<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of The Securities Exchange Act of 1934
For Quarter Ended March 31, 1995
Commission File Number 1-8269
OMNICARE, INC.
Incorporated under the laws of I.R.S. Employer Identification
State of Delaware No. 31-1001351
2800 Chemed Center, 255 E. Fifth Street, Cincinnati, Ohio 45202-4728
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices and Zip Code)
Registrant's telephone number, including area code (513) 762-6666
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Indicate by check mark whether the registrant:
1) has filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such
reports) and
2) has been subject to such filing requirement for the past 90
days.
Yes x No
----- -----
COMMON STOCK OUTSTANDING
<TABLE>
<CAPTION>
Number of
Shares Date
---------- ----
<S> <C> <C>
Common Stock, $1 par value 12,902,164 March 31, 1995
</TABLE>
<PAGE> 2
OMNICARE, INC. AND
SUBSIDIARY COMPANIES
Index
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I. Financial Information:
Item 1. Financial Statements
Consolidated Balance Sheet -
March 31, 1995 and December 31, 1994 3
Consolidated Statement of Income -
Three months ended -
March 31, 1995 and 1994 4
Consolidated Statement of Cash Flow -
Three months ended -
March 31, 1995 and 1994 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial Condition 7
Part II. Other Information:
Item 6. Exhibits and Reports on Form 8-K 10
</TABLE>
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<PAGE> 3
Item 1. Financial Statements
OMNICARE, INC. AND SUBSIDIARY COMPANIES
Consolidated Balance Sheet
UNAUDITED
(in thousands except share data)
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
--------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 25,841 $ 34,351
Marketable securities 45,980 45,245
Accounts receivable, less allowances 59,792 54,792
Inventories 22,850 18,976
Deferred income tax benefits 6,183 5,619
Other current assets 3,806 3,256
-------- --------
Total current assets 164,452 162,239
Properties and equipment, at cost
less accumulated depreciation 22,578 20,496
Intangible assets, less accumulated amortization 133,031 117,822
Other assets 5,529 5,246
-------- --------
Total assets $325,590 $305,803
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 18,444 $ 15,558
Amounts payable pursuant to acquisition agreements 7,532 4,576
Current portion of long-term debt 724 641
Income taxes payable 3,319 1,839
Accrued employee compensation 2,786 3,023
Liabilities relating to discontinued operations 2,223 2,399
Other current liabilities 7,280 9,127
-------- --------
Total current liabilities 42,308 37,163
Long-term debt 82,992 82,961
Deferred income taxes 1,916 1,368
Amounts payable pursuant to acquisition agreements 2,953 2,910
Other noncurrent liabilities 2,726 2,542
-------- --------
Total liabilities 132,895 126,944
-------- --------
Stockholders' equity:
Preferred stock-authorized 1,000,000 shares
without par value; none issued
Common stock-authorized 22,000,000 shares
$1 par; 15,407,655 shares issued
(1994-15,134,433 shares) 15,408 15,134
Paid-in capital 142,198 130,165
Retained earnings 74,805 70,238
-------- --------
232,411 215,537
Treasury stock, at cost-2,505,491 shares
(1994-2,488,274 shares) (34,475) (33,060)
Deferred Compensation (2,606) (858)
Unallocated stock of ESOP (2,635) (2,760)
-------- --------
Total stockholders' equity 192,695 178,859
-------- --------
Total liabilities and stockholders' equity $325,590 $305,803
======== ========
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement.
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<PAGE> 4
OMNICARE, INC. AND SUBSIDIARY COMPANIES
Consolidated Statement of Income
UNAUDITED
(In thousands except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------
1995 1994(a)
------- -------
<S> <C> <C>
Sales $82,473 $60,697
Cost of sales 59,102 44,532
------- -------
Gross profit 23,371 16,165
Selling, general and administrative expenses 14,442 9,683
------- -------
Operating income 8,929 6,482
Investment income 1,096 415
Interest expense (1,435) (1,502)
------- -------
Income before income taxes 8,590 5,395
Income taxes 3,403 2,013
------- -------
Net income $ 5,187 $ 3,382
======= =======
Earnings per share:
Primary $ .41 $ .31
======= =======
Fully diluted $ .38 $ .31
======= =======
Dividends paid per share $ .05 $ .045
======= =======
Weighted average number of
common shares outstanding:
Primary 12,783 10,830
======= =======
Fully diluted 15,934 13,772
======= =======
</TABLE>
(a) Restated for the September 30, 1994 acquisition of Evergreen
Pharmaceutical, Inc. and an affiliated company in a pooling of
interests transaction.
The Notes to Consolidated Financial Statements are an integral part of this
statement.
