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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Pharmerica Corp. (delisted) | NYSE:PMC | NYSE | Ordinary Share |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 29.25 | 0.00 | 01:00:00 |
☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
87-0792558
|
|
(State or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S. Employer Identification No.)
|
|
1901 Campus Place
Louisville, KY
|
40299
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Large accelerated filer
☒
|
Accelerated filer
☐
|
Non-accelerated filer
☐
|
Smaller reporting company
☐
|
Emerging growth company
☐
|
(Do not check if a smaller reporting company)
|
Class of Common Stock
|
Outstanding at November 3, 2017
|
|
Common stock, $0.01 par value
|
31,120,213 shares
|
Page
|
||
PART I. FINANCIAL INFORMATION
|
||
Item 1.
|
Financial Statements (Unaudited)
|
|
3
|
||
4
|
||
5
|
||
6
|
||
7
|
||
Item 2.
|
17
|
|
Item 3.
|
34
|
|
Item 4.
|
34
|
|
PART II. OTHER INFORMATION
|
35
|
|
Item 1.
|
35
|
|
Item 1A
|
35
|
|
Item 2.
|
35
|
|
Item 4.
|
35
|
|
Item 6.
|
36
|
|
37
|
||
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2016
|
2017
|
2016
|
2017
|
|||||||||||||
Revenues
|
$
|
512.6
|
$
|
595.1
|
$
|
1,556.7
|
$
|
1,753.9
|
||||||||
Cost of goods sold
|
434.1
|
505.8
|
1,314.4
|
1,487.2
|
||||||||||||
Gross profit
|
78.5
|
89.3
|
242.3
|
266.7
|
||||||||||||
Selling, general and administrative expenses
|
53.1
|
62.2
|
165.8
|
187.4
|
||||||||||||
Amortization expense
|
8.3
|
10.0
|
24.7
|
29.0
|
||||||||||||
Merger, acquisition, integration costs and other charges
|
5.3
|
5.6
|
14.1
|
12.7
|
||||||||||||
Settlement, litigation and other related charges
|
(0.8
|
)
|
1.2
|
7.2
|
6.5
|
|||||||||||
Restructuring and impairment charges
|
0.6
|
0.1
|
3.1
|
0.1
|
||||||||||||
Operating income
|
12.0
|
10.2
|
27.4
|
31.0
|
||||||||||||
Interest expense, net
|
3.0
|
4.1
|
9.3
|
11.9
|
||||||||||||
Income before income taxes
|
9.0
|
6.1
|
18.1
|
19.1
|
||||||||||||
Provision for income taxes
|
1.7
|
2.9
|
4.2
|
7.7
|
||||||||||||
Net income
|
$
|
7.3
|
$
|
3.2
|
$
|
13.9
|
$
|
11.4
|
||||||||
Earnings per common share:
|
||||||||||||||||
Basic
|
$
|
0.24
|
$
|
0.10
|
$
|
0.45
|
$
|
0.37
|
||||||||
Diluted
|
$
|
0.23
|
$
|
0.10
|
$
|
0.44
|
$
|
0.36
|
||||||||
Shares used in computing earnings per common share:
|
||||||||||||||||
Basic
|
30,754,253
|
31,118,756
|
30,670,487
|
31,019,184
|
||||||||||||
Diluted
|
31,071,290
|
31,401,624
|
31,040,849
|
31,355,196
|
December 31, 2016
|
September 30, 2017
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
5.4
|
$
|
7.8
|
||||
Accounts receivable, net
|
235.4
|
249.2
|
||||||
Inventory
|
214.7
|
139.2
|
||||||
Income taxes receivable
|
4.7
|
5.1
|
||||||
Prepaids and other assets
|
56.5
|
54.0
|
||||||
516.7
|
455.3
|
|||||||
Equipment and leasehold improvements
|
250.9
|
273.4
|
||||||
Accumulated depreciation
|
(165.1
|
)
|
(184.1
|
)
|
||||
85.8
|
89.3
|
|||||||
Goodwill
|
392.3
|
449.3
|
||||||
Intangible assets, net
|
187.6
|
193.4
|
||||||
Deferred tax assets, net
|
9.2
|
1.8
|
||||||
Other long-term assets (See Note 5)
|
81.4
|
79.3
|
||||||
$
|
1,273.0
|
$
|
1,268.4
|
|||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
107.1
|
$
|
97.1
|
||||
Salaries, wages and other compensation
|
32.5
|
34.8
|
||||||
Current portion of long-term debt
|
15.6
|
15.4
|
||||||
Other accrued liabilities
|
27.1
|
29.0
|
||||||
182.3
|
176.3
|
|||||||
Long-term debt
|
457.8
|
444.8
|
||||||
Other long-term liabilities
|
88.7
|
85.7
|
||||||
Commitments and contingencies (See Note 5)
|
||||||||
Stockholders' equity:
|
||||||||
Preferred stock, $0.01 par value per share; 1,000,000 shares authorized and no shares issued, December 31, 2016 and September 30, 2017
|
-
|
-
|
||||||
Common stock, $0.01 par value per share; 175,000,000 shares authorized; 33,698,269 and 34,130,736 shares issued as of December 31, 2016 and September 30, 2017, respectively
|
0.3
|
0.3
|
||||||
Capital in excess of par value
|
411.1
|
419.3
|
||||||
Retained earnings
|
173.7
|
185.1
|
||||||
Treasury stock at cost, 2,916,906 and 3,011,789 shares at December 31, 2016 and September 30, 2017, respectively
|
(40.9
|
)
|
(43.1
|
)
|
||||
544.2
|
561.6
|
|||||||
$
|
1,273.0
|
$
|
1,268.4
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2016
|
2017
|
2016
|
2017
|
|||||||||||||
Cash flows provided by (used in) operating activities:
|
||||||||||||||||
Net income
|
$
|
7.3
|
$
|
3.2
|
$
|
13.9
|
$
|
11.4
|
||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
