Chronimed Reports Fiscal 2000 Second Quarter Results
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| NEWS RELEASE January 24, 2000 |
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Contacts: |
Paul S. Dunn, Investor Relations,
or |
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MINNEAPOLIS, January 24, 2000 -- Chronimed Inc. (Nasdaq: CHMD), today reported record revenue for the second quarter ended December 31, 1999 of $67.2 million, up 38 percent from $48.7 million in last year's second quarter. Excluding one-time expenses of $470,000 incurred in seeking strategic alternatives, pre-tax income from operations was $3.1 million, in line with last year. Net income per diluted share was 15 cents in the current quarter compared to 16 cents last year, excluding one-time expenses in 2000 and a gain on the sale of a business in 1999. Including the one-time events, Chronimed reported net income per diluted share of 13 cents compared to 18 cents last year. Commenting on results, Chronimed's chairman and chief executive officer Maurice R. Taylor, II, said, “I am extremely pleased with our results this quarter. As adjusted, operating income more than tripled from $1.0 million in first quarter ended September to $3.1 million in second quarter ended December. Operating income as a percent of revenue improved from 1.7 percent in first quarter to 4.6 percent in second quarter. Our Pharmacy business – the mail order Specialty Pharmacy and retail Disease Management segments – has shown tremendous strength as its increased volume leverages our infrastructure. The Pharmacy business is growing, increasingly profitable, and in fact contributed two-thirds of Chronimed's total operating income in second quarter. Our Diagnostic Products segment showed profit improvement as well in second quarter compared to first quarter. Overall, Chronimed is positioned nicely for the second half of fiscal 2000.” For the six-month period, revenue grew 38 percent to $126.1 million, up from $91.5 million last year. Adjusted for the one-time events noted above, income from operations was down from $5.6 million last year to $4.1 million this year, and, as adjusted, net income per diluted share decreased from 30 cents last year to 20 cents this year. Including the one-time events, Chronimed reported net income per diluted share of 16 cents in the first half of the year compared to 32 cents last year. Chronimed is continuing to seek strategic alternatives for its Diagnostic Products and Pharmacy businesses, and will publicly communicate any material events as appropriate. Chronimed Inc. is a leading integrated healthcare company specializing in diagnostic products, specialty pharmacy services, and disease management for people with chronic health conditions. The Company develops, manufactures, markets, and distributes pharmaceuticals and medical diagnostic products. It provides specialized patient management services nationwide for people with long-term chronic conditions such as HIV/AIDS, diabetes, organ transplants, and diseases treated with injectable medications. Chronimed works directly with patients, providers, and payors to improve clinical and cost-of-care outcomes. The Company's web site address is www.chronimed.com. As a cautionary note to investors, certain matters discussed in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such matters involve risks and uncertainties that may cause actual results to differ materially, including the following: changes in economic conditions; general competitive factors; pressures on gross profit margins; the Company's ability to execute its sales and marketing plans; changes in the status of managed care contracts; changes in ownership; material litigation; and the risks described from time to time in the Company's public reports filed with the SEC. |
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Chronimed Inc. |
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(In thousands, except per share amounts) |
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(Unaudited) |
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Second Quarter Ended |
Six Months Ended |
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Dec 31, 1999 |
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Jan 1, 1999 |
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Dec 31, 1999 |
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Jan 1, 1999 |
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Revenue |
$67,171 |
$48,680 |
$126,121 |
$91,476 |
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Yr to Yr Growth |
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38% |
38% |
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Income from operations |
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-- as reported |
$2,626 |
$3,134 |
$3,187 |
$5,596 |
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-- as adjusted |
$3,096 |
* |
$3,134 |
$4,069 |
* |
$5,596 |
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Net income |
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-- as reported |
$1,566 |
$2,255 |
$1,894 |
$3,949 |
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-- as adjusted |
$1,853 |
* |
$1,950 |
** |
$2,432 |
* |
$3,644 |
** |
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Net income (loss) per share -- diluted |
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-- as reported |
$0.13 |
$0.18 |
$0.16 |
$0.32 |
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-- as adjusted*** |
$0.15 |
$0.16 |
$0.20 |
$0.30 |
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Average shares outstanding--diluted |
12,106 |
12,316 |
12,121 |
12,319 |
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* Excludes one-time expenses of $470,000 before tax ($287,000 after tax) for the second quarter and $882,000 before tax ($538,000 after tax) for the first six months related to the company's efforts in seeking strategic alternatives. |
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** Excludes $500,000 pre-tax gain ($305,000 after tax) on sale of Chronimed's publishing business. |
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*** Reflects the above two adjustments. |
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Chronimed Inc. |
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Consolidated Statements of Income |
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(In thousands, except per share amounts) |
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(Unaudited) |
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Quarter
Ended
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Six
Months Ended
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Dec 31, 1999 |
Jan 1, |
Dec 31, |
Jan 1, |
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| Revenues | ||||||||||||||||||
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Specialty Pharmacy Services |
$32,150 |
$26,800 |
$58,983 |
$49,685 |
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Disease Management |
26,196 |
13,901 |
50,241 |
25,868 |
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Diagnostic Products |
8,825 |
7,979 |
16,897 |
15,923 |
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Total Revenue |
67,171 |
48,680 |
126,121 |
91,476 |
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Yr to Yr Growth |
38% |
38% |
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Costs and Expenses |
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Cost of revenues |
52,183 |
36,508 |
99,080 |
67,921 |
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Gross profit |
14,988 |
12,172 |
27,041 |
23,555 |
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% of Revenue |
22.3% |
25.0% |
21.4% |
25.7% |
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Selling and marketing |
2,369 |
2,351 |
4,861 |
4,711 |
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General and administrative |
9,675 |
6,507 |
18,440 |
12,923 |
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Research and development |
318 |
180 |
553 |
325 |
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Total operating expenses |
12,362 |
9,038 |
