D&K Healthcare Resources Reports Record Q4 EPS of $0.56 and FY 2001 EPS of $2.02; Initiates FY 2002 Revenue and Earnings Guidance.Business Editors ST. LOUIS--(BUSINESS WIRE)--Aug. 9, 2001 D&K Healthcare Resources, Inc. (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 : DKWD DKWD Disk Write Data ) today reported record fourth quarter and full year net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight , 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 and 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 for the periods ended June June: see month. 30, 2001. Summary Financial Results (in millions, except per share data)
Three Months Ended
June 30, 2001 June 30, 2000 % Change
------------- ------------- --------
Net sales $ 449.3 $ 370.3 + 21 %
EBITDA $ 8.1 $ 7.2 + 13 %
Net income $ 2.6 $ 2.2 + 18 %
Diluted EPS $ 0.56 $ 0.51 + 10 %
Year Ended
June 30, 2001 June 30, 2000 % Change
------------- ------------- --------
Net sales $ 1,646.0 $ 1,458.0 + 13 %
EBITDA $ 30.3 $ 25.3 + 20 %
Net income $ 9.1 $ 8.2 + 12 %
Diluted EPS $ 2.02 $ 1.84 + 10 %
J. Hord Armstrong, III, Chairman and Chief Executive Officer commented, "By virtually any measure this was a record for both the fourth quarter and the year for D&K. In addition to generating the best operating results for these periods in D&K's history, we also completed a number of transactions which significantly expanded our capital and operating base, enabling us to capitalize To regard the cost of an improvement or other purchase as a capital asset for purposes of determining Income Tax liability. To calculate the net worth upon which an investment is based. To issue company stocks or bonds to finance an investment. further on the significant growth trends we are experiencing in our industry. "We completed a follow-on fol·low-on adj. Following as a related or consequent aspect or development: "Such contracts involve follow-on sales of maintenance services" Christian Science Monitor. public offering of D&K stock on July July: see month. 5th, raising $77 million in net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). for the Company as reflected in the accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma balance sheet. We also increased D&K's credit availability from $247 million to $300 million through the extension of two facilities arranged by units of FleetBoston Financial FleetBoston Financial was a Boston, Massachusetts-based bank created in 1999 by the merger of Fleet Financial Group and BankBoston. In 2004 it merged with Bank of America; all of its banks and branches were given the Bank of America logo. and completed the acquisition of privately held Diversified diversified (di·verˑ·s Healthcare, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , which we expect to be accretive to our earnings per share in its first full year as part of D&K." Martin D. Wilson Wilson, city (1990 pop. 36,930), seat of Wilson co., E N.C., in a rich agricultural region; inc. 1849. It is a commercial and industrial center with a large tobacco market. Manufactures include textile goods (especially clothing), metal products, and processed foods. , President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , added, "Our enhanced financial strength improves D&K's ability to invest in our existing operations and pursue other opportunities for growth. We have been successful in deploying capital into our national 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. chain and independent and regional pharmacy businesses, which were significant contributors in increasing our gross margin to 4.18% in FY 2001 from 3.87% the previous year as well as producing a 20% improvement in EBITDA. "Additionally, Diversified Healthcare, which has a current run rate of nearly $200 million in annual net sales, expands our presence and distribution capabilities in solid markets while further building our customer base, principally among independent and regional pharmacy businesses." Sales growth in the quarter was achieved primarily in the national pharmacy chain business; the independent and regional pharmacy trade class also achieved above average gains. National