AdvancePCS Announces Record Revenues and Earnings for FY 2002 Fourth Quarter and Full Year.Business Editors/Health & Medical Writers IRVING Irving, city (1990 pop. 155,037), Dallas co., N Tex., a suburb of Dallas; inc. as a city 1952. Building supplies, chemicals, electronic equipment, and airplane parts are manufactured in Irving. , Texas--(BW HealthWire)--May 15, 2002 AdvancePCS AdvancePCS Inc. was a large prescription benefit plan administrator from the USA. The company merged with Caremark Rx in the beginning of 2005 and is now known under that name. (Nasdaq: ADVP), the nation's leading provider of health improvement services, Wednesday Wednesday: see week. reported its 60th consecutive quarter of record revenues and 31st consecutive quarter of record earnings (excluding one time charges). For its fiscal 2002 fourth quarter ended March 31, 2002, AdvancePCS generated revenues in excess of $3.4 billion and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become of $79.0 million, compared to almost $3.0 billion in revenues and $61.3 million in EBITDA during the same period last year, for increases of 15 percent and 29 percent, respectively. Earnings per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share were $0.34 compared with $0.11 for the fourth quarter of the prior year (excluding extraordinary loss, merger costs and non-recurring charges), an increase of 209 percent. Diluted weighted average shares outstanding were 102.5 million compared to 89.7 million shares for the fourth quarter of the prior year. For the 12 months ended March 31, 2002, the company reported revenues of $13.1 billion and EBITDA of $300.4 million compared with revenues of $7.0 billion and EBITDA of $148.0 million for the 12 months of the prior year, representing increases of 87 percent and 103 percent, respectively. Excluding extraordinary loss, merger costs and non-recurring charges, diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were $1.24 for the 12 months ended March 31, 2002, compared with $0.41 for the year ended March 31, 2001, an increase of 202 percent. "The excellent results we posted for the quarter and the year complete our original projections set out at the time of the PCS (1) (Personal Communications Services) Refers to wireless services that emerged after the U.S. government auctioned commercial licenses in 1994 and 1995. This radio spectrum in the 1. acquisition. We have exceeded those earnings targets in each of the quarters since the acquisition," said David D. Halbert, chairman and chief executive officer of AdvancePCS. "Now, with the majority of our large clients renewed in the past year, our specialty distribution program fully developed and a rapidly growing mail service pharmacy pharmacy, art of compounding and dispensing drugs and medication. The term is also applied to an establishment used for such purposes. Until modern times medication was prepared and dispensed by the physician himself. In the 18th cent. business, we are poised to continue this growth in profitability in the coming quarters." Halbert added, "With the solid results generated this year and the strong positioning for future growth, we are offering expanded guidance for fiscal 2003. We expect to generate a 25 percent growth rate in the next fiscal year on our EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. base of $1.24 for fiscal 2002." In fiscal 2002, the company implemented new benefit programs for more than 5 million plan members, retained all key contracts up for renewal and signed contracts with new clients representing 3 million additional lives to be implemented in fiscal 2003. AdvancePCS renewed or extended contracts with most of its largest clients in this last fiscal year, including Humana Humana Inc. (NYSE: HUM), founded in 1961 in Louisville, Kentucky, is a Fortune 500 company that markets and administers health benefit consumer services. With a customer base of over 11. ; the Blue Cross and Blue Shield Blue Shield A US not-for-profit health care insurer that is a reimbursement intermediary for physicians. Cf Blue Cross. Federal Employee Program; Great-West Life; Principal; BlueCross BlueShield of Tennessee  This article or section is written like an .Please help [ rewrite this article] from a neutral point of view. Mark blatant advertising for , using . ; and Blue Cross and Blue Shield of Texas and Blue Cross and Blue Shield of New Mexico New Mexico, state in the SW United States. At its northwestern corner are the so-called Four Corners, where Colorado, New Mexico, Arizona, and Utah meet at right angles; New Mexico is also bordered by Oklahoma (NE), Texas (E, S), and Mexico (S). , now both part of Health Care Service Corp. The Health Care Service Corp. contract also represented the addition of 2 million new lives with Blue Cross and Blue Shield of Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. . The largest new client to be added in fiscal 2003 is Horizon Blue Cross and Blue Shield of New Jersey Horizon Blue Cross Blue Shield of New Jersey, headquartered in Newark, New Jersey, is the only licensed Blue Cross and Blue Shield Association plan in New Jersey, providing health insurance coverage to over 3.2 million people throughout all of North, Central, and South Jersey. , with approximately 1.6 million pharmacy lives under management, scheduled to begin service in July July: see month. 