Exhibit 99.1
FOR IMMEDIATE RELEASE
Investor Contacts: | | Media Contact: |
Tania Almond | | Denise DesChenes/Dan Gagnier |
Investor Relations | | Citigate Sard Verbinnen |
410-528-7555 | | 212-687-8080 |
NeighborCare Reports Second Quarter Fiscal 2005 Results;
Revenues Grow 13.5% Year-Over-Year;
Total Beds Served Up 13.0% Year-Over-Year;
NeighborCare Signs Definitive Agreement to Acquire an Additional 10,000 Beds
BALTIMORE, MD – (May 4, 2005) – NeighborCare, Inc. today announced its results for the second quarter of fiscal 2005 ended March 31, 2005. Net revenues in the quarter totaled $404.7 million compared with $356.6 million last year, a 13.5% increase. Net revenues for the year to date period were up 14.6% to $796.7 million from $695.0 million.
For the quarter, income from continuing operations was $9.7 million, or $0.22 per diluted share. In the same quarter of the prior year, income from continuing operations was $8.2 million, or $0.19 per diluted share. Income from continuing operations for the quarter ended March 31, 2005 includes an unusual charge totaling $1.4 million before taxes ($0.8 million after taxes or $0.02 per diluted share) predominately related to state Medicaid audits related to prior periods which were a direct charge to gross profit for the quarter. In addition, income from continuing operations for the current quarter includes the effect of expenses incurred in connection with the unsolicited tender offer to purchase all of our outstanding common stock, as well as adjustments for certain strategic planning, severance and other operating items together aggregating $0.7 million. Income from continuing operations for the quarter ended March 31, 2004 includes certain strategic planning, severance and other operating items aggregating $2.0 million. For the current year to date period, income from continuing operations was $19.4 million or $0.43 per diluted share. For the prior year to date period, loss from continuing operations was ($5.9) million or ($0.14) per diluted share.
NeighborCare’s income from continuing operations, excluding the charges and adjustments noted above and an adjustment to a 40% effective tax rate, was $11.2 million, or $0.25 per diluted share for the current quarter. In the same quarter of the prior year, income from continuing operations adjusted for certain strategic planning, severance and other operating items and including an adjustment to a 40% tax rate was $10.2 million, or $0.23 per diluted share. For the current year to date period, adjusted income from continuing operations was $21.6 million or $0.48 per diluted share compared to $19.4 million or $0.44 per diluted share in the prior year to date period. (See Table 3 in “Financial Highlights” on page 6 for a reconciliation of income from continuing operations to income from continuing operations, as adjusted).
Adjusted EBITDA for the quarter ended March 31, 2005 was $32.4 million compared with adjusted EBITDA of $28.7 million for the same period last year or an increase of 13.1%. For the current year to date period, adjusted EBITDA was $62.8 million compared to $54.3 million in the prior year to date period or an increase of 15.7%. (See Table 2 in “Financial Highlights” on page 6 for a reconciliation of income (loss) from continuing operations to EBITDA and adjusted EBITDA).
John J. Arlotta, NeighborCare’s Chairman, President and CEO, said “I am pleased to report that NeighborCare recorded strong performance for our second quarter of 2005 in line with the indications I provided on our last earnings call. Despite start-up expenses for our new drug repack facility and continued pricing pressures, on a sequential basis we were able to maintain our adjusted gross margins for the quarter and through our cost control program, adjusted EBITDA margin improved.”
Arlotta added, “I am also pleased to announce today our most recent acquisition of Primecare Pharmacy in Los Angeles, California, a 10,000 bed institutional pharmacy which is an outstanding add-on to our existing business in southern California. This acquisition brings our total beds served to almost 300,000 and solidifies us as the second largest provider in the institutional pharmacy industry today. Importantly, this bed count demonstrates our continued success in growing our business both organically and through acquisitions.”