pharmacy chain sales increased $79.3 million, or 56%, over the same period of fiscal 2000, reflecting D&K's specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. expertise, capabilities and infrastructure. Sales to independent and regional 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 increased $33.1 million, or 19.6% in the fourth quarter, over the fourth quarter of fiscal 2000, reflecting growing demand in this trade class and D&K's attention to the personalized per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. service it requires. Sales to other healthcare providers declined 56.7% in the fourth quarter to $25.5 million. The decrease was due principally to the loss of sales from two mail order accounts that ended in the fourth quarter of FY 2000. The accounts had contributed net sales of $39 million in the fourth quarter of 2000 and $335 million in fiscal 2000. Net interest expense was essentially flat in the fourth quarter at $2.9 million as an increase in weighted average borrowings was offset by a decrease in interest rates. Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs S. Hilton Hil·ton , Conrad Nicholson 1887-1979. American hotel-chain organizer who acquired hotels in many American cities and in 1946 founded the Hilton Hotel Corporation. , Senior Vice President and Chief Financial Officer commented, "In addition to strong operating trends, D&K continues to benefit from lower interest rates, which on a weighted average basis declined 111 basis points in the fourth quarter versus the same quarter last year. Factoring in the impact from the newly issued shares, a 25 basis point reduction in rates now improves our annual 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. by $0.02 to $0.03 per share." Fiscal 2002 Revenue and Earnings Guidance Mr. Hilton added, "Looking forward to fiscal 2002, we are currently targeting net sales of $2.3 billion for the full year, a projected 39% improvement over fiscal 2001. Given the mix of business that we anticipate for the upcoming year, we expect our gross margins to be approximately 4.2% for the year, allowing for some quarterly fluctuations. We are projecting fiscal 2002 EPS of at least $2.40, with approximately 60% of our earnings being generated in the second half of the year, which includes our seasonally strongest third quarter. Due to an approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. 50% increase in total shares outstanding as a result of the public offering, we expect earnings per share of $0.35 to $0.37 in the first quarter of fiscal 2002, approximating fiscal 2001 Q1 earnings of $0.36 per share." About D&K Healthcare Resources With fiscal 2001 revenues of $1.65 billion, St. Louis-based D&K Healthcare Resources, Inc., is a wholesale distributor of pharmaceutical and related healthcare and beauty aid products to independent and regional pharmacies, national pharmacy chains and other healthcare providers. D&K currently services customers in 24 states primarily in the Midwest Midwest or Middle West, region of the United States centered on the western Great Lakes and the upper-middle Mississippi valley. It is a somewhat imprecise term that has been applied to the northern section of the land between the Appalachians and South from distribution facilities in Cape Girardeau Cape Girardeau (jĭrär`dō, jērərdō`), city (1990 pop. 61,633), Cape Girardeau co., SE Mo., overlooking the Mississippi River; founded 1793, inc. as a city 1843. , MO; Davie Da·vie A town of southeast Florida southwest of Fort Lauderdale. It is in a citrus-growing area. Population: 79,800. , FL; Lexington Lexington. 