Option Care Announces Record First Quarter Results
Revenues of $103 Million; Earnings Per Share of $0.20; DSO of 57 Days
BUFFALO GROVE, Ill., May 4 /PRNewswire-FirstCall/ -- Option Care, Inc. today
reported record results for the quarter ended March 31, 2004. Revenues were
$103 million for the first quarter of 2004, an 11% increase compared to
revenues of $93 million for the first quarter of 2003. Same store sales growth
was 13% for the first quarter. Net income increased 8% for the first quarter
to $4.3 million compared to $4.0 million for the first quarter of 2003.
Diluted earnings per share was $0.20 for the quarter ended March 31, 2004, as
compared to $0.19 for the comparable period last year.
Raj Rai, Option Care's chief executive officer, commented, "I am extremely
pleased with our record results for the first quarter and, in particular, our
continued improvement in cash flow. Our home infusion and specialty pharmacy
services have generated solid organic growth from last year as we have
strengthened our sales team and executed our marketing plans. I am
particularly pleased with the stronger than expected seasonal sales of
Synagis(R). In addition, we continue to see sales growth for Xolair(R), which
we launched in the third quarter of last year as well as growth of our managed
care specialty pharmacy revenues as payors focus on managing the costs of
physician-office based injectible medications. For the remainder of 2004, we
will continue to execute our strategic sales and operating initiatives as well
as accelerating our acquisition program." Rick Smith, Option Care's president and chief operating officer, commented, "As
the sales of Synagis(R) decline cyclically during the second quarter, our focus
will remain on maintaining our growth rate for both home infusion and specialty
pharmacy services. In addition, we continue to drive improvements in our
operating infrastructure with particular emphasis on purchasing leverage,
controlling operating expenses and account receivable management." Commenting on the financial aspects of the quarter, Paul Mastrapa, chief
financial officer, stated, "Our organic growth of 13% included growth of 15%
for specialty pharmacy services and 7% for home infusion and related healthcare
services. In particular, we are very pleased with our growth of Synagis(R),
which increased 19% organically from the prior year. Synagis(R) treats RSV in
infants and is a seasonal therapy typically administered from October through
April. Consistent with our guidance and the seasonality of the product, we
expect our overall revenues to decline in the second quarter as the Synagis(R)
season ends." Mr. Mastrapa continued, "Overall gross profit for the first quarter was 27.8%
as compared to 29.5% for the prior year quarter. The decline in overall gross
profit is a result of the shift in mix towards specialty pharmacy revenues,
which were 63% of revenues in the current quarter compared to 62% for the same
quarter of the prior year, as well as lower gross profit within our specialty
pharmacy services. Gross profit for our specialty pharmacy services declined
to 16.2% from 19.3% due to shift in mix towards lower margin products resulting
from our growth in Synagis(R), Xolair(R), Human Growth Hormone, and our managed
care specialty pharmacy services. As the Synagis(R) season ends during the
second quarter, we expect to see an increase in our specialty pharmacy gross
profit as the mix shifts towards higher margin therapies. Home infusion
services gross profit improved to 43.0% as compared to 42.0% for the first
quarter of the prior year primarily due to improved utilization of our direct
labor." Mastrapa concluded, "Our balance sheet remains very strong with positive cash
flow from operations of $5.2 million. I am pleased with our cash flow results
considering the sequential increase in revenues from the fourth quarter of $7.4
million. Our strong cash flow is a reflection of our continued improvement in
accounts receivable. Days sales outstanding were 57 days at the end of the
quarter, a decrease of 4 days from the previous quarter ended December 31,
2003. Lastly, we ended the quarter debt free with $6.6 million of cash
on-hand." Outlook The company estimates that earnings per diluted share will range from $0.75 to
$0.80 for 2004. These estimates exclude the impact of any future acquisitions.
First Quarter Conference Call The Company will be hosting a conference call today, Tuesday, May 4, 2004, to
review the financial results for the first quarter. Investors and other
interested parties may access the call at 9:00 a.m. Central Time by dialing in
at (800) 299-9630, participant passcode 21020092.
The call will be broadcast live as well as replayed through the internet. The
webcast can be accessed through a link at http://www.optioncare.com/ . For
those who cannot listen to the live broadcast, a replay will be available two
hours after the call concludes at (888) 286-8010, passcode 52320179. The
playback will be available until midnight on May 7, 2004.
