Priority Healthcare Announces First Quarter Results - Record Sales
Performance LAKE MARY, Fla., April 22 /PRNewswire-FirstCall/ --
Priority Healthcare Corporation reported record sales for the first
quarter ended April 3, 2004. For the quarter, sales increased to
$401 million, operating earnings were $19.5 million, and net
earnings were $12.2 million. Diluted earnings per share were $.28.
"We are pleased that we exceeded our sales forecast and met our
earnings guidance for the first quarter even with continued
sluggish national growth in our key pharmacy markets and a very
challenging environment in oncology distribution," stated Steve
Cosler, President and Chief Executive Officer. "We are hopeful that
the recent approval of generic ribavirin will incrementally
stimulate some unit demand in the national hepatitis market and
potentially provide some improvement in gross margins, as generics
have traditionally done for pharmacies and distributors. "Looking
to the future, we continue to be enthusiastic about the biotech
pipeline and related new product opportunities which create new
growth platforms for the company. I am pleased to announce that
Priority Healthcare has been selected by Roche and Trimeris as a
specialty provider for Fuzeon(TM), effective later this month.
Fuzeon marks the addition of HIV to our disease portfolio. "We are
also optimistic about industry consolidation opportunities, such as
our recent acquisition of Partners-In-Care, a Midwestern
infertility specialty pharmacy. Partners-in-Care strengthens our
industry leading position in infertility and allows us to reach
even more patients and physicians with our services. With similar
acquisition opportunities available, our $150 million credit
facility can be utilized to facilitate strategic investments in our
growth," said Mr. Cosler. In commenting on certain financial
aspects of the quarter, Steve Saft, Chief Financial Officer,
stated, "Our 14% sales increase for the quarter was virtually all
organic growth. This increase was primarily led by our
ophthalmology, pulmonology and oncology disease states." Mr. Saft
continued, "Our balance sheet remains strong with $66 million in
cash and marketable securities and no debt. Cash flow from
operations was $13 million for the first quarter, which exceeded
our net earnings. Our trade DSO's are at 39 days, a decrease of one
day, sequentially, from the fourth quarter. Our inventory turns are
at 13, an increase of one turn, sequentially, from the fourth
quarter. Our return on committed capital and invested capital for
the quarter was 49% and 30%, respectively, which we believe is
among the highest in the industry." Mr. Cosler concluded, "As in
2003, Priority Healthcare continues to gain share in virtually
every market we serve. The second half of the year will be shaped
by additional new markets, improved leverage of our infrastructure
under the leadership of our new Chief Operating Officer, Tracy
Nolan, and increased momentum in several of the new contracts and
projects we have developed. Furthermore, several of our existing
key markets will likely rebound from their current negative trends
and stabilize, improving our performance in those areas." As
previously announced, a web cast of the company's conference call
to review the financial results is available on Priority
Healthcare'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 of 1995. 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 treatment of
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-month Three-month period ended period ended April
3, March 29, 2004 2003 Net sales $401,243 $351,529 Cost of products
sold 358,230 311,244 Gross profit 43,013 40,285 Selling, general
and administrative expense 22,158 18,725 Depreciation and
amortization 1,369 927 Earnings from operations 19,486 20,633
Interest income, net 174 461 Minority interest (78) -- Earnings
before income taxes 19,582 21,094 Provision for income taxes 7,343
7,910 Net earnings $12,239 $13,184 Earnings per share: Basic $.28
$.30 Diluted $.28 $.30 Weighted average shares outstanding: Basic
43,322,604 43,521,657 Diluted 44,056,295 44,010,503 PRIORITY
HEALTHCARE CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (000's
omitted) (unaudited) April 3, January 3, 2004 2004 Cash and cash
equivalents $55,945 $47,719 Marketable securities 10,006 15,317
Receivables, net 192,177 172,206 Finished goods inventory 103,558
117,218 Other current assets 21,630 20,642 Fixed assets, net 31,890
29,780 Other assets 117,453 111,127 Total assets $532,659 $514,009
Current liabilities $171,216 $164,663 Long-term debt -- -- Other
liabilities 6,515 6,437 Shareholders' equity 354,928 342,909 Total
liabilities and shareholders' equity $532,659 $514,009
http://www.newscom.com/cgi-bin/prnh/20030417/PHCLOGO
http://photoarchive.ap.org/ DATASOURCE: Priority Healthcare
Corporation 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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