[February 24, 2017] |
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PharMerica Reports Fourth Quarter and Full Year 2016 Results
PharMerica Corporation (the "Corporation" or the "Company") (NYSE: PMC),
a national provider of institutional, specialty home infusion, hospital
and oncology pharmacy services, today reported its financial results for
the fourth quarter and full year ended December 31, 2016.
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4Q'16 Results
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Comparison to 4Q'15
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Comparison to
3Q'16
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Revenue
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$534.4 million
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Increase of 2.7%
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Increase of 4.3%
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Gross profit
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$83.7 million
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Decrease of 3.5%
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Increase of 6.6%
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Selling, general and administrative
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$54.8 million
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Decrease of 1.1%
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Increase of 3.2%
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Net income
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$7.7 million
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Decrease of 61.9%
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Increase of 5.5%
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Diluted earnings per common share
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$0.25
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Decrease of 62.1%
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Increase of 8.7%
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Adjusted EBITDA
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$35.6 million
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Increase of 2.6%
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Increase of 13.0%
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Adjusted diluted earnings per share
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$0.58
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Increase of 3.6%
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Increase of 31.8%
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Generic drug
dispensing rate
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85.3%
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Decrease of
100 basis points
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Decrease of
30 basis points
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Greg Weishar, PharMerica Corporation's Chief Executive Officer, said,
"The Company delivered strong sequential growth in revenues and earnings
for the quarter in both the core Institutional Pharmacy business and
Diversified Pharmacy businesses. In addition, the Company completed two
institutional pharmacy acquisitions during the fourth quarter -- Express
Care and Stanley -- which primarily serve the fast growing assisted
living facility markets in North Carolina and Virginia. As we have for
the past several years, during 2016 we acquired in excess of $100
million in annualized revenues.
"For 2017, the Company's guidance reflects tailwinds from numerous
positive developments: first, sequential improvement in Medicare Part D
reimbursement based on contracted rates; second, lower cost of goods
sold due to successful drug purchasing and cost management efforts in
late 2016; third, the full year benefit of acquisitions completed in
2016; and fourth, continued growth in the Diversified Pharmacy
businesses.
"Regarding the Diversified Pharmacy businesses, we expect that
annualized revenues in the second half of 2017 will be greater than one
billion dollars, significantly exceeding previous expectations.
Moreover, we expect Diversified Pharmacy revenues in 2017 will be
approximately 40% of the Company's total revenues, as revenue and
Adjusted EBITDA are expected to grow approximately 50% and 25%,
respectively. This growth is anticipated in spite of headwinds
attributable to the recently enacted 21st Century Cures Act.
Absent this legislation, the Diversified Pharmacy businesses would
generate year over year Adjusted EBITDA growth in excess of the growth
in revenues.
"As noted above regarding acquisitions, for the past several years we
have established and achieved a goal of acquiring $100 million in annual
revenues. For 2017, given a strong acquisition pipeline and pending
transactions, we are setting the goal at acquiring annualized revenues
of $200 million or more. We are targeting 75% of this for the
Diversified Pharmacy businesses and 25% for the Institutional Pharmacy
business. Notably, our 2017 guidance includes Adjusted EBITDA of
approximately $5 million related to pending acquisitions.
Mr. Weishar concluded, "In summary, we are confident in the Company's
long-term strategy and expect to accelerate growth in 2017. We remain
committed to our business diversification and growth strategies, and to
generating superior value for all PharMerica shareholders".
Full Year 2017 Financial Guidance
PharMerica also announces its full year 2017 guidance metrics. For the
full year 2017, PharMerica expects:
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Revenue in the range of $2.3 billion to $2.4 billion;
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Adjusted EBITDA in the range of $132.0 million to $142.0 million; and
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Adjusted diluted earnings per share in the range of $1.75 to $1.95.
With respect to the Company's full year guidance of Adjusted EBITDA and
Adjusted diluted earnings per share, the Company is not able to provide
a reconciliation of these non-GAAP financial measures to the most
comparable GAAP measure without unreasonable efforts; certain items that
are included have not yet occurred or are out of the Company's control
and/or cannot be reasonably predicted and, accordingly, the probable
significance of such items cannot be determined at this time. The most
comparable GAAP measure and reconciling information that is unavailable,
or not reasonably predictable, would include non-recurring and
acquisition-related expenses.
