Provider of drugs to long-term care facilities and nursing
) posted fourth-quarter 2012 adjusted (excluding one-time
expenses) earnings per share of 86 cents surpassing the Zacks
Consensus Estimate of 85 cents. For 2012, the company reported
adjusted earnings per share of $3.36 beating the Zacks Consensus
Estimate of $3.34.
Reported net income in the quarter jumped 89.3% year over year
to $59 million (or 54 cents per share).
Net sales decreased 1.7% year over year to $1,530 million in the
fourth quarter, beating the Zacks Consensus Estimate of $1,508
million. For 2012, revenues remained roughly flat y/y at $6,160
million surpassing the Zacks Consensus Estimate of $6,133
Net sales of the Long Term Care Group were $1,184 million in
the quarter, down 7.3% year over year. Net sales of the Specialty
Care Group were $346 million, up 25.4% year over year.
Adjusted EBITDA margin picked up 20 basis points year over
year to 10.7% in the reported quarter. Adjusted operating margin
increased 30 basis points to 8.9%.
Adjusted operating income from continuing operations for Long
Term Care Group improved 6.2% year over year to $155 million. The
same for Specialty Care Group jumped 33.3% to $36 million in the
Balance Sheet, Cash Flow and Other
Omnicare exited the fourth quarter with cash and cash
equivalents of $454.2 million, down 21.7% year over year.
Long-term debt (including notes and convertible debentures) rose
3.2% year over year and was sizeable at $2,030 million. Cash flow
from continuing operations climbed 26.7% year over year to $128
Omnicare repurchased about 0.8 million shares in the fourth
quarter for $28 million. The company had $220 million available
under its recent share repurchase authorization, as of Dec 31,
For 2013, Omnicare anticipates revenues between $6.1 billion
and $6.2 billion. The company forecasts adjusted earnings per
share (from continuing operations) in a range of $3.47 to $3.57.
Omnicare also expects cash flows (from continuing operations) in
the range of $450 million to $500 million.
Omnicare is a market-leading provider of long-term care
pharmacy services for individuals directly and indirectly through
subsidiaries, across North America. It competes with
) in certain niche segments.
Omnicare has shown significant improvement in margins,
attributable to new generic introductions and cost containment
efforts. The company's performance in the most recent quarter
negated external pricing pressure and reimbursement cuts.
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. Operational
synergies from the buyout of Five Star's pharmacy business are
also expected to materialize in 2013. However, the company
continues to rely on Medicare and Medicaid programs for a major
share of its revenues.
We currently have a Zacks Rank #2 (Buy) on the stock.
Air Methods Corp.
) also carry a Zacks Rank #2 (Buy) and are expected to do well.
AIR METHODS CRP (AIRM): Free Stock Analysis
COVANCE INC (CVD): Free Stock Analysis Report
OMNICARE INC (OCR): Free Stock Analysis
PHARMERICA CORP (PMC): Free Stock Analysis
To read this article on Zacks.com click here.