Priority Healthcare Announces Record Second Quarter Results LAKE
MARY, Fla., July 22 /PRNewswire-FirstCall/ -- ? Priority Healthcare
Corporation (NASDAQ:PHCC) reported results for the second quarter
and six months ended July 3, 2004. For the second quarter, sales
increased 25% to $438 million. Excluding a restructuring charge,
operating earnings increased 17% to $21 million, net earnings grew
14% to $13 million and diluted earnings per share increased 15% to
$.30. Including the restructuring charge, operating earnings
increased 10% to $19.7 million, net earnings grew 7% to $12.2
million and diluted earnings per share increased 8% to $.28. The
company recorded a pre-tax charge of $1.3 million or $.02 per
diluted share related to facility consolidation and certain
employee and lease termination costs. For the six month period,
sales increased 20% to $840 million. Excluding the restructuring
charge, operating earnings increased 5% to $41 million, net
earnings grew 3% to $25.2 million and diluted earnings per share
increased 2% to $.57. Including the restructuring charge, operating
earnings increased 2% to $39 million, net earnings decreased 1% to
$24.4 million and diluted earnings per share were flat at $.56. "We
are pleased that we exceeded our sales forecast and our earnings
guidance for the second quarter after excluding the restructuring
charge. The strong sales performance was led by ophthalmology,
oncology, neurology and certain components of other specialty
markets. The performance in these areas more than offset the
continued challenging national unit trends in infertility,
idiopathic pulmonary fibrosis and hepatitis, as well as the sales
compression related to the generic version of ribavirin." stated
Steve Cosler, President and Chief Executive Officer. "We are
looking forward to continued growth from many of our specialty
markets, along with the strong pipeline of new product and payor
opportunities we are pursuing. "In addition to our solid financial
performance, we had a very active quarter, strategically. We
expanded and enhanced our product and service offerings through the
recent acquisitions of HealthBridge and Integrity Healthcare
Services. HealthBridge strengthens our product reimbursement and
support capabilities for manufacturers, as well as our consultative
capabilities for our payor customers. Integrity Healthcare Services
expands our product and service offering to our entire customer
base, as well as expanding our geographic presence. "We also began
the expansion of our corporate headquarters at Technology Park in
Lake Mary, Florida. This expansion will be partially funded with
$1.8 million in tax incentives provided by the State of Florida,
Seminole County and the City of Lake Mary. In addition, we
consolidated our Carpinteria, California operation into our
Monrovia, California facility. This location will serve as the hub
of our west coast operations as we expand our national geographic
presence." In commenting on certain financial aspects of the
quarter, Steve Saft, Chief Financial Officer, stated, "Our 25%
sales increase for the quarter was driven by 24% organic growth.
Our gross profit decreased 20 basis points to 10.5% sequentially,
from the first quarter. We are pleased SG&A expense decreased
20 basis points sequentially, from the first quarter." Mr. Saft
continued, "Our balance sheet remains strong with $51 million in
cash and marketable securities, offset by $5 million drawn on our
line of credit. Cash flow from operations was $7 million for the
second quarter. Our trade DSO's were 39 days, a decrease of one day
from the second quarter of 2003. Our inventory turns were 13, an
increase of one turn from the second quarter of last year. Return
on committed capital and invested capital for the quarter were
strong at 48% and 29%, respectively, which we believe is among the
highest in the industry." Mr. Cosler concluded, "The momentum
continues to build in our industry. We remain focused on
capitalizing on this momentum by generating solid financial
results, expanding and improving our operating platform, adding new
product and service offerings to better serve our customers, and
adding new leadership and talent to the Priority Healthcare team to
manage our growth opportunities. We will continue to take a very
disciplined approach across all aspects of our business to assure
we maximize our returns." 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:///
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.
For further information: Stephen Saft, Chief Financial Officer
(407) 804-6700 PRIORITY HEALTHCARE CORPORATION CONSOLIDATED
STATEMENTS OF EARNINGS (000's omitted, except share data)
(unaudited) Six-month Six-month Three-month Three-month period
period period period ended ended ended ended July 3, June 28, July
3, June 28, 2004 2003 2004 2003 Net sales $ 839,695 $ 702,036 $
438,452 $ 350,507 Cost of products sold 750,815 623,967 392,585
312,723 Gross profit 88,880 78,069 45,867 37,784 Selling, general
and administrative expense 45,572 37,525 23,414 18,800
Restructuring charge 1,317 ? 1,317 ? Depreciation and 2,799 2,010
1,430 1,083 amortization Earnings from operations 39,192 38,534
19,706 17,901 Interest income 369 812 163 351 Interest expense
(196) -- (164) -- Minority interest (163) -- (85) -- Earnings
before income taxes 39,202 39,346 19,620 18,252 Provision for
income taxes 14,799 14,755 7,456 6,845 Net earnings $ 24,403 $
24,591 $ 12,164 $ 11,407 Earnings per share: Basic $.56 $.56 $.28
$.26 Diluted $.56 $.56 $.28 $.26 Weighted average shares
outstanding: Basic 43,305,603 43,549,394 433,288,606 43,577,129
Diluted 43,926,991 44,149,962 43,797,690 44,289,419 RECONCILIATION
OF NET EARNINGS TO NET EARNINGS, EXCLUDING RESTRUCTURING CHARGE
Six-month Six-month Three-month Three-month period period period
period ended ended ended ended July 3, June 28, July 3, June 28,
2004 2003 2004 2003 Net earnings $ 24,403 $ 24,591 $ 12,164 $
11,407 Restructuring charge, net of applicable income taxes 817 --
817 -- Net earnings, excluding restructuring charge $ 25,220 $
24,591 $ 12,981 $ 11,407 Earnings per share, excluding
restructuring charge: Basic $.58 $.56 $.30 $.26 Diluted $.57 $.56
$.30 $.26 PRIORITY HEALTHCARE CORPORATION CONDENSED CONSOLIDATED
BALANCE SHEETS (000's omitted) (unaudited) July 3, January 3, 2004
2004 Cash and cash equivalents $ 43,101 $ 47,719 Marketable
securities 7,721 15,317 Receivables, net 213,789 172,206 Finished
goods inventory 104,759 117,218 Other current assets 35,686 20,642
Fixed assets, net 33,418 29,780 Other assets 125,146 111,127 Total
assets $563,620 $514,009 Current liabilities $184,388 $164,663 Line
of credit 5,006 -- Long-term debt -- -- Other liabilities 6,490
6,437 Shareholders' equity 367,736 342,909 Total liabilities and
shareholders' equity $563,620 $514,009
http://www.newscom.com/cgi-bin/prnh/20030417/PHCLOGO
http://photoarchive.ap.org/
http://www.priorityhealthcare.com/DATASOURCE: Priority Healthcare
Corporation CONTACT: Stephen Saft, Chief Financial Officer,
Priority Healthcare Corporation, +1-407-804-6700 Web site:
http://www.priorityhealthcare.com/
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