Fourth Quarter 2016 Results
The results for the fourth quarter of 2016 are set forth below:
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Key Comparisons of Fourth Quarters Ended December 31, 2016 and
2015:
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Revenues for the fourth quarter of 2016 were $534.4 million
compared with $520.6 million for the fourth quarter of 2015; an
increase of 2.7%. The increase in revenues of $13.8 million was
driven by significant organic growth and acquisitions in the
Company's diversified pharmacy businesses, partially offset by a
6.7% reduction in prescription volumes in the Institutional
Pharmacy business, lower Medicare Part D reimbursement and the
impact of 2015 brand-to-generic conversions.
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Gross profit for the fourth quarter of 2016 was $83.7
million compared with $86.7 million in the fourth quarter of 2015.
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Selling, general and administrative expenses were $54.8
million, or 10.3% of revenues, for the three months ended December
31, 2016 compared to $55.4 million, or 10.6% of revenues, for the
three months ended December 31, 2015. The decrease of $0.6 million
was primarily the result of decreases in labor and benefits and
professional fees partially offset by an increase in bad debt
expense.
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Net income for the fourth quarter of 2016 was $7.7 million,
or $0.25 diluted earnings per share, compared to $20.2 million, or
$0.66 diluted earnings per share, for the same period in 2015.
Adjusted diluted earnings per share was $0.58 in the fourth
quarter of 2016 compared to $0.56 in the fourth quarter of 2015.
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Adjusted EBITDA for the fourth quarter of 2016 was $35.6
million compared to $34.7 million in the fourth quarter of 2015.
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Cash flows used in operating activities for the fourth
quarter of 2016 were $49.5 million compared with $41.1 million in
the fourth quarter of 2015. The Company has historically used
significant cash flows in the fourth quarter of each year as it
executes its strategic purchasing strategies.
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Key Comparisons of the Years Ended December 31, 2016 and 2015:
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2016 Results
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Comparison to 2015
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Revenue
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$2,091.1 million
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Increase of 3.1%
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Gross profit
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$326 million
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Decrease of 2.7%
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Selling, general and administrative
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$220.6 million
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Decrease of 0.9%
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Net income
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$21.6 million
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Decrease of 38.5%
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Diluted earnings per common share
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$0.69
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Decrease of 39.5%
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Adjusted EBITDA
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$129.2 million
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Decrease of 3.0%
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Adjusted diluted
earnings per share
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$1.94
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Decrease of 7.6%
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Generic drug
dispensing rate
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86.0%
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Unchanged
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Revenues for the year ended December 31, 2016 were $2,091.1
million compared with $2,028.5 million for the year ended December 31,
2015, an increase of 3.1%. The increase was driven by recent
acquisitions, growth in the Company's diversified pharmacy businesses
and branded drug inflation partially offset by a 4.5% reduction in
prescription volumes in the Institutional Pharmacy business, lower
Medicare Part D reimbursement and the impact of 2015 brand-to-generic
conversions.
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Gross profit for the year ended December 31, 2016 was $326.0
million compared with $335.1 million for the year ended December 31,
2015, a decrease of 2.7%. The decrease in gross profit was due to
lower prescription volumes in the Company's Institutional Pharmacy
business and lower Medicare Part D reimbursement partially offset by
higher gross profit associated with the Company's diversified pharmacy
businesses.
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Selling, general and administrative expenses were $220.6
million, or 10.5% of revenues, for the year ended December 31, 2016,
compared to $222.5 million, or 11.0% of revenues, for the year ended
December 31, 2015. The decrease of $1.9 million was due to a decrease
in professional fees and bad debt expense partially offset by an
increase in labor and benefits.
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Net income for the year ended December 31, 2016 was $21.6
million, or $0.69 diluted earnings per share, compared to $35.1
million, or $1.14 diluted earnings per share, for the same period in
2015. Adjusted diluted earnings per share was $1.94 for the year ended
December 31, 2016 compared to $2.10 for the year ended December 31,
2015.
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Adjusted EBITDA for the year ended December 31, 2016 was $129.2
million compared with $133.2 million for the year ended December 31,
2015, a decrease of 3.0%.
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Cash flows provided by operating activities for the year ended
December 31, 2016 were $30.8 million compared with $18.5 million for
the year ended December 31, 2015. The increase in cash provided by
operating activities was primarily due to an increase in accounts
payable and a reduction in income taxes receivable, offset by
inventory increases as a result of the Company's purchasing strategies
and increases in accounts receivable.