At March 31, 2005, NeighborCare served 289,362 beds. Organic net bed growth for the quarter totaled 671 beds. Bed counts ending March 31, 2004 and December 31, 2004 were 255,990 and 287,249, respectively. Average revenue per bed per month for the quarter ended March 31, 2005 was $415 compared to $406 for the same quarter of the prior year.
Quarterly Results Review
Introductory Note. Net revenues and cost of revenues do not include intersegment revenues and related cost of revenues with Genesis Healthcare Corporation (GHC) for periods prior to the spin-off (October 1, 2003 through December 1, 2003). GAAP requires that intersegment revenues from GHC for periods prior to the spin-off be eliminated in consolidation and that the associated gross profit be included in NeighborCare’s discontinued operations. For comparison purposes, the presentation of adjusted net revenues, cost of revenues and gross margin reflects the adjustment to include the intersegment transactions as these transactions with GHC are and will continue to be reflected in continuing operations in all periods subsequent to December 1, 2003. NeighborCare accounts for discontinued operations, including assets distributed, under the provisions of Statement of Financial Accounting Standards, No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”). Under SFAS 144, discontinued businesses including assets distributed are removed from the results of continuing operations and presented as a separate line on the statement of operations. Adjusted net revenues and gross margin also reflect an adjustment to add back the current quarter charges related to state Medicaid audits. (See Reconciliation Table 1 in “Financial Highlights” on page 6).
Revenues. Net revenues in the quarter increased $48.1 million, or 13.5%, to $404.7 million from $356.6 million in the year ago quarter. This was principally driven by growth in revenue of the Company’s institutional pharmacy segment of approximately $47.1 million, or 15.5% over the same period in the prior year. This growth was driven by an increase in bed census, as well as increased drug trend partially offset by certain state Medicaid reimbursement reductions and competitive price reductions.
Cost of revenues. Cost of revenues in the quarter increased by $39.0 million, or 13.8%, to $321.3 million from $282.3 million in the year ago quarter. Increases in delivery costs - including fuel, labor costs and insurance - were partially offset by reduced labor costs due to pharmacy consolidations and process improvement initiatives.
Gross margin. Gross margin in the quarter declined to 20.6% from 20.9% last year. This reduction is primarily due to the charge recorded related to the state Medicaid audits. On an adjusted basis, gross margin remained constant at 20.9%.
Selling, general and administrative (SG&A). SG&A in the current quarter increased $8.9 million to $60.5 million from the year ago level of $51.6 million. The primary reason for the increase in SG&A is acquisitions, increased salary and wages expense due to the creation of corporate functions after the spin-off of GHC, the expensing of restricted stock granted to employees, increased depreciation expense, and costs incurred in connection with Sarbanes-Oxley compliance. As a percentage of adjusted net revenues, SG&A was 14.9% compared to 14.5% for the same period in the prior year.
Liquidity and capital resources. NeighborCare ended the quarter with $27.3 million of cash and $263.0 million of working capital.
Outlook
NeighborCare today commented on the Company’s previously issued fiscal 2005 guidance. Revenues are expected to be toward the middle of the original range of $1.55-$1.725 billion for 2005 or approximately $1.6 billion. Adjusted EBITDA and adjusted earnings per share, which in each case exclude one time charges and
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special items, are now expected to be approximately $132 million and $1.02 per share, respectively. One-time charges or special items would reduce net income, EBITDA and net income per share. We are not able to reasonably forecast such charges or items at this time and accordingly have not provided an estimate of their impact on net income, EBITDA or net income per share nor an estimate of net income. (See reconciliation in “Earnings Outlook for the Fiscal Year Ended September 30, 2005” on page 9)
Conference Call
NeighborCare will host a conference call and webcast at 10:00 a.m. Eastern Time on May 5, 2005 to discuss results for the second fiscal quarter. The conference call information follows:
Toll-Free Number: (888) 240-0264
Toll Number: (706) 679-5757
Leader: John Arlotta
Conference ID: 5738227
Investors can also access the conference live via webcast through NeighborCare’s web site at http://www.neighborcare.com/investor/earnings.cfm, where a replay of the call will also be posted.
