Delaware
|
001-33380
|
87-0792558
|
(State or Other Jurisdiction of Incorporation)
|
(Commission File Number)
|
(IRS Employer Identification No.)
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1901 Campus Place
Louisville, Kentucky
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40299
|
|
(Address of principal executive offices)
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(Zip Code)
|
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | 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 6, 2016. |
PHARMERICA CORPORATION
|
||
Date: May 6, 2016
|
By:
|
/s/ David W. Froesel, Jr.
|
David W. Froesel, Jr.
|
||
Executive Vice President, Chief Financial Officer and Treasurer
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Exhibit No.
|
Description
|
Press Release of PharMerica Corporation dated May 6, 2016.
|
1Q’16 Results
|
Comparison to
1Q’15
|
Comparison to
4Q’15
|
|
Revenue
|
$524.5 million
|
Increase of 2.5%
|
Increase of 0.7%
|
Adjusted EBITDA
|
$30.3 million
|
Decrease of 14.4%
|
Decrease of 12.7%
|
Adjusted diluted earnings per share
|
$0.45
|
Decrease of 21.1%
|
Decrease of 19.6%
|
Gross profit
|
$82.0 million
|
Decrease of 7.4%
|
Decrease of 5.4%
|
Selling, general and administrative
|
$57.0 million
|
Decrease of 3.4%
|
Increase of 2.9%
|
Generic drug dispensing rate
|
86.6%
|
Increase of 130 basis points
|
Increase of 30 basis points
|
·
|
Revenue in the range of $2.125 billion to $2.150 billion;
|
·
|
Adjusted EBITDA in the range of $130.3 million to $135.3 million; and
|
·
|
Adjusted diluted earnings per share in the range of $1.95 to $2.05.
|
Ø
|
Key Comparisons of First Quarters Ended March 31, 2016 and 2015:
|
·
|
Revenues for the first quarter of 2016 were $524.5 million compared with $511.6 million for the first quarter of 2015, an increase of 2.5%. The increase in revenues of $12.9 million is due to significant organic growth and acquisitions in the Company’s specialty businesses, partially offset by the 2015 initiative to improve the overall quality mix of clients, the 2016 reduction in Medicare Part D reimbursement and 2015 brand to generic conversions.
|
·
|
Gross profit for the first quarter of 2016 was $82.0 million compared with $88.6 million in the first quarter of 2015; a decrease of 7.4%. The decrease in gross profit was driven by higher drug costs under the Cardinal Health prime vendor agreement, changes made in 2015 to improve the overall quality mix of clients and lower Medicare Part D reimbursement.
|
·
|
Selling, general and administrative expenses were $57.0 million or 10.9% of revenues for the three months ended March 31, 2016 compared to $59.0 million or 11.5% of revenues for the three months ended March 31, 2015. The decrease of $2.0 million was due to cost improvements and lower bad debt expense.
|
·
|
Adjusted EBITDA for the first quarter of 2016 was $30.3 million compared with $35.4 million in the first quarter of 2015; a decrease of 14.4%.
|
·
|
Net income for the first quarter of 2016 was $4.1 million, or $0.13 diluted earnings per share, compared to $9.6 million, or $0.31 diluted earnings per share, for the same period in 2015. Adjusted diluted earnings per share was $0.45 in the first quarter of 2016 compared to $0.57 in the first quarter of 2015.
|
·
|
Cash flows provided by operating activities for the first quarter of 2016 were $62.3 million compared with $44.3 million in the first quarter of 2015. The increase in cash from operating activities is due to a decrease in inventory purchases and a higher accounts payable balance due to the timing of the weekly Cardinal Health prime vendor payment. Additionally, in the first quarter of 2015, $48.8 million of AmerisourceBergen drug purchase payments were withheld.
