Priority Healthcare Announces Record Fourth Quarter and 2003 Annual
Results LAKE MARY, Fla., Feb. 19 /PRNewswire-FirstCall/ -- Priority
Healthcare Corporation reported record results for the fourth
quarter and fiscal year ended January 3, 2004. For the quarter,
sales increased 18% to $397 million, operating earnings grew 22% to
$21.9 million, and net earnings increased 19% to $13.8 million.
Diluted earnings per share grew 23% to $.32. For the year, sales
increased 22% to $1.46 billion, operating earnings grew 19% to
$79.7 million and net earnings increased 16% to $50.6 million.
Earnings per share grew 17% to $1.15. "We are pleased with our
record results for the fourth quarter, which concluded another
record year for Priority Healthcare," stated Steve Cosler,
President and Chief Executive Officer. "These results were achieved
despite continuing sluggish national growth in several of our key
specialty pharmacy markets and tighter margins in oncology
distribution products. Our performanceis validation of the full
service specialty model and balanced strategy that we have
developed and executed that has enabled us to create new growth
platforms in other specialty segments, which continue to provide
strong organic growth. It is also a testimony to the dedication of
our outstanding group of associates to serving our customers and
patients in the delivery of biopharmaceutical products in a cost
effective manner." "In 2003, we added five new key products to our
portfolio, which includedentry into two new specialty segments,
ophthalmology and dermatology. The acquisition of Sinus Pharmacy
added another new specialty segment in otolaryngology. We also
added significant new initiatives with a large national retailer,
as their specialty pharmacy provider, and Schering Plough
Corporation, as the administrator of the Commitment-to-Care
program. Our leadership position in the industry was recognized by
our addition to the NASDAQ Biotechnology Index in November," stated
Mr. Cosler. In commenting on certain financial aspects of the
quarter, Steve Saft, Chief Financial Officer, stated, "Our 18%
sales increase for the fourth quarter was virtually all organic
growth. We are satisfied with this sales increase in light of the
challenges with several of our key markets on a national basis. We
are also pleased that our gross profit increased 30 basis points to
11.2%, sequentially, from the third quarter. Our increase in
operating earnings of 22% for the quarter is very strong. As a
reminder, 2003 was a 53-week fiscal year for Priority Healthcare,
and thus, the fourth quarter of 2003 was a 14-week quarter." "Our
balance sheet remains strong with $63 million in cash and
marketable securities and no debt. Trade DSO's were 40 days, a
decrease of 2 days sequentially from the third quarter,
representing continued strong management of our collections. Our
return on committed capital and invested capital for the quarter
was 53% and 32%, respectively, which we believe is among the
highest in the industry," stated Mr. Saft. Mr. Cosler concluded,
"We continue to be encouraged by the momentum of both manufacturers
and payors to partner with the specialty channel for the
distribution of biopharmaceutical therapies. We have a very active
pipeline of opportunities, including acquisitions and strategic
relationships, that we are developing to increase the breadth of
our portfolio of products and services. Based on this activity,
investment in our infrastructure will continue in 2004, including
the implementation of COMPASS, the Oracle based system we are
developing specific to the unique requirements of our specialty
customers. The system installation should be completed by the
middle of the fourth quarter. We are hopeful that we will see
national recovery of hepatitis and infertility growth in the second
half of the year and into 2005. We also believe that the recent
changes in Medicare oncology reimbursement will create long term
opportunities for us. Along with our new opportunities and ability
to leverage our infrastructure, 2004 should be a solid year and
position us well for an even stronger 2005." As previously
announced, a web cast of the company's conference call to review
the financial results is available on PriorityHealthcare's website,
http://www.priorityhealthcare.com/, live at 9:00 AM Eastern today.
