AdvancePCS Announces Record Revenues and Earnings for Second Fiscal Quarter Ended Sept. 30, 2002; And Raises Earnings Guidance for Fiscal 2003.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--(BUSINESS WIRE)--Oct. 28, 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 health improvement company, today reported its 62nd consecutive quarter of record revenues and 33rd consecutive quarter of record earnings. For its fiscal 2003 second quarter ended Sept. 30, 2002, AdvancePCS generated revenues of approximately $3.9 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 $92.2 million, compared to $3.2 billion in revenues and $74.1 million in EBITDA during the same period last year. Earnings and 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 $42.2 million and $0.43 for the second quarter, versus earnings and earnings per diluted share, excluding non-recurring charges, of $29.0 million and $0.30 for the second quarter of the prior year. The second quarter results produced 45 percent and 43 percent growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. in earnings and earnings per share on a year-over-year basis, respectively. EBITDA increased at a 24 percent growth rate on a year-over-year basis and 11 percent sequentially versus the first quarter of fiscal 2003. For the six months ended Sept. 30, 2002, the company reported revenues of $7.4 billion and EBITDA of $175.1 million, compared with revenues of $6.3 billion and EBITDA of $145.3 million for the comparable period last year, representing increases of 18 percent and 21 percent, respectively. 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 , excluding an extraordinary loss due to early repayment of debt, were $0.79 for the six months ended Sept. 30, compared with $0.58 in six months in the prior year, excluding non-recurring charges, an increase of 36 percent. The company's strong performance generated cash provided by operating activities of $82.9 million during the quarter, versus $20.3 million in the second quarter of the prior year and $26.1 million in the first quarter of fiscal 2003. As of Sept. 30, 2002, the company had repurchased $71.8 million of its stock under its $150 million share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program, or 4.0 million shares. As a result, diluted weighted average shares outstanding were 98.4 million compared to 97.0 million shares for the second quarter of the prior year and 102.1 million for the first quarter of fiscal 2003. "We are extremely pleased with the record financial and operating results we posted this quarter, which were supported by our entire company's alignment with our key strategic goals," said David D. Halbert, AdvancePCS chairman and chief executive officer. "We grew our mail prescriptions dispensed dis·pense v. dis·pensed, dis·pens·ing, dis·pens·es v.tr. 1. To deal out in parts or portions; distribute. See Synonyms at distribute. 2. To prepare and give out (medicines). 3. by more than 50 percent versus the prior year, we hit our goal of $200 million in annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. revenues in our AdvancePCS SpecialtyRx business one quarter early, we continued to optimize optimize - optimisation our clients' alignment with our clinically validated val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. prescribing recommendations, and we tightened controls on operating costs operating costs npl → gastos mpl operacionales ." AdvancePCS mail claims grew to approximately 3.9 million during the past quarter, an increase of 52 percent over the second quarter of the prior year and a 12 percent sequential growth rate over the FY2003 first quarter. The company also saw significant increases in its generic 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. rates at both its mail service pharmacies This article is a list of major pharmacies (also known as chemists and drugstores) by country. Australia Pharmacies in Australia are mostly independently-owned by pharmacists, often operated as franchises of retail brands offered by the three major and in the retail setting this quarter. "We are continuing to perform well for our shareholders as we perform well for our clients. We are saving our clients money through higher rebates, more cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. mail 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. service, increased generic dispensing rates and additional savings through our specialty pharmacy," said Halbert. "Because of the outstanding financial and operating results we posted this quarter, and our increased confidence in our ability to continue along this track, we are raising earnings