Priority Healthcare b (NASDAQ:PHCC)
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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/