|
Three Months Ended March 31,
|
||||||||||||||||
2015
|
2016
|
|||||||||||||||
Amount
|
% of
Revenues
|
Amount
|
% of
Revenues
|
|||||||||||||
Revenues
|
$
|
511.6
|
100.0
|
%
|
$
|
524.5
|
100.0
|
%
|
||||||||
Cost of goods sold
|
423.0
|
82.7
|
442.5
|
84.4
|
||||||||||||
Gross profit
|
88.6
|
17.3
|
82.0
|
15.6
|
||||||||||||
Selling, general and administrative expenses
|
59.0
|
11.5
|
57.0
|
10.9
|
||||||||||||
Amortization expense
|
6.6
|
1.3
|
8.2
|
1.5
|
||||||||||||
Merger, acquisition, integration costs and other charges
|
3.8
|
0.7
|
4.4
|
0.8
|
||||||||||||
Settlement, litigation and other related charges
|
2.3
|
0.5
|
3.1
|
0.6
|
||||||||||||
Restructuring and impairment charges
|
0.1
|
-
|
1.4
|
0.3
|
||||||||||||
Operating income
|
16.8
|
3.3
|
7.9
|
1.5
|
||||||||||||
Interest expense, net
|
1.4
|
0.3
|
3.0
|
0.6
|
||||||||||||
Income before income taxes
|
15.4
|
3.0
|
4.9
|
0.9
|
||||||||||||
Provision for income taxes
|
5.8
|
1.1
|
0.8
|
0.1
|
||||||||||||
Net income
|
$
|
9.6
|
1.9
|
%
|
$
|
4.1
|
0.8
|
%
|
Three Months Ended
March 31,
|
||||||||
2015
|
2016
|
|||||||
Earnings per common share:
|
||||||||
Basic
|
$
|
0.32
|
$
|
0.13
|
||||
Diluted
|
$
|
0.31
|
$
|
0.13
|
||||
Shares used in computing earnings per common share:
|
||||||||
Basic
|
30,185,230
|
30,527,697
|
||||||
Diluted
|
30,733,381
|
30,917,192
|
(As Adjusted)
Dec. 31,
2015
|
Mar. 31,
2016
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
23.1
|
$
|
25.5
|
||||
Accounts receivable, net
|
200.5
|
199.5
|
||||||
Inventory
|
155.2
|
118.5
|
||||||
Deferred tax assets, net
|
41.8
|
42.2
|
||||||
Income taxes receivable
|
10.5
|
12.4
|
||||||
Prepaids and other assets
|
52.4
|
55.3
|
||||||
483.5
|
453.4
|
|||||||
Equipment and leasehold improvements
|
218.5
|
223.9
|
||||||
Accumulated depreciation
|
(144.0
|
)
|
(149.3
|
)
|
||||
74.5
|
74.6
|
|||||||
Goodwill
|
371.0
|
372.1
|
||||||
Intangible assets, net
|
190.2
|
182.1
|
||||||
Other long-term assets
|
32.4
|
84.4
|
||||||
$
|
1,151.6
|
$
|
1,166.6
|
|||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
71.7
|
$
|
87.2
|
||||
Salaries, wages and other compensation
|
30.6
|
23.8
|
||||||
Current portion of long-term debt
|
11.6
|
11.6
|
||||||
Other accrued liabilities
|
27.5
|
26.9
|
||||||
141.4
|
149.5
|
|||||||
Long-term debt
|
413.6
|
366.0
|
||||||
Other long-term liabilities
|
56.5
|
104.4
|
||||||
Deferred tax liabilities
|
20.7
|
24.3
|
||||||
Commitments and contingencies
|
||||||||
Stockholders' equity:
|
||||||||
Preferred stock, $0.01 par value per share; 1,000,000 shares authorized and no shares issued, December 31, 2015 and March 31, 2016
|
-
|
-
|
||||||
Common stock, $0.01 par value per share; 175,000,000 shares authorized; 33,237,732 and 33,640,063 shares issued as of December 31, 2015 and March 31, 2016, respectively
|
0.3
|
0.3
|
||||||
Capital in excess of par value
|
404.6
|
406.5
|
||||||
Retained earnings
|
152.1
|
156.2
|
||||||
Treasury stock at cost, 2,776,875 and 2,905,713 shares at December 31, 2015 and March 31, 2016, respectively
|
(37.6
|
)
|
(40.6
|
)
|
||||
519.4
|
522.4
|
|||||||
$
|
1,151.6
|
$
|
1,166.6
|
Three Months Ended
March 31,
|
||||||||
2015
|
2016
|
|||||||
Cash flows provided by (used in) operating activities:
|
||||||||
Net income
|
$
|
9.6
|
$
|
4.1
|
||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
||||||||
Depreciation
|
5.8
|
5.3
|
||||||
Amortization
|
6.6
|
8.2
|
||||||
Stock-based compensation and deferred compensation
|
2.0
|
1.4
|
||||||
Amortization of deferred financing fees
|
0.1
|
0.1
|
||||||
Deferred income taxes
|
2.3
|
3.1
|
||||||
Loss on disposition of equipment
|
0.1
|
-
|
||||||
Other
|
-
|
0.1
|
||||||
Change in operating assets and liabilities:
|
||||||||
Accounts receivable, net
|
(2.3
|
)
|
1.0
|
|||||
Inventory
|
13.2
|
34.9
|
||||||
Prepaids and other assets
|
27.4
|
(0.7
|
)
|
|||||
Accounts payable
|
(14.1
|
)
|
14.2
|
