BUFFALO GROVE, Ill., May 4 /PRNewswire-FirstCall/ -- Option Care, Inc. today reported record results for the quarter ended March 31, 2004. Revenues were $103 million for the first quarter of 2004, an 11% increase compared to revenues of $93 million for the first quarter of 2003. Same store sales growth was 13% for the first quarter. Net income increased 8% for the first quarter to $4.3 million compared to $4.0 million for the first quarter of 2003. Diluted earnings per share was $0.20 for the quarter ended March 31, 2004, as compared to $0.19 for the comparable period last year.
Raj Rai, Option Care's chief executive officer, commented, "I am extremely pleased with our record results for the first quarter and, in particular, our continued improvement in cash flow. Our home infusion and specialty pharmacy services have generated solid organic growth from last year as we have strengthened our sales team and executed our marketing plans. I am particularly pleased with the stronger than expected seasonal sales of Synagis(R). In addition, we continue to see sales growth for Xolair(R), which we launched in the third quarter of last year as well as growth of our managed care specialty pharmacy revenues as payors focus on managing the costs of physician-office based injectible medications. For the remainder of 2004, we will continue to execute our strategic sales and operating initiatives as well as accelerating our acquisition program."
Rick Smith, Option Care's president and chief operating officer, commented, "As the sales of Synagis(R) decline cyclically during the second quarter, our focus will remain on maintaining our growth rate for both home infusion and specialty pharmacy services. In addition, we continue to drive improvements in our operating infrastructure with particular emphasis on purchasing leverage, controlling operating expenses and account receivable management."
Commenting on the financial aspects of the quarter, Paul Mastrapa, chief financial officer, stated, "Our organic growth of 13% included growth of 15% for specialty pharmacy services and 7% for home infusion and related healthcare services. In particular, we are very pleased with our growth of Synagis(R), which increased 19% organically from the prior year. Synagis(R) treats RSV in infants and is a seasonal therapy typically administered from October through April. Consistent with our guidance and the seasonality of the product, we expect our overall revenues to decline in the second quarter as the Synagis(R) season ends."
Mr. Mastrapa continued, "Overall gross profit for the first quarter was 27.8% as compared to 29.5% for the prior year quarter. The decline in overall gross profit is a result of the shift in mix towards specialty pharmacy revenues, which were 63% of revenues in the current quarter compared to 62% for the same quarter of the prior year, as well as lower gross profit within our specialty pharmacy services. Gross profit for our specialty pharmacy services declined to 16.2% from 19.3% due to shift in mix towards lower margin products resulting from our growth in Synagis(R), Xolair(R), Human Growth Hormone, and our managed care specialty pharmacy services. As the Synagis(R) season ends during the second quarter, we expect to see an increase in our specialty pharmacy gross profit as the mix shifts towards higher margin therapies. Home infusion services gross profit improved to 43.0% as compared to 42.0% for the first quarter of the prior year primarily due to improved utilization of our direct labor."
Mastrapa concluded, "Our balance sheet remains very strong with positive cash flow from operations of $5.2 million. I am pleased with our cash flow results considering the sequential increase in revenues from the fourth quarter of $7.4 million. Our strong cash flow is a reflection of our continued improvement in accounts receivable. Days sales outstanding were 57 days at the end of the quarter, a decrease of 4 days from the previous quarter ended December 31, 2003. Lastly, we ended the quarter debt free with $6.6 million of cash on-hand."
Outlook
The company estimates that earnings per diluted share will range from $0.75 to $0.80 for 2004. These estimates exclude the impact of any future acquisitions.
First Quarter Conference Call
The Company will be hosting a conference call today, Tuesday, May 4, 2004, to review the financial results for the first quarter. Investors and other interested parties may access the call at 9:00 a.m. Central Time by dialing in at (800) 299-9630, participant passcode 21020092.
The call will be broadcast live as well as replayed through the internet. The webcast can be accessed through a link at http://www.optioncare.com/ . For those who cannot listen to the live broadcast, a replay will be available two hours after the call concludes at (888) 286-8010, passcode 52320179. The playback will be available until midnight on May 7, 2004.
