CMX releases awesome earnings...I am hearing buyout rumours as well (both CVS and RAD) mentioned.
Caremark Rx Records 26% Growth in Operating Income for Fourth Quarter 1999 and 25% Growth in Operating Income for Fiscal 1999 Over Prior Year Periods
PR NEWSWIRE - February 10, 2000 07:15
BIRMINGHAM, Ala., Feb 10, 2000 /PRNewswire via COMTEX/ -- Caremark Rx, Inc. (NYSE: CMX) today reported its results for the fourth quarter and year ended December 31, 1999. In both periods, Caremark Rx's continuing operations posted substantial growth in revenue, operating income, and net income compared to the same periods in fiscal 1998.
Fourth quarter revenue increased 28%, to $913.5 million, compared to the fourth quarter of fiscal 1998. Operating income (income before interest, restructuring charges and income taxes) for the fourth quarter of 1999 was $53.0 million and net income from continuing operations available to common shareholders totaled $19.5 million. Operating income rose 26% from the fourth quarter of 1998 to the fourth quarter of 1999. Fourth-quarter 1999 earnings from continuing operations per share totaled $0.10 per basic and diluted share, which represents a 67% improvement over the $0.06 per share in the prior year.
For 1999, revenue grew 26%, to $3.308 billion, compared to 1998. Operating income for 1999 was $179.4 million and net income from continuing operations available to common shareholders was $55.9 million. Operating income rose 25% from 1998 compared to 1999. Earnings from continuing operations per basic and diluted share for 1999 totaled $0.29, which represents an 81% increase over the $0.16 per share in the prior year.
Mac Crawford, Chairman, President and CEO of Caremark Rx, said, "We are extremely pleased with Caremark Rx's performance for both the quarter and the year. Over the past year, we have had a number of significant new business wins and we go into 2000 with the largest net new book of business in recent history. During the past year, we have expanded our service offerings, including the launch of an Internet strategy that provides improved service and convenience to our members, and we enhanced our pharmacy operations to enable us to service the significant growth in new business that we experienced."
"We have also worked to expand our presence in the biotech industry through our therapeutic services products. We believe that Caremark is well positioned to serve this industry through the launch of new products that are anticipated over the next several years," continued Crawford. "1999 was a very good year for Caremark, and we look forward to 2000 as we believe that the Company can capitalize on the competitive strengths and the momentum gained over the past year."
The Company also noted that it had substantially completed its divestiture of its physician practice management assets as planned.
Caremark is a leading prescription benefit manager (PBM), providing comprehensive drug benefit services to over 1,200 health plan sponsors and holding contracts to serve over 20 million participants throughout the U.S. Caremark's clients include managed care organizations, insurance companies, corporate health plans, unions, government agencies, and other funded benefit plans. The company operates a national retail pharmacy network with over 50,000 participating pharmacies, three state-of-the-art mail service pharmacies, the industry's only FDA-regulated repackaging plant, and twenty-two JCAHO-accredited specialized therapeutic pharmacies for delivery of advanced medications to patients with chronic or genetic diseases and disorders.
This press release contains statements that constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934 as amended by the Private Securities Litigation Reform Act of 1955. "Forward-looking" statements contained in this press release include the intent, belief or current expectations of the Company and members of its senior management team with respect to the growth prospects for Caremark Rx, the divestiture of the physician practice management business, and the quality and value of the Caremark business, as well as the assumptions upon which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance, and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements.
Important factors currently known to management that could cause actual results to differ materially from those contemplated by the forward-looking statements in this press release include, but are not limited to, adverse developments with respect to the planned divestiture of the physician practice services division (including the timing, terms or feasibility of such divestiture), adverse developments with respect to the operation of the Company's business units during such divestiture process, failure to meet operating objectives and to execute the operating plan, and adverse developments with respect to the healthcare industry in general and overall market conditions. Additional factors that could cause actual results to differ materially from those contemplated in this press release can be found in the Company's Quarterly Report on Form 10-Q for the period ended September 30, 1999 and filed with the Securities and Exchange Commission on November 15, 1999.