||||||||||||||||
Depreciation
|
6.2
|
6.6
|
17.2
|
20.3
|
||||||||||||
Amortization
|
8.3
|
10.0
|
24.7
|
29.0
|
||||||||||||
Stock-based compensation and deferred compensation
|
2.2
|
2.2
|
6.3
|
7.2
|
||||||||||||
Amortization of deferred financing fees
|
0.1
|
0.2
|
0.4
|
0.6
|
||||||||||||
Deferred income taxes
|
0.2
|
1.3
|
8.0
|
8.5
|
||||||||||||
Other
|
0.1
|
0.1
|
0.2
|
-
|
||||||||||||
Change in operating assets and liabilities:
|
||||||||||||||||
Accounts receivable, net
|
(7.4
|
)
|
(2.6
|
)
|
(14.4
|
)
|
(6.7
|
)
|
||||||||
Inventory
|
43.9
|
3.5
|
36.5
|
81.0
|
||||||||||||
Prepaids and other assets
|
(0.2
|
)
|
(3.9
|
)
|
(0.7
|
)
|
4.6
|
|||||||||
Accounts payable
|
(24.5
|
)
|
(7.4
|
)
|
2.3
|
(15.8
|
)
|
|||||||||
Salaries, wages and other compensation
|
0.2
|
3.2
|
(2.5
|
)
|
2.1
|
|||||||||||
Other accrued and long-term liabilities
|
(4.1
|
)
|
-
|
(13.4
|
)
|
(9.0
|
)
|
|||||||||
Change in income taxes (receivable)
|
6.9
|
1.6
|
3.1
|
(0.4
|
)
|
|||||||||||
Excess tax benefit from stock-based compensation
|
(0.1
|
)
|
-
|
(1.3
|
)
|
(0.1
|
)
|
|||||||||
Net cash provided by operating activities
|
39.1
|
18.0
|
80.3
|
132.7
|
||||||||||||
Cash flows provided by (used in) investing activities:
|
||||||||||||||||
Purchase of equipment and leasehold improvements
|
(13.0
|
)
|
(7.5
|
)
|
(26.3
|
)
|
(23.4
|
)
|
||||||||
Acquisitions, net of cash acquired
|
(24.4
|
)
|
(43.3
|
)
|
(31.3
|
)
|
(94.0
|
)
|
||||||||
Cash proceeds from sale of assets
|
0.1
|
-
|
0.1
|
-
|
||||||||||||
Net cash used in investing activities
|
(37.3
|
)
|
(50.8
|
)
|
(57.5
|
)
|
(117.4
|
)
|
||||||||
Cash flows provided by (used in) financing activities:
|
||||||||||||||||
Repayments of long-term debt
|
(2.8
|
)
|
(3.8
|
)
|
(8.4
|
)
|
(11.3
|
)
|
||||||||
Net activity of long-term revolving credit facility
|
(19.5
|
)
|
31.1
|
(27.5
|
)
|
(1.9
|
)
|
|||||||||
Payment of debt issuance costs
|
-
|
(0.1
|
)
|
-
|
(0.1
|
)
|
||||||||||
Issuance of common stock
|
0.1
|
-
|
0.2
|
3.0
|
||||||||||||
Treasury stock, for employee taxes on stock awards
|
(0.3
|
)
|
-
|
(3.3
|
)
|
(2.2
|
)
|
|||||||||
Repayments of capital lease obligations
|
(0.2
|
)
|
(0.1
|
)
|
(0.4
|
)
|
(0.4
|
)
|
||||||||
Net cash (used in) provided by financing activities
|
(22.7
|
)
|
27.1
|
(39.4
|
)
|
(12.9
|
)
|
|||||||||
Change in cash and cash equivalents
|
(20.9
|
)
|
(5.7
|
)
|
(16.6
|
)
|
2.4
|
|||||||||
Cash and cash equivalents at beginning of period
|
27.4
|
13.5
|
23.1
|
5.4
|
||||||||||||
Cash and cash equivalents at end of period
|
$
|
6.5
|
$
|
7.8
|
$
|
6.5
|
$
|
7.8
|
||||||||
Supplemental information:
|
||||||||||||||||
Cash paid for interest
|
$
|
2.7
|
$
|
3.9
|
$
|
7.9
|
$
|
11.3
|
||||||||
Cash (received) paid for taxes
|
$
|
(5.0
|
)
|
$
|
0.4
|
$
|
(4.8
|
)
|
$
|
0.2
|
Common Stock
|
Capital in Excess of
|
Retained
|
Treasury
|
|||||||||||||||||||||
Shares
|
Amount
|
Par Value
|
Earnings
|
Stock
|
Total
|
|||||||||||||||||||
Balance at December 31, 2016
|
30,781,363
|
$
|
0.3
|
$
|
411.1
|
$
|
173.7
|
$
|
(40.9
|
)
|
$
|
544.2
|
||||||||||||
Net income
|
11.4
|
11.4
|
||||||||||||||||||||||
Exercise of stock options and tax components of stock-based awards, net
|
178,079
|
-
|
3.2
|
-
|
-
|
3.2
|
||||||||||||||||||
Vested restricted stock units
|
181,251
|
-
|
(0.1
|
)
|
-
|
-
|
(0.1
|
)
|
||||||||||||||||
Vested performance stock units
|
74,429
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Treasury stock, for employees taxes on stock awards
|
(94,883
|
)
|
-
|
-
|
-
|
(2.2
|
)
|
(2.2
|
)
|
|||||||||||||||
Forfeiture of non-vested restricted stock
|
(1,292
|
)
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||
Stock-based compensation - non-vested restricted stock
|
-
|
-
|
5.1
|
-
|
-
|
5.1
|
||||||||||||||||||
Balance at September 30, 2017
|
31,118,947
|
$
|
0.3
|
$
|
419.3
|
$
|
185.1
|
$
|
(43.1
|
)
|
$
|
561.6
|
Level 1: |
Observable inputs such as quoted prices in active markets;
|
Level 2: |
Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
|
Level 3: |
Unobservable inputs for which there is little or no market data, which require the Corporation to develop its own assumptions.
|
A. |
Market approach:
Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.
|
B. |
Cost approach:
Amount that would be required to replace the service capacity of an asset (replacement cost).
|
C. |
Income approach:
Techniques to convert future amounts to a single present amount based upon market expectations (including present value techniques, option-pricing and excess earnings models).