Conference Call
Management will hold an online webcast of its fourth quarter 2016
earnings conference call on Friday, February 24, 2017, at 10:00 a.m.
Eastern Time. A seven-day online replay will be available approximately
one hour following the conclusion of the live broadcast. A link to these
events can be found under the Investor Relations section of the
Company's website, www.pharmerica.com.
About PharMerica
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 99 institutional pharmacies, 19 specialty home
infusion pharmacies and 4 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.
Forward-looking Statements
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 and long-term growth
prospects, the Company's goal of acquiring annualized revenues of $200
million or more in 2017 the Company's expectation regarding its guidance
for 2017, the Company's expectations regarding prescriptions dispensed,
drug purchasing costs, growth in various Company lines of business,
contributions from planned and completed acquisitions, future impacts on
the Company's business including organic bed growth, improvement in
Medicare Part D reimbursements, lower drug costs, and revenue and EBITDA
growth, and the Company's expectation regarding its ability to deliver
long term earnings growth and shareholder value. 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, our ability to close on pending acquisition
transactions, our ability to integrate future acquisitions, and our
ability to collect the receivables due from AmerisourceBergen Drug
Corporation under the terms of our former prime vendor agreement with
them, 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
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CONSOLIDATED INCOME STATEMENTS
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(In millions, except share and per share amounts)
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Three Months Ended December 31,
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Year Ended
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2015
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2016
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2015
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2016
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Amount
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% of Revenues
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Amount
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% of Revenues
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Amount
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% of Revenues
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Amount
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% of Revenues
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Revenues
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$
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520.6
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100.0
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%
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$
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534.4
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100.0
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%
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$
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2,028.5
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100.0
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%
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$
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2,091.1
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100.0
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%
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Cost of goods sold
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433.9
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83.3
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450.7
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84.3
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1,693.4
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83.5
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1,765.1
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84.4
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Gross profit
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86.7
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16.7
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83.7
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15.7