About NeighborCare, Inc.
NeighborCare, Inc. (NASDAQ: NCRX) is one of the nation’s leading institutional pharmacy providers serving long term care and skilled nursing facilities, specialty hospitals, assisted and independent living communities, and other assorted group settings. NeighborCare also provides infusion therapy services, home medical equipment, respiratory therapy services, community-based retail pharmacies and group purchasing. In total, NeighborCare’s operations span the nation, providing pharmaceutical services in 34 states and the District of Columbia. Visit our website at www.neighborcare.com.
Statements made in this document, our website and in our other public filings and releases, which are not historical facts contain “forward-looking” statements (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties and are subject to change at any time. These forward-looking statements may include, but are not limited to, statements containing words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “may”, “target” and similar expressions. Such forward looking statements include, without limitation, statements regarding the effect of the spin-off on our operations, expected changes in reimbursement rates and inflationary increases in state Medicaid rates, expected bed count, expected SG&A expense, anticipated restructuring charges, our anticipated results of operations for fiscal 2005 and estimates of timing and costs savings related to cost improvement initiatives. Factors that could cause actual results to differ materially include, but are not limited to, the following: our ability, and the ability of our customers, to comply with Medicare or Medicaid reimbursement regulations or other applicable laws, changes in the reimbursement rates or methods of payment from Medicare and Medicaid, or the implementation of other measures to reduce the reimbursement for our services and the impact of the Medicare Prescription Drug, Improvement and Modernization Act of 2003, changes in pharmacy legislation and payment formulas, the impact of federal and state regulations, competition in our businesses, the impact of Omnicare, Inc.’s unsolicited tender offer to acquire all of our outstanding common stock, competition for qualified management and pharmacy professionals, the impact of investigations and audits relating to alleged violations of federal and/or state regulations, changes in the acuity of patients, payor mix and payment methodologies, further consolidation of managed care organizations and other third party payors, the effect of the expiration or termination of certain service and supply contracts, changes in or our failure to satisfy pharmaceutical manufacturers’ rebate programs, an economic downturn or changes in the laws affecting our business in those markets in which we operate, the impact of acquisitions, and our ability to integrate acquired businesses, on our operations and finances, our ability to control operating costs and generate sufficient cash flow to meet operational and financial requirements, our ability, and the ability of our subsidiary guarantors, to fulfill debt obligations, our covenants and restrictions contained in financing agreements which limit our discretion in the operation of our business, our charter documents and the Pennsylvania Business Corporation Law of 1988, as amended, which could delay or prevent a change of control, availability of financial and other resources to us after the spin-off of GHC, operating inefficiencies and higher costs after the spin-off of GHC, federal income tax liabilities and indemnification obligations related to the spin-off of GHC, conflicts of interest as a result of our continuing relationship with GHC after the spin-off, the ability of GHC, as our largest customer, to operate as a separate entity and acts of God or public authorities, war, civil unrest, terrorism, fire, floods, earthquakes and other matters beyond our control.
The forward-looking statements involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control. We caution investors that any forward-looking statements made by us are not guarantees of future performance. We disclaim any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments.