23,854 |
17,959 |
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% of Revenue |
18.4% |
18.6% |
18.9% |
19.6% |
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| Income from Operations |
2,626 |
3,134 |
3,187 |
5,596 |
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% of Revenue |
3.9% |
6.4% |
2.5% |
6.1% |
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Interest (expense) income |
(59) |
58 |
(82) |
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375
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Other income - Publishing sale |
-- |
503 |
-- |
503 |
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| Income before Income Taxes |
2,567 |
3,695 |
3,105 |
6,474 |
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| Income taxes |
(1,001) |
(1,440) |
(1,211) |
2,505 |
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| Net Income |
$1,566 |
$2,255 |
$1,894 |
$3,949 |
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% of Revenue |
2.3% |
4.6% |
1.5% |
4.3% |
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Net Income per Share--Basic |
$0.13 |
$0.19 |
$0.16 |
$0.33 |
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Net Income per Share--Diluted |
$0.13 |
$0.18 |
$0.16 |
$0.32 |
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Average Shares Outstanding--Basic |
12,095 |
12,115 |
12,093 |
12,108 |
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Average Shares Outstanding--Diluted |
12,106 |
12,316 |
12,121 |
12,319 |
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Chronimed Inc. |
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Consolidated Balance Sheets |
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(In thousands) |
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Dec 31, 1999 |
July 2, 1999 |
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Assets |
(Unaudited) |
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Current assets: |
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Cash and cash equivalents |
$1,613 |
$3,312 |
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Accounts receivable, net |
47,727 |
36,274 |
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Inventory |
10,241 |
9,786 |
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Other current assets |
1,446 |
1,529 |
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Deferred taxes |
774 |
774 |
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Total current assets |
61,801 |
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51,675 |
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Available-for-sale securities |
619 |
610 |
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Property and equipment: |
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Property and equipment |
27,924 |
25,954 |
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Allowance for depreciation |
(16,971) |
(13,745) |
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10,953 |
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12,209 |
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Goodwill, net |
15,436 |
16,242 |
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Other assets, net |
138 |
159 |
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Total assets |
$88,947 |
$80,895 |
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Liabilities and shareholders' equity |
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Current liabilities: |
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Accounts payable |
$12,972 |
$11,230 |
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Accrued expenses |
2,950 |
2,992 |
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Income taxes payable |
286 |
186 |
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Short-term debt |
4,100 |
-- |
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Total current liabilities |
20,308 |
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14,408 |
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Shareholders' equity: |
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Preferred Stock |
-- |
-- |
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Common Stock, issued and outstanding shares-- |
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12,131 and 12,088 respectively |
121 |
121 |
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Additional paid-in capital |
52,748 |
52,499 |
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Retained earnings |
15,603 |
13,709 |
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68,472 |
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66,329 |
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Unrealized gain on available-for-sale securities |
167 |
158 |
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Total shareholders' equity |
68,639 |
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66,487 |
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Total liabilities and shareholders' equity |
$88,947 |
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$80,895 |
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Chronimed Inc. |
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Consolidated Statements of Cash Flows |
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(In thousands) |
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(Unaudited) |
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Six Months Ended
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Dec 31, 1999 |
Jan 1, 1999 |
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Operating activities: |
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Net income |
$1,894 |
$3,949 |
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Adjustments to reconcile net income to net cash |
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provided by operating activities: |
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Depreciation and amortization |
4,273 |
3,461 |
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Changes in operating assets and liabilities: |
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Accounts and notes receivable |
(11,453) |
(9,853) |
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Income taxes |
100 |
-- |
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Inventory |
(455) |
124 |
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Accounts payable and accrued expenses |
1,700 |
7,667 |
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Other assets |
104 |
(779) |
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Net cash (used) provided by operating activities |
(3,837) |
4,569 |
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Investing activities: |
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Acquisitions, net of cash acquired |
(241) |
-- |
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Purchases of property and equipment |
(1,970) |
(2,726) |
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Purchases of available-for-sale securities |
-- |
(300) |
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Sales and maturities of available-for-sale securities |
-- |
6,536 |
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Net cash (used in) provided by investing activities |
(2,211) |
3,510 |
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Financing activities: |
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Repurchase of Common Stock |
-- |
(45) |
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Net proceeds from issuance of Common Stock |
249 |
875 |
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Net proceeds from borrowings |
4,100 |
-- |
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Net cash provided by financing activities |
4,349 |
830 |
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(Decrease) Increase in cash and cash equivalents |
(1,699) |
8,909 |
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Cash and cash equivalents at beginning of period |
3,312 |
1,027 |
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Cash and cash equivalents at end of period |
$1,613 |
$9,936 |
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