guidance for FY2003 to a range of $1.67 to $1.69 per diluted share, versus current analyst consensus estimates of $1.57 per diluted share," said Halbert. AdvancePCS recently secured a multi-year agreement with UICI to provide fully integrated pharmacy benefit management A Pharmacy Benefit Manager (PBM) is a third party administrator of prescription drug programs. They are primarily responsible for processing and paying prescription drug claims. services beginning on Jan. 1, 2003. UICI, through its subsidiaries, offers insurance (primarily health and life) and selected financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. to niche consumer and institutional markets. UICI provides insurance and financial services to approximately 500,000 customers in the 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. . AdvancePCS will manage a comprehensive retail pharmacy network and provide online claims processing, mail order and formulary formulary /for·mu·lary/ (for´mu-lar?e) a collection of recipes, formulas, and prescriptions. National Formulary see under N. for·mu·lar·y n. management services on behalf of UICI's insurance company customers. During the quarter, the company successfully implemented a major new client agreement -- the Horizon Blue Cross Blue Shield Blue Shield A US not-for-profit health care insurer that is a reimbursement intermediary for physicians. Cf Blue Cross. of New Jersey account with more than 1.4 million lives under contract for pharmacy benefit management. With the addition of Horizon, and the commitments for Jan. 1, 2003, AdvancePCS will implement new clients representing almost 6 million lives in fiscal 2003. The company saw stronger than expected interest in its cash card program, especially from its health plan clients who want to offer their members without pharmacy coverage the opportunity to purchase prescriptions at a discounted price and with the safety benefits a PBM PBM - play by mail. See play by electronic mail. offers. In addition, notable client wins from the employer segment for Jan. 1 implementations include such premier accounts as Hershey Hershey, uninc. city (1990 pop. 11,860), Dauphin co., S central Pa.; founded 1903 as a planned community built for workers at the Hershey Corp., the chocolate manufacturer that remains its largest employer. Food Corp. and Wendy's International Wendy's International, Inc. NYSE: WEN is the parent company of Wendy's Old Fashioned Hamburgers. It also owns 70 percent of Cafe Express and 25 percent (fully diluted) of Pasta Pomodoro. The Tim Hortons chain was spun off by Wendy's into a separate company in September 2006. Inc. "Our sales results for fiscal 2003 benefited from the implementation of the significant Horizon contract on July July: see month. 1 -- six months earlier than plans typically are implemented," Halbert said. "As well, we are pleased with our success within the employer segment. Our concerted effort to bring unique, custom programs to this market segment in Fiscal 2003 has begun to pay off." AdvancePCS SpecialtyRx, the company's specialty pharmacy business, continued its significant growth during the quarter and is poised for its future growth. AdvancePCS SpecialtyRx generated over $50 million in revenues in the quarter. To date, the company has signed contracts with payers representing approximately 16 million lives, and has implemented almost 9 million of those lives under commitment. The company's specialty pharmacy subsidiary, TheraCom Inc., achieved several notable successes during the quarter. Last month, it announced the award of an exclusive distribution contract by Sankyo Sankyo means "third one" in Japanese. It may refer to:
dis·pense v. To prepare and give out medicines. the new GlucoWatch GlucoWatch™ Diabetology A painless, bloodless, automatic, wristwatch device worn for up to 12–hr monitoring of serum glucose, which incorporates an alarm triggered when hypoglycemic or hyperglycemic levels are detected. See Glucose monitoring. (R) G2(TM) Biographer biographer Clinical medicine A popular term for a Pt who describes his/her own medical history glucose monitoring glucose monitoring Lab medicine The periodic evaluation of any analyte abnormal in Pts with DM, to assess short and long-term control with antiglycemic agents. See Glucose, Glycated hemoglobin. system for diabetes patients in the United States. TheraCom also won Accreditation accreditation, n a process of formal recognition of a school or institution attesting to the required ability and performance in an area of education, training, or practice. with Full Standards Compliance from the Joint Commission on Accreditation of Healthcare