|
As of December 31, 2016
|
Liability
|
Level 1
|
Level 2
|
Level 3
|
Valuation
Technique
|
|||||||||||||||
Financial Liability
|
||||||||||||||||||||
Deferred Compensation Plan
|
$
|
(8.8
|
)
|
$
|
-
|
$
|
(8.8
|
)
|
$
|
-
|
A
|
|||||||||
Contingent Considerations
|
(8.1
|
)
|
-
|
-
|
(8.1
|
)
|
C
|
|||||||||||||
Mandatorily Redeemable Interest
|
(4.0
|
)
|
-
|
-
|
(4.0
|
)
|
C
|
As of September 30, 2017
|
Liability
|
Level 1
|
Level 2
|
Level 3
|
Valuation
Technique
|
|||||||||||||||
Financial Liability
|
||||||||||||||||||||
Deferred Compensation Plan
|
$
|
(11.6
|
)
|
$
|
-
|
$
|
(11.6
|
)
|
$
|
-
|
A
|
|||||||||
Contingent Considerations
|
(9.0
|
)
|
-
|
-
|
(9.0
|
)
|
C
|
|||||||||||||
Mandatorily Redeemable Interest
|
(4.0
|
)
|
-
|
-
|
(4.0
|
)
|
C
|
Contingent Consideration
|
Mandatorily Redeemable Interest
|
|||||||
Beginning balance, December 31, 2015
|
$
|
11.5
|
$
|
5.8
|
||||
Additions from business acquisitions
|
1.4
|
-
|
||||||
Contingent consideration payment
|
(3.9
|
)
|
-
|
|||||
Change in fair value
|
(0.9
|
)
|
(1.8
|
)
|
||||
Balance at December 31, 2016
|
8.1
|
4.0
|
||||||
Additions from business acquisitions
|
6.0
|
-
|
||||||
Contingent consideration payment
|
(3.9
|
)
|
-
|
|||||
Change in fair value
|
(1.2
|
)
|
-
|
|||||
Balance, September 30, 2017
|
$
|
9.0
|
$
|
4.0
|
December 31,
|
September 30,
|
|||||||
2016
|
2017
|
|||||||
Institutional healthcare providers
|
$
|
138.2
|
$
|
144.0
|
||||
Medicare Part D
|
42.5
|
51.0
|
||||||
Private payer and other
|
28.1
|
29.3
|
||||||
Insured
|
38.7
|
40.0
|
||||||
Medicaid
|
15.6
|
16.0
|
||||||
Medicare
|
3.4
|
1.9
|
||||||
Allowance for doubtful accounts
|
(31.1
|
)
|
(33.0
|
)
|
||||
$
|
235.4
|
$
|
249.2
|
|||||
0 to 60 days
|
62.9
|
%
|
61.9
|
%
|
||||
61 to 120 days
|
15.7
|
%
|
15.3
|
%
|
||||
Over 120 days
|
21.4
|
%
|
22.8
|
%
|
||||
100.0
|
%
|
100.0
|
%
|
Beginning Balance
|
Charges Included in Selling, General & Administrative Expenses
|
Write-offs
|
Ending Balance
|
|||||||||||||
Allowance for doubtful accounts:
|
||||||||||||||||
Year Ended December 31, 2016
|
$
|
49.3
|
$
|
6.3
|
$
|
(24.5
|
)
|
$
|
31.1
|
|||||||
Nine Months Ended September 30, 2017
|
$
|
31.1
|
$
|
9.6
|
$
|
(7.7
|
)
|
$
|
33.0
|
Finite Lived Intangible Assets
|
Balance at
December 31, 2016
|
Additions
|
Balance at
September 30, 2017
|
|||||||||
Customer relationships
|
$
|
245.7
|
$
|
29.5
|
$
|
275.2
|
||||||
Trade name
|
64.0
|
4.1
|
68.1
|
|||||||||
Non-compete agreements
|
22.2
|
1.2
|
23.4
|
|||||||||
Sub Total
|
331.9
|
34.8
|
366.7
|
|||||||||
Accumulated amortization
|
(144.3
|
)
|
(29.0
|
)
|
(173.3
|
)
|
||||||
Net intangible assets
|
$
|
187.6
|
$
|
5.8
|
$
|
193.4
|
December 31, 2016
|
September 30, 2017
|
|||||||
Term Debt - payable to lenders at LIBOR plus applicable margin (3.24% as of September 30, 2017), matures September 17, 2019
|
$
|
297.2
|
$
|
285.9
|
||||
Revolving Credit Facility payable to lenders, interest at LIBOR plus applicable margin (3.20% as of September 30, 2017), matures September 17, 2019
|
176.5
|
174.6
|
||||||
Deferred financing costs, net
|
(1.9
|
)
|
(1.5
|
)
|
||||
Capital lease obligations
|
1.6
|
1.2
|
||||||
Total debt
|
473.4
|
460.2
|
||||||
Less: Current portion of long-term debt
|
15.6
|
15.4
|
||||||
Total long-term debt
|
$
|
457.8
|
$
|
444.8
|
Year Ending December 31,
|
Term Debt
|
Revolving
Credit
Facility
|
Deferred
Financing
Costs
|
Capital
Lease
Obligations
|
Total
Maturities
|
|||||||||||||||
2017
|
$
|
3.7
|
$
|
-
|
$
|
(0.2
|
)
|
$
|
0.1
|
$
|
3.6
|
|||||||||
2018
|
15.0
|
-
|
(0.7
|
)
|
0.5
|
14.8
|
||||||||||||||
2019
|
267.2
|
174.6
|
(0.6
|
)
|
0.4
|
441.6
|
||||||||||||||
2020
|
-
|
-
|
-
|
0.2
|
0.2
|
|||||||||||||||
$
|
285.9
|
$
|
174.6
|
$
|
(1.5
|
)
|
$
|
1.2
|
$
|
460.2
|
Balance at December 31, 2016
|
Accrual
|
Utilized Amounts
|
Balance at September 30, 2017
|
|||||||||||||
Employee Severance and related costs
|
$
|
0.2
|
$
|
-
|
$
|
(0.1
|
)
|
$
|
0.1
|
|||||||
Facility costs
|
0.4
|
0.1
|
(0.2
|
)
|
0.3
|
|||||||||||
$
|
0.6
|
$
|
0.1
|
$
|
(0.3
|
)
|
$
|
0.4
|
Number of
Shares
|
Weighted-
Average
Exercise Price
Per Share
|
Weighted-
Average
Remaining
Term
|
Aggregate
Intrinsic Value
(in millions)
|
||||||||||
Outstanding shares at December 31, 2016
|
413,346
|
$
|
13.99
|
0.8 years
|
$
|
4.6
|
|||||||
Exercised
|
(178,079
|
)
|
18.00
|
||||||||||
Expired
|
(4,645
|
)
|
16.39
|
||||||||||
Outstanding shares at September 30, 2017
|
230,622
|
$
|
10.85
|
0.5 years
|
$
|
4.3
|
|||||||
Exercisable at September 30, 2017
|
230,622
|
$
|
10.85
|
0.5 years
|
$
|
4.3
|
Number of Shares
|
Weighted- Average Grant Date Fair Value
|
|||||||
Outstanding shares at December 31, 2016
|
968,834
|
$
|
22.63
|
|||||
Granted - Restricted Stock Units
|
214,895
|
23.90
|
||||||
Granted - Performance Share Units
|
185,993
|
23.90
|
||||||
Forfeited
|
(104,908
|
)
|
24.24
|
|||||
Vested
|
(255,680
|
)
|
24.06
|
|||||
Outstanding shares at September 30, 2017
|
1,009,134
|
$
|
22.60
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2016
|
2017
|
2016
|
2017
|
|||||||||||||
Provision for income taxes
|
$
|
1.7
|
$
|
2.9
|
$
|
4.2
|
$
|
7.7
|
||||||||
Total provision as a percentage of pre-tax income
|
19.7
|
%
|
47.7
|
%
|
23.4
|
%
|
40.3
|
%
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2016
|
2017
|
2016
|
2017
|
|||||||||||||
Numerator:
|
||||||||||||||||
Numerator for basic and diluted earnings per share - net income
|
$
|
7.3
|
$
|
3.2
|
$
|
13.9
|
$
|
11.4
|
||||||||
Denominator:
|
||||||||||||||||
Denominator for basic earnings per share - weighted average shares
|
30,754,253
|
31,118,756
|
30,670,487
|
31,019,184
|
||||||||||||
Effect of dilutive securities (stock options, restricted stock units and performance share units)
|
317,037
|
282,868
|
370,362
|
336,012
|
||||||||||||
Denominator for earnings per diluted share - adjusted weighted average shares
|
31,071,290
|
31,401,624
|
31,040,849
|
31,355,196
|
||||||||||||
Basic earnings per share
|
$
|
0.24
|
$
|
0.10
|
$
|
0.45
|
$
|
0.37
|
||||||||
Earnings per diluted share
|
$
|
0.23
|
$
|
0.10
|
$
|
0.44
|
$
|
0.36
|
||||||||
Unexercised employee stock options and unvested restricted shares excluded from the effect of dilutive securities above (a)
|
213
|
-
|
-
|
-
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
• |
the Corporation's access to capital, credit ratings, indebtedness, and ability to raise additional financings and operate under the terms of the Corporation's debt obligations;
|
• |
anti-takeover provisions of the Delaware General Corporation Law, which in concert with our certificate of incorporation and our by-laws could delay or deter a change in control;
|
• |
the effects of adverse economic trends or intense competition in the markets in which we operate;
|
• |
the Corporation's risk of loss of revenues due to a customer or owner of a skilled nursing facility entering the institutional pharmacy business;
|
• |