A replay of this conference call will be available on the company's
website approximately two hours after the event for a two week
period. About Priority Healthcare Corporation Priority Healthcare
Corporation is a national specialty pharmacy and distributor that
provides biopharmaceuticals, complex therapies, and related disease
treatment services. Priority Healthcare provides comprehensive
programs for patients, payors, physicians, and pharmaceutical
manufacturers for a growing number of disease states including
cancer, hepatitis C, respiratory and pulmonary conditions,
infertility, rheumatoid arthritis, hemophilia, multiple sclerosis,
and macular degeneration. Certain statements included in this press
release, which are not historical facts, are forward-looking
statements. Such forward-looking statements are made pursuant to
the safe harbor provisions of the Private Securities Litigation
Reform Act of1995. These forward-looking statements represent our
expectations or beliefs and involve certain risks and
uncertainties, including those described in our public filings with
the United States Securities and Exchange Commission; also
including, but not limited to, changes in interest rates,
competitive pressures, changes in customer mix, changes in third
party reimbursement rates, financial stability of major customers,
changes in government regulations or the interpretation of these
regulations, changes in supplier relationships, growth
opportunities, cost savings, revenue enhancements, synergies and
other benefits anticipated from acquisition transactions,
difficulties relative to integrating acquired businesses, the
accounting and tax treatmentof acquisitions, and asserted and
unasserted claims, which could cause actual results to differ from
those in the forward-looking statements. The forward-looking
statements by their nature involve substantial risks and
uncertainties, certain of which are beyond our control, and actual
results may differ materially depending on a variety of important
factors. You are cautioned not to place undue reliance on these
forward-looking statements that speak only as of the date herein.
PRIORITY HEALTHCARE CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS
(000's omitted, except share data) (unaudited) Three- Three- month
month Year Year period period ended ended ended ended January
December January December 3, 2004 28, 2002 3, 2004 28, 2002 Net
sales $ 1,461,811 $1,200,391 $396,920 $336,926 Cost of products
sold 1,299,948 1,063,181 352,498 297,780 Gross profit 161,863
137,210 44,422 39,146 Selling, general and administrative expense
77,932 64,959 21,426 18,067 Impairment of fixed asset -- 2,386 --
2,386 Depreciation and amortization 4,273 2,760 1,136 780 Earnings
from operations 79,658 67,105 21,860 17,913 Interest income 1,302
2,632 244 586 Earnings before income taxes 80,960 69,737 22,104
18,499 Provision for income taxes 30,360 26,151 8,289 6,937 Net
earnings $50,600 $43,586 $13,815 $11,562 Earnings per share: Basic
$1.17 $1.00 $.32 $.27 Diluted $1.15 $.98 $.32 $.26 Weighted average
shares outstanding: Basic 43,362,614 43,699,208 43,258,876
43,452,655 Diluted 43,930,042 44,384,665 43,813,506 44,070,437
PRIORITY HEALTHCARE CORPORATION CONDENSED CONSOLIDATED BALANCE
SHEETS (000's omitted) (unaudited) January 3, December 28, 2004
2002 Cash and cash equivalents $47,719 $37,031 Marketable
securities 15,317 46,337 Receivables, net 172,206 163,688 Finished
goods inventory 117,218 108,604 Other current assets 20,642 17,888
Fixed assets, net 29,780 13,749 Other assets 111,127 97,565 Total
assets $ 514,009 $ 484,862 Current liabilities $ 164,663 $ 188,114
Long-term debt -- -- Other liabilities 6,437 2,321 Shareholders'
equity 342,909 294,427 Total liabilities and shareholders' equity $
514,009 $ 484,862
http://www.newscom.com/cgi-bin/prnh/20030417/PHCLOGODATASOURCE:
Priority HealthcareCorporation CONTACT: Financial, Stephen Saft,
Chief Financial Officer, +1-407-804-6700, or Media, Kirsten Ayars,
Public Relations Manager, +1-407-804-5826, both of Priority
Healthcare Corporation Web site: http://www.priorityhealthcare.com/
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