Capstone Pharmacy Services, Inc. Announces Record Third Quarter Results.IRVING, Texas--(BUSINESS WIRE)--Nov. 5, 1997--Capstone 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. Se (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :DOSE) Company Reports Revenue of $81.6 million and Net Income Before Merger Related Expenses of $4.0 million for the Quarter ended Sept. 30, 1997. CAPSTONE PHARMACY SERVICES, INC inc - /ink/ increment, i.e. increase by one. Especially used by assembly programmers, as many assembly languages have an "inc" mnemonic. Antonym: dec. . (Nasdaq National Market - DOSE), a leading provider of institutional pharmacy services to long-term care facilities long-term care facility n. See skilled nursing facility. and correctional institutions Noun 1. correctional institution - a penal institution maintained by the government detention camp, detention home, detention house, house of detention - an institution where juvenile offenders can be held temporarily (usually under the supervision of a juvenile throughout 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. , today announced record operating results for the quarter ended Sept. 30, 1997. Capstone reported net revenue for the third quarter and nine months then ended of $81.6 million and $228 million, respectively, as compared to $44 million and $90.1 million for the corresponding periods of the previous year. This represented an increase in net revenues of 85 percent and 153 percent for the third quarter and nine month period, respectively. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , exclusive of merger related expenses, associated with the pending combination with Pharmacy Corporation of America, was $7.8 million and $19.7 million for the three month and nine month periods ended Sept. 30, 1997, respectively. The merger related expenses incurred during the third quarter and nine months ended Sept. 30, 1997 were $1.9 million and $3.5 million respectively. The Company reported operating income for the three month and nine month periods ended Sept. 30, 1996 of $2.2 million and $3.9 million, respectively. The operating income for Fiscal 1996 excludes $2.8 million of restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. and $246,446 of costs related to pharmacy closures. Net income for the third quarter, exclusive of the merger related expenses was $4.0 million or $.11 per share as compared to a loss of $3.3 million or ($.17( per share for the same period in Fiscal 1996. Included in operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the third quarter of Fiscal 1996 was a restructuring charge of $2,825,000 related to the Company's Symphony acquisition and a one-time charge of $4,573,530 for acquisition financing fees and expenses related to the same acquisition. Without these charges, net income for the third quarter would have been $1.2 million or $.06 per share. For the nine months ended Sept. 30, 1997, net income, exclusive of the merger related expenses, was $9.7 million or $.26 per share as compared to a loss of $2.6 million or <$.16> per share for the corresponding period in Fiscal 1996. The net loss for the nine months ended Sept. 30, 1996 includes the restructuring charges, and refinancing Refinancing An extension and/or increase in amount of existing debt. fees and expenses discussed above. If these charges were not included in the operating results for the nine months ended Sept. 30, 1996, net income would have been $1.8 or $.11 per share. Net income including the merger related expenses for the third quarter and nine months ended Sept. 30, 1997 was $2.1 million and $6.1 million, respectively. Allan Silber, Chairman said, "Our earnings for the third quarter continued to demonstrate the improvement in our operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: and our ability to achieve significant earnings growth. We were also pleased with the progress made in finalizing our merger with Pharmacy Corporation of America (PCA (tool, programming) PCA - A dynamic analyser from DEC giving information on run-time performance and code use. ). During the past few months we have continued to work diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d on plans to integrate Capstone and PCA. We are confident that the merger will provide us with a platform to remain a leader in providing institutional pharmacy services." Following are highlights for the third quarter: Margin Improvement. The Company's gross profit 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 margins, before merger related expenses, for the third quarter improved to 44.3 percent and 12.8 percent respectively as compared to 44.2 