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NEIGHBORCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands except per share amounts)
| | Three Months Ended March 31, | | Six Months Ended March 31, | |
| | 2005 | | 2004 | | 2005 | | 2004 | |
| | | | | | | | | |
Net revenues | | $ | 404,706 | | $ | 356,646 | | $ | 796,706 | | $ | 695,040 | |
Cost of revenues | | 321,329 | | 282,285 | | 631,063 | | 544,256 | |
Gross profit | | 83,377 | | 74,361 | | 165,643 | | 150,784 | |
| | | | | | | | | |
Selling, general and administrative | | 60,518 | | 51,599 | | 120,164 | | 108,635 | |
Strategic planning, severance and other operating items | | (64 | ) | 2,037 | | 455 | | 42,701 | |
Takeover defense expenses | | 785 | | — | | 1,557 | | — | |
Operating income (loss) | | 22,138 | | 20,725 | | 43,467 | | (552 | ) |
| | | | | | | | | |
Interest expense, net | | 4,498 | | 4,553 | | 8,529 | | 10,207 | |
Other expense | | 1,173 | | 1,225 | | 2,301 | | 2,317 | |
| | | | | | | | | |
Income (loss) before income tax provision (benefit) | | 16,467 | | 14,947 | | 32,637 | | (13,076 | ) |
Income tax provision (benefit) | | 6,782 | | 6,731 | | 13,250 | | (7,143 | ) |
| | | | | | | | | |
Income (loss) from continuing operations | | 9,685 | | 8,216 | | 19,387 | | (5,933 | ) |
Income from discontinued operations, net of taxes | | — | | — | | — | | 8,435 | |
| | | | | | | | | |
Net income | | $ | 9,685 | | $ | 8,216 | | 19,387 | | 2,502 | |
| | | | | | | | | |
Per common share data | | | | | | | | | |
Basic | | | | | | | | | |
Income (loss) from continuing operations | | $ | 0.22 | | $ | 0.19 | | $ | 0.44 | | $ | (0.14 | ) |
Income from discontinued operations | | $ | — | | $ | — | | $ | — | | $ | 0.20 | |
Net income | | $ | 0.22 | | $ | 0.19 | | $ | 0.44 | | $ | 0.06 | |
Weighted average shares outstanding | | 43,838 | | 43,640 | | 43,823 | | 42,010 | |
| | | | | | | | | |
Diluted | | | | | | | | | |
Income (loss) from continuing operations | | $ | 0.22 | | $ | 0.19 | | $ | 0.43 | | $ | (0.14 | ) |
Income from discontinued operations | | $ | — | | $ | — | | $ | — | | $ | 0.20 | |
Net income | | $ | 0.22 | | $ | 0.19 | | $ | 0.43 | | $ | 0.06 | |
Weighted average shares outstanding | | 44,688 | | 43,957 | | 44,649 | | 42,010 | |
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NEIGHBORCARE, INC.
SEGMENT INFORMATION
(Unaudited)
(in thousands) | | Institutional
Pharmacy | | Corporate
and Other | | Consolidated | |
Three months ended March 31, 2005 | | | | | | | |
Net revenues | | $ | 350,344 | | $ | 54,362 | | $ | 404,706 | |
Gross profit | | $ | 67,206 | | $ | 16,171 | | $ | 83,377 | |
Operating income (loss) | | $ | 33,344 | | $ | (11,206 | ) | $ | 22,138 | |
| | | | | | | |
Three months ended March 31, 2004 | | | | | | | |
Net revenues | | $ | 303,256 | | $ | 53,390 | | $ | 356,646 | |
Gross profit | | $ | 57,704 | | $ | 16,657 | | $ | 74,361 | |
Operating income (loss) | | $ | 28,521 | | $ | (7,796 | ) | $ | 20,725 | |
| | | | | | | |
Six months ended March 31, 2005 | | | | | | | |
Net revenues | | $ | 688,176 | | $ | 108,530 | | $ | 796,706 | |
Gross profit | | $ | 132,705 | | $ | 32,938 | | $ | 165,643 | |
Operating income (loss) | | $ | 66,394 | | $ | (22,927 | ) | $ | 43,467 | |
| | | | | | | |
Six months ended March 31, 2004 | | | | | | | |
Net revenues | | $ | 585,047 | | $ | 109,993 | | $ | 695,040 | |
Gross profit | | $ | 115,818 | | $ | 34,966 | | $ | 150,784 | |
Operating income (loss) | | $ | 55,094 | | $ | (55,646 | ) | $ | (552 | ) |
| | | | | | | |
Total assets as of | | | | | | | |
March 31, 2005 | | $ | 282,235 | | $ | 605,187 | | $ | 887,422 | |
September 30, 2004 | | $ | 217,969 | | $ | 631,439 | | $ | 849,408 | |
Note: Reference Table 1 of the Financial Highlights section for intersegment adjustments and special charges which impact only the institutional pharmacy segment.
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NEIGHBORCARE, INC.
FINANCIAL HIGHLIGHTS
(Unaudited)
Table 1 - Reconciliation of net revenues, cost of revenues, gross profit and gross margin, each as adjusted
(in thousands)
| | Three Months Ended | | Six Months Ended | |
| | 31-Mar-05 | | 31-Mar-04 | | 31-Dec-04 | | 31-Mar-05 | | 31-Mar-04 | |
Net revenues - as reported | | $ | 404,706 | | $ | 356,646 | | $ | 392,000 | | $ | 796,706 | | $ | 695,040 | |
Add back: | | | | | | | | | | | |
Intersegment revenues with Genesis HealthCare | | — | | — | | — | | — | | 13,013 | |
Unusual charge | | 1,400 | | — | | — | | 1,400 | | | |
Net revenues - as adjusted | | $ | 406,106 | | $ | 356,646 | | $ | 392,000 | | $ | 798,106 | | $ | 708,053 | |
Cost of revenues - as reported | | $ | 321,329 | | $ | 282,285 | | $ | 309,734 | | $ | 631,063 | | $ | 544,256 | |
Add back: | | | | | | | | | | | |
Intersegment cost of revenues for Genesis HealthCare | | — | | $ | — | | — | | $ | — | | $ | 10,332 | |
Cost of revenues - as adjusted | | $ | 321,329 | | $ | 282,285 | | $ | 309,734 | | $ | 631,063 | | $ | 554,588 | |
| | | | | | | | | | | |
Gross Margin $ - as adjusted | | $ | 84,777 | | $ | 74,361 | | $ | 82,266 | | $ | 167,043 | | $ | 153,465 | |
Gross Margin % - as adjusted | | 20.9 | % | 20.9 | % | 21.0 | % | 20.9 | % | 21.7 | % |
Table 2 - Reconciliation of income (loss) from continuing operations, as reported, to EBITDA and Adjusted EBITDA
(in thousands)
| | Three Months Ended | | Six Months Ended | |
| | 31-Mar-05 | | 31-Mar-04 | | 31-Dec-04 | | 31-Mar-05 | | 31-Mar-04 | |
Income (loss) from continuing operations - as reported | | $ | 9,685 | | $ | 8,216 | | $ | 9,702 | | $ | 19,387 | | $ | (5,933 | ) |
Add back (deduct): | | | | | | | | | | | |
Other expense | | 1,173 | | 1,225 | | 1,128 | | 2,301 | | 2,317 | |
Income tax provision (benefit) | | 6,782 | | 6,731 | | 6,468 | | 13,250 | | (7,143 | ) |
Interest expense, net | | 4,498 | | 4,553 | | 4,031 | | 8,529 | | 10,207 | |
Depreciation and amortization | | 8,182 | | 5,912 | | 7,697 | | 15,879 | | 12,156 | |
EBITDA | | $ | 30,320 | | $ | 26,637 | | $ | 29,026 | | $ | 59,346 | | $ | 11,604 | |
Add back: | | | | | | | | | | | |
Unusual charge | | 1,400 | | — | | — | | 1,400 | | — | |
Strategic planning, severance and other operating items | | (64 | ) | 2,037 | | 519 | | 455 | | 42,701 | |
Takeover defense expenses | | 785 | | — | | 772 | | 1,557 | | — | |
Adjusted EBITDA | | $ | 32,441 | | $ | 28,674 | | $ | 30,317 | | $ | 62,758 | | $ | 54,305 | |
Table 3 - Reconciliation of income (loss) from continuing operations, as reported, to income from continuing operations, as adjusted
(in thousands, except per share amounts)
| | Three Months Ended | | Six Months Ended | |
| | 31-Mar-05 | | 31-Mar-04 | | 31-Dec-04 | | 31-Mar-05 | | 31-Mar-04 | |
Income (loss) from continuing operations - as reported | | $ | 9,685 | | $ | 8,216 | | $ | 9,702 | | $ | 19,387 | | $ | (5,933 | ) |
Add back (deduct): | | | | | | | | | | | |
Intersegment revenues with Genesis HealthCare | | — | | — | | — | | — | | 13,013 | |
Intersegment cost of revenues for Genesis HealthCare | | — | | — | | — | | — | | (10,332 | ) |
