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Exhibit 99.1

 

	2Q’15 Results	Comparison to 2Q’14	Comparison to 1Q’15
Revenue	$497.5 million	Increase of 10.9%	Decrease of 2.8%
Adjusted EBITDA	$33.2 million	Increase of 8.5%	Decrease of 11.2%
Adjusted diluted earnings per share	$0.37	Decrease of 7.5%	Decrease of 22.9%
Gross profit	$81.2 million	Decrease of 0.9%	Decrease of 8.4%
Selling, general and administrative	$55.4 million	Improvement of 4.3%	Improvement of 6.1%
Generic drug dispensing rate	86.0%	Increase of 100 basis points	Increase of 70 basis points

 

PharMerica Corporation is a leading provider of pharmacy services.  PharMerica serves the long-term care, hospital pharmacy management services, specialty home infusion and oncology pharmacy markets.

PharMerica operates 96 institutional pharmacies, 15 specialty home infusion pharmacies and 5 specialty oncology pharmacies in 45 states. PharMerica’s customers are institutional healthcare providers, such as skilled nursing facilities, assisted living facilities, hospitals, individuals receiving in-home care and patients with cancer.

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect the Company’s current estimates, expectations and projections about its future results, performance, prospects and opportunities. Forward-looking statements include, among other matters, the information concerning the Company’s “guidance” and possible future results of operations and future potential acquisitions, the strength of the Company’s financial and operational performance during 2015, 2016 and beyond, the expected revenues from the specialty infusion and oncology businesses, including $400 million in specialty revenue by 2016, the Company’s ability to identify and consummate future acquisitions, the Company’s acquisition goal of $100 million in annualized revenues, the Company’s focus on competing aggressively for market share, the Company’s expectation that the generic drugs dispensing rate will continue to increase in 2015 and 2016, the Company’s ability to deliver outstanding value to its shareholders, clients and patients, the Company’s continued pursuit of its strategic and operational initiatives including those focused on client retention, driving organic growth, diversifying the revenue base, disciplined acquisitions, building scale and operating margins, the Company’s expectation to deliver improved financial results in 2015 and beyond and the Company’s ability to achieve organic growth and topline revenue growth. Forward-looking statements include statements that are not historical facts and can be identified by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “plan,” “may,” “should,” “will,” “would,” “project” and similar expressions.

These forward-looking statements are based upon information currently available to us and are subject to a number of risks, uncertainties and other factors that could cause the Company’s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. Important factors that could cause the Company’s actual results to differ materially from the results referred to in the forward-looking statements we make in this press release include our ability to consummate our strategic and operational initiatives, our ability to identify and consummate future acquisitions, the adequacy of our litigation-related reserves, and our ability to collect the receivables due from AmerisourceBergen Drug Corporation under the terms of our prime vendor agreement, and those included in the Risk Factors section set forth in the Company’s Annual Report on Form 10-K filed with the SEC and in other reports, including Quarterly Reports on Form 10-Q filed with the SEC by the Company.

You are cautioned not to place undue reliance on any forward-looking statements, all of which speak only as of the date of this press release. Except as required by law, we undertake no obligation to publicly update or release any revisions to these forward-looking statements to reflect any events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events. All subsequent written and oral forward-looking statements attributable to us or any person acting on the Company’s behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this press release and in the Risk Factors section set forth in the Company’s Annual Report on Form 10-K filed with the SEC and in other reports filed with the SEC by the Company.

 

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PHARMERICA CORPORATION

UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENTS

(In millions, except share and per share amounts)

