NMHC Reports Fiscal Third Quarter 2007 Results.PORT WASHINGTON Port Washington, uninc. town (1990 pop. 15,387), Nassau co., SE N.Y., a suburb of New York City, on the north shore of Long Island and Manhasset Bay. There is extensive manufacturing, much of it reflecting the region's past association with the aircraft and aerospace , N.Y. -- National Medical Health Card Systems, Inc. (Nasdaq: NMHC NMHC National Multi Housing Council NMHC Non-Methane Hydrocarbons NMHC National Modular Housing Council ), a national independent pharmacy An independent pharmacy is a retail pharmacy that is not directly affiliated with any chain pharmacy, such as CVS/pharmacy, Walgreens or Eckerd. However, owners of independent pharmacies will often form alliances with other independents and use their power in numbers to bargain for benefit manager ("PBM PBM - play by mail. See play by electronic mail. "), today reported its results for the 2007 fiscal third quarter. Jim Smith There are several famous people with the name Jim Smith, including:
adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. client mix trends but 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. impacted by lower rebate rebate, partial refund of the total price paid for goods or services. In the United States, rebates were historically given by railroads to favored shippers as a return on transportation charges. revenue, higher expenses and a decrease in the number of covered lives. We are pleased that the efforts we have devoted to our enhanced selling process continue to result in a growing pipeline of sales prospects. These efforts are yielding increasing final-stage opportunities for NMHC across a number of vertical markets resulting in several attractive wins, including the State of Hawaii which we announced yesterday. Our focus for the remainder of the fiscal year is on demonstrating the competitive advantages in NMHC's PBM, Specialty, Mail Order and Part D areas of expertise, and on closing more business that can contribute to fiscal 2008." 2007 Fiscal Third Quarter Operating Results Revenue for the 2007 fiscal third quarter decreased 33.1% to $145.0 million from $216.8 million for the same period last year. The decrease is primarily the result of a decrease in covered lives as compared to last year. Gross profit for the 2007 fiscal third quarter was $21.3 million as compared to $22.4 million for the same period last year reflecting a decrease of 4.9%. The decrease in gross profit is primarily attributable to a $1.7 million reduction from the PBM segment, primarily related to a reduction in rebate revenue stemming from current trends in negotiations with NMHC's clients, offset by improvements in our client mix. This decrease was partially offset by a $592,000 increase in gross profit from our Specialty segment. Gross profit, as a percentage of revenue, increased to 14.7% for the 2007 fiscal third quarter as compared to 10.3% for the same period last year. Gross profit per estimated paid prescription increased to $3.87 from $2.77 for the same period last year. The 32.1% decrease in our script count was primarily offset by an increase in the gross profit per script. Estimated adjusted paid prescriptions for the 2007 fiscal third quarter were 5.5 million as compared to 8.1 million for the same period last year. Estimated adjusted prescription volume equals prescriptions processed at our mail service facility multiplied mul·ti·ply 1 v. mul·ti·plied, mul·ti·ply·ing, mul·ti·plies v.tr. 1. To increase the amount, number, or degree of. 2. Mathematics To perform multiplication on. by 3, plus retail prescriptions. The prescriptions processed at our mail service facility are multiplied by 3 to adjust for the fact that they typically include approximately 3 times the amount of product days supplied compared with retail prescriptions. SG&A increased $2.1 million, or 10.9%, from $19.3 million for the 2006 fiscal third quarter to $21.4 million for the 2007 fiscal third quarter. This increase is primarily the result of an $1.5 million net increase in compensation and related items (inclusive of inclusive of prep. Taking into consideration or account; including. $293,000 of additional stock-based compensation recognized in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the provisions of FAS 123R), a $466,000 increase in professional fees and insurance, and $137,000 net increase in other selling, general and administrative expenses. Operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the 2007 fiscal third quarter was $76,000 as compared to operating income of $3.1 million for the 2006 third quarter. Our effective tax rate was (66.7%) for the three months ended March 31, 2007 as compared to 42.6% for the three months ended March 31, 2006. This benefit for the three months ended March 31, 2007 primarily resulted from a $439,000 reversal of a prior state tax reserve as the related statute of limitations A type of federal or state law that restricts the time within which legal proceedings may be brought. Statutes of limitations, which date back to early Roman Law, are a fundamental part of European and U.S. law. expired during the quarter ended March 31, 2007 offset by lower pre-tax income combined with the effects of expensing employee stock options in accordance with SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 123R. 