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335.1
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16.5
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326.0
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15.6
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Selling, general and administrative expenses
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55.4
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10.6
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54.8
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10.3
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222.5
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11.0
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220.6
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10.5
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Amortization expense
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8.0
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1.5
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9.0
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1.7
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28.6
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1.4
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33.7
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1.6
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Merger, acquisition, integration costs and other charges
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6.1
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1.2
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6.7
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1.3
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21.3
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|
1.0
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20.8
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0.9
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Settlement, litigation and other related charges
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2.0
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0.4
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2.4
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0.4
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13.3
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0.7
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9.6
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0.5
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Restructuring and impairment charges
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0.2
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-
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(0.2)
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-
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0.5
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-
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2.9
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|
0.1
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Hurricane Sandy disaster costs (recoveries)
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(5.0)
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|
|
(1.0)
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-
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-
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(4.9)
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|
(0.2)
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-
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-
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Operating income
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20.0
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|
|
3.9
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|
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|
|
11.0
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|
|
2.0
|
|
|
|
|
53.8
|
|
|
2.6
|
|
|
|
|
38.4
|
|
|
1.8
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|
|
|
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Interest expense, net
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|
|
|
|
1.2
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|
|
0.3
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|
|
|
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0.2
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-
|
|
|
|
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6.6
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|
|
0.3
|
|
|
|
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9.5
|
|
|
0.4
|
|
|
|
|
|
|