Organizations Joint Commission on Accreditation of Healthcare Organizations, n.pr the United States body that accredits healthcare organizations. Joint Commission on Accreditation of Healthcare Organizations (JCAHO/TJC), n. with a perfect score of 100 percent. Just 6 percent of similar organizations surveyed received this score. Earlier this month, TheraCom expanded its service offering for Berlex Laboratories' Mirena(R), an intrauterine contraceptive intrauterine contraceptive n. An intrauterine device. system. In addition, AdvancePCS' expansion of its specialty pharmacy and disease management offerings took a major step forward with this month's announcement of the company's definitive agreement to acquire Accordant Health Services health services Managed care The benefits covered under a health contract . Privately held Accordant is a premier disease management company that focuses on helping patients with complex, chronic and progressive diseases, in the highest-cost disease states that typically use specialty pharmacy drugs. "Because Accordant addresses highest-cost disease states that also typically require specialty pharmacy drugs, this acquisition will enable AdvancePCS to meet all the management needs for health plans that have members with these complex diseases," Halbert said. "Accordant also complements our existing disease management programs, which address broader, more prevalent conditions." AdvancePCS is acquiring the stock of Accordant for less than $100 million, with a component of the consideration dependent upon achievement of certain targets in calendar year 2003. The cash transaction, which is expected to close during the third quarter of FY2003, will be funded with existing lines of credit and cash balances. On Sept. 30, AdvancePCS amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. its bank credit facility to increase the size of its revolver revolver: see small arms. revolver Pistol with a revolving cylinder that provides multishot action. Some early versions, known as pepperboxes, had several barrels, but as early as the 17th century pistols were being made with a revolving chamber to from $175 million to $275 million. "Together with the strong operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. generated this quarter, this expanded credit facility should provide adequate capital to fund our currently planned strategic initiatives, including acquisitions, the announced share repurchase program and capital expenditures," Halbert said. Consumer Health Interactive (CHI (Computer Human Interface) Typically refers to the devices and associated applications used by humans to interact with computers. For example, a CICS data entry screen displayed on a 3270 terminal makes up a CHI for a banking application. ), an AdvancePCS subsidiary that develops consumer-focused Web sites for health-care organizations, continued to demonstrate its leadership capabilities during the quarter by winning 15 awards for sites designed for its clients. CHI swept the HMO/Managed Care category in one event by taking four gold awards, including AdvancePCS' own consumer site, www.AdvanceRx.com. CHI-designed sites educate health plan members and patients by providing in-depth in-depth adj. Detailed; thorough: an in-depth study. in-depth Adjective detailed or thorough: an in-depth analysis 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, and medical information -- empowering them to make better-informed decisions about their own care. 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 approximately $28 billion in annual prescription 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, 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. AdvancePCS is ranked by Fortune magazine as one of America's 100 fastest-growing public companies and is included on the Forbes Platinum 400 list of best big companies. AdvancePCS earned the No. 2 spot on the Barron's 500 list of best performing companies. AdvancePCS is both a Fortune 500 and Fortune Global 500 company. Conference Call Information As previously announced, AdvancePCS will hold an investor conference call at 10 a.m. CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. on Tuesday, Oct. 29, 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. CST on Oct. 29 by dialing 888/203-1112, confirmation code 174163. 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
(Unaudited)
(in thousands, except per share data)
Three Months Ended Six Months Ended
Sept. 30, Sept. 30,
2002 2001 2002 2001
---------- ---------- ---------- ----------
Revenues $3,852,668 $3,154,629 $7,444,906 $6,302,523
Cost of revenues 3,717,206 3,046,653 7,184,097 6,086,781
Selling, general and
administrative 54,182 43,334 107,447 89,089
Non-recurring charges - 906 - 1,760
---------- ---------- ---------- ----------
Operating income 81,280 63,736 153,362 124,893
Interest expense (net of
income) 10,292 16,240 20,456 35,539
Loss from joint venture 1,224 431 2,257 1,090
---------- ---------- ---------- ----------
Income before taxes 69,764 47,065 130,649 88,264
Provision for income taxes 27,557 18,589 51,607 34,856
---------- ---------- ---------- ----------
Net income before
extraordinary loss 42,207 28,476 79,042 53,408
Extraordinary loss on early
retirement of debt, net of
taxes - - 1,491 -
---------- ---------- ---------- ----------
Net income $ 42,207 $ 28,476 $ 77,551 $ 53,408
========== ========== ========== ==========
Net income exclusive of
extraordinary loss and
non-recurring charges
(net of taxes):
Add:
Non-recurring charges - 906 - 1,760
Tax effect of non-recurring
charges - (353) - (686)
Extraordinary loss, net of
taxes - - 1,491 -
---------- ---------- ---------- ----------
$ 42,207 $ 29,029 $ 79,042 $ 54,482
========== ========== ========== ==========
Net income per share
exclusive of extraordinary
loss and non-recurring
charges:
Diluted $ 0.43 $ 0.30 $ 0.79 $ 0.58
Basic $ 0.46 $ 0.37 $ 0.86 $ 0.71
Net income per share before
extraordinary loss:
Diluted $ 0.43 $ 0.29 $ 0.79 $ 0.57
Basic $ 0.46 $ 0.36 $ 0.86 $ 0.70
Net income per share:
Diluted $ 0.43 $ 0.29 $ 0.77 $ 0.57
Basic $ 0.46 $ 0.36 $ 0.84 $ 0.70
Weighted average shares
outstanding:
Diluted 98,412 96,952 100,255 94,285
Basic 91,615 79,499 92,319 76,489
Supplemental Data
(in thousands)
Three Months Ended Six Months Ended
Sept. 30, Sept. 30,
2002 2001 2002 2001
---------- ---------- ----------- ----------
EBITDA:
Operating Income $81,280 $63,736 $153,362 $124,893
Add:
Depreciation &
amortization 10,929 9,480 21,689 18,597
Non-recurring
charges - 906 - 1,760
---------- ---------- ----------- ----------
EBITDA $92,209 $74,122 $175,051 $145,250
========== ========== =========== ==========
Capital expenditures $25,879 $13,888 $44,774 $20,773
Cash provided by
operating activities $ 82,925 $ 20,273 $ 109,073 $ 80,320
Pharmacy network claims
processed 120,056 109,307 238,803 222,303
Mail pharmacy
prescriptions filled 3,884 2,550 7,337 5,125
Revenues (%)
Data Services 80.1 84.5 80.6 84.8
Mail Services 15.5 11.2 15.0 11.0
Clinical and Other 4.4 4.3 4.4 4.2
Condensed Balance Sheet Data
(Unaudited)
(in thousands)
Sept. 30, Mar. 31,
2002 2002
----------- -----------
Cash $101,199 $139,145
Accounts receivable, net 1,507,428 1,225,929
Inventories 76,983 65,336
Property & equipment, net 146,606 121,277
Goodwill and intangible assets, net 1,566,208 1,571,966
Other assets 92,367 100,311
----------- -----------
Total assets 3,490,791 3,223,964
=========== ===========
Claims and accounts payable 1,828,608 1,557,909
Accrued expenses 126,044 117,910
Long-term debt, including current portion 468,627 500,786
Other liabilities 172,606 170,099
----------- -----------
Total liabilities 2,595,885 2,346,704
----------- -----------
Stockholders' equity 894,906 877,260
----------- -----------
Total liabilities & stockholders' equity $3,490,791 $3,223,964
=========== ===========
Long-term debt, including current portion consisted of the following:
Senior notes $187,825 $200,000
Asset securitization facility 280,802 150,000
Term B bank debt - 150,786
--------- ---------
$468,627 $500,786
========= =========
Condensed Cash Flow Statement
(Unaudited)
(in thousands)
Six Months Ended
Sept. 30, Sept. 30,
2002 2001
----------- ---------
Cash flows from operating activities:
Net income $77,551 $53,408
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 21,689 18,597
Other 9,833 8,315
----------- ---------
Net cash provided by operating activities 109,073 80,320
----------- ---------
Cash flows from investing activities:
Purchase of property and equipment (44,774) (20,773)
Other (1,900) (2,850)
----------- ---------
Net cash used in investing activities (46,674) (23,623)
----------- ---------
Cash flows from financing activities:
Purchase of Class A Common Stock --
Treasury Stock (71,841) -
Proceeds from long-term obligations 1,343,387 58,000
Payments on long-term obligations (1,375,546) (409,066)
Other 3,655 297,861
----------- ---------
Net cash used in financing activities (100,345) (53,205)
----------- ---------
Net (decrease) increase in cash (37,946) 3,492
Cash and cash equivalents, beginning of period 139,145 110,048
----------- ---------
Cash and cash equivalents, end of period $101,199 $113,540
=========== =========
Notes:
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.
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