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 (earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. until April 2, 2007; during the 2006 fiscal third quarter, NMHC paid $1.4 million of dividends on the series A preferred stock. Net loss available to common stockholders for the 2007 fiscal third quarter was $1.1 million, or $(0.20) per basic and 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, as compared to net income available to common stockholders of $510,000, or $0.10 per basic share and diluted share, for the same period last year. For the 2007 fiscal third quarter, the Company's weighted-average number of diluted shares outstanding approximated 5.5 million shares, as compared to 5.3 million shares for the same period last year. The 2007 fiscal third quarter calculation does not assume the conversion of approximately 7.0 million shares of redeemable Redeemable Eligible for redemption under the terms of an indenture. convertible preferred stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". or the outstanding options to purchase shares of common stock as they are anti-dilutive. For the same period last year, the calculation did not assume the conversion of approximately 7.0 million shares of redeemable convertible preferred stock as they are anti-dilutive. Operating Results for the Nine Months ended March 31, 2007 Through the nine months ended March 31, 2007, revenue decreased 18.2% to $533.0 million from $651.4 million for the same period last year. The decrease is primarily the result of a decrease in covered lives as compared to last year. Through the nine months ended March 31, 2007, gross profit was $66.2 million as compared to $69.7 million for the same period last year reflecting a decrease of 5.0%. This decrease is primarily the result of a $5.7 million reduction in rebate revenue from our PBM segment (exclusive of the $1.0 million Rebate Error as defined and discussed in our Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the period ended September 30, 2006 ("First Quarter 10-Q")) due to the current trends in negotiations with our clients offset by improvements in our client mix. This decrease was partially offset by i) $506,000 net increase which consists of $1.5 million relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Claims Payable Error offset by $1.0 million relating to the Rebate Error as defined and discussed in our First Quarter 10-Q, ii) $794,000 increase in gross profit from our PBM segment, exclusive of the impact of the changes in rebates, and iii) $940,000 increase in gross profit from our Specialty segment. Gross profit, as a percentage of revenue, increased to 12.4% for the nine months ended March 31, 2007 as compared to 10.7% for the same period last year. Estimated adjusted paid prescriptions for the nine months ended March 31, 2007 was 19.4 million as compared to 25.6 million for the same period last year. Gross profit per estimated paid prescription increased to $3.41 from $2.72 for the same period last year. Through the nine months ended March 31, 2007, SG&A increased $4.5 million, or 7.9%, from $56.9 million to $61.4 million for the same period last year. This increase is primarily the result of i) a $2.8 million increase in compensation and related items (inclusive of $992,000 of additional stock-based compensation recognized in accordance with the provisions of FAS 123R), ii) a $2.0 million increase in professional fees and insurance, and iii) a $247,000 net increase which consists of $831,000 relating to the Claims Payable Error offset by $584,000 relating to the Lease Error as defined and discussed in our First Quarter 10-Q. These increases were offset by a net reduction of $547,000 in other SG&A. Selling, general and administrative expenses as a percent of revenue increased from 8.7% for the nine months ended March 31, 2006 to 11.5% for the nine months ended March 31, 2007. Our effective tax rate was 41.1% for the nine months ended March 31, 2007 as compared to 42.6% for the nine months ended March 31, 2006. The decrease in the effective tax rate for the nine months ended March 31, 2007 primarily resulted from a $439,000 reversal of a prior state tax reserve as the related statute of limitations expired during the quarter ended March 31, 2007 offset by lower pre-tax income combined with the effects of expensing employee stock options in accordance with SFAS No. 123R. EBITDA for the nine months ended March 31, 2007 was $11.9 million, a 34.3% decrease, as compared to $18.1 million for the same period last year. EBITDA before stock-based compensation expense for the nine months ended March 31, 2007 was $14.9 million as compared to $20.1 million for the same period last year, a 25.9% decrease. EBITDA per estimated paid prescription decreased to $0.61 during the nine months ended March 31, 2007 from $0.71 during the same period last year. Net loss available to common stockholders for the nine months ended March 31, 2007 was $1.2 million, or $(0.22) per basic and diluted share as compared to net income available to common stockholders of $3.2 million, or $0.63 per basic share and $0.61 per diluted share for the same period last year. For the nine months ended March 31, 2007, the Company's weighted-average number of diluted shares outstanding approximated 5.4 million shares, as compared to 5.3 million shares for the same period last year. The calculation for the nine months ended March 31, 2007 does not assume the conversion of approximately 7.0 million shares of redeemable convertible preferred stock or the outstanding options to purchase shares of common stock as they are anti-dilutive. For the same period last year, the calculation did not assume the conversion of approximately 7.0 million shares of redeemable convertible preferred stock as they were anti-dilutive. Business Outlook As noted in the Company's press release of November 15, 2006, the fiscal 2007 earnings guidance issued on September 11, 2006 should not be relied upon. Management is not providing forward looking financial guidance at this time. Conference Call Management will host a conference call tomorrow, May 9, 2007, to discuss its 2007 fiscal third quarter and year-to-date results at 8:30 a.m. ET. To listen to the call, please dial (706) 634-1287. A live webcast of the call will be accessible on the Company's website, www.nmhc.com. The webcast will be archived on the site and a telephone replay will be available for seven days beginning at 8:00 p.m. ET. To access the replay, please dial (706) 645-9291 using the using conference ID: 6641750. Non-GAAP Measures In addition to the results presented in accordance with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). throughout this press release, NMHC has presented non-GAAP financial measures, such as EBITDA, EBITDA per