Unusual charge | | 1,400 | | — | | — | | 1,400 | | — | |
Strategic planning, severance and other operating items | | (64 | ) | 2,037 | | 519 | | 455 | | 42,701 | |
Takeover defense expenses | | 785 | | — | | 772 | | 1,557 | | — | |
Tax impact of items added back above to 40% effective tax rate | | (653 | ) | (63 | ) | (516 | ) | (1,170 | ) | (20,065 | ) |
Income from continuing operations - as adjusted | | $ | 11,153 | | $ | 10,190 | | $ | 10,477 | | $ | 21,629 | | $ | 19,384 | |
Income from continuing operations - as adjusted per share - basic | | $ | 0.25 | | $ | 0.23 | | $ | 0.24 | | $ | 0.49 | | $ | 0.46 | |
Weighted average shares - basic | | 43,838 | | 43,640 | | 43,809 | | 43,823 | | 42,010 | |
Income from continuing operations - as adjusted per share - diluted | | $ | 0.25 | | $ | 0.23 | | $ | 0.24 | | $ | 0.48 | | $ | 0.44 | |
Weighted average shares - diluted | | 44,688 | | 43,957 | | 44,545 | | 44,649 | | 43,875 | |
Notes:
• Adjusted EBITDA is a non-GAAP financial measure that management considers, along with GAAP measures, when evaluating the Company’s operating performance. Adjusted EBITDA is reconciled to the most directly comparable GAAP financial measure.
• Income from continuing operations - as adjusted is a non-GAAP financial measure that management considers, along with GAAP measures, when evaluating the Company’s operating performance. This non-GAAP financial measure is reconciled to the most directly comparable GAAP financial measure.
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NEIGHBORCARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
| | March 31,
2005 | | December 31,
2004 | | September 30,
2004 | |
ASSETS | | | | | | | |
Current assets | | | | | | | |
Cash and cash equivalents | | $ | 27,316 | | $ | 21,092 | | $ | 81,923 | |
Accounts receivable, net | | 265,557 | | 253,015 | | 230,903 | |
Inventories | | 69,779 | | 73,873 | | 64,111 | |
Prepaid expenses and other current assets | | 43,906 | | 41,026 | | 40,046 | |
Total current assets | | 406,558 | | 389,006 | | 416,983 | |
Property, plant and equipment, net | | 95,600 | | 91,207 | | 84,215 | |
Other long-term assets | | 21,343 | | 20,735 | | 19,353 | |
Identifiable intangible assets, net | | 16,824 | | 16,990 | | 12,737 | |
Goodwill | | 347,097 | | 342,940 | | 316,120 | |
Total assets | | $ | 887,422 | | $ | 860,878 | | $ | 849,408 | |
| | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | |
Current liabilities | | | | | | | |
Current portion of long-term debt | | $ | 9,035 | | $ | 22,150 | | $ | 4,263 | |
Accounts payable and accrued expenses | | 119,604 | | 96,029 | | 116,965 | |
Income taxes payable | | 14,878 | | 8,838 | | 4,747 | |
Total current liabilities | | 143,517 | | 127,017 | | 125,975 | |
Long-term debt | | 255,648 | | 258,418 | | 258,008 | |
Other long-term liabilities | | 73,049 | | 70,738 | | 70,765 | |
Total liabilities | | 472,214 | | 456,173 | | 454,748 | |
| | | | | | | |
Minority interest | | 7,893 | | 7,531 | | 7,880 | |
| | | | | | | |
Total shareholders’ equity | | 407,315 | | 397,174 | | 386,780 | |
Total liabilities and shareholders’ equity | | $ | 887,422 | | $ | 860,878 | | $ | 849,408 | |
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NEIGHBORCARE, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in thousands)
| | Three Months
Ended | | Six Months Ended March 31, | |
| | March 31, 2005 | | 2005 | | 2004 | |
Cash flows from operating activities | | | | | | | |
Net income | | $ | 9,685 | | $ | 19,387 | | $ | 2,502 | |
Net charges included in operations not requiring funds | | 12,892 | | 28,159 | | 26,412 | |
Changes in operating assets and liabilities, excluding impact of business acquisitions | | | | | | | |
Change in accounts receivable, net | | (14,372 | ) | (34,504 | ) | (39,986 | ) |
Change in accounts payable and accrued expenses | | 28,909 | | 10,475 | | 79,671 | |
Other, net | | 537 | | (8,330 | ) | (33,384 | ) |
Net cash provided by operating activities | | 37,651 | | 15,187 | | 35,215 | |
| | | | | | | |
Cash flows from investing activities | | | | | | | |
Capital expenditures | | (10,408 | ) | (23,133 | ) | (16,545 | ) |
Business acquisitions | | (7,011 | ) | (46,900 | ) | (3,969 | ) |
Other, net | | — | | (2,004 | ) | (33,432 | ) |
Net cash used by investing activities | | (17,419 | ) | (72,037 | ) | (53,946 | ) |
| | | | | | | |
Cash flows from financing activities | | | | | | | |
Net borrowings against revolving credit facility | | (13,000 | ) | 4,000 | | — | |
Repayment of long-term debt | | (1,070 | ) | (2,399 | ) | (556,285 | ) |
Proceeds from issuance of long-term debt, net of debt issuance costs | | — | | — | | 465,804 | |
Distributions of cash to GHC | | — | | — | | (63,154 | ) |
Funds received from GHC for debt financing | | — | | — | | 135,885 | |
Other | | 62 | | 642 | | (4,907 | ) |
Net cash provided (used) by financing activities | | (14,008 | ) | 2,243 | | (22,657 | ) |
| | | | | | | |
Net increase (decrease) in cash and cash equivalents | | 6,224 | | (54,607 | ) | (41,388 | ) |
Cash and cash equivalents at beginning of period | | 21,092 | | 81,923 | | 132,726 | |
Cash and cash equivalents at end of period | | $ | 27,316 | | $ | 27,316 | | $ | 91,338 | |
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NEIGHBORCARE, INC.
EARNINGS OUTLOOK FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005
(Unaudited, in thousands except per share amounts)
Reconciliation of net income to Adjusted EBITDA
| | FY2005E | |
| | | |
Net income | | $ | 43,309 | |
Add back: | | | |
Unusual charge | | 1,400 | |
Strategic planning, severance and other operating items | | 455 | |
Takeover defense expenses | | 1,557 | |
Income taxes | | 29,080 | |
Depreciation and amortization | | 33,743 | |
Interest expense | | 18,556 | |
Other expense | | 4,300 | |
Adjusted EBITDA | | $ | 132,400 | |
Reconciliation of net income to adjusted net income and EPS to adjusted EPS
| | $ | | Per Share | |
Net income | | $ | 43,309 | | $ | 0.97 | |
Add back: | | | | | |
Unusual charge | | 1,400 | | 0.03 | |
Strategic planning, severance and other operating items | | 455 | | 0.01 | |
Takeover defense expenses | | 1,557 | | 0.03 | |
Tax impact of adjustments | | (1,365 | ) | (0.03 | ) |
Adjusted net income | | $ | 45,356 | | $ | 1.02 | |
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