		Three Months Ended June 30,																Six Months Ended June 30,
		2014								2015								2014								2015
		Amount				% of Revenues				Amount				% of Revenues				Amount				% of Revenues				Amount				% of Revenues
Revenues		$	448.6				100.0	%		$	497.5				100.0	%		$	900.8				100.0	%		$	1,009.0				100.0	%
Cost of goods sold			366.7				81.7				416.3				83.7				738.9				82.0				839.2				83.2
Gross profit			81.9				18.3				81.2				16.3				161.9				18.0				169.8				16.8
Selling, general and administrative expenses			57.9				12.9				55.4				11.1				115.1				12.8				114.4				11.3
Amortization expense			4.3				1.0				7.0				1.4				8.7				1.0				13.6				1.4
Merger, acquisition, integration costs and other charges			1.5				0.3				3.4				0.7				6.5				0.7				7.2				0.7
Settlement, litigation and other related charges			26.6				6.0				6.9				1.4				27.8				3.1				9.2				0.9
Restructuring and impairment charges			1.2				0.3				-				-				3.1				0.3				0.1				-
Hurricane Sandy disaster costs			0.1				-				-				-				0.1				-				-				-
Operating income (loss)			(9.7	)			(2.2	)			8.5				1.7				0.6				0.1				25.3				2.5
Interest expense, net			2.3				0.5				1.9				0.4				4.8				0.5				3.3				0.3
Income (loss) before income taxes			(12.0	)			(2.7	)			6.6				1.3				(4.2	)			(0.4	)			22.0				2.2
Provision (benefit) for income taxes			(2.3	)			(0.5	)			4.3				0.9				0.7				0.1				10.1				1.0
Net income (loss)		$	(9.7	)			(2.2	)%		$	2.3				0.4	%		$	(4.9	)			(0.5	)%		$	11.9				1.2	%

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2015				2014				2015
Earnings (loss) per common share:
Basic		$	(0.32	)		$	0.08			$	(0.16	)		$	0.39
Diluted		$	(0.32	)		$	0.07			$	(0.16	)		$	0.38
Shares used in computing earnings (loss) per common share:
Basic			30,004,950				30,388,902				29,879,683				30,287,638
Diluted			30,004,950				30,829,724				29,879,683				30,748,072

 

 

PHARMERICA CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except share and per share amounts)

		(As Adjusted) Dec. 31, 2014				June 30, 2015
ASSETS
Current assets:
Cash and cash equivalents		$	33.3			$	21.3
Accounts receivable, net			195.4				199.1
Inventory			135.6				135.2
Deferred tax assets, net			42.2				38.4
Income taxes receivable			-				8.7
Prepaids and other assets			90.3				47.5
			496.8				450.2
Equipment and leasehold improvements			196.4				204.3
Accumulated depreciation			(125.0	)			(133.5	)
			71.4				70.8
Goodwill			318.5				336.8
Intangible assets, net			177.6				172.2
Other			4.1				26.7
		$	1,068.4			$	1,056.7
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	96.0			$	80.1
Salaries, wages and other compensation			35.1				32.2
Current portion of long-term debt			6.4				11.6
Income taxes payable			2.3				-
Other accrued liabilities			36.4				31.3
			176.2				155.2
Long-term debt			344.9				338.2
Other long-term liabilities			57.6				60.6
Deferred tax liabilities			11.6				10.6
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value per share; 1,000,000 shares authorized and no shares issued, December 31, 2014 and June 30, 2015			-				-
Common stock, $0.01 par value per share; 175,000,000 shares authorized; 32,725,786 and 33,188,915 shares issued as of December 31, 2014 and June 30, 2015, respectively			0.3				0.3
Capital in excess of par value			394.1				400.1
Retained earnings			117.0				128.9
Treasury stock at cost, 2,617,305 and 2,761,719 shares at December 31, 2014 and June 30, 2015, respectively			(33.3	)			(37.2	)
			478.1				492.1
		$	1,068.4			$	1,056.7

 