2002. "The proportion of our business that recently has been won or renewed is significant," stated Halbert. "We believe that so many large clients went to competitive bid at one time because of uncertainties around the PCS sale process. It is noteworthy that every important PCS account that was out for renewal selected AdvancePCS to continue as their partner in health improvement. "This was on top of a record sales year in fiscal 2002. With the major renewal cycle complete, fiscal 2003 will be a year in which we can focus on developing and cross-selling Cross-selling is the term used to describe the sale of additional products or services to a customer. Less frequently it is used to describe the sale of services to additional business units at an account or to different geographic units of a customer. new services to our existing clients and adding new clients." In fiscal 2002, AdvancePCS developed, launched and rapidly grew its specialty pharmacy business. The company completed the acquisition of TheraCom in August 2001 and its joint venture with Priority Healthcare in June June: see month. 2001. The joint venture began shipping product within five months of formation. Reception of the service offering has been strong and broad, across all client segments. To date, AdvancePCS has agreements with clients for specialty pharmacy services representing approximately 10 million lives and already has initiated services for clients representing 8 million of those lives. TheraCom has seen strong receptivity receptivity, n the state of being open to the action of a drug or homeopathic remedy. See also reactivity. of its service offerings in the manufacturer community, as evidenced by the recent announcement of Serono's selection of TheraCom for service support of its new Rebif(R) product and distribution of its proprietary Rebiject(R) injection kit. During the year, AdvancePCS announced plans for a new customer care center, expansion of an existing customer care center and a new mail facility. AdvancePCS will open a fourth customer care center in Knoxville Knoxville, city (1990 pop. 165,121), seat of Knox co., E Tenn., on the Tennessee River; inc. 1876. A port of entry, it is a trade and shipping center for a farm, bituminous-coal, and marble area. in June 2002 -- capable of handing 350,000 calls per month -- in support of the large book of new business the company has won in the eastern United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. In November November: see month. 2001, the company expanded and relocated re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. its Sacramento-area customer care center to enable it to handle 350,000 calls per month as well. The company also recently announced the opening of a third state-of-the-art mail service pharmacy in Wilkes-Barre Wilkes-Barre (wĭlks-bâr`ē), city (1990 pop. 47,523), seat of Luzerne co., E Pa., on the east bank of the Susquehanna River; settled 1769, inc. as a city 1871. , Pa. in order to expand the company's capacity to provide health plan members with the savings and convenience of prescriptions delivered to their homes. The new facility will begin operations in October October: see month. 2002 and will be capable of dispensing dispensing provision of drugs or medicines as set out properly on a lawful prescription. A prescription can only be filled, the drugs supplied, by a registered pharmacist, veterinarian, dentist or member of the medical profession. up to 500,000 prescriptions per week at full capacity. "We are committed to continue to lead the industry in service," said Halbert. "The areas of mail pharmacy service and customer care centers are where we have the highest member interaction and the highest opportunity to differentiate our member experience. We are expanding to meet the needs of our clients who are increasingly turning to us for mail pharmacy services." In the last quarter, AdvancePCS mail claims grew to 3.2 million, representing a 19 percent sequential growth rate over the December December: see month. 