paid prescription, and gross profit and SG&A expenses exclusive of various errors which are defined and discussed in the First Quarter 10-Q. NMHC calculates and uses EBITDA as an indicator of their ability to generate cash from their reported operating results. This measurement is used in concert with net income and cash flows from operations, which measure actual cash generated in the period. In addition, we believe that EBITDA is a supplemental measurement tool used by analysts and investors to help evaluate overall operating performance and the ability to incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. and service debt and make capital expenditures. EBITDA does not represent funds available for their discretionary use, nor is it intended to represent or to be used as a substitute for net income or cash flows from operations data as measured under GAAP. The items excluded from EBITDA but included in the calculation of their reported net income are significant components of their consolidated statements of income, and must be considered in performing a comprehensive assessment of their overall financial performance. EBITDA, and the associated year-to-year trends, should not be considered in isolation. Their calculation of EBITDA may not be consistent with calculations of EBITDA used by other companies. Reconciliation schedules to the comparable GAAP measures are available in the tables below. Estimated adjusted prescription volume equals prescriptions processed at our mail service facility multiplied by 3, plus retail prescriptions. These prescriptions processed at our mail service facility are multiplied by 3 to adjust for the fact that they typically include approximately 3 times the amount of product days supplied compared with retail prescriptions. EBITDA per paid prescription is calculated by dividing EBITDA by estimated adjusted prescriptions. While gross profit and SG&A expenses excluding the impact of various errors which are defined and discussed in the First Quarter 10-Q are not measures of financial performance under U.S. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting , they are provided as information for investors for analysis purposes in evaluating the effect of the identified errors on our gross profit and SG&A. Gross profit and SG&A excluding the impact of the identified errors are not meant to be considered a substitute or replacement for gross profit or SG&A as prepared in accordance with U.S. generally accepted accounting principles. The reconciliations from gross profit and SG&A to gross profit and SG&A excluding the impact of the identified errors are available in the tables below. About NMHC National Medical Health Card Systems, Inc. provides PBM services to plan clients, which include managed care organizations, local governments, unions, corporations and third party health care plan administrators through its network of licensed 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 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. . The Company's PBM services include electronic point-of-sale 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. claims management, retail pharmacy network management, mail service pharmacy claims management, specialty pharmacy claims management, benefit design consultation, preferred drug management programs, drug review and analysis, consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" , disease information services See Information Systems. , data access, reporting and information analysis, and physician profiling physician profiling Managed care A method of cost containment that focuses on the patterns of health care provided by a single physician or group, instead of on specific clinical decisions; the resulting profile is then compared to other norms based on . In addition, the Company operates a mail service pharmacy and a specialty pharmacy. 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. This press release and any attachment 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. contains forward-looking information about National Medical Health Card Systems, Inc.'s financial results and estimates, business prospects, and products and services that involve substantial risks and uncertainties or other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. You can identify these statements by the use of words such as "may," "could," "estimate," "will," "believe," "anticipate," "think," "intend," "expect," "project," "plan," "target," "forecast", and similar words and expressions which identify forward-looking statements within the meaning 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 statements are not guarantees of future performance and involve known and unknown risks and uncertainties, and other factors. Readers are cautioned not to place undue reliance on such statements, which speak only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . For a discussion of such risks, uncertainties and other matters that could cause actual results to differ materially, including risks relating to, among other factors, pricing, competition in the bidding and proposal process, our ability to consummate To carry into completion; to fulfill; to accomplish. A Common-Law Marriage is consummated when the parties live in a manner intended to bring about public recognition of their relationship as Husband and Wife. contract negotiations with prospective clients, dependence on key members of management, government regulation, acquisitions and affiliations, the market for PBM services, readers are urged to carefully review and consider various disclosures made by NMHC in its Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended June 30, 2006, and in its reports on Forms 10-Q and 8-K filed with the U.S. Securities and Exchange Commission. NMHC assumes no obligation to update any forward-looking statements contained in this document or the attachments to reflect new information or future events or developments after the date any such statement is made. 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