CAREMARK Rx, Inc. Consolidated Statements of Operations (In thousands, except per share amounts)
Three Months Ended Year Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1999 1998 1999 1998
Net Revenue $913,545 $713,726 $3,307,806 $2,634,017
Operating expenses:
Cost of revenues 826,912 642,245 3,005,918 2,383,666
Selling, general
and administrative
expenses 27,843 24,181 100,403 87,721
Depreciation and
amortization 5,839 5,200 22,095 18,944
Operating income 52,951 42,100 179,390 143,686
Net interest
expense 28,397 24,009 115,292 84,574
Income from continuing
operations excluding
restructuring
charges 24,554 18,091 64,098 59,112
Restructuring charges -- -- -- 9,500
Income from continuing
operations before
income taxes 24,554 18,091 64,098 49,612
Income tax expense 1,865 6,875 4,952 18,852
Income from continuing
operations before
preferred security
dividends 22,689 11,216 59,146 30,760
Preferred security
dividends 3,220 -- 3,255 --
Net income from continuing
operations available to
common shareholders 19,469 11,216 55,891 30,760
Loss from discontinued
operations -- (1,225,602) (199,310) (1,284,878)
Cumulative effect of
change in accounting
principle, net of tax -- (6,348) -- (6,348)
Net income (loss) $19,469 $(1,220,734) $(143,419) $(1,260,466)
Basic earnings per
common share:
Continuing
operations $0.10 $0.06 $0.29 $0.16
Discontinued operations -- (6.45) (1.04) (6.79)
Cumulative effect of
change in accounting
principle -- (0.03) -- (0.03)
Basic earnings per
common share $0.10 $(6.42) $(0.75) $(6.66)
Diluted earnings per
common share:
Continuing
operations $0.10 $0.06 $0.29 $0.16
Discontinued
operations -- (6.41) (1.03) (6.77)
Cumulative effect of
change in accounting
principle -- (0.03) -- (0.03)
Diluted earnings per
common share $0.10 $(6.38) $(0.74) $(6.64)
Weighted average common
shares outstanding 190,913 190,078 190,734 189,327
Dilutive effect of
employee stock options 3,409 1,137 4,216 600
Weighted average common
shares outstanding,
assuming dilution 194,322 191,215 194,950 189,927
CAREMARK Rx, Inc.
Consolidated Balance Sheets
(In thousands) December 31,
1999 1998
ASSETS
Current assets:
Cash and cash equivalents $6,797 $23,100
Accounts receivable, net 229,332 185,719
Inventories 159,031 171,739
Prepaid expenses and
other current assets 14,880 11,513
Current assets of
discontinued operations 124,616 793,495
Total current assets 534,656 1,185,566
Property and equipment, net 108,168 115,835
Intangible assets, net 41,080 27,463
Other assets 54,089 51,272
Non current assets of
discontinued operations 32,853 481,970
$770,846 $1,862,106
LIABILITIES AND STOCKHOLDER'S DEFICIT
Current liabilities:
Accounts payable $275,119 $215,861
Other accrued expenses
and liabilities 152,368 297,265
Income tax payable 17,378 9,480
Current portion of
long-term debt 500,371 207
Current liabilities of
discontinued operations 99,170 577,642
Total current liabilities 1,044,406 1,100,455
Long-term debt, net of
current portion 749,025 1,735,096
Other long-term liabilities 46,453 61,954
Long-term liabilities of
discontinued operations 12,437 108,774
Total liabilities 1,852,321 3,006,279
Convertible preferred
securities 200,000 --
STOCKHOLDERS' DEFICIT
Common stock 200 199
Additional paid-in capital 952,432 954,420
Shares held in trust (135,141) (142,477)
Accumulated deficit (2,098,966) (1,956,315)
Total stockholders'
deficit (1,281,475) (1,144,173)
$770,846 $1,862,106
SOURCE Caremark Rx, Inc.
(C) 2000 PR Newswire. All rights reserved.
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