|||||
Salaries, wages and other compensation
|
(2.4
|
)
|
(9.7
|
)
|
||||
Other accrued liabilities
|
(2.2
|
)
|
2.2
|
|||||
Change in income taxes payable (receivable)
|
0.1
|
(0.9
|
)
|
|||||
Excess tax benefit from stock-based compensation
|
(1.9
|
)
|
(1.0
|
)
|
||||
Net cash provided by operating activities
|
44.3
|
62.3
|
||||||
Cash flows provided by (used in) investing activities:
|
||||||||
Purchase of equipment and leasehold improvements
|
(4.6
|
)
|
(5.4
|
)
|
||||
Acquisitions, net of cash acquired
|
(20.5
|
)
|
(6.7
|
)
|
||||
Cash proceeds from dispositions
|
0.1
|
-
|
||||||
Net cash used in investing activities
|
(25.0
|
)
|
(12.1
|
)
|
||||
Cash flows provided by (used in) financing activites:
|
||||||||
Repayments of long-term debt
|
-
|
(2.8
|
)
|
|||||
Net activity of long-term revolving credit facility
|
(25.0
|
)
|
(45.0
|
)
|
||||
Issuance of common stock
|
0.3
|
0.1
|
||||||
Treasury stock at cost
|
(4.4
|
)
|
(3.0
|
)
|
||||
Employee taxes paid on stock award vestings
|
-
|
3.0
|
||||||
Excess tax benefit from stock-based compensation
|
1.9
|
-
|
||||||
Repayment of capital lease obligations
|
(0.2
|
)
|
(0.1
|
)
|
||||
Net cash used in financing activities
|
(27.4
|
)
|
(47.8
|
)
|
||||
Change in cash and cash equivalents
|
(8.1
|
)
|
2.4
|
|||||
Cash and cash equivalents at beginning of period
|
33.3
|
23.1
|
||||||
Cash and cash equivalents at end of period
|
$
|
25.2
|
$
|
25.5
|
||||
Supplemental information:
|
||||||||
Cash paid for interest
|
$
|
2.1
|
$
|
2.6
|
||||
Cash paid for taxes
|
$
|
4.7
|
$ |
-
|
Three Months Ended
March 31,
|
||||||||
2015
|
2016
|
|||||||
Pharmacy data:
|
||||||||
Prescriptions dispensed (in thousands)
|
9,053
|
8,647
|
||||||
Revenue per prescription dispensed
|
$
|
56.51
|
$
|
60.66
|
||||
Gross profit per prescription dispensed
|
$
|
9.79
|
$
|
9.48
|
(In millions)
|
Three Months Ended
March 31,
|
|||||||
2015
|
2016
|
|||||||
Net income
|
$
|
9.6
|
$
|
4.1
|
||||
Add:
|
||||||||
Interest expense, net
|
1.4
|
3.0
|
||||||
Merger, acquisition, integration costs and other charges
|
3.8
|
4.4
|
||||||
Settlement, litigation and other related charges
|
2.3
|
3.1
|
||||||
Restructuring and impairment charges
|
0.1
|
1.4
|
||||||
Provision for income taxes
|
5.8
|
0.8
|
||||||
Depreciation and amortization expense
|
12.4
|
13.5
|
||||||
Adjusted EBITDA
|
$
|
35.4
|
$
|
30.3
|
||||
Adjusted EBITDA margin
|
6.9
|
%
|
5.8
|
%
|
(In whole numbers)
|
Three Months Ended
March 31,
|
|||||||
2015
|
2016
|
|||||||
Diluted earnings per share
|
$
|
0.31
|
$
|
0.13
|
||||
Add:
|
||||||||
Diluted earnings per share impact of:
|
||||||||
Merger, acquisition, integration costs and other charges
|
0.08
|
0.09
|
||||||
Settlement, litigation and other related charges
|
0.05
|
0.06
|
||||||
Restructuring and impairment charges
|
-
|
0.03
|
||||||
Amortization of intangible assets
|
0.13
|
0.17
|
||||||
Impact of discrete items and non-recuring charges on tax provision
|
-
|
(0.03
|
)
|
|||||
Adjusted diluted earnings per share
|
$
|
0.57
|
$
|
0.45
|
(In millions)
|
Three Months Ended
March 31,
|
|||||||
2015
|
2016
|
|||||||
Adjusted EBITDA
|
$
|
35.4
|
$
|
30.3
|
||||
Interest expense, net
|
(1.4
|
)
|
(3.0
|
)
|
||||
Merger, acquisition, integration costs and other charges
|
(6.2
|
)
|
(8.9
|
)
|
||||
Provision for bad debt
|
5.0
|
3.2
|
||||||
Amortization of deferred financing fees
|
0.1
|
0.1
|
||||||
Loss on disposition of equipment
|
0.1
|
-
|
||||||
Provision for income taxes
|
(5.8
|
)
|
(0.8
|
)
|
||||
Deferred income taxes
|
2.3
|
3.1
|
||||||
Changes in federal and state income tax payable (receivable)
|
0.1
|
(0.9
|
)
|
|||||
Stock-based compensation and deferred compensation
|
2.0
|
1.4
|
||||||
Excess tax benefit from stock-based compensation
|
(1.9
|
)
|
(1.0
|
)
|
||||
Changes in assets and liabilities
|
14.6
|
38.8
|
||||||
Net cash provided by operating activities
|
$
|
44.3
|
$
|
62.3
|