1 City (1990 pop. 225,366), seat of Fayette co., N central Ky., in the heart of the bluegrass region; inc. 1832, made coextensive with Fayette co. 1974. , KY; Minneapolis Minneapolis (mĭn'ēăp`əlĭs), city (1990 pop. 368,383), seat of Hennepin co., E Minn., at the head of navigation on the Mississippi River, at St. Anthony Falls; inc. 1856. , MN; Aberdeen Aberdeen, former county, Scotland Aberdeen, former county, Scotland: see Aberdeenshire. Aberdeen, city, Scotland Aberdeen, city (1991 pop. , SD; and through its recent acquisition of Diversified Healthcare LLC, in Owensboro Owensboro, city (1990 pop. 53,549), seat of Daviess co., W Ky., on the Ohio River; settled c.1800, inc. as a city 1866. It is an important tobacco market and a shipping point for a farm and oil region. , KY. D&K also offers a variety of additional services to its customers, including inventory management, services designed to contain costs, information technology systems and various marketing programs related to generic pharmaceuticals and other products. In addition, D&K owns a 68% equity interest in Pharmaceutical Buyers, Inc., a recognized alternate-site group purchasing organization A group purchasing organization is an entity that leverages the purchasing power of a group of businesses to obtain discounts from vendors based on the collective buying power of the GPO members. Many GPOs are funded by administrative fees that are actually paid by the vendors. . D&K invites you to visit its Web site at http://www.dkwd.com. Conference Call / Web Cast Notification D&K Healthcare Resources' fourth quarter conference call will take place today, Thursday Thursday: see week. , August 9, at 10:30 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . A webcast and replay will be available at www.dkwd.com/irevents.htm. 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. Provisions This press release may contain 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. within the meaning of the safe harbor provisions 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. Such forward-looking statements are inherently subject to risks and uncertainties. D&K's actual results could differ materially from those currently anticipated due to a number of factors, including without limitation, the competitive nature of the wholesale pharmaceutical distribution industry, with many competitors having substantially greater resources than D&K, and D&K's customers generally having the right to terminate Terminate (terminat.exe) was a shareware modem terminal and host program for MS-DOS and compatible operating systems developed from the early to the late 1990s by the Dane Bo Bendtsen. The last release (5. or reduce their purchases on relatively short notice, the changing business and 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 of the healthcare industry in which D&K operates, changes in interest rates and other factors set forth in reports and other documents filed by D&K with the Securities and Exchange Commission from time to time. D&K undertakes no obligation to publicly update or revise any forward-looking statements.
D&K Healthcare Resources, Inc.
Condensed Consolidated Balance Sheet
(In thousands)
(Unaudited)
Pro Forma
June 30, 2001 (1) June 30, 2001 June 30, 2000
Assets
Cash $ 9,006 $ 7,516 $ 3,661
Accounts receivable 46,419 45,131 29,923
Inventories 214,739 214,739 202,467
Other current
assets 2,820 2,664 1,443
-------------- ------------- -------------
Total current
assets 272,984 270,050 237,494
-------------- ------------- --------------
Property and
equipment, net 11,076 10,915 8,184
Investment in affiliates 954 5,506 5,199
Other assets 54,308 43,784 43,542
-------------- -------------- --------------
Total assets $ 339,322 $ 330,255 $ 294,419
============== ============= ==============
Liabilities and
stockholders'
equity
Accounts payable $ 158,985 $ 158,949 $ 134,834
Current portion
long-term debt 1,242 320 305
Other current
liabilities 14,073 13,367 8,799
-------------- ------------- --------------
Total current
liabilities 174,300 172,636 143,938
Long-term liabilities 2,232 2,232 700
Long-term debt 20,862 94,489 99,647
Deferred income taxes 3,388 3,388 4,869
Stockholders' equity 138,540 57,510 45,265
-------------- -------------- --------------
Total liabilities and
stockholders' equity $ 339,322 $ 330,255 $ 294,419
============== ============= ==============
(1) Reflects net proceeds from the sale of 2,445,797 shares of common
stock in a public offering as well as the issuance of 180,000
shares of common stock in exchange for an additional 18% equity
stake in Pharmaceutical Buyers, Inc. The public offering was
completed July 5, 2001.
D&K Healthcare Resources, Inc.