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Income before income taxes
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|
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|
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18.8
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|
|
3.6
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|
|
|
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10.8
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|
|
2.0
|
|
|
|
|
47.2
|
|
|
2.3
|
|
|
|
|
28.9
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|
|
1.4
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|
|
|
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Provision (benefit) for income taxes
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|
(1.4)
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|
|
(0.3)
|
|
|
|
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3.1
|
|
|
0.6
|
|
|
|
|
12.1
|
|
|
0.6
|
|
|
|
|
7.3
|
|
|
0.4
|
|
|
|
|
|
|
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Net income
|
|
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$
|
20.2
|
|
|
3.9
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%
|
|
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$
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7.7
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|
|
1.4
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%
|
|
|
$
|
35.1
|
|
|
1.7
|
%
|
|
|
$
|
21.6
|
|
|
1.0
|
%
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Year Ended
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
|
0.66
|
|
|
$
|
0.25
|
|
|
$
|
1.16
|
|
|
$
|
0.70
|
Diluted
|
|
|
|
$
|
0.66
|
|
|
$
|
0.25
|
|
|
$
|
1.14
|
|
|
$
|
0.69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
30,447,228
|
|
|
|
30,769,641
|
|
|
|
30,363,588
|
|
|
|
30,695,411
|
Diluted
|
|
|
|
|
31,009,368
|
|
|
|
31,205,964
|
|
|
|
30,767,366
|
|
|
|
31,157,836
|
|
|
PHARMERICA CORPORATION
|
CONSOLIDATED BALANCE SHEETS
|
(In millions, except share and per share amounts)
|
|
|
|
|
|
Dec. 31,
|
|
|
Dec. 31,
|
|
|
|
|
2015
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
23.1
|
|
|
$
|
5.4
|
Accounts receivable, net
|
|
|
|
|
200.5
|
|
|
|
235.4
|
Inventory
|
|
|
|
|
155.2
|
|
|
|
214.7
|
Deferred tax assets, net
|
|
|
|
|
41.8
|
|
|
|
35.7
|
Income taxes receivable
|
|
|
|
|
10.5
|
|
|
|
4.7
|
Prepaids and other assets
|
|
|
|
|
52.4
|
|
|
|
56.5
|
|
|
|
|
|
483.5
|
|
|
|
552.4
|
|
|
|
|
|
|
|
|
|
|
Equipment and leasehold improvements
|
|
|
|
|
218.5
|
|
|
|
250.9
|
Accumulated depreciation
|
|
|
|
|
(144.0)
|
|
|
|
(165.1)
|
|
|
|
|
|
74.5
|
|
|
|
85.8
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
|
|
371.0
|
|
|
|
392.3
|
Intangible assets, net
|
|
|
|
|
190.2
|
|
|
|
187.6
|
Other long-term assets
|
|
|
|
|
32.4
|
|
|
|
81.4
|
|
|
|
|
$
|
1,151.6
|
|
|
$
|
1,299.5
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
71.7
|
|
|
$
|
107.1
|
Salaries, wages and other compensation
|
|
|
|
|
30.6
|
|
|
|
32.5
|
Current portion of long-term debt
|
|
|
|
|
11.6
|
|
|
|
15.6
|
Other accrued liabilities
|
|
|
|
|
27.5
|
|
|
|
27.1
|
|
|
|
|
|
141.4
|
|
|
|
182.3
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
|
413.6
|
|
|
|
457.8
|
Other long-term liabilities
|
|
|
|
|
56.5
|
|
|
|
88.7
|
Deferred tax liabilities
|
|
|
|
|
20.7
|
|
|
|
26.5
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.01 par value per share; 1,000,000 shares
authorized and no
|
|
|
|
|
|
|
|
|
|
shares issued, December 31, 2015 and 2016
|
|
|
|
|
-
|
|
|
|
-
|
Common stock, $0.01 par value per share; 175,000,000 shares
authorized;
|
|
|
|
|
|
|
|
|
|
33,237,732 and 33,698,269 shares issued as of December 31, 2015
|
|
|
|
|
|
|
|
|
|
and 2016, respectively
|
|
|
|
|
0.3
|
|
|
|
0.3
|
Capital in excess of par value
|
|
|
|
|
404.6
|
|
|
|
411.1
|
Retained earnings
|
|
|
|
|
152.1
|
|
|
|
173.7
|
Treasury stock at cost, 2,776,875 and 2,916,906 shares at December
31, 2015
|
|
|
|
|
|
|
|
|
|
and 2016, respectively
|
|
|
|
|
(37.6)
|
|
|
|
(40.9)
|
|
|
|
|
|
519.4
|
|
|
|
544.2
|
|
|
|
|
$
|
1,151.6
|
|
|
$
|
1,299.5
|
|
|
PHARMERICA CORPORATION
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In millions)
|
|
|
|
|
|
Three Months Ended
|
|
|
Year Ended
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
Cash flows provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
20.2
|
|
|
$
|
7.7
|
|
|
$
|
35.1
|
|
|
$
|
21.6
|
Adjustments to reconcile net income to net cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
5.9
|
|
|
|
6.6
|
|
|
|
23.1
|
|
|
|
23.8
|
Amortization
|
|
|
|
|
8.0
|
|
|
|
9.0
|
|