PHARMERICA CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2015				2014				2015
Cash flows provided by (used in) operating activities:
Net income (loss)		$	(9.7	)		$	2.3			$	(4.9	)		$	11.9
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation			4.8				5.7				9.6				11.5
Amortization			4.3				7.0				8.7				13.6
Merger, acquisition, integration costs and other charges			-				-				2.5				-
Stock-based compensation and deferred compensation			1.8				1.7				3.9				3.7
Amortization of deferred financing fees			0.6				0.2				1.3				0.3
Deferred income taxes			(3.3	)			0.2				0.7				2.5
(Gain) Loss on disposition of equipment			-				-				(0.1	)			0.1
Gain on acquisition/ disposition			-				-				(0.3	)			-
Other			-				0.1				0.1				0.1
Change in operating assets and liabilities:
Accounts receivable, net			(1.0	)			0.1				12.1				(2.2	)
Inventory			(34.0	)			(12.6	)			(31.2	)			0.6
Prepaids and other assets			(9.0	)			(7.4	)			(11.1	)			20.0
Accounts payable			1.3				(1.4	)			(20.5	)			(15.5	)
Salaries, wages and other compensation			(3.2	)			(0.6	)			(7.9	)			(3.0	)
Other accrued and long-term liabilities			24.2				(8.2	)			22.3				(10.4	)
Change in income taxes payable (receivable)			(2.8	)			(9.1	)			(4.1	)			(9.0	)
Excess tax benefit from stock-based compensation			(0.5	)			(0.2	)			(3.2	)			(2.1	)
Net cash (used in) provided by operating activities			(26.5	)			(22.2	)			(22.1	)			22.1
Cash flows provided by (used in) investing activities:
Purchase of equipment and leasehold improvements			(6.8	)			(6.4	)			(12.8	)			(11.0	)
Acquisitions, net of cash acquired			(6.9	)			(0.1	)			(17.6	)			(20.6	)
Cash proceeds from sale of assets			0.1				-				0.1				-
Cash proceeds from dispositions			-				-				0.4				0.1
Net cash used in investing activities			(13.6	)			(6.5	)			(29.9	)			(31.5	)
Cash flows provided by (used in) financing activities:
Repayments of long-term debt			(3.2	)			-				(6.3	)			-
Net activity of long-term revolving credit facility			41.1				24.0				43.9				(1.0	)
Issuance of common stock			0.5				0.4				3.0				0.7
Purchase of treasury stock			(0.4	)			0.5				(4.9	)			(3.9	)
Excess tax benefit from stock-based compensation			0.5				0.2				3.2				2.1
Repayments of capital lease obligations			-				(0.3	)			-				(0.5	)
Net cash (used in) provided by financing activities			38.5				24.8				38.9				(2.6	)
Change in cash and cash equivalents			(1.6	)			(3.9	)			(13.1	)			(12.0	)
Cash and cash equivalents at beginning of period			12.7				25.2				24.2				33.3
Cash and cash equivalents at end of period		$	11.1			$	21.3			$	11.1			$	21.3
Supplemental information:
Cash paid for interest		$	1.9			$	0.9			$	3.7			$	3.0
Cash paid for taxes		$	4.3			$	12.3			$	4.7			$	17.0

 

PHARMERICA CORPORATION

SUPPLEMENTAL INFORMATION

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2015				2014				2015
Pharmacy data:
Prescriptions dispensed (in thousands)			8,411				8,452				17,019				17,505
Revenue per prescription dispensed		$	53.33			$	58.86			$	52.93			$	57.64
Gross profit per prescription dispensed		$	9.74			$	9.61			$	9.51			$	9.70

UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA

(In millions)		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2015				2014				2015
Net income (loss)		$	(9.7	)		$	2.3			$	(4.9	)		$	11.9
Add:
Interest expense, net			2.3				1.9				4.8				3.3
Merger, acquisition, integration costs and other charges			1.5				3.4				6.5				7.2
Settlement, litigation and other related charges			26.6				6.9				27.8				9.2
Restructuring and impairment charges			1.2				-				3.1				0.1
Hurricane Sandy disaster costs			0.1				-				0.1				-
Stock-based compensation and deferred compensation			1.8				1.7				3.9				3.7
Provision (benefit) for income taxes			(2.3	)			4.3				0.7				10.1
Depreciation and amortization expense			9.1				12.7				18.3				25.1
Adjusted EBITDA		$	30.6			$	33.2			$	60.3			$	70.6
Adjusted EBITDA margin			6.8	%			6.7	%			6.7	%			7.0	%

UNAUDITED RECONCILIATION OF DILUTED EARNINGS (LOSS) PER SHARE

TO ADJUSTED DILUTED EARNINGS PER SHARE

(In whole numbers)		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2015				2014				2015
Diluted earnings (loss) per share		$	(0.32	)		$	0.07			$	(0.16	)		$	0.38
Add:
Diluted earnings (loss) per share impact of:
Merger, acquisition, integration costs and other charges			0.03				0.07				0.13				0.15
Settlement, litigation and other related charges			0.61				0.13				0.64				0.18
Restructuring and impairment charges			0.03				-				0.07				-
Stock-based compensation and deferred compensation			0.04				0.04				0.08				0.08
Impact of discrete items on tax provision			0.01				0.06				0.01				0.06
Adjusted diluted earnings per share		$	0.40			$	0.37			$	0.77			$	0.85

 

PHARMERICA CORPORATION

SUPPLEMENTAL INFORMATION (Continued)