the effects of the loss of a large customer and the Corporation's ability to adequately restructure its operations to offset the loss;
|
• |
the demand for the Corporation's products and services;
|
• |
the risk of retaining existing customers and service contracts and the Corporation's ability to attract new customers for growth of the Corporation's business;
|
• |
the effects of renegotiating contract pricing relating to significant customers and suppliers, including the hospital pharmacy business which is substantially dependent on service provided to one customer;
|
• |
the impacts of cyber security risks and/or incidents;
|
• |
the effects of a failure in the security or stability of our technology infrastructure, or the infrastructure of one or more of our key vendors, or a significant failure or disruption in service;
|
• |
the effects of an increase in credit risk, loss or bankruptcy of or default by any significant customer, supplier, or other entity relevant to the Corporation's operations;
|
• |
the Corporation's ability to successfully pursue the Corporation's development and acquisition activities and successfully integrate acquired businesses, and new operations and systems, including the realization of anticipated revenues, economies of scale, cost savings, and productivity gains associated with such operations;
|
• |
the Corporation's ability to control costs, particularly labor and employee benefit costs, rising pharmaceutical costs, and regulatory compliance costs;
|
• |
the effects of healthcare reform and government regulations, including interpretation of regulations and changes in the nature and enforcement of regulations governing the healthcare and institutional pharmacy services industries including the dispensing of antipsychotic prescriptions;
|
• |
changes in the reimbursement rates or methods of payment from Medicare and Medicaid and other third party payers to both us and our customers;
|
• |
the potential impact of state government budget shortfalls and their ability to pay the Corporation and its customers for services provided;
|
• |
the Corporation's ability, and the ability of the Corporation's customers, to comply with Medicare or Medicaid reimbursement regulations or other applicable laws;
|
• |
the effects of changes in the interest rate on the Corporation's outstanding floating rate debt instrument and the increases in interest expense, including increases in interest rate terms on any new debt financing;
|
• |
further consolidation of managed care organizations and other third party payers;
|
• |
political and economic conditions nationally, regionally, and in the markets in which the Corporation operates;
|
• |
natural disasters, war, civil unrest, terrorism, fire, floods, tornadoes, earthquakes, hurricanes, epidemic, pandemic, catastrophic event or other matters beyond the Corporation's control;
|
• |
increases in energy costs, including state and federal taxes, and the impact on the costs of delivery expenses and utility expenses;
|
• |
elimination of, changes in, or the Corporation's failure to satisfy pharmaceutical manufacturers' rebate programs;
|
• |
the Corporation's ability to attract and retain key executives, pharmacists, and other healthcare personnel;
|
• |
the Corporation's risk of loss not covered by insurance;
|
• |
the outcome of litigation to which the Corporation is a party from time to time, including adverse results in material litigation or governmental inquiries including the possible insufficiency of any accruals established by the Corporation from time to time;
|
• |
changes in accounting rules and standards, audits, compliance with the Sarbanes-Oxley Act, and regulatory investigations;
|
• |
changes in market conditions that would result in the impairment of goodwill or other assets of the Corporation;
|
• |
changes in market conditions in which we operate that would influence the value of the Corporation's stock;
|
• |
the uncertainty as to the long-term value of the Corporation's common stock;
|
• |
the Corporation's ability to anticipate a shift in demand for generic drug equivalents and the impact on the financial results including the negative impact on brand drug rebates;
|
• |
the effect on prescription volumes and the Corporation's net revenues and profitability if the safety risk profiles of drugs increase or if drugs are withdrawn from the market, including as a result of manufacturing issues, or if prescription drugs transition to over-the-counter products;
|
• |
the effects on the Corporation's results of operations related to interpretations of accounting principles by the SEC staff that may differ from those of management;
|
• |
the potential impact of the litigation proceedings with ABDC regarding the Previous PVA;
|
• |
the Corporation's ability to comply with the terms of its Memorandum of Agreement with the DEA and the Corporate Integrity Agreements with the OIG to which it is subject;
|
• |
the timing to consummate the Merger; the risk that a condition to closing of the Merger may not be satisfied or that the closing of the Merger might otherwise not occur including, but not limited to, the adverse impact of any termination fees; management time on Merger-related issues; and the risk that the Merger and its announcement could have an adverse effect on the Corporation's ability to retain customers and retain and hire key personnel;
|
• |
the Corporation's ability to collect outstanding receivables;
|
• |
changes in tax laws and regulations;
|
• |
the effects of changes to critical accounting estimates; and
|
• |
other factors, risks and uncertainties referenced in the Corporation's filings with the Commission, including the "Risk Factors" set forth in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2016.
|
· |
Monthly reviews of each resident's drug regimen to assess the appropriateness and efficiency of drug therapies, including the review of medical records, monitoring drug interactions with other drugs or food, monitoring laboratory test results, and recommending alternative therapies;
|
· |
Participation on quality assurance and other committees of our customers, as required or requested by such customers;
|
· |
Monitoring and reporting on facility-wide drug utilization;
|
· |
Development and maintenance of pharmaceutical policy and procedure manuals; and
|
· |
Assistance with federal and state regulatory compliance pertaining to resident care.
|
· |
Real-time access to medication and treatment administration records, physician order sheets and psychotropic drug monitoring sheets;
|
· |
Online ordering to save time and resources;
|
· |
A customized database with the medication profiles of each resident's medication safety, efficiency and regulatory compliance;
|
· |
Web-based individual patient records detailing each prescribed medicine; and
|
· |
Electronic medical records to improve information to make it more legible and instantaneous.
