|
||||||||
Long-term debt
|
218.8
|
218.4
|
||||||
Other long-term liabilities
|
49.9
|
49.3
|
||||||
Deferred tax liabilities
|
18.7
|
18.7
|
||||||
Commitments and contingencies
|
||||||||
Stockholders' equity:
|
||||||||
Preferred stock, $0.01 par value per share; 1,000,000 shares authorized and no shares issued, December 31, 2013 and March 31, 2014
|
-
|
-
|
||||||
Common stock, $0.01 par value per share; 175,000,000 shares authorized; 31,954,264 and 32,581,547 shares issued as of December 31, 2013 and March 31, 2014, respectively
|
0.3
|
0.3
|
||||||
Capital in excess of par value
|
380.2
|
387.4
|
||||||
Retained earnings
|
110.2
|
115.0
|
||||||
Treasury stock at cost, 2,416,971 and 2,594,281 shares at December 31, 2013 and March 31, 2014, respectively
|
(28.2
|
)
|
(32.7
|
)
|
||||
|
462.5
|
470.0
|
||||||
|
$
|
901.3
|
$
|
869.4
|
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2013
|
2014
|
||||||
Cash flows provided by (used in) operating activities:
|
||||||||
Net income
|
$
|
10.5
|
$
|
4.8
|
||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
||||||||
Depreciation
|
4.8
|
4.8
|
||||||
Amortization
|
4.1
|
4.4
|
||||||
Merger, acquisition, integration costs and other charges
|
-
|
2.5
|
||||||
Hurricane Sandy disaster costs
|
(0.6
|
)
|
-
|
|||||
Stock-based compensation and deferred compensation
|
2.2
|
2.1
|
||||||
Amortization of deferred financing fees
|
0.3
|
0.7
|
||||||
Deferred income taxes
|
3.6
|
4.0
|
||||||
Gain on disposition of equipment
|
-
|
(0.1
|
)
|
|||||
Gain on acquisition
|
-
|
(0.3
|
)
|
|||||
Other
|
0.1
|
0.1
|
||||||
Change in operating assets and liabilities:
|
||||||||
Accounts receivable, net
|
(1.2
|
)
|
13.1
|
|||||
Inventory
|
35.5
|
2.8
|
||||||
Prepaids and other assets
|
3.4
|
(2.1
|
)
|
|||||
Accounts payable
|
(12.6
|
)
|
(21.8
|
)
|
||||
Salaries, wages and other compensation
|
(4.8
|
)
|
(4.7
|
)
|
||||
Other accrued liabilities
|
(0.5
|
)
|
(1.9
|
)
|
||||
Change in income taxes payable (receivable)
|
2.9
|
(1.3
|
)
|
|||||
Excess tax benefit from stock-based compensation
|
(0.2
|
)
|
(2.7
|
)
|
||||
Net cash provided by operating activities
|
47.5
|
4.4
|
|
|||||
|
||||||||
Cash flows provided by (used in) investing activities:
|
||||||||
Purchase of equipment and leasehold improvements
|
(6.7
|
)
|
(6.0
|
)
|
||||
Acquisitions, net of cash acquired
|
(0.5
|
)
|
(10.7
|
)
|
||||
Cash proceeds from dispositions
|
-
|
0.4
|
||||||
Net cash used in investing activities
|
(7.2
|
)
|
(16.3
|
)
|
||||
|
||||||||
Repayments of long-term debt
|
(3.1
|
)
|
(3.1
|
)
|
||||
Net activity of long-term revolving credit facility
|
(40.5
|
)
|
2.8
|
|||||
Issuance of common stock
|
0.1
|
2.5
|
||||||
Treasury stock at cost
|
(1.8
|
)
|
(4.5
|
)
|
||||
Excess tax benefit from stock-based compensation
|
0.2
|
2.7
|
||||||
Other
|
0.3
|
-
|
||||||
Net cash used in financing activities
|
(44.8
|
)
|
0.4
|
|||||
|
||||||||