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<PAGE> 5
OMNICARE, INC. AND SUBSIDIARY COMPANIES
Consolidated Statement of Cash Flow
UNAUDITED
<TABLE>
<CAPTION>
(in thousands) Three Months Ended
March 31,
-------------------------
1995 1994
-------- --------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 5,187 $ 3,382
Adjustments to reconcile net income
to net cash flow from operating activities:
Depreciation and amortization 2,201 1,634
Provision for doubtful accounts 442 416
Deferred tax provision 35 122
Change in assets and liabilities, net of effects from acquisition/disposal
of businesses:
Accounts receivable (2,680) (3,695)
Inventory (2,530) (283)
Current and noncurrent assets (413) 858
Income taxes payable 1,480 1,292
Payables and accruals 1,906 235
Current and noncurrent liabilities (1,613) (954)
-------- --------
Net cash flow from operating activities 4,015 3,007
-------- --------
Cash flow from investing activities:
Acquisition of businesses (7,972) (17,242)
Capital expenditures (2,800) (1,382)
Marketable securities (735) -
Proceeds from sale of properties 65 272
Cash flow from discontinued operations (176) (57)
-------- --------
Net cash flow from investing activities (11,618) (18,409)
-------- --------
Cash flow from financing activities:
Proceeds from long-term borrowings 37 401
Principal payments on revolving lines of credit
and long-term obligations (31) (289)
Exercise of stock options and warrants, net of
stock tendered in payment (280) (65)
Dividends paid (633) (416)
-------- --------
Net cash flow from financing activities (907) (369)
-------- --------
Net decrease in cash and cash equivalents (8,510) (15,771)
Cash and cash equivalents at beginning of period 34,351 63,276
-------- --------
Cash and cash equivalents at end of period $ 25,841 $ 47,505
======== ========
Supplemental disclosures of cash flow information
Income taxes paid $ 1,165 $ 411
Interest paid 2,447 2,418
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement.
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<PAGE> 6
OMNICARE, INC. AND SUBSIDIARY COMPANIES
Notes to Consolidated Financial Statements
1. The interim financial data are unaudited; however, in the opinion of the
management of Omnicare, Inc., the interim data include all adjustments (which
include only normal adjustments) considered necessary for a fair presentation of
the consolidated financial position, results of operations and cash flow of
Omnicare, Inc. and its consolidated subsidiaries ("Company").
2. Since January 1, 1995, the Company has completed four acquisitions including
Shore Pharmaceutical Providers, Inc. in Westbury, New York, in January, and
North Shore Pharmacy Services, Inc., in Boston, Massachusetts, Genrex Nursing
Home Pharmacy Division of Genovese Drug Stores, Inc., in Melville, New York and
Consulting and Pharmaceutical, Services, Inc., Yakima, Washington, all in
March. All of these transactions have been accounted for as purchase
transactions and, accordingly, the purchase price paid for each has been
allocated to the fair value of the assets acquired and liabilities assumed. The
results of operations of the acquired companies have been included in
consolidated results of the Company from the effective dates of the
acquisitions.
3. On February 1, 1995, the Board of Directors declared a 11% increase in the
Company's quarterly cash dividend to 5 cents per share from the 4.5 cents per
share paid in each quarter of 1994.
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<PAGE> 7
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition.
Results of Operations
Net income for the three months ended March 31, 1995 increased 53% to
$5,187,000 from the $3,382,000 earned in the first quarter of 1994. Earnings per
share, on a primary basis, rose 32% to $.41 and, on a fully diluted basis, were
up 23% to $.38 versus the $.31 earned, on both a primary and fully diluted
basis, in the 1994 first quarter. The average number of shares outstanding was
higher by 18%, on a primary basis, and 16%, on a fully diluted basis, over the
comparable prior-year period. Sales for the first three months of 1995 of
$82,473,000 were 36% higher than the $60,697,000 recorded in the comparable
prior-year period.
The increases in the Company's sales and earnings were the result of
continued focus on the execution of its growth strategy in the long-term care
pharmacy market. The quarter benefited from the contribution of acquisitions
made late in 1994 and in 1995, as well as solid internal growth.
Four acquisitions of institutional pharmacy providers were completed during
the first quarter of 1995. Three of these acquisitions served to broaden the
Company's geographic reach as they marked its entry into the Northeast. These
include Shore Pharmaceutical Providers, Inc. (Shore), based in Westbury, New
York, the Genrex Nursing Home Pharmacy Division of Genovese Drug Stores, Inc.
(Genrex), based in Melville, New York, and North Shore Pharmacy Services (North
Shore), a Boston, Massachusetts-based provider, which, in total, added 12,300
new nursing home residents. Additionally, the acquisition of Consulting and
Pharmaceutical Services, Inc. (CAPS), based in Yakima, Washington, added
approximately 1,450 nursing facility residents in central Washington. In total
these acquisitions added 13,750 new nursing
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<PAGE> 8
home residents to those already served by Omnicare and over $21 million in
annualized sales.
The Company's existing pharmacy operations continued to generate solid growth
through the addition of new clients, increases in drug utilization reflecting
higher acuity levels of nursing home residents, and the expansion of infusion
therapy services which continued to show strong growth during the quarter.
As a result of both acquisition activity and internal growth, the total number
of nursing facility residents served by the Company rose to approximately
167,200, up 13% over year-end 1994 and up 59% over the number served one year
ago.