The webcast is also being distributed over CCBN's Investor Distribution Network
to both institutional and individual investors. Individual investors can
listen to the call through CCBN's individual investor center at
http://www.fulldisclosure.com/ or by visiting any of the investor sites in
CCBN's Individual Investor Network. Institutional investors can access the
call via CCBN's password-protected event management site, StreetEvents
http://www.streetevents.com/.
About Option Care Option Care provides various home infusion therapies and specialty injectible
pharmaceuticals to patients at home and other alternate sites such as infusion
suites and physician's offices. The company's services and pharmaceuticals are
provided nationally through its local and regional pharmacies.
Forward-Looking Statements This press release contains certain 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 are intended to
be covered by the safe harbors created thereby. Forward looking statements can
be identified by the use of terms such as "anticipates," "expects," "believes"
and other words having a similar meaning. Investors are cautioned that all
forward-looking statements involve risks and uncertainty. Such forward-looking
information involves important risks and uncertainties that could significantly
affect anticipated results in the future and, accordingly, such results may
differ from those expressed in any forward-looking statements made by us, or on
our behalf. These risks and uncertainties include, but are not limited to,
uncertainties affecting our businesses and our franchisees relating to
acquisitions and divestitures (including continuing obligations with respect to
completed transactions), sales and renewals of franchises, government and
regulatory policies (including federal, state and local efforts to reform the
delivery of and payment for healthcare services), general economic conditions
(including economic conditions affecting the healthcare industry in
particular), the pricing and availability of equipment and services,
technological developments and changes in the competitive environment in which
we operate. These statements are based upon assumptions and, although the
Company believes that the assumptions underlying the forward-looking statements
contained herein are reasonable, there can be no assurance that the
forward-looking statements included in this press release will prove to be
accurate.
Further Information on Option Care Can Be Found at:
http://www.optioncare.com/
http://www.optionmed.com/
http://www.mbimbi.com/ [Financial tables follow]
Option Care, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
(in thousands) Three Months Ended
March 31,
2004 2003
Revenue:
Specialty pharmacy services $64,932 $57,034
Infusion and related
healthcare services 34,946 33,073
Other 3,271 2,455
Total revenue 103,149 92,562 Cost of revenue:
Cost of goods sold 63,808 54,824
Cost of services provided 10,644 10,458
Total cost of revenue 74,452 65,282 Gross profit 28,697 27,280 Selling, general and
administrative expenses 19,249 18,030
Provision for doubtful accounts 1,559 1,878
Depreciation and amortization 681 668
Total operating expenses 21,489 20,576 Operating income 7,208 6,704 Interest income (expense), net 1 (99)
Other expense, net (67) (9) Income before income taxes 7,142 6,596
Income tax provision 2,857 2,630 Net income $4,285 $3,966 Net income per share:
Basic $0.20 $0.19 Diluted $0.20 $0.19 Shares used in computing net
income per Common share:
Basic 21,091 20,807 Diluted 21,556 21,156
Option Care, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands) (Unaudited)
March 31, December 31,
2004 2003
Assets
Current assets:
Cash and cash equivalents $6,649 $3,961
Accounts receivable, net 65,721 62,190
Inventory 8,248 11,522
Other current assets 8,194 9,721
Total current assets 88,812 87,394 Equipment and other fixed assets, net 12,176 12,145
Goodwill, net 65,661 64,970
Other assets 1,874 2,025
Total assets $168,523 $166,534 Liabilities and stockholders' equity
Current liabilities:
Trade accounts payable $18,523 $19,940
Current portion of long-term debt 112 424
Other current liabilities 9,054 10,253
Total current liabilities 27,689 30,617 Long-term debt, less current portion 29 82
Other liabilities 7,153 6,815
Total liabilities 34,871 37,514 Total stockholders' equity 133,652 129,020 Total liabilities and
stockholders' equity $168,523 $166,534
Option Care, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands) Three Months Ended
March 31,
2004 2003 Net cash provided by
operating activities $5,226 $4,670 Net cash used in investing
activities (including acquisitions) (2,065) (4,364) Net cash provided by
(used in) financing activities (473) 280 Increase (decrease) in cash
and cash equivalents $2,688 $586
DATASOURCE: Option Care, Inc.
CONTACT: Paul Mastrapa, Chief Financial Officer of Option Care, Inc., +1-847-229-7773 Web site: http://www.mbimbi.com/ http://www.optionmed.com/ http://www.optioncare.com/
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