2001 quarter and a 30 percent increase over the fourth quarter of the prior year. In the year ended March 31, 2002, AdvancePCS significantly reduced and refinanced portions of its indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. . In August 2001, the company issued 9 million shares of common stock, raising $291 million to repay debt. As a result of this financing and strong cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses , AdvancePCS reduced long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. to $500 million at March 31, 2002, versus $845 million on March 31, 2001 and reduced its debt-to-EBITDA on a run-rate basis from 3.4 times to 1.6 times. In the third fiscal quarter ended December 2001, the company completed a partial refinancing Refinancing An extension and/or increase in amount of existing debt. of its secured bank debt with a $150 million asset securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. facility in order to reduce financing costs. This securitization facility has been recorded on the balance sheet. In recognition of the company's strong performance and debt paydown Paydown A payment made towards an outstanding loan balance. Notes: Every time you make a mortgage payment you are "paying down" your loan. See also: Loan, Mortgage, Principal paydown In a corporate or U.S. , Standard & Poor's and Moody's Investors Service Moody's Investors Service A leading global credit rating, research and risk analysis firm. Moody's Investors Service A leading firm engaged in credit rating, risk analysis, and research of fixed-income securities and their issuers. raised their credit ratings on the company's debt to BB+ from BB and to Ba1 from Ba3, respectively, on the company's senior secured credit rating in February February: see month. of this year. In further recognition of the company's financial performance and achievements, AdvancePCS joined the ranks of the Fortune 500 list of largest companies this year. In addition, Fortune named AdvancePCS one of America's fastest-growing public companies. AdvancePCS was again included on the Forbes Platinum 400 list of best big companies, and AdvancePCS earned the No. 2 spot on the Barron's 500 list of best performing companies. In an analysis published by The Wall Street Journal, AdvancePCS ranked first in share price appreciation among health care provider stocks for both three-year and five-year average returns. On a one-year return measurement, the company ranked third among the 26 companies on the list. In addition, SmartMoney magazine, published by Dow Jones Dow Jones the best known of several U.S. indexes of movements in price on Wall Street. [Am. Hist.: Payton, 202] See : Finance & Co., selected AdvancePCS as one of its top 10 stocks for the next 10 years. About AdvancePCS AdvancePCS (www.advancepcs.com) is the nation's largest independent provider of health improvement services, touching the lives of more than 75 million health plan members and managing more than $27 billion in annual prescription drug prescription drug Prescription medication Pharmacology An FDA-approved drug which must, by federal law or regulation, be dispensed only pursuant to a prescription–eg, finished dose form and active ingredients subject to the provisos of the Federal Food, Drug, spending. AdvancePCS offers health plans a wide range of health improvement products and services designed to improve the quality of care delivered to health plan members and manage costs. The company's capabilities include integrated mail service and retail pharmacy networks, innovative clinical services, customized disease management programs, specialty pharmacy, clinical trials and outcomes research, information management, prescription drug services for the uninsured, and online health information for consumers. AdvancePCS clients include Blue Cross and Blue Shield organizations, insurance companies and HMOs, Fortune 500 employers, Taft-Hartley groups, state and local governments, and other health plan sponsors. Conference Call Information As previously announced, AdvancePCS will hold an investor conference call at 10 a.m. CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT on Thursday, May 16, 2002, to review the financial results and discuss the general operations of the company. The call will be broadcast live through the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the and can be accessed at www.streetevents.com or on the investor relations Investor relations The process by which the corporation communicates with its investors. section of the AdvancePCS Web site at www.advancepcs.com. The webcast will be archived and available for replay for 14 days. A telephone replay of the conference call will be available for seven days beginning at 1 p.m. CDT on May 16 by dialing 888/203-1112, confirmation code 476397. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Any statements included in this press release that are not historical facts and that concern predictions of economic performance and management's plans and objectives constitute forward-looking statements under the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provision of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. We do not undertake any obligation to provide updates to such forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, changes in the health care industry or the economy in general, competition, acquisitions, changes in the legislative or regulatory environment, and other factors detailed in AdvancePCS' Securities and Exchange Commission filings.