Condensed Consolidated Statement of Operations
(In thousands, except per share data)
June 30, % of June 30,
Net
2001 Sales 2000
---------------- ------------ ----------------
Net sales $ 449,347 100.00% $ 370,348
Cost of sales 431,112 95.94% 354,376
------------ ----------------
Gross profit 18,235 4.06% 15,972
Operating expenses 10,983 2.44% 9,558
------------ ----------------
Income from
operations 7,252 1.61% 6,414
Other income (expense):
Interest expense, net (2,948) -0.66% (2,923)
Other, net 40 0.01% 187
------------ ----------------
Pretax earnings 4,344 0.97% 3,678
Income tax provision 1,719 0.38% 1,457
------------ ----------------
Net income $ 2,625 0.58% $ 2,221
============ ================
EBITDA $ 8,121 1.81% $ 7,180
Basic earnings per
share $ 0.62 $ 0.53
Diluted earnings
per share $ 0.56 $ 0.51
EBITDA per diluted share $ 1.74 $ 1.62
Basic common shares
outstanding 4,266 4,186
Diluted common shares
outstanding 4,673 4,443
% of %
Net Sales Change
------------ -----------
Net sales 100.00% 21.3%
Cost of sales 95.69% 21.7%
Gross profit 4.31% 14.2%
Operating expenses 2.58% 14.9%
Income from
operations 1.73% 13.1%
Other income (expense):
Interest expense, net -0.79% 0.9%
Other, net 0.05% -78.6%
Pretax earnings 0.99% 18.1%
Income tax provision 0.39% 18.0%
Net income 0.60% 18.2%
EBITDA 1.94% 13.1%
EPS calculation: Three months ended Three months ended
June 30, 2001 June 30, 2000
Income Shares Per Share Income Shares Per Share
------ ------ --------- ------ ------ ---------
Basic earnings
per share:
Net income
available to
common
shareholders $ 2,625 4,266 $ 0.62 $ 2,221 4,186 $ 0.53
Effect of
diluted
securities:
Options and
warrants - 207 - 57
Convertible
PBI stock 1 200 38 200
--------- ------- ------- --------
Diluted
earnings
per share:
Net income
available
to common
shareholders
plus
assumed
conversions $ 2,626 4,673 $ 0.56 $ 2,259 4,443 $ 0.51
========= ======= ======== =======
D&K Healthcare Resources, Inc.
Condensed Consolidated Statement of Operations
(In thousands, except per share data)
Twelve Months Ended
June 30, % of June 30,
2001 Net Sales 2000
----------------- ------------- ---------------
Net sales $ 1,645,993 100.00% $ 1,458,047
Cost of sales 1,577,169 95.82% 1,401,625
------------- --------------
Gross profit 68,824 4.18% 56,422
Operating expenses 41,878 2.54% 34,123
------------- --------------
Income from
operations 26,946 1.64% 22,299
Other income (expense):
Interest expense, net (11,959) -0.73% (9,636)
Other, net 44 0.00% 736
------------- --------------
Pretax earnings 15,031 0.91% 13,399
Income tax provision 5,887 0.36% 5,200
------------- --------------
Net income $ 9,144 0.56% $ 8,199
============= ==============
EBITDA $ 30,324 1.84% $ 25,342
Basic earnings
per share $ 2.16 $ 1.93
Diluted earnings
per share $ 2.02 $ 1.84
EBITDA per diluted
share $ 6.64 $ 5.57
Basic common shares
outstanding 4,239 4,241
Diluted common shares
outstanding 4,566 4,550
% of %
Net Sales Change
----------- --------------
Net sales 100.00% 12.9%
Cost of sales 96.13% 12.5%
Gross profit 3.87% 22.0%
Operating expenses 2.34% 22.7%
Income from operations 1.53% 20.8%
Other income (expense):
Interest expense, net -0.66% 24.1%
Other, net 0.05% -94.0%
Pretax earnings 0.92% 12.2%
Income tax provision 0.36% 13.2%
Net income 0.56% 11.5%
EBITDA 1.74% 19.7%
EPS calculation: Twelve months ended Twelve months ended
June 30, 2001 June 30, 2000
Income Shares Per Share Income Shares Per Share
------ ----- --------- ------- ------ ---------
Basic earnings
per share:
Net income
available to
common
shareholders $ 9,144 4,239 $ 2.16 $ 8,199 4,241 $ 1.93
Effect of diluted
securities:
Options and
warrants - 127 - 109
Convertible
PBI stock 95 200 152 200
-------- ------- -------- -------
Diluted earnings
per share:
Net income
available
to common
shareholders
plus
assumed
conversions $ 9,239 4,566 $ 2.02 $ 8,351 4,550 $ 1.84
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