Edit Symbol List
Enter up to 25 symbols separated by commas or spaces in the text box below. These symbols will be available during your session for use on applicable pages.
Don't know the stock symbol? Use the
Symbol Lookup tool.
Alphabetize the sort order of my symbols
Investing just got easier…
Sign up now to become a NASDAQ.com member and begin receiving instant notifications when key events occur that affect the stocks you follow.Access Now X
PharMerica Corporation (PMC)
Q1 2014 Earnings Conference Call
May 2, 2014 10:00 ET
Cynthia Archer - Manager, Treasury and Risk
Greg Weishar - Chief Executive Officer
David Froesel - Executive Vice President, Chief Financial Officer and Treasurer
Glen Santangelo - Credit Suisse
Jason Gurda - KeyBanc
Brendan Strong - Barclays
Frank Morgan - RBC Capital Markets
Robert Willoughby - Bank of America/Merrill Lynch
Previous Statements by PMC
» PharMerica Management Discusses Q4 2013 Results - Earnings Call Transcript
» PharMerica Corporation Discusses Q4 2013 Results (Webcast)
» PharMerica Management Discusses Q3 2013 Results - Earnings Call Transcript
» PharMerica Corporation Discusses Q3 2013 Results (Webcast)
I would now like to turn the call over to Ms. Cynthia Archer. Please proceed, ma’am.
Good morning and thank you for joining us for the first quarter 2014 conference call. On the call with me today are Greg Weishar, Chief Executive Officer; and David Froesel, Executive Vice President, Chief Financial Officer and Treasurer.
Before beginning our remarks regarding the first quarter 2014 results, I would like to make a cautionary statement. During the call today, we will make forward-looking statements about our business prospects and financial expectations. We want to remind you that there are many risks and uncertainties that could cause our actual results to differ materially from our current expectations.
In addition to the risks and uncertainties discussed on this morning’s press release and in the comments made during this conference call, more detailed information about the additional risks and uncertainties may be found in our SEC filings including our annual report on Form 10-K and quarterly report on Form 10-Q. Copies of these documents maybe obtained from the SEC or by visiting the Investor Relations section of our website. PharMerica assumes no obligation to update the matters discussed on this call.
During this call, we will be referring to non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with Generally Accepted Accounting Principles. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in our press release and in our quarterly report on Form 10-Q. We have made available to you our press release and our quarterly report on Form 10-Q filed with the SEC. In addition, this webcast will be on our website along with the transcript from this call.
And now at this time, I would like to turn the call over to Greg.
Thank you, Cynthia and thanks for all of you. As always, we appreciate for your attendance and your interest in PharMerica.
As you saw in this morning’s earnings release, we have reported strong results. Revenue, adjusted EBITDA and adjusted diluted earnings per share, all exceeded expectations for the first quarter. These results demonstrate the company is off to a great start towards achieving stated 2014 objectives and long-term growth and value creation.
Let me summarize the highlights. Excluding Golden Living and Kindred, we posted another sequential quarter of organic growth. This gives us confidence that we are gaining competitive strength in the core long-term care business. We anticipate achieving net organic bed growth for the year. The strategic investment in Onco360 in December 2013 gives us market entry into the large and fast growing specialty oncology pharmacy market. Growth in revenues on a year-over-year and sequential basis was in large part due to the inclusion of 100% of Onco360’s revenues in the first quarter of 2014. Amerita continues to grow according to plan. Amerita also achieved record revenues.
We continue to bring value to our clients through an industry-leading generic dispensing rate. The generic dispensing rate for the quarter was 84.5%, an improvement of 120 basis points year-over-year and 80 basis points sequentially. Looking towards the end of 2015, the generic dispensing rate is forecasted to hit 88% due to upcoming patent expirations. Nexium, Namenda and Abilify lead the list.
The investment in Onco360 coupled with the acquisition of Amerita reflects our focus on pursuing diversified growth opportunities in closely-related pharmacy markets. We believe the specialty infusion and oncology businesses will generate revenues of approximately $400 million by 2016. Complementing organic growth initiatives, we have a stated goal to complete acquisitions yearly that generate at least $100 million of annualized sales. We are targeting companies in the institutional pharmacy and specialty infusion pharmacy markets. And we are evaluating a number of acquisition opportunities and are optimistic we will achieve our yearly goal.
So, with that, I will turn it over to Dave. He will walk you through the financials.
Thank you, Greg and good morning. I would like to spend the next several minutes discussing our results of operations for the first quarter of 2014. Revenues reported for the first quarter of 2014 were $452.2 million, which represents an increase of $12.4 million or approximately 3% versus the first quarter of 2013. In addition, on a sequential basis, revenues were slightly higher. The increase in revenues on a year-over-year basis was primarily attributable to PharMerica’s new investment in Onco360, strong branded drug inflation and growth in our specialty home infusion business, Amerita. More importantly, revenues associated with Onco360, home infusion and branded drug inflation more than offset losses in revenues associated with Kindred and Golden Living.
Gross profit for the quarter was $80 million or 17.7% of revenues as compared to $84.3 million or 19.2% of revenues in the comparable quarter of last year. The decrease in gross profit was primarily associated with the loss of Kindred and Golden Living facilities partially offset by lower cost associated with our planned restructuring program and improved drug purchasing economics. In addition, the Onco360 business contributed to gross profit dollars in the current quarter. On a gross profit dollar per script basis, Onco360 metrics are higher than PharMerica’ institutional pharmacy business, however, lower on a gross profit percentage of revenue basis.