Condensed Statement of Operations
(in thousands, except per share data)
Three Months Ended
March 31,
2002 2001(b)
------------- -------------
Revenues (a) $ 3,438,872 $ 2,991,394
Cost of revenues (a) 3,317,840 2,896,885
Selling, general and administrative 51,979 52,616
Non-recurring charges - 10,449
------------- -------------
Operating income 69,053 31,444
Interest expense (net of income) 10,205 19,929
Merger costs - -
Loss from joint venture 1,040 -
------------- -------------
Income before taxes 57,808 11,515
Provision for income taxes 22,834 8,359
------------- -------------
Net income before extraordinary
loss 34,974 3,156
Extraordinary loss on early
retirement of debt, net of
taxes - -
------------- -------------
Net income $ 34,974 $ 3,156
============= =============
Net income exclusive of extraordinary
loss, merger costs and non-recurring
charges (net of tax):
Add:
Non-recurring charges - 10,449
Merger costs - -
Tax effect of non-recurring and merger - (4,075)
Extraordinary loss, net of tax - -
------------- -------------
$ 34,974 $ 9,530
============= =============
Net income per share exclusive of
extraordinary loss, merger costs
and non-recurring charges:
Diluted $ 0.34 $ 0.11
Basic $ 0.38 $ 0.13
Net income per share before
extraordinary loss:
Diluted $ 0.34 $ 0.04
Basic $ 0.38 $ 0.04
Net income per share:
Diluted $ 0.34 $ 0.04
Basic $ 0.38 $ 0.04
Weighted average shares outstanding:
Diluted 102,462 89,654
Basic 92,840 72,980
Twelve Months Ended
March 31,
2002(b) 2001(b)
------------- -------------
Revenues (a) $ 13,107,290 $ 7,024,298
Cost of revenues (a) 12,655,699 6,795,138
Selling, general and administrative 189,320 128,984
Non-recurring charges 1,760 11,129
------------- -------------
Operating income 260,511 89,047
Interest expense (net of income) 57,579 41,882
Merger costs - 1,200
Loss from joint venture 2,871 -
------------- -------------
Income before taxes 200,061 45,965
Provision for income taxes 79,015 24,291
------------- -------------
Net income before extraordinary
loss 121,046 21,674
Extraordinary loss on early
retirement of debt, net of
taxes 5,315 -
------------- -------------
Net income $ 115,731 $ 21,674
============= =============
Net income exclusive of extraordinary
loss, merger costs and non-recurring
charges (net of tax):
Add:
Non-recurring charges 1,760 11,129
Merger costs - 1,200
Tax effect of non-recurring and merger (686) (4,614)
Extraordinary loss, net of tax 5,315 -
------------- -------------
$ 122,120 $ 29,389
============= =============
Net income per share exclusive of
extraordinary loss, merger costs
and non-recurring charges:
Diluted $ 1.24 $ 0.41
Basic $ 1.45 $ 0.50
Net income per share before
extraordinary loss:
Diluted $ 1.23 $ 0.30
Basic $ 1.43 $ 0.37
Net income per share:
Diluted $ 1.18 $ 0.30
Basic $ 1.37 $ 0.37
Weighted average shares outstanding:
Diluted 98,338 72,378
Basic 84,432 58,290
Three Months Twelve Months
Ended Ended
March 31, March 31,
2001(b) 2001(b)
--------- ---------
Reconciliation of prior year under FAS 142:
Amortization, net of tax effect $ 10,169 $ 21,562
Net income $ 13,325 $ 43,236
Net income per share:
Diluted $ 0.15 $ 0.60
Basic $ 0.18 $ 0.74
Supplemental Data
(in thousands)
Three Months Ended Twelve Months Ended
March 31, March 31,
2002 2001(b) 2002(b) 2001(b)
--------- --------- --------- ---------
EBITDA (operating
income plus
depreciation,
amortization and
non-recurring charges) $ 79,039 $ 61,332 $ 300,432 $ 147,973
Total depreciation and amort.
(including goodwill) $ 9,986 $ 19,439 $ 38,161 $ 47,797
Pharmacy network claims
processed 119,969 113,890 456,314 269,501
Mail pharmacy
prescriptions filled 3,220 2,481 11,042 5,670
Balance Sheet Data
(in thousands)
March 31, March 31,
2002 2001(b)
----------- -----------
Cash $ 139,145 $ 110,048
Total assets $ 3,223,964 $ 3,001,850
Long-term debt, including current portion $ 500,786 $ 845,000
Stockholders' equity $ 871,610 $ 404,537
Notes
(a) Historical revenues for the twelve months ended March 31, 2001
have been reclassified to reflect adoption of consistent revenue
recognition policies with PCS.
(b) Have been restated to give effect to the acquisition of CHI.
Financial and share information contained throughout this press
release has been retroactively adjusted to reflect the impact of a
two-for-one stock split in October 2001.
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion