AdvancePCS Announces Record Revenues and Earnings for Third Fiscal Quarter Ended Dec. 31, 2002; Revises Estimates for Fiscal 2003 and 2004.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)--Jan. 28, 2003 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 record revenues and earnings for its third quarter of fiscal 2003. For the third quarter ended Dec. 31, 2002, AdvancePCS generated revenues of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $4.1 billion, earnings of $45.0 million 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 of $0.46, compared to revenues of $3.4 billion, earnings (before extraordinary loss) of $32.7 million and earnings per diluted share (before extraordinary loss) of $0.32 for the third quarter of the prior year. The third quarter results produced 38 percent and 44 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. , respectively, in earnings and earnings per diluted share (before extraordinary loss) on a year-over-year basis. Further, the company increased guidance for Fiscal 2003, ending March 31, 2003, to $1.71 - $1.72 per diluted share (before extraordinary loss.) The company also established guidance for Fiscal 2004 of $2.05 - $2.13 per diluted share. For the nine months ended Dec. 31, 2002, the company reported revenues of $11.6 billion and earnings and earnings per diluted share (before extraordinary loss) of $124.0 million and $1.25, respectively. These results compare to revenues of $9.7 billion and earnings and earnings per diluted share (before extraordinary loss) of $86.1 million and $0.89, respectively, for the first nine months of fiscal 2002. The nine-month results produced 44 percent and 40 percent growth rates in earnings and earnings per share (before extraordinary loss) on a year-over-year basis. The company generated 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 $96.4 million for the third fiscal quarter, versus $76.1 million during the same period last year, representing a 27 percent growth rate. For the nine-month period ended Dec. 31, 2002, the company generated EBITDA of $271.4 million, compared with EBITDA of $221.4 million for the comparable period of the prior year, representing an increase of 23 percent. The company's strong performance generated cash provided by operating activities of $81.7 million during the quarter, versus $40.0 million in the third quarter of the prior year. Fiscal year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. , the company has generated cash provided by operating activities of $190.8 million. For the December December: see month. 2002 quarter, diluted weighted average shares outstanding were 97.4 million, compared to 102.3 million shares in the third quarter of the prior year. As of Dec. 31, 2002, the company had repurchased 4.7 million shares of its stock at a cost of $87.7 million under its previously announced $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. "We are pleased to report another quarter of consistent, strong financial performance," said David D. Halbert, AdvancePCS chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "As we continue to work closely with our clients to navigate (1) "Surfing the Web." To move from page to page on the Web. (2) To move through the menu structure in a software application. the challenges of the dynamic health care and pharmaceutical landscapes, we have again been able to deliver this predictable performance for our shareholders." Growth in claim volume, specifically in the company's 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. operations, contributed to the company's results during the third quarter. Mail claims increased by 50 percent over the third quarter of the prior year and retail claims increased by 10 percent over the same period of the prior year. The company's specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. pharmacy business also grew in the quarter. Specialty pharmacy revenues reached $68.8 million, or more than $275 million on an 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. basis, during the quarter ended Dec. 31, 2002. These revenues compare to $30.1 million for the same quarter of the prior year, representing an increase of 129 percent on a year-over-year basis. On a sequential One after the other in some consecutive order such as by name or number. basis, specialty pharmacy revenues grew 27 percent versus the quarter ended Sept. 30, 2002. "We continue to see strong alignment Alignment is the adjustment of an object in relation with other objects, or a static orientation of some object or set of objects in relation to others.
Pharmacies in Australia are mostly independently-owned by pharmacists, often operated as franchises of retail brands offered by the three major ," Halbert said. "We are positioning the company to expand these opportunities even further in calendar 2003 with the recent opening of the Richardson Richardson, city (1990 pop. 74,840), Dallas and Collins counties, N Tex., a suburb of Dallas; founded in the 1850s, inc. as a city 1956. Richardson manufactures telecommunications equipment, medical devices, supercomputers, computer chips, and fiber optics. specialty pharmacy and the 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. mail service facility." In November November: see month. , the company completed its previously announced acquisition of Accordant Health Services health services Managed care The benefits covered under a health contract , a premier disease management company focusing on patients with complex, chronic and progressive diseases. "The integration of Accordant into AdvancePCS has progressed smoothly and our clients will soon see the benefits of our combined offerings," Halbert added. "We recently sold our first integrated disease management and specialty pharmacy contract, which will provide our first opportunity to demonstrate the incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. value that we can create for clients by combining the cost-saving advantage of AdvancePCS SpecialtyRx with Accordant's proven value proposition." Halbert noted that recently, an independent government agency performed its own analysis to assess the impact of pharmacy benefit managers on heath heath, tract of open land heath, tract of open land characterized by a few scattered trees, abundant moss cover, and numerous low shrubs, principally of the heath family (see heath, in botany). plans, members and retail pharmacies. The General Accounting Office study confirmed that AdvancePCS and other PBMs achieve significant savings on the cost of prescription drugs 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, for health plan clients and their members. The GAO study examined the use of PBMs by three plans representing 55 percent of the 8.3 million enrollees in the Federal Employees Health Benefits Program. It found, for example, that PBMs produced savings of up to 47 percent for federal employees obtaining prescription prescription In property law, the effect of the lapse of time in creating and destroying rights. Acquisitive prescription allows an individual, after unequivocal possession for a specific period, to acquire an interest in real property, such as an easement, but not the medications in retail pharmacies. "The GAO study provides independent validation See validate. validation - The stage in the software life-cycle at the end of the development process where software is evaluated to ensure that it complies with the requirements. of what our clients already know, that we perform a vital function in today's health care marketplace by helping our clients and their members reduce their drug spend," Halbert said. Halbert concluded by stating that the company's results represent the 63rd consecutive quarter of record revenues and 34th consecutive quarter of record earnings (excluding one time charges.) Moreover, AdvancePCS continues to win recognition for its financial performance. For the third straight year, AdvancePCS is included on the annual Forbes Forbes , B(ertie) C(harles) 1880-1954. American publisher and businessman who founded and edited (1916-1954) Forbes magazine. His son Malcolm Stevenson Forbes Platinum platinum (plăt`ənəm), metallic chemical element; symbol Pt; at. no. 78; at. wt. 195.08; m.p. 1,772°C;; b.p. 3,827±100°C;; sp. gr. 21.45 at 20°C;; valence +2 or +4. 400 list of America's biggest, best companies. To make the list, a company must rank in the upper half of one of 23 industry groups in Forbes' composite composite, alternate common name for Asteraceae or Compositae, the aster family. composite - aggregate scoring for return on capital, sales growth and earnings growth. Forbes looks at the latest 12-month and five-year returns. In the health care category, AdvancePCS was ranked No. 1 in sales growth during the past five years at 141.9 percent. Extraordinary losses in the periods referenced were driven by early retirement of debt obligations and are shown net of tax on the company's financial statements. There were no extraordinary losses in the quarter ended Dec. 31, 2002, compared to an extraordinary loss, net of tax, of $5.3 million during the same quarter of the prior year. For the nine months ended Dec. 31, 2002, extraordinary loss on early retirement of debt, net of tax, was $1.5 million, compared to $5.3 million in the same period of the prior year. 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 Blue Shield A US not-for-profit health care insurer that is a reimbursement intermediary for physicians. Cf Blue Cross. 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. 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 Wednesday Wednesday: see week. , Jan. 29, 2003, 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.advancepcsrx.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 Jan. 29 by dialing 888/203-1112, confirmation code 377155. 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 reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. 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 Nine Months Ended
Dec. 31, Dec. 31,
2002 2001 2002 2001
-------- -------- -------- --------
Revenues $ 4,106,375 $3,365,895 $11,551,281 $9,668,418
Cost of revenues 3,965,418 3,251,077 11,149,515 9,337,859
Selling, general and
administrative 56,387 48,252 163,834 137,341
Non-recurring charges - - - 1,760
--------- --------- --------- ---------
Operating
income 84,570 66,566 237,932 191,458
Interest expense (net of
income) 8,983 11,835 29,439 47,374
Loss from joint venture 1,253 741 3,510 1,831
--------- --------- --------- ---------
Income before
taxes 74,334 53,990 204,983 142,253
Provision for income
taxes 29,362 21,326 80,969 56,181
--------- --------- --------- ---------
Net income before
extraordinary
loss 44,972 32,664 124,014 86,072
Extraordinary loss on
early retirement of
debt, net of taxes - 5,315 1,491 5,315
--------- --------- --------- ---------
Net income $44,972 $ 27,349 $ 122,523 $ 80,757
========= ========= ========= =========
Net income per share
before extraordinary
loss:
Diluted $ 0.46 $ 0.32 $ 1.25 $ 0.89
Basic $ 0.50 $ 0.36 $ 1.35 $ 1.05
Net income per share:
Diluted $ 0.46 $ 0.27 $ 1.23 $ 0.83
Basic $ 0.50 $ 0.30 $ 1.34 $ 0.99
Weighted average shares
outstanding:
Diluted 97,394 102,321 99,302 96,964
Basic 89,983 91,912 91,540 81,630
Supplemental Data
(in thousands)
Three Months Ended Nine Months Ended
Dec. 31 Dec. 31
2002 2001 2002 2001
---------- ---------- ----------- -----------
EBITDA:
Operating Income $84,570 $66,566 $237,932 $191,458
Add:
Depreciation &
amortization 11,780 9,577 33,469 28,174
Non-recurring
charges - - - 1,760
---------- ---------- ----------- -----------
EBITDA $96,350 $76,143 $271,401 $221,392
========== ========== =========== ===========
Cash provided by
operating activities $ 81,691 $ 39,991 $ 190,764 $ 120,311
Capital expenditures $13,896 $14,328 $58,670 $35,101
Acquisition and joint
venture (net of cash
acquired) $ 73,983 $ 9,549 $ 75,883 $ 12,399
Pharmacy network claims
processed 125,724 114,042 364,527 336,345
Mail pharmacy
prescriptions filled 4,042 2,697 11,379 7,822
Revenues (%)
Data Services 80.1 84.3 80.4 84.6
Mail Services 15.6 11.7 15.2 11.2
Clinical and Other 4.3 4.0 4.4 4.2
Condensed Balance Sheet Data
(Unaudited)
(in thousands)
Dec. 31, Mar. 31,
2002 2002
----------- -----------
Cash $71,236 $139,145
Accounts receivable, net 1,630,751 1,225,929
Inventories 125,073 65,336
Property & equipment, net 152,658 121,277
Goodwill and intangible assets, net 1,635,589 1,571,966
Other assets 90,487 100,311
----------- -----------
Total assets 3,705,794 3,223,964
=========== ===========
Claims and accounts payable 1,999,569 1,557,909
Accrued expenses 142,176 117,910
Long-term debt, including current portion 458,137 500,786
Other liabilities 176,359 170,099
----------- -----------
Total liabilities 2,776,241 2,346,704
----------- -----------
Stockholders' equity 929,553 877,260
----------- -----------
Total liabilities & stockholders' equity $3,705,794 $3,223,964
=========== ===========
Long-term debt, including current portion, consisted of the following:
Senior notes $187,825 $200,000
Asset securitization facility and other 270,312 150,000
Term B bank debt - 150,786
--------- ---------
$458,137 $500,786
========= =========
Condensed Cash Flow Statement
(Unaudited)
(in thousands)
Nine Months Ended
Dec. 31, Dec. 31,
2002 2001
----------- ----------
Cash flows from operating activities:
Net income $122,523 $80,757
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 33,469 28,174
Other 34,772 11,380
----------- ----------
Net cash provided by operating activities 190,764 120,311
----------- ----------
Cash flows from investing activities:
Purchase of property and equipment (58,670) (35,101)
Acquisition, net of cash acquired, and JV
Investment (75,883) (12,399)
----------- ----------
Net cash used in investing activities (134,553) (47,500)
----------- ----------
Cash flows from financing activities:
Net proceeds from issuance of Common Stock - 303,286
Purchase of Class A Common Stock --
Treasury Stock (87,739) -
Proceeds from long-term obligations 1,972,212 261,000
Payments on long-term obligations (2,015,234) (615,454)
Other 6,641 (2,444)
----------- ----------
Net cash used in financing activities (124,120) (53,612)
----------- ----------
Net (decrease) increase in cash (67,909) 19,199
Cash and cash equivalents, beginning of period 139,145 110,048
----------- ----------
Cash and cash equivalents, end of period $71,236 $129,247
=========== ==========
Notes Financial and share information contained throughout this press release has been retroactively ret·ro·ac·tive adj. Influencing or applying to a period prior to enactment: a retroactive pay increase. [French rétroactif, from Latin adjusted to reflect the impact of a two-for-one stock split in October October: see month. 2001. |
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