<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, 1996
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(6) 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 32,325,381 March 31, 1996
</TABLE>
<PAGE> 2
OMNICARE, INC. AND
------------------
SUBSIDIARY COMPANIES
--------------------
Index
Page
----
Part I. Financial Information:
Item 1. Financial Statements
Consolidated Balance Sheet -
March 31, 1996 and December 31, 1995 3
Consolidated Statement of Income -
Three months ended -
March 31, 1996 and 1995 4
Consolidated Statement of Cash Flow -
Three months ended -
March 31, 1996 and 1995 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
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<PAGE> 3
Item 1. Financial Statements
--------------------
OMNICARE, INC. AND SUBSIDIARY COMPANIES
Consolidated Balance Sheet
UNAUDITED
<TABLE>
<CAPTION>
(in thousands except share data)
March 31, December 31,
ASSETS 1996 1995
--------- ---------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 311,668 $ 40,137
Accounts receivable, less allowances 83,670 80,247
Inventories 34,121 28,841
Deferred income tax benefits 6,505 6,600
Other current assets 5,861 5,247
--------- ---------
Total current assets 441,825 161,072
Properties and equipment, at cost
less accumulated depreciation 36,733 32,458
Goodwill, less accumulated amortization 162,125 157,843
Other assets 9,659 9,463
--------- ---------
Total assets $ 650,342 $ 360,836
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 20,729 $ 22,020
Amounts payable pursuant to acquisition agreements 4,031 13,642
Current portion of long-term debt 1,028 1,051
Income taxes payable 3,681 --
Accrued employee compensation 4,118 5,338
Liabilities relating to discontinued operations 1,367 1,547
Other current liabilities 10,182 11,090
--------- ---------
Total current liabilities 45,136 54,688
Long-term debt 82,298 82,692
Deferred income taxes 2,807 2,621
Amounts payable pursuant to acquisition agreements 3,309 1,418
Other noncurrent liabilities 4,935 4,656
--------- ---------
Total liabilities 138,485 146,075
--------- ---------
Stockholders' equity:
Preferred stock-authorized 1,000,000 shares
without par value; none issued
Common stock-authorized 44,000,000 shares
$1 par; 32,378,642 shares issued
(1995-26,344,508 shares) 32,379 26,345
Paid-in capital 392,211 99,686
Retained earnings 100,935 93,598
--------- ---------
525,525 219,629
Treasury stock, at cost-53,261 shares
(1995-24,268 shares) (2,006) (462)
Deferred compensation (9,552) (2,126)
Unallocated stock of ESOP (2,110) (2,260)
--------- ---------
Total stockholders' equity 511,857 214,761
--------- ---------
Total liabilities and stockholders' equity $ 650,342 $ 360,836
========= =========
</TABLE>
The Notes to Consolidated Financial Statements are
an integral part of this statement.
-3-
<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,
---------------------------
1996 1995(a)
--------- -------
<S> <C> <C>
Sales $ 117,185 $90,527
Cost of sales 83,553 65,879
--------- -------
Gross profit 33,632 24,648
Selling, general and administrative expenses 19,433 15,413
--------- -------
Operating income 14,199 9,235
Investment income 560 1,096
Interest expense (1,320) (1,631)
--------- -------
Income before income taxes 13,439 8,700
Income taxes 5,310 3,449
--------- -------
Net income $ 8,129 $ 5,251
========= =======
Earnings per share:
Primary $ .29 $ .20
========= =======
Fully diluted $ .27 $ .19
========= =======
Dividends paid per share $ .03 $ .023
========= =======
Weighted average number of
common shares outstanding:
Primary 27,924 25,968
========= =======
Fully diluted 33,549 32,271
========= =======
<FN>
(a) Restated for the June 30, 1995 acquisition of Specialized Pharmacy
Services, Inc. in a pooling of interests transaction.
</TABLE>
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,
----------------------------
1996 1995
--------- --------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 8,129 $ 5,251
Adjustments to reconcile net income
to net cash flow from operating activities:
Depreciation and amortization 3,183 2,464
Provision for doubtful accounts 1,279 560
Deferred tax provision 261 26
Changes in assets and liabilities, net of effects
from acquisition/disposal of businesses:
Accounts receivable (3,714) (3,055)
Inventories (4,373) (2,804)
Current and noncurrent assets (672) (377)
Income taxes payable 3,681 1,438
Payables and accrued liabilities (2,546) 2,303
Current and noncurrent liabilities 462 (1,693)
--------- --------
Net cash flow from operating activities 5,690 4,113
--------- --------
Cash flow from investing activities:
Acquisition of businesses (12,805) (8,028)
Capital expenditures (5,813) (3,019)
Marketable securities -- (735)
Proceeds from sale of properties and equipment 33 65
Cash flow from discontinued operations (180) (176)
--------- --------
Net cash flow from investing activities (18,765) (11,893)
--------- --------
Cash flow from financing activities:
Net borrowings on line-of-credit -- (50)
Proceeds from long-term borrowings -- 50
Principal payments on long-term obligations (136) (244)
Net proceeds from stock offering 286,529 --
Exercise of stock options and warrants, net (995) (280)
Dividends paid (792) (633)
--------- --------
Net cash flow from financing activities 284,606 (1,157)
--------- --------
Net increase (decrease) in cash and cash equivalents 271,531 (8,937)
Cash and cash equivalents at beginning of period 40,137 34,553
--------- --------
Cash and cash equivalents at end of period $ 311,668 $ 25,616
========= ========
Supplemental disclosures of cash flow information
- -------------------------------------------------