|
2017
|
2018
|
2019
|
2020
|
|||||
Renvela (Q3)**
|
Zytiga (Q1)
|
Ranexa (Q1)*
|
Namenda XR (Q1)
|
|||||
Copaxone 40mg (Q4)***
|
ProAir (Q3)
|
Lyrica (Q2)*
|
||||||
Reyataz (Q4)
|
Advair (Q3)*
|
Vesicare (Q2)*
|
||||||
Invanz (Q4)
|
Sensipar (Q3)*
|
|||||||
* These represent the most significant brand-to-generic conversions
**Renvela went generic in July 2017
|
||||||||
***Copaxone 40mg went generic in October 2017
|
||||||||
(Number in parentheses refers to the expected quarter of conversion)
|
||||||||
• |
It requires assumptions to be made that were uncertain at the time the estimate was made; and
|
• |
Changes in the estimate or different estimates could have a material impact on our condensed consolidated results of operations or financial condition.
|
2016*
|
2017
|
||||||||||||||||
Amount
|
% of Revenues
|
Amount
|
% of Revenues
|
||||||||||||||
First Quarter
|
$
|
3.2
|
0.6
|
%
|
First Quarter
|
$
|
3.9
|
0.7
|
%
|
||||||||
Second Quarter
|
0.7
|
0.1
|
Second Quarter
|
2.7
|
0.5
|
||||||||||||
Third Quarter
|
0.1
|
0.0
|
Third Quarter
|
3.0
|
0.5
|
||||||||||||
Fourth Quarter
|
2.3
|
0.4
|
2016
|
2017
|
|||||||
First Quarter
|
34.7
|
37.9
|
||||||
Second Quarter
|
35.4
|
37.5
|
||||||
Third Quarter
|
37.4
|
37.5
|
||||||
Fourth Quarter
|
38.0
|
2016
|
2017
|
|||||||||||||||||||||||||||
First
|
Second
|
Third
|
Fourth
|
First
|
Second
|
Third
|
||||||||||||||||||||||
0 to 60 days
|
63.5
|
%
|
61.9
|
%
|
61.0
|
%
|
62.9
|
%
|
63.5
|
%
|
64.5
|
%
|
61.9
|
%
|
||||||||||||||
61 to 120 days
|
14.7
|
16.3
|
14.4
|
15.7
|
14.5
|
14.8
|
15.3
|
|||||||||||||||||||||
Over 120 days
|
21.8
|
21.8
|
24.6
|
21.4
|
22.0
|
20.7
|
22.8
|
2016
|
2017
|
||||||||||||||||||||||||
Allowance
|
Gross Accounts Receivable
|
% of Gross Accounts Receivable
|
Allowance
|
Gross Accounts Receivable
|
% of Gross Accounts Receivable
|
||||||||||||||||||||
First Quarter
|
$
|
44.9
|
$
|
244.4
|
18.4
|
%
|
First Quarter
|
$
|
32.9
|
$
|
280.7
|
11.7
|
%
|
||||||||||||
Second Quarter
|
43.0
|
251.1
|
17.1
|
Second Quarter
|
32.8
|
279.4
|
11.7
|
||||||||||||||||||
Third Quarter
|
39.9
|
255.3
|
15.6
|
Third Quarter
|
33.0
|
282.2
|
11.7
|
||||||||||||||||||
Fourth Quarter
|
31.1
|
266.5
|
11.7
|
||||||||||||||||||||||
Three Months Ended September 30,
|
||||||||||||||||
2016
|
2017
|
|||||||||||||||
Amount
|
% of Revenues
|
Amount
|
% of Revenues
|
|||||||||||||
Medicare Part D
|
$
|
244.9
|
47.8
|
%
|
$
|
317.0
|
53.3
|
%
|
||||||||
Institutional healthcare providers
|
108.6
|
21.2
|
108.2
|
18.2
|
||||||||||||
Medicaid
|
29.5
|
5.8
|
32.1
|
5.4
|
||||||||||||
Private and other
|
17.0
|
3.3
|
19.7
|
3.3
|
||||||||||||
Insured
|
84.4
|
16.4
|
95.6
|
16.1
|
||||||||||||
Medicare
|
8.6
|
1.7
|
3.2
|
0.5
|
||||||||||||
Hospital management fees
|
19.6
|
3.8
|
19.3
|
3.2
|
||||||||||||
Total
|
$
|
512.6
|
100.0
|
%
|
$
|
595.1
|
100.0
|
%
|
Nine Months Ended September 30,
|
||||||||||||||||
2016
|
2017
|
|||||||||||||||
Amount
|
% of Revenues
|
Amount
|
% of Revenues
|
|||||||||||||
Medicare Part D
|
$
|
734.3
|
47.2
|
%
|
$
|
904.5
|
51.6
|
%
|
||||||||
Institutional healthcare providers
|
340.9
|
21.9
|
329.1
|
18.8
|
||||||||||||
Medicaid
|
99.0
|
6.4
|
102.0
|
5.8
|
||||||||||||
Private and other
|
54.1
|
3.5
|
57.0
|
3.3
|
||||||||||||
Insured
|
243.5
|
15.6
|
290.2
|
16.5
|
||||||||||||
Medicare
|
26.0
|
1.7
|
11.0
|
0.6
|
||||||||||||
Hospital management fees
|
58.9
|
3.7
|
60.1
|
3.4
|
||||||||||||
Total
|
$
|
1,556.7
|
100.0
|
%
|
$
|
1,753.9
|
100.0
|
%
|
2016
|
2017
|
|||||||
First Quarter
|
24.4
|
26.6
|
||||||
Second Quarter
|
33.5
|
25.3
|
||||||
Third Quarter
|
25.2
|
24.8
|
||||||
Fourth Quarter
|
43.4
|
-
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||||||||||||||||||||||||||
2016
|
Increase (Decrease)
|
2017
|
2016
|
Increase (Decrease)
|
2017
|
|||||||||||||||||||||||||||||||||||||||||||
Amount
|
% of Revenues
|
Amount
|
% of Revenues
|
Amount
|
% of Revenues
|
Amount
|
% of Revenues
|
|||||||||||||||||||||||||||||||||||||||||
Revenues
|
$
|
512.6
|
100.0
|
%
|
$
|
82.5
|
16.1
|
%
|
$
|
595.1
|
100.0
|
%
|
$
|
1,556.7
|
100.0
|
%
|
$
|
197.2
|
12.7
|
%
|
$
|
1,753.9
|
100.0
|
%
|
||||||||||||||||||||||||
Cost of goods sold
|
434.1
|
84.7
|
71.7
|
16.5
|
505.8
|
85.0
|
1,314.4
|
84.4
|
172.8
|
13.1
|
1,487.2
|
84.8
|
||||||||||||||||||||||||||||||||||||
Gross profit
|
$
|
78.5
|
15.3
|
%
|
$
|
10.8