Investment income increased by 164% to $1,096,000 in 1995 due to a significant
increase in the invested cash balance during the quarter, owing primarily to the
receipt of $59.2 million in net proceeds from the November 1994 stock offering,
and a 91% increase in the average rate of interest earned on invested cash
balances in the first quarter of 1995 as compared to the prior year period.
The effective tax rate increased 2.3 percentage points to 39.6% from 37.3% one
year ago. The increase is primarily caused by the favorable impact on last
year's rate of the income of Evergreen Pharmaceutical East, Inc. an S
Corporation, acquired on September 30, 1994 in a pooling of interests
transaction, whose income was not subject to tax.
Liquidity and Capital Resources
Cash and cash equivalents and marketable securities at March 31, 1995
decreased by $7,775,000 to $71,821,000 from the $79,596,000 balance at December
31, 1994. The Company's capital requirements are primarily related to its
acquisition program. In the first quarter of 1995, the Company made four
acquisitions for an aggregate capital investment of approximately $18 million.
Such acquisitions were financed from cash and cash equivalents and the issuance
of 44,276, 63,550, 21,372 and 63,424 shares of common stock for the
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<PAGE> 9
Shore, Genrex, North Shore and CAPS acquisitions, respectively.
In early April, 1995 the Company increased its revolving line of credit from
$50 million to $135 million on significantly more favorable terms. The Company's
current ratio at March 31, 1995 was 3.9 to 1 compared to 4.4 to 1 at December
31, 1994.
The Company believes its sources of liquidity and capital are adequate for its
needs.
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<PAGE> 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit Page
Number Exhibit Number
------- ------- ------
<S> <C> <C>
11 Computation of Earnings per Share 11
</TABLE>
(b) Reports on Form 8-K - No reports on Form 8-K were filed during
the three months ended March 31, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Omnicare, Inc.
-----------------------------------
(Registrant)
Date May 12, 1995 By /s/ Joel F. Gemunder
--------------------- -------------------------------
Joel F. Gemunder
President
(Principal Executive Officer)
Date May 12, 1995 By /s/ Kurt H. Stump
--------------------- -------------------------------
Kurt H. Stump
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
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<PAGE> 1
Exhibit 11 Omnicare, Inc. and Subsidiary Companies
Computation of Earnings Per Common Share
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------
1995 1994
-------- --------
<S> <C> <C>
Primary Earnings*
Net income $ 5,187 $ 3,382
Aftertax expense related to preferred stock dividend
payable to minority interest in subsidiary 3 --
Minority interest in net income of subsidiary (4) --
-------- --------
Net income as adjusted $ 5,186 $ 3,382
======== ========
Shares
Weighted average number of common
shares outstanding 12,783 10,830
Additional shares assuming conversion of:
Stock options and stock warrants 317 154
-------- --------
Average common shares outstanding and
equivalent as adjusted 13,100 10,984
======== ========
Primary earnings per common share $ 0.40 $ 0.31
======== ========
Fully Diluted Earnings
Net income $ 5,187 $ 3,382
Aftertax expense related to preferred stock divided
payable to minority interest in subsidiary 3 --
Minority interest in net income of subsidiary (4) --
Aftertax interest expense related to 5 3/4%
convertible subordinated debentures 803 810
-------- --------
Net income as adjusted $ 5,989 $ 4,192
======== ========
Shares
Weighted average number of common
shares outstanding 12,783 10,830
Additional shares assuming conversion of:
Stock options and stock warrants 363 154
Convertible subordinated debentures 2,788 2,788
-------- --------
Average common shares outstanding and
equivalents as adjusted 15,934 13,772
======== ========
Fully diluted earnings per common shares: $ 0.38 $ 0.31
======== ========
</TABLE>
* This calculation is submitted in accordance with Regulation S-K Item
602(b)(11) although not required by footnote 2 to paragraph 14 of APB
Opinion No. 15 if it results in dilution of less than 3% or is
anti-dilutive.
-11-
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000353230
<NAME> OMNICARE, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 25,841
<SECURITIES> 45,980
<RECEIVABLES> 59,792
<ALLOWANCES> 3,312
<INVENTORY> 22,850
<CURRENT-ASSETS> 164,452
<PP&E> 34,712
<DEPRECIATION> 12,134
<TOTAL-ASSETS> 325,590
<CURRENT-LIABILITIES> 42,308
<BONDS> 82,992
<COMMON> 15,408
0
0
<OTHER-SE> 177,287
<TOTAL-LIABILITY-AND-EQUITY> 325,590
<SALES> 82,473
<TOTAL-REVENUES> 82,473
<CGS> 59,102
<TOTAL-COSTS> 59,102
<OTHER-EXPENSES> 14,442
<LOSS-PROVISION> 442
<INTEREST-EXPENSE> 1,435
<INCOME-PRETAX> 8,590
<INCOME-TAX> 3,403
<INCOME-CONTINUING> 5,187
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,187
<EPS-PRIMARY> .41
<EPS-DILUTED> .38
</TABLE>
