Provider of drugs to long-term care facilities and nursing
) posted first quarter 2013 adjusted (excluding one-time
expenses) earnings per share of 90 cents surpassing the Zacks
Consensus Estimate of 86 cents.
Reported net income, which includes extraordinary and one-time
items, in the quarter was $54.4 million (or 51 cents per share),
down 2.5% year over year
Net sales decreased 4.3% year over year to $1,525 million in
the first quarter, trailing the Zacks Consensus Estimate of
$1,534 million. Net sales of the Long Term Care Group were $1,155
million in the quarter, down 10.9% year over year. Net sales of
the Specialty Care Group were $369 million, up 25.9% year over
Gross margin improved 120 basis points (bps) year over year to
24.3% in the first quarter. Operating margin dropped 10 basis
points on a year-over-year basis to 7.7% in the quarter. Adjusted
EBITDA from continuing operations stood at $172 million, up 1.2%
year over year.
Adjusted operating income from continuing operations for Long
Term Care Group improved marginally 0.6% year over to $155.1
million while the same for Specialty Care Group jumped 26% to $38
million in the quarter.
Balance Sheet, Cash Flow and Other
Omnicare exited the first quarter with cash and cash
equivalents of $509.8 million, up 12.2% on a sequential basis.
Long-term debt (including notes and convertible debentures)
declined 10.4% year sequentially but still remained sizeable at
For 2013, Omnicare reaffirmed its earlier guidance. It
continues to anticipate revenues between $6.1 billion and $6.2
billion. The company has maintained its forecast for adjusted
earnings per share (from continuing operations) in a range of
$3.47 to $3.57. Omnicare maintains its expected cash flows (from
continuing operations) in the range of $450 million to $500
Omnicare is a market leading provider of long-term care
pharmacy services and health care environment for individuals
directly and indirectly, through subsidiaries, across North
America. Omnicare has shown significant improvement in margins,
attributable to new generics introductions and cost containment
efforts. It competes with
) in certain niche segments.
Moreover, generic launches in the next few quarters present a
major opportunity due to Omnicare's direct access to
manufacturers and current greater exposure to the institutional
pharmacy channel than in the past couple of years. However, the
company continues to rely on Medicare and Medicaid programs for a
major share of its revenues.
The stock carries a Zacks Rank #2 (Buy).
) are Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy) stocks,
respectively, which are expected to do well.
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