UNAUDITED RECONCILIATION OF ADJUSTED EBITDA

TO NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES

(In millions)		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2015				2014				2015
Adjusted EBITDA		$	30.6			$	33.2			$	60.3			$	70.6
Interest expense, net			(2.3	)			(1.9	)			(4.8	)			(3.3	)
Merger, acquisition, integration costs and other charges			(29.4	)			(10.3	)			(35.0	)			(16.5	)
Provision for bad debt			5.7				3.0				11.3				8.0
Amortization of deferred financing fees			0.6				0.2				1.3				0.3
Loss (gain) on disposition of equipment			-				-				(0.1	)			0.1
Gain on acquisition			-				-				(0.3	)			-
Provision (benefit) for income taxes			2.3				(4.3	)			(0.7	)			(10.1	)
Deferred income taxes			(3.3	)			0.2				0.7				2.5
Changes in federal and state income tax payable (receivable)			(2.8	)			(9.1	)			(4.1	)			(9.0	)
Excess tax benefit from stock-based compensation			(0.5	)			(0.2	)			(3.2	)			(2.1	)
Changes in assets and liabilities			(27.4	)			(33.1	)			(47.6	)			(18.5	)
Other			-				0.1				0.1				0.1
Net cash flows provided by (used in) operating activities		$	(26.5	)		$	(22.2	)		$	(22.1	)		$	22.1

PharMerica calculates Adjusted EBITDA as provided in the reconciliation above and calculates Adjusted EBITDA Margin by taking Adjusted EBITDA and dividing it by revenues. PharMerica calculates and uses Adjusted EBITDA as an indicator of its ability to generate cash from reported operating results.  The measurement is used in concert with net income and cash flows from operations, which measure actual cash generated in the period.  In addition, PharMerica believes that Adjusted EBITDA and Adjusted EBITDA Margin are supplemental measurement tools used by analysts and investors to help evaluate overall operating performance and the ability to incur and service debt and make capital expenditures.  In addition, Adjusted EBITDA, as defined in the Credit Agreement, is used in conjunction with the Corporation’s debt leverage ratio and this calculation sets the applicable margin for the quarterly interest charge.  Adjusted EBITDA, as defined in the Credit Agreement, is not the same calculation as these unaudited reconciliation tables.  Adjusted EBITDA does not represent funds available for PharMerica’s discretionary use and is not intended to represent or to be used as a substitute for net income or cash flows from operations data as measured under U.S. generally accepted accounting principles (“GAAP”).  The items excluded from Adjusted EBITDA but included in the calculation of PharMerica’s reported net income and cash flows from operations are significant components of the accompanying consolidated income statements and cash flows and must be considered in performing a comprehensive assessment of overall financial performance.  PharMerica’s calculation of Adjusted EBITDA may not be consistent with calculations of EBITDA used by other companies.

PharMerica calculates and uses adjusted diluted earnings per share, exclusive of the impact of merger, acquisition, integration costs and other charges, settlement, litigation and other related charges, restructuring and impairment charges, loss on extinguishment of debt, Hurricane Sandy disaster costs, stock-based and deferred compensation, and the impact of discrete items on the tax provision as an indicator of its core operating results.  The measurement is used in concert with net income and diluted earnings per share, which measure actual earnings per share generated in the period.  PharMerica believes the exclusion of these charges in expressing adjusted diluted earnings per share provides management with a useful measure to assess period to period comparability and is useful to investors in evaluating PharMerica’s operating results from period to period.  Adjusted diluted earnings per share, exclusive of the impact of merger, acquisition, integration costs and other charges, settlement, litigation and other related charges, restructuring and impairment charges, loss on extinguishment of debt, Hurricane Sandy disaster costs, stock-based and deferred compensation, and the impact of discrete items on the tax provision do not represent the amount that effectively accrues directly to stockholders (i.e., such costs are a reduction in earnings and stockholders’ equity) and is not intended to represent or to be used as a substitute for diluted earnings per share as measured under GAAP.  The impact of merger, acquisition, integration costs and other charges, settlement, litigation and other related charges, restructuring and impairment charges, Hurricane Sandy disaster costs, loss on debt extinguishment, stock-based and deferred compensation and the impact of discrete items on the tax provision excluded from the diluted earnings per share are significant components of the accompanying consolidated income statements and must be considered in performing a comprehensive assessment of overall financial performance.

 

 

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