PHCC Priority Healthcare b (MM)

Priority Healthcare Announces First Quarter Results - Record Sales Performance LAKE MARY, Fla., April 22 /PRNewswire-FirstCall/ -- Priority Healthcare Corporation reported record sales for the first quarter ended April 3, 2004. For the quarter, sales increased to $401 million, operating earnings were $19.5 million, and net earnings were $12.2 million. Diluted earnings per share were $.28. "We are pleased that we exceeded our sales forecast and met our earnings guidance for the first quarter even with continued sluggish national growth in our key pharmacy markets and a very challenging environment in oncology distribution," stated Steve Cosler, President and Chief Executive Officer. "We are hopeful that the recent approval of generic ribavirin will incrementally stimulate some unit demand in the national hepatitis market and potentially provide some improvement in gross margins, as generics have traditionally done for pharmacies and distributors. "Looking to the future, we continue to be enthusiastic about the biotech pipeline and related new product opportunities which create new growth platforms for the company. I am pleased to announce that Priority Healthcare has been selected by Roche and Trimeris as a specialty provider for Fuzeon(TM), effective later this month. Fuzeon marks the addition of HIV to our disease portfolio. "We are also optimistic about industry consolidation opportunities, such as our recent acquisition of Partners-In-Care, a Midwestern infertility specialty pharmacy. Partners-in-Care strengthens our industry leading position in infertility and allows us to reach even more patients and physicians with our services. With similar acquisition opportunities available, our $150 million credit facility can be utilized to facilitate strategic investments in our growth," said Mr. Cosler. In commenting on certain financial aspects of the quarter, Steve Saft, Chief Financial Officer, stated, "Our 14% sales increase for the quarter was virtually all organic growth. This increase was primarily led by our ophthalmology, pulmonology and oncology disease states." Mr. Saft continued, "Our balance sheet remains strong with $66 million in cash and marketable securities and no debt. Cash flow from operations was $13 million for the first quarter, which exceeded our net earnings. Our trade DSO's are at 39 days, a decrease of one day, sequentially, from the fourth quarter. Our inventory turns are at 13, an increase of one turn, sequentially, from the fourth quarter. Our return on committed capital and invested capital for the quarter was 49% and 30%, respectively, which we believe is among the highest in the industry." Mr. Cosler concluded, "As in 2003, Priority Healthcare continues to gain share in virtually every market we serve. The second half of the year will be shaped by additional new markets, improved leverage of our infrastructure under the leadership of our new Chief Operating Officer, Tracy Nolan, and increased momentum in several of the new contracts and projects we have developed. Furthermore, several of our existing key markets will likely rebound from their current negative trends and stabilize, improving our performance in those areas." As previously announced, a web cast of the company's conference call to review the financial results is available on Priority Healthcare's website, http://www.priorityhealthcare.com/, live at 9:00 AM Eastern today. A replay of this conference call will be available on the company's website approximately two hours after the event for a two week period. About Priority Healthcare Corporation Priority Healthcare Corporation is a national specialty pharmacy and distributor that provides biopharmaceuticals, complex therapies, and related disease treatment services. Priority Healthcare provides comprehensive programs for patients, payors, physicians, and pharmaceutical manufacturers for a growing number of disease states including cancer, hepatitis C, respiratory and pulmonary conditions, infertility, rheumatoid arthritis, hemophilia, multiple sclerosis, and macular degeneration. Certain statements included in this press release, which are not historical facts, are forward-looking statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent our expectations or beliefs and involve certain risks and uncertainties, including those described in our public filings with the United States Securities and Exchange Commission; also including, but not limited to, changes in interest rates, competitive pressures, changes in customer mix, changes in third party reimbursement rates, financial stability of major customers, changes in government regulations or the interpretation of these regulations, changes in supplier relationships, growth opportunities, cost savings, revenue enhancements, synergies and other benefits anticipated from acquisition transactions, difficulties relative to integrating acquired businesses, the accounting and tax treatment of acquisitions, and asserted and unasserted claims, which could cause actual results to differ from those in the forward-looking statements. The forward-looking statements by their nature involve substantial risks and uncertainties, certain of which are beyond our control, and actual results may differ materially depending on a variety of important factors. You are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date herein. PRIORITY HEALTHCARE CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (000's omitted, except share data) (unaudited) Three-month Three-month period ended period ended April 3, March 29, 2004 2003 Net sales $401,243 $351,529 Cost of products sold 358,230 311,244 Gross profit 43,013 40,285 Selling, general and administrative expense 22,158 18,725 Depreciation and amortization 1,369 927 Earnings from operations 19,486 20,633 Interest income, net 174 461 Minority interest (78) -- Earnings before income taxes 19,582 21,094 Provision for income taxes 7,343 7,910 Net earnings $12,239 $13,184 Earnings per share: Basic $.28 $.30 Diluted $.28 $.30 Weighted average shares outstanding: Basic 43,322,604 43,521,657 Diluted 44,056,295 44,010,503 PRIORITY HEALTHCARE CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (000's omitted) (unaudited) April 3, January 3, 2004 2004 Cash and cash equivalents $55,945 $47,719 Marketable securities 10,006 15,317 Receivables, net 192,177 172,206 Finished goods inventory 103,558 117,218 Other current assets 21,630 20,642 Fixed assets, net 31,890 29,780 Other assets 117,453 111,127 Total assets $532,659 $514,009 Current liabilities $171,216 $164,663 Long-term debt -- -- Other liabilities 6,515 6,437 Shareholders' equity 354,928 342,909 Total liabilities and shareholders' equity $532,659 $514,009 http://www.newscom.com/cgi-bin/prnh/20030417/PHCLOGO http://photoarchive.ap.org/ DATASOURCE: Priority Healthcare Corporation CONTACT: Financial - Stephen Saft, Chief Financial Officer, +1-407-804-6700, or Media - Kirsten Ayars, Public Relations Manager, +1-407-804-5826, both of Priority Healthcare Corporation Web site: http://www.priorityhealthcare.com/

Copyright