Change in cash and cash equivalents
|
(4.5
|
)
|
(11.5
|
)
|
||||
Cash and cash equivalents at beginning of period
|
12.3
|
24.2
|
||||||
|
||||||||
Cash and cash equivalents at end of period
|
$
|
7.8
|
$
|
12.7
|
||||
|
||||||||
Supplemental information:
|
||||||||
Cash paid for interest
|
$
|
2.3
|
$
|
1.8
|
||||
Cash paid for taxes
|
$
|
1.3
|
$
|
0.4
|
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2013
|
2014
|
||||||
|
||||||||
Pharmacy data:
|
||||||||
Prescriptions dispensed (in thousands)
|
9,711
|
8,608
|
||||||
Revenue per prescription dispensed
|
$
|
45.29
|
$
|
52.53
|
||||
Gross profit per prescription dispensed
|
$
|
8.68
|
$
|
9.29
|
|
Three Months Ended
|
|||||||
(In millions)
|
March 31,
|
|||||||
|
2013
|
2014
|
||||||
Net income
|
$
|
10.5
|
$
|
4.8
|
||||
Add:
|
||||||||
Interest expense, net
|
2.6
|
2.5
|
||||||
Merger, acquisition, integration costs and other charges
|
2.8
|
5.0
|
||||||
Settlement, litigation and other related charges
|
0.1
|
1.2
|
||||||
Restructuring and impairment charges
|
-
|
1.9
|
||||||
Hurricane Sandy disaster costs
|
0.6
|
-
|
||||||
Stock-based compensation and deferred compensation
|
2.2
|
2.1
|
||||||
Provision for income taxes
|
6.9
|
3.0
|
||||||
Depreciation and amortization expense
|
8.9
|
9.2
|
||||||
Adjusted EBITDA
|
$
|
34.6
|
$
|
29.7
|
||||
Adjusted EBITDA margin
|
7.9
|
%
|
6.6
|
%
|
|
Three Months Ended
|
|||||||
(In whole numbers)
|
March 31,
|
|||||||
|
2013
|
2014
|
||||||
|
||||||||
Diluted earnings per share
|
$
|
0.35
|
$
|
0.16
|
||||
Add:
|
||||||||
Diluted earnings per share impact of:
|
||||||||
Merger, acquisition, integration costs and other charges
|
0.06
|
0.10
|
||||||
Settlement, litigation and other related charges
|
-
|
0.03
|
||||||
Restructuring and impairment charges
|
-
|
0.04
|
||||||
Hurricane Sandy disaster costs
|
0.01
|
-
|
||||||
Stock-based compensation and deferred compensation
|
0.04
|
0.04
|
||||||
Adjusted diluted earnings per share
|
$
|
0.46
|
$
|
0.37
|
|
Three Months Ended
|
|||||||
(In millions)
|
March 31,
|
|||||||
|
2013
|
2014
|
||||||
Adjusted EBITDA
|
$
|
34.6
|
$
|
29.7
|
||||
Interest expense, net
|
(2.6
|
)
|
(2.5
|
)
|
||||
Merger, acquisition, integration costs and other charges
|
(2.9
|
)
|
(2.5
|
)
|
||||
Provision for bad debt
|
5.3
|
5.6
|
||||||
Amortization of deferred financing fees
|
0.3
|
0.7
|
||||||
Loss (gain) on disposition of equipment
|
-
|
(0.1
|
)
|
|||||
Gain on acquisition
|
-
|
(0.3
|
)
|
|||||
Provision for income taxes
|
(6.9
|
)
|
(3.0
|
)
|
||||
Deferred income taxes
|
3.6
|
4.0
|
||||||
Changes in federal and state income tax payable (receivable)
|
2.9
|
(1.3
|
)
|
|||||
Excess tax benefit from stock-based compensation
|
(0.2
|
)
|
(2.7
|
)
|
||||
Changes in assets and liabilities
|
13.3
|
(23.3
|
)
|
|||||
Other
|
0.1
|
0.1
|
||||||
Net cash flows provided by (used in) operating activities
|
$
|
47.5
|
$
|
4.4
|
|