|
|
28.6
|
|
|
|
33.7
|
Stock-based compensation and deferred compensation
|
|
|
|
|
2.4
|
|
|
|
0.6
|
|
|
|
7.8
|
|
|
|
6.9
|
Amortization of deferred financing fees
|
|
|
|
|
0.2
|
|
|
|
0.2
|
|
|
|
0.6
|
|
|
|
0.6
|
Deferred income taxes
|
|
|
|
|
(0.6)
|
|
|
|
1.0
|
|
|
|
4.0
|
|
|
|
9.0
|
Gain on disposition of equipment
|
|
|
|
|
(0.1)
|
|
|
|
(0.1)
|
|
|
|
-
|
|
|
|
-
|
Gain on acquisition/disposition
|
|
|
|
|
(0.4)
|
|
|
|
(0.6)
|
|
|
|
(0.4)
|
|
|
|
(0.6)
|
Other
|
|
|
|
|
(0.1)
|
|
|
|
0.1
|
|
|
|
-
|
|
|
|
0.2
|
Change in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
|
|
(3.6)
|
|
|
|
(19.9)
|
|
|
|
(2.4)
|
|
|
|
(34.3)
|
Inventory
|
|
|
|
|
(34.0)
|
|
|
|
(93.2)
|
|
|
|
(15.9)
|
|
|
|
(56.7)
|
Prepaids and other assets
|
|
|
|
|
(8.1)
|
|
|
|
(1.1)
|
|
|
|
4.2
|
|
|
|
(1.8)
|
Accounts payable
|
|
|
|
|
(12.1)
|
|
|
|
34.1
|
|
|
|
(24.0)
|
|
|
|
36.4
|
Salaries, wages and other compensation
|
|
|
|
|
(3.8)
|
|
|
|
4.3
|
|
|
|
(4.7)
|
|
|
|
1.8
|
Other accrued and long-term liabilities
|
|
|
|
|
(14.2)
|
|
|
|
(2.2)
|
|
|
|
(24.4)
|
|
|
|
(15.6)
|
Income taxes payable (receivable)
|
|
|
|
|
(0.7)
|
|
|
|
4.1
|
|
|
|
(10.7)
|
|
|
|
7.2
|
Excess tax benefit from stock-based compensation
|
|
|
|
|
(0.1)
|
|
|
|
(0.1)
|
|
|
|
(2.4)
|
|
|
|
(1.4)
|
Net cash (used in) provided by operating activities
|
|
|
|
|
(41.1)
|
|
|
|
(49.5)
|
|
|
|
18.5
|
|
|
|
30.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows provided by (used in) investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of equipment and leasehold improvements
|
|
|
|
|
(6.3)
|
|
|
|
(7.9)
|
|
|
|
(23.9)
|
|
|
|
(34.2)
|
Hurricane Sandy insurance recovery
|
|
|
|
|
3.3
|
|
|
|
-
|
|
|
|
3.3
|
|
|
|
-
|
Acquisitions, net of cash acquired
|
|
|
|
|
(62.7)
|
|
|
|
(26.3)
|
|
|
|
(83.6)
|
|
|
|
(57.6)
|
Cash proceeds from sale of assets
|
|
|
|
|
(0.1)
|
|
|
|
-
|
|
|
|
0.1
|
|
|
|
0.1
|
Net cash used in investing activities
|
|
|
|
|
(65.8)
|
|
|
|
(34.2)
|
|
|
|
(104.1)
|
|
|
|
(91.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows provided by (used in) financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayments of long-term debt
|
|
|
|
|
(2.8)
|
|
|
|
(2.9)
|
|
|
|
(5.6)
|
|
|
|
(11.3)
|
Proceeds from long-term debt
|
|
|
|
|
-
|
|
|
|
89.1
|
|
|
|
-
|
|
|
|
89.1
|
Net activity of long-term revolving credit facility
|
|
|
|
|
92.0
|
|
|
|
(3.0)
|
|
|
|
82.0
|
|
|
|
(30.5)
|
Payment of debt issuance costs
|
|
|
|
|
-
|
|
|
|
(0.5)
|
|
|
|
-
|
|
|
|
(0.5)
|
Net activity of capital lease obligations
|
|
|
|
|
0.6
|
|
|
|
(0.1)
|
|
|
|
0.1
|
|
|
|
(0.5)
|
Issuance of common stock
|
|
|
|
|
0.1
|
|
|
|
-
|
|
|
|
0.8
|
|
|
|
0.2
|
Treasury stock, for employee taxes on stock awards
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(4.3)
|
|
|
|
(3.3)
|
Excess tax benefit from stock-based compensation
|
|
|
|
|
0.1
|
|
|
|
-
|
|
|
|
2.4
|
|
|
|
-
|
Net cash used in financing activities
|
|
|
|
|
90.0
|
|
|
|
82.6
|
|
|
|
75.4
|
|
|
|
43.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in cash and cash equivalents
|
|
|
|
|
(16.9)
|
|
|
|
(1.1)
|
|
|
|
(10.2)
|
|
|
|
(17.7)
|
Cash and cash equivalents at beginning of period
|
|
|
|
|
40.0
|
|
|
|
6.5
|
|
|
|
33.3
|
|
|
|
23.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
|
|
$
|
23.1
|
|
|
$
|
5.4
|
|
|
$
|
23.1
|
|
|
$
|
5.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
|
|
$
|
2.3
|
|
|
$
|
2.7
|
|
|
$
|
8.5
|
|
|
$
|
10.6
|
Cash paid (received) for taxes
|
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
19.4
|
|
|
$
|
(4.8)
|
|
|
PHARMERICA CORPORATION
|
SUPPLEMENTAL INFORMATION
|
|
|
|
|
|
Three Months Ended
|
|
|
Year Ended
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmacy data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prescriptions dispensed (in thousands)
|
|
|
|
|
8,411
|
|
|
|
7,861
|
|
|
|
34,124
|
|
|
|
32,623
|
Revenue per prescription dispensed
|
|
|
|
$
|
61.60
|
|
|
$
|
67.98
|
|
|
$
|
59.37
|
|
|
$
|
64.10
|
Gross profit per prescription dispensed
|
|
|
|
$
|
10.01
|
|
|
$
|
10.65
|
|
|
$
|
9.75
|
|
|
$
|
9.99
|
|
|
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
|
|
|
|
|
|
Three Months Ended
|
|
|
Year Ended
|
(In millions)
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
Net income
|
|
|
|
$
|
20.2
|
|
|
$
|
7.7
|
|
|
$
|
35.1
|
|
|
$
|
21.6
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
|
|
1.2
|
|
|
|
0.2
|
|
|
|
6.6
|
|
|
|
9.5
|
Merger, acquisition, integration costs and other charges
|
|
|
|
|
6.1
|
|
|
|
6.7
|
|
|
|
21.3
|
|
|
|
20.8
|
Settlement, litigation and other related charges
|
|
|
|
|
2.0
|
|
|
|
2.4
|
|
|
|
13.3
|
|
|
|
9.6
|
California Medicaid recoupment
|
|
|
|
|
(2.5)
|
|
|
|
-
|
|
|
|
(2.5)
|
|
|
|
-
|
Restructuring and impairment charges
|
|
|
|
|
0.2
|
|
|
|
(0.2)
|
|
|
|
0.5
|
|
|
|
2.9
|
Hurricane Sandy disaster recoveries
|
|
|
|
|
(5.0)
|
|
|
|
-
|
|
|
|
(4.9)
|
|
|
|
-
|
Provision (benefit) for income taxes
|
|
|
|
|
(1.4)
|
|
|
|
3.1
|
|
|
|
12.1
|
|
|
|
7.3
|
Depreciation and amortization expense
|
|
|
|
|
13.9
|
|
|
|
15.7
|
|
|
|
51.7
|
|
|
|
57.5
|
Adjusted EBITDA
|
|
|
|
$
|
34.7
|
|
|
$
|
35.6
|
|
|
$
|
133.2
|
|
|
$
|
129.2
|
Adjusted EBITDA margin
|
|
|
|
|
6.7%
|
|
|
|
6.7%
|
|
|
|
6.6%
|
|
|
|
6.2%
|
|
|
RECONCILIATION OF DILUTED EARNINGS PER SHARE
|
TO ADJUSTED DILUTED EARNINGS PER SHARE
|
|
|
|
|
|
Three Months Ended
|
|
|
Year Ended
|
(In whole numbers)
|
|
|
|
December 31,
|
|
|
December 31
|
|
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
|
|
$
|
0.66
|
|
|
$
|
0.25
|
|
|
$
|
1.14
|
|
|
$
|
0.69
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share impact of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger, acquisition, integration costs and
|
|
|
|
|
0.11
|
|
|
|
0.13
|
|
|
|
0.43
|
|
|
|
0.42
|
other charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Settlement, litigation and other related charges
|
|
|
|
|
0.05
|
|
|
|
0.05
|
|
|
|
0.27
|
|
|
|
0.19
|
California Medicaid recoupment
|
|
|
|
|
(0.05)
|
|
|
|
-
|
|
|
|
(0.05)
|
|
|
|
-
|
Restructuring and impairment charges
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.01
|
|
|
|
0.06
|
Hurricane Sandy disaster recoveries
|
|
|
|
|
(0.10)
|
|
|
|
-
|
|
|
|
(0.10)
|
|
|
|
-
|
Amortization of intangible assets
|
|
|
|
|
0.15
|
|
|
|
0.18
|
|
|
|
0.57
|
|
|
|
0.69
|
Tax impact of the above adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
on tax provision
|
|
|
|
|
(0.26)
|
|
|
|
(0.03)
|
|
|
|
(0.17)
|
|
|
|
(0.11)
|
Adjusted diluted earnings per share
|
|
|
|
$
|
0.56
|
|
|
$
|
0.58
|
|
|
$
|
2.10
|
|
|
$
|
1.94
|
|
|
RECONCILIATION OF ADJUSTED EBITDA
|
TO NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES
|
|
|
|
|
|
Three Months Ended
|
|
|
Year Ended
|
(In millions)
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
Adjusted EBITDA
|
|
|
|
$
|
34.7
|
|
|
$
|
35.6
|
|
|
$
|
133.2
|
|
|
$
|
129.2
|
Interest expense, net
|
|
|
|
|
(1.2)
|
|
|
|
(0.2)
|
|
|
|
(6.6)
|
|
|
|
(9.5)
|
Merger, acquisition, integration costs and other charges
|
|
|
|
|
(0.8)
|
|
|
|
(8.7)
|
|
|
|
(27.7)
|
|
|
|
(33.3)
|
Provision for bad debt
|
|
|
|
|
(1.6)
|
|
|
|
2.3
|
|
|
|
7.9
|
|
|
|
6.3
|
Amortization of deferred financing fees
|
|
|
|
|
0.2
|
|
|
|
0.2
|
|
|
|
0.6
|
|
|
|
0.6
|
(Gain) Loss on disposition of equipment
|
|
|
|
|
(0.1)
|
|
|
|
(0.1)
|
|
|
|
-
|
|
|
|
-
|
Gain on acquisition
|
|
|
|
|
(0.4)
|
|
|
|
(0.6)
|
|
|
|
(0.4)
|
|
|
|
(0.6)
|
(Provision) benefit for income taxes
|
|
|
|
|
1.4
|
|
|
|
(3.1)
|
|
|
|
(12.1)
|
|
|
|
(7.3)
|
Deferred income taxes
|
|
|
|
|
(0.6)
|
|
|
|
1.0
|
|
|
|
4.0
|
|
|
|
9.0
|
Changes in federal and state income tax payable (receivable)
|
|
|
|
|
(0.7)
|
|
|
|
4.1
|
|
|
|
(10.7)
|
|
|
|
7.2
|
Stock-based compensation and deferred compensation
|
|
|
|
|
2.4
|
|
|
|
0.6
|
|
|
|
7.8
|
|
|
|
6.9
|
Excess tax benefit from stock-based compensation
|
|
|
|
|
(0.1)
|
|
|
|
(0.1)
|
|
|
|
(2.4)
|
|
|
|
(1.4)
|
Changes in assets and liabilities
|
|
|
|
|
(74.2)
|
|
|
|
(80.6)
|
|
|
|
(75.1)
|
|
|
|
(76.5)
|
Other
|
|
|
|
|
(0.1)
|
|
|
|
0.1
|
|
|
|
-
|
|
|
|
0.2
|
Net cash flows provided by operating activities
|
|
|
|
$
|
(41.1)
|
|
|
$
|
(49.5)
|
|
|
$
|
18.5
|
|
|
$
|
30.8
|
|
Use of Non-GAAP Measures
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 a performance measure. 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
contained in this release. 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,
California Medicaid recoupment, restructuring and impairment charges,
Hurricane Sandy disaster recoveries, amortization of intangible assets,
and the tax impact of the adjustments 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, California Medicaid recoupment, restructuring and
impairment charges, Hurricane Sandy disaster recoveries, amortization of
intangible assets, and the tax impact of the adjustments 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, California Medicaid
recoupment, restructuring and impairment charges, Hurricane Sandy
disaster recoveries, amortization of intangible assets, and the tax
impact of the adjustments 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170224005286/en/
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