|
13.8
|
%
|
$
|
89.3
|
15.0
|
%
|
$
|
242.3
|
15.6
|
%
|
$
|
24.4
|
10.1
|
%
|
$
|
266.7
|
15.2
|
%
|
||||||||||||||||||||||||
Pharmacy (in whole numbers except where indicated)
|
||||||||||||||||||||||||||||||||||||||||||||||||
Financial data
|
||||||||||||||||||||||||||||||||||||||||||||||||
Prescriptions dispensed (in thousands)
|
7,520
|
(23
|
)
|
(0.3
|
)%
|
7,497
|
23,683
|
(725
|
)
|
(3.1
|
)%
|
22,959
|
||||||||||||||||||||||||||||||||||||
Revenue per prescription dispensed
|
$
|
68.16
|
$
|
11.22
|
16.5
|
%
|
$
|
79.38
|
$
|
65.73
|
$
|
10.66
|
16.2
|
%
|
$
|
76.39
|
||||||||||||||||||||||||||||||||
Gross profit per prescription dispensed
|
$
|
10.44
|
$
|
1.47
|
14.1
|
%
|
$
|
11.91
|
$
|
10.23
|
$
|
1.39
|
13.5
|
%
|
$
|
11.62
|
||||||||||||||||||||||||||||||||
Gross profit margin
|
15.3
|
%
|
(0.3
|
)%
|
(2.0
|
)%
|
15.0
|
%
|
15.6
|
%
|
(0.4
|
)%
|
(2.5
|
)%
|
15.2
|
%
|
||||||||||||||||||||||||||||||||
Generic dispensing rate
|
84.7
|
%
|
1.1
|
%
|
1.3
|
%
|
85.8
|
%
|
86.2
|
%
|
(0.7
|
)%
|
(0.8
|
)%
|
85.5
|
%
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2016
|
2017
|
2016
|
2017
|
|||||||||||||
Net cash provided by operating activities
|
$
|
39.1
|
$
|
18.0
|
$
|
80.3
|
$
|
132.7
|
||||||||
Net cash used in investing activities
|
(37.3
|
)
|
(50.8
|
)
|
(57.5
|
)
|
(117.4
|
)
|
||||||||
Net cash provided by (used in) financing activities
|
(22.7
|
)
|
27.1
|
(39.4
|
)
|
(12.9
|
)
|
|||||||||
Net change in cash and cash equivalents
|
(20.9
|
)
|
(5.7
|
)
|
(16.6
|
)
|
2.4
|
|||||||||
Cash and cash equivalents at beginning of period
|
27.4
|
13.5
|
23.1
|
5.4
|
||||||||||||
Cash and cash equivalents at end of period
|
$
|
6.5
|
$
|
7.8
|
$
|
6.5
|
$
|
7.8
|
2016 Quarters
|
2017 Quarters
|
|||||||||||||||||||||||||||
First
|
Second
|
Third
|
Fourth
|
First
|
Second
|
Third
|
||||||||||||||||||||||
Revenues
|
$
|
524.5
|
$
|
519.6
|
$
|
512.6
|
$
|
534.4
|
$
|
566.8
|
$
|
592.0
|
$
|
595.1
|
||||||||||||||
Cost of goods sold
|
442.5
|
437.8
|
434.1
|
450.7
|
478.9
|
502.4
|
505.8
|
|||||||||||||||||||||
Gross profit
|
82.0
|
81.8
|
78.5
|
83.7
|
87.9
|
89.6
|
89.3
|
|||||||||||||||||||||
Selling, general and administrative
|
57.0
|
55.7
|
53.1
|
54.8
|
63.5
|
61.8
|
62.2
|
|||||||||||||||||||||
Amortization expense
|
8.2
|
8.2
|
8.3
|
9.0
|
9.1
|
9.9
|
10.0
|
|||||||||||||||||||||
Merger, acquisition, integration costs, and other charges
|
4.4
|
4.4
|
5.3
|
6.7
|
3.5
|
3.6
|
5.6
|
|||||||||||||||||||||
Settlement, litigation and other related charges
|
3.1
|
4.9
|
(0.8
|
)
|
2.4
|
2.6
|
2.7
|
1.2
|
||||||||||||||||||||
Restructuring and impairment charges
|
1.4
|
1.1
|
0.6
|
(0.2
|
)
|
-
|
-
|
0.1
|
||||||||||||||||||||
Operating income
|
7.9
|
7.5
|
12.0
|
11.0
|
9.2
|
11.6
|
10.2
|
|||||||||||||||||||||
Interest expense, net
|
3.0
|
3.3
|
3.0
|
0.2
|
3.7
|
4.1
|
4.1
|
|||||||||||||||||||||
Income before income taxes
|
4.9
|
4.2
|
9.0
|
10.8
|
5.5
|
7.5
|
6.1
|
|||||||||||||||||||||
Provision for income taxes
|
0.8
|
1.7
|
1.7
|
3.1
|
2.0
|
2.8
|
2.9
|
|||||||||||||||||||||
Net income
|
$
|
4.1
|
$
|
2.5
|
$
|
7.3
|
$
|
7.7
|
$
|
3.5
|
$
|
4.7
|
$
|
3.2
|
||||||||||||||
Earnings per share (1):
|
||||||||||||||||||||||||||||
Basic
|
$
|
0.13
|
$
|
0.08
|
$
|
0.24
|
$
|
0.25
|
$
|
0.11
|
$
|
0.15
|
$
|
0.10
|
||||||||||||||
Diluted
|
$
|
0.13
|
$
|
0.08
|
$
|
0.23
|
$
|
0.25
|
$
|
0.11
|
$
|
0.15
|
$
|
0.10
|
||||||||||||||
Adjusted diluted earnings per share (1)(2):
|
$
|
0.45
|
$
|
0.47
|
$
|
0.44
|
$
|
0.58
|
$
|
0.42
|
$
|
0.47
|
$
|
0.46
|
||||||||||||||
Shares used in computing earnings per share:
|
||||||||||||||||||||||||||||
Basic
|
30.5
|
30.7
|
30.8
|
30.8
|
30.8
|
31.4
|
31.1
|
|||||||||||||||||||||
Diluted
|
30.9
|
31.0
|
31.1
|
31.2
|
31.2
|
31.7
|
31.4
|
|||||||||||||||||||||
Balance sheet data:
|
||||||||||||||||||||||||||||
Cash and cash equivalents
|
$
|
25.5
|
$
|
27.4
|
$
|
6.5
|
$
|
5.4
|
$
|
15.4
|
$
|
13.5
|
$
|
7.8
|
||||||||||||||
Working capital
|
$
|
303.9
|
$
|
325.8
|
$
|
291.5
|
$
|
334.4
|
$
|
307.6
|
$
|
279.6
|
$
|
279.0
|
||||||||||||||
Goodwill
|
$
|
372.1
|
$
|
372.2
|
$
|
388.1
|
$
|
392.3
|
$
|
431.6
|
$
|
422.9
|
$
|
449.3
|
||||||||||||||
Intangible assets, net
|
$
|
182.1
|
$
|
173.9
|
$
|
171.4
|
$
|
187.6
|
$
|
179.9
|
$
|
187.6
|
$
|
193.4
|
||||||||||||||
Total assets
|
$
|
1,166.6
|
$
|
1,201.1
|
$
|
1,157.5
|
$
|
1,273.0
|
$
|
1,252.3
|
$
|
1,236.7
|
$
|
1,268.4
|
||||||||||||||
Long-term debt
|
$
|
377.6
|
$
|
411.8
|
$
|
390.5
|
$
|
473.4
|
$
|
466.5
|
$
|
432.9
|
$
|
460.2
|
||||||||||||||
Total stockholders' equity
|
$
|
522.4
|
$
|
526.9
|
$
|
535.8
|
$
|
544.2
|
$
|
550.4
|
$
|
556.8
|
$
|
561.6
|
||||||||||||||
Supplemental information:
|
||||||||||||||||||||||||||||
Adjusted EBITDA(2)
|
$
|
30.3
|
$
|
31.8
|
$
|
31.5
|
35.6
|
$
|
31.3
|
$
|
34.6
|
$
|
33.7
|
|||||||||||||||
Adjusted EBITDA Margin (2)
|
5.8
|
%
|
6.1
|
%
|
6.1
|
%
|
6.7
|
%
|
5.5
|
%
|
5.9
|
%
|
5.7
|
%
|
||||||||||||||
Adjusted EBITDA per prescription dispensed (2)
|
$
|
3.50
|
$
|
3.87
|
$
|
3.99
|
$
|
4.53
|
$
|
3.97
|
$
|
4.57
|
$
|
4.50
|
||||||||||||||
Net cash provided by (used in) operating activities
|
$
|
65.3
|
$
|
(24.1
|
)
|
$
|
39.1
|
$
|
(49.5
|
)
|
$
|
72.2
|
$
|
42.5
|
$
|
18.0
|
||||||||||||
Net cash used in investing activities
|
$
|
(12.1
|
)
|
$
|
(8.1
|
)
|
$
|
(37.3
|
)
|
$
|
(34.2
|
)
|
$
|
(56.1
|
)
|
$
|
(10.5
|
)
|
$
|
(50.8
|
)
|
|||||||
Net cash (used in) provided by financing activities
|
$
|
(50.8
|
)
|
$
|
34.1
|
$
|
(22.7
|
)
|
$
|
82.6
|
$
|
(6.1
|
)
|
$
|
(33.9
|
)
|
$
|
27.1
|
||||||||||
Statistical information (in whole numbers except where indicated)
|
||||||||||||||||||||||||||||
Volume information
|
||||||||||||||||||||||||||||
Prescriptions dispensed (in thousands) (3)
|
8,295
|
7,868
|
7,520
|
7,616
|
7,884
|
7,578
|
7,497
|
|||||||||||||||||||||
Revenue per prescription dispensed
|
$
|
63.23
|
$
|
66.04
|
$
|
68.16
|
$
|
70.17
|
$
|
71.89
|
$
|
78.12
|
$
|
79.38
|
||||||||||||||
Gross profit per prescription dispensed
|
$
|
9.89
|
$
|
10.40
|
$
|
10.44
|
$
|
10.99
|
$
|
11.15
|
$
|
11.82
|
$
|
11.91
|
||||||||||||||
Gross profit margin
|
15.6
|
%
|
15.7
|
%
|
15.3
|
%
|
15.7
|
%
|
15.5
|
%
|
15.1
|
%
|
15.0
|
%
|
||||||||||||||
Generic drug dispensing rate
|
85.9
|
%
|
85.5
|
%
|
84.7
|
%
|
84.7
|
%
|
85.0
|
%
|
85.7
|
%
|
85.8
|
%
|
||||||||||||||
Inventory days on hand
|
24.4
|
33.5
|
25.2
|
43.4
|
26.6
|
25.3
|
24.8
|
|||||||||||||||||||||
Revenue days outstanding
|
34.7
|
35.4
|
37.4
|
38.0
|
37.9
|
37.5
|
37.5
|
(1) |
The Corporation has never declared a cash dividend. Earnings per common share are in actual cents.
|
(2) |
See "Use of Non-GAAP Measures for Measuring Quarterly Results" for a definition and Reconciliation of Diluted Earnings Per Share to Adjusted Diluted Earnings Per Share, and for Reconciliation of Net Income to Adjusted EBITDA and Adjusted EBITDA Margin.
|
2016 Quarters
|
2017 Quarters
|
|||||||||||||||||||||||||||
First
|
Second
|
Third
|
Fourth
|
First
|
Second
|
Third
|
||||||||||||||||||||||
Net income
|
$
|
4.1
|
$
|
2.5
|
$
|
7.3
|
$
|
7.7
|
$
|
3.5
|
$
|
4.7
|
$
|
3.2
|
||||||||||||||
Add:
|
||||||||||||||||||||||||||||
Interest expense, net
|
3.0
|
3.3
|
3.0
|
0.2
|
3.7
|
4.1
|
4.1
|
|||||||||||||||||||||
Provision for income taxes
|
0.8
|
1.7
|
1.7
|
3.1
|
2.0
|
2.8
|
2.9
|
|||||||||||||||||||||
Depreciation and amortization expense
|
13.5
|
13.9
|
14.4
|
15.7
|
16.0
|
16.7
|
16.6
|
|||||||||||||||||||||
EBITDA
|
21.4
|
21.4
|
26.4
|
26.7
|
25.2
|
28.3
|
26.8
|
|||||||||||||||||||||
Merger, acquisition, integration costs and other charges
|
4.4
|
4.4
|
5.3
|
6.7
|
3.5
|
3.6
|
5.6
|
|||||||||||||||||||||
Settlement, litigation and other related charges
|
3.1
|
4.9
|
(0.8
|
)
|
2.4
|
2.6
|
2.7
|
1.2
|
||||||||||||||||||||
Restructuring and impairment charges
|
1.4
|
1.1
|
0.6
|
(0.2
|
)
|
-
|
-
|
0.1
|
||||||||||||||||||||
Adjusted EBITDA
|
$
|
30.3
|
$
|
31.8
|
$
|
31.5
|
$
|
35.6
|
$
|
31.3
|
$
|
34.6
|
$
|
33.7
|
||||||||||||||
Adjusted EBITDA Margin
|
5.8
|
%
|
6.1
|
%
|
6.1
|
%
|
6.7
|
%
|
5.5
|
%
|
5.9
|
%
|
5.7
|
%
|
2016 Quarters
|
2017 Quarters
|
|||||||||||||||||||||||||||
First
|
Second
|
Third
|
Fourth
|
First
|
Second
|
Third
|
||||||||||||||||||||||
Adjusted EBITDA
|
$
|
30.3
|
$
|
31.8
|
$
|
31.5
|
$
|
35.6
|
$
|
31.3
|
$
|
34.6
|
$
|
33.7
|
||||||||||||||
Interest expense, net
|
(3.0
|
)
|
(3.3
|
)
|
(3.0
|
)
|
(0.2
|
)
|
(3.7
|
)
|
(4.1
|
)
|
(4.1
|
)
|
||||||||||||||
Merger, acquisition, integration costs and other charges
|
(8.9
|
)
|
(10.4
|
)
|
(5.3
|
)
|
(8.7
|
)
|
(6.1
|
)
|
(6.3
|
)
|
(6.9
|
)
|
||||||||||||||
Provision for bad debt
|
3.2
|
0.7
|
0.1
|
2.3
|
3.9
|
2.7
|
3.0
|
|||||||||||||||||||||
Amortization of deferred financing fees
|
0.1
|
0.2
|
0.1
|
0.2
|
0.2
|
0.2
|
0.2
|
|||||||||||||||||||||
Gain on acquisition
|
-
|
-
|
-
|
(0.6
|
)
|
-
|
-
|
-
|
||||||||||||||||||||
Provision for income taxes
|
(0.8
|
)
|
(1.7
|
)
|
(1.7
|
)
|
(3.1
|
)
|
(2.0
|
)
|
(2.8
|
)
|
(2.9
|
)
|
||||||||||||||
Deferred income taxes
|
3.1
|
4.7
|
0.2
|
1.0
|
2.9
|
4.3
|
1.3
|
|||||||||||||||||||||
Changes in federal and state income tax payable (receivable)
|
(0.9
|
)
|
(2.9
|
)
|
6.9
|
4.1
|
(0.2
|
)
|
(1.8
|
)
|
1.6
|
|||||||||||||||||
Stock-based compensation and deferred compensation
|
1.4
|
2.7
|
2.2
|
0.6
|
2.5
|
2.5
|
2.2
|
|||||||||||||||||||||
Excess tax benefit from stock-based compensation
|
(1.0
|
)
|
(0.2
|
)
|
(0.1
|
)
|
(0.1
|
)
|
(0.1
|
)
|
-
|
-
|
||||||||||||||||
Changes in assets and liabilities
|
41.7
|
(45.7
|
)
|
8.1
|
(80.6
|
)
|
43.5
|
13.3
|
(10.2
|
)
|
||||||||||||||||||
Other
|
0.1
|
-
|
0.1
|
-
|
-
|
(0.1
|
)
|
0.1
|
||||||||||||||||||||
Net Cash Flows Provided by (Used in) Operating Activities
|
$
|
65.3
|
$
|
(24.1
|
)
|
$
|
39.1
|
$
|
(49.5
|
)
|
$
|
72.2
|
$
|
42.5
|
$
|
18.0
|
2016 Quarters
|
2017 Quarters
|
|||||||||||||||||||||||||||
First
|
Second
|
Third
|
Fourth
|
First
|
Second
|
Third
|
||||||||||||||||||||||
Diluted earnings per share
|
$
|
0.13
|
$
|
0.08
|
$
|
0.23
|
$
|
0.25
|
$
|
0.11
|
$
|
0.15
|
$
|
0.10
|
||||||||||||||
Add:
|
||||||||||||||||||||||||||||
Diluted earnings per share impact of:
|
||||||||||||||||||||||||||||
Merger, acquisition, integration costs and other charges
|
0.09
|
0.09
|
0.11
|
0.13
|
0.07
|
0.07
|
0.11
|
|||||||||||||||||||||
Settlement, litigation and other related charges
|
0.06
|
0.10
|
(0.02
|
)
|
0.05
|
0.05
|
0.05
|
0.03
|
||||||||||||||||||||
Restructuring and impairment charges
|
0.03
|
0.02
|
0.01
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Amortization of intangible assets
|
0.17
|
0.17
|
0.17
|
0.18
|
0.18
|
0.20
|
0.20
|
|||||||||||||||||||||
Tax impact of the above adjustment charges on tax provision
|
(0.03
|
)
|
0.01
|
(0.06
|
)
|
(0.03
|
)
|
0.01
|
-
|
0.02
|
||||||||||||||||||
Adjusted diluted earnings per share
|
$
|
0.45
|
$
|
0.47
|
$
|
0.44
|
$
|
0.58
|
$
|
0.42
|
$
|
0.47
|
$
|
0.46
|
Item 1A. |
Risk Factors
|
Period
|
Total
Number of
Shares
Purchased
|
Weighted
Average
Price Paid
per Share
|
Total Number
of Shares
Purchased as
Part of a
Publicly
Announced
Plans or
Programs (2)
|
Approximate
Dollar Value of
Shares that may
yet be Purchased
under the Plans
or Programs
|
||||||||||||||||
(in millions)
|
||||||||||||||||||||
July 1, 2017 - July 31, 2017
|
124
|
(1
|
)
|
$
|
26.14
|
-
|
$
|
19.7
|
||||||||||||
August 1, 2017 - August 31, 2017
|
16
|
(1
|
)
|
25.05
|
-
|
19.7
|
||||||||||||||
September 1, 2017 - September 30, 2017
|
50
|
(1
|
)
|
29.15
|
-
|
19.7
|
(1) |
The Corporation repurchased 190 shares of common stock in connection with the vesting of certain stock awards to cover minimum statutory withholding taxes.
|
(2) |
On August 24, 2010, the Board of Directors announced a share repurchase program whereby the Corporation is authorized to purchase up to $25.0 million of the Corporation's common stock, of which $10.5 million was used. On July 2, 2012, the Board of Directors authorized an increase to the remaining portion of the existing share repurchase program that allows the Corporation to again repurchase up to a maximum of $25.0 million of the Corporation's common stock. The Corporation did not repurchase any common stock shares under this program during the three months ended September 30, 2017.
|
Exhibit No.
|
||
Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
||
Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
||
Certification of Chief Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
101.INS
|
XBRL Instance Document.
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
* |
Furnished herewith.
|
PHARMERICA CORPORATION
|
|
Date: November 9, 2017
|
/s/ Gregory S. Weishar
|
Gregory S. Weishar
|
|
Chief Executive Officer and
Director
|
|
/s/ Robert E. Dries
|
|
Date: November 9, 2017
|
Robert E. Dries
|
Executive Vice President and Chief Financial Officer
|
|
/s/ Berard E. Tomassetti
|
|
Date: November 9, 2017
|
Berard E. Tomassetti
|
Senior Vice President and Chief Accounting Officer
|
1 Year Pharmerica Corp. (delisted) Chart |
1 Month Pharmerica Corp. (delisted) Chart |
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