The webcast is also being distributed over CCBN's Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN's individual investor center at http://www.fulldisclosure.com/ or by visiting any of the investor sites in CCBN's Individual Investor Network. Institutional investors can access the call via CCBN's password-protected event management site, StreetEvents http://www.streetevents.com/.
About Option Care
Option Care provides various home infusion therapies and specialty injectible pharmaceuticals to patients at home and other alternate sites such as infusion suites and physician's offices. The company's services and pharmaceuticals are provided nationally through its local and regional pharmacies.
Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Forward looking statements can be identified by the use of terms such as "anticipates," "expects," "believes" and other words having a similar meaning. Investors are cautioned that all forward-looking statements involve risks and uncertainty. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by us, or on our behalf. These risks and uncertainties include, but are not limited to, uncertainties affecting our businesses and our franchisees relating to acquisitions and divestitures (including continuing obligations with respect to completed transactions), sales and renewals of franchises, government and regulatory policies (including federal, state and local efforts to reform the delivery of and payment for healthcare services), general economic conditions (including economic conditions affecting the healthcare industry in particular), the pricing and availability of equipment and services, technological developments and changes in the competitive environment in which we operate. These statements are based upon assumptions and, although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, there can be no assurance that the forward-looking statements included in this press release will prove to be accurate.
Further Information on Option Care Can Be Found at: http://www.optioncare.com/http://www.optionmed.com/http://www.mbimbi.com/ [Financial tables follow] Option Care, Inc. and Subsidiaries Condensed Consolidated Statements of Income (Unaudited) (in thousands) Three Months Ended March 31, 2004 2003 Revenue: Specialty pharmacy services $64,932 $57,034 Infusion and related healthcare services 34,946 33,073 Other 3,271 2,455 Total revenue 103,149 92,562 Cost of revenue: Cost of goods sold 63,808 54,824 Cost of services provided 10,644 10,458 Total cost of revenue 74,452 65,282 Gross profit 28,697 27,280 Selling, general and administrative expenses 19,249 18,030 Provision for doubtful accounts 1,559 1,878 Depreciation and amortization 681 668 Total operating expenses 21,489 20,576 Operating income 7,208 6,704 Interest income (expense), net 1 (99) Other expense, net (67) (9) Income before income taxes 7,142 6,596 Income tax provision 2,857 2,630 Net income $4,285 $3,966 Net income per share: Basic $0.20 $0.19 Diluted $0.20 $0.19 Shares used in computing net income per Common share: Basic 21,091 20,807 Diluted 21,556 21,156 Option Care, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands) (Unaudited) March 31, December 31, 2004 2003 Assets Current assets: Cash and cash equivalents $6,649 $3,961 Accounts receivable, net 65,721 62,190 Inventory 8,248 11,522 Other current assets 8,194 9,721 Total current assets 88,812 87,394 Equipment and other fixed assets, net 12,176 12,145 Goodwill, net 65,661 64,970 Other assets 1,874 2,025 Total assets $168,523 $166,534 Liabilities and stockholders' equity Current liabilities: Trade accounts payable $18,523 $19,940 Current portion of long-term debt 112 424 Other current liabilities 9,054 10,253 Total current liabilities 27,689 30,617 Long-term debt, less current portion 29 82 Other liabilities 7,153 6,815 Total liabilities 34,871 37,514 Total stockholders' equity 133,652 129,020 Total liabilities and stockholders' equity $168,523 $166,534 Option Care, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands) Three Months Ended March 31, 2004 2003 Net cash provided by operating activities $5,226 $4,670 Net cash used in investing activities (including acquisitions) (2,065) (4,364) Net cash provided by (used in) financing activities (473) 280 Increase (decrease) in cash and cash equivalents $2,688 $586
Option Care, Inc.CONTACT: Paul Mastrapa, Chief Financial Officer of Option Care, Inc.,+1-847-229-7773