percent and 12.1 percent for the second quarter of Fiscal 1997. The improvement in the gross profit percentage is due to the continuing impact of previously negotiated purchasing contracts and an increase in other ancillary revenues Ancillary Revenue Revenue generated from goods or services that differ from or enhance the main services or product lines of a company. By introducing new products and services or using existing products to branch into new markets, companies create additional opportunities for . The decrease in selling, general and administrative expenses as a percentage of net revenue was also a contributor to the improvement in EBITDA margin. Combination with Pharmacy Corporation of America. The Company continues to work with PCA's management team in finalizing plans to integrate the operations of both companies. Beverly and Capstone have set the date for the shareholder meetings to approve the merger on Nov. 20. The Company anticipates the merger with Pharmacy Corporation of America will close during the fourth quarter of Fiscal 1997. The Company anticipates the closing of its new $550 million credit facility will occur simultaneous with the consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of the combination with Pharmacy Corporation of America. The Company also announced that it would change its name to PHARMERICA, Inc. as of the merger date. This release involved forward looking statements with respect to aquisition prospects, development of preferred provider relationships and other plans and expectations on the part of the Company. The accuracy of these statements involve a number of risks and uncertainties, including, but not limited to, the availability of acquisition prospects and financing for such prospects, changing economic and market conditions that would impact such prospects or financing related thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. , changes in governmental reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. regulations and laws which could impair im·pair tr.v. im·paired, im·pair·ing, im·pairs To cause to diminish, as in strength, value, or quality: an injury that impaired my hearing; a severe storm impairing communications. or hinder hin·der 1 v. hin·dered, hin·der·ing, hin·ders v.tr. 1. To be or get in the way of. 2. To obstruct or delay the progress of. v.intr. the entering into strategic alliances or preferred provider agreements, as well as other risk factors detailed in the Company's Securities and Exchange Commission filings, to which recipient of this release are referred for additional information concerning the Company and its prospects. -0-
CAPSTONE PHARMACY SERVICES, INC.
Consolidated Unaudited Statements of Income
Amounts in Thousands of Dollars
Three Months Ended Nine Months Ended
September 30 September 30
------------------ -----------------
1997 1996 1997 1996
------------------ -----------------
Net revenues 81,562 44,015 228,048 90,162
Costs of sales 45,403 25,524 127,354 54,370
------------------ -----------------
Gross margin 36,159 18,491 100,694 35,792
Operating Expenses:
Selling, general,
and
administrative 25,724 14,790 73,481 29,243
Depreciation
and
amortization 2,630 1,489 7,547 2,651
------------------ -----------------
Income from operations
before merger related,
restructuring and
pharmacy closure
costs 7,805 2,212 19,666 3,898
Merger related
expenses 1,866 --- 3,525 ---
Restructuring charges --- 2,825 --- 2,825
Costs relating to
pharmacy closure --- --- --- 246
------------------ -----------------
Income (loss) from
operations 5,939 (613) 16,141 827
Non-operating
expenses:
Interest expense,
net 1,771 358 4,578 947
Acquisition
financing fees and
expenses --- 4,574 --- 4,574
------------------ -----------------
Income (loss)
before income
tax provision 4,168 (5,545) 11,563 (4,694)
Income tax
provision
(benefit) 2,066 (2,209) 5,415 (2,137)
------------------ -----------------
Net Income (loss) 2,102 (3,336) 6,148 (2,557)
------------------ -----------------
Income (loss)
before merger
related expenses 3,968 (3,336) 9,673 (2,557)
------------------ -----------------
Earnings (Loss) Per
Share:
Primary before merger
related costs $.11 $(.17) $.26 $(.16)
Fully diluted before
merger related costs $.11 $(.17) $.26 $(.16)
Primary after merger
related costs $.06 $(.17) $.17 $(.16)
Fully diluted after
merger related costs $.06 $(.17) $.17 $(.16)
Weighed average number
of common shares outstanding:
Primary 36,645 19,397 36,576 16,298
Fully Diluted 37,305 19,397 37,055 16,298
CONTACT: Capstone Pharmacy Services, Inc. Jim Shelton, 972/401-1541 or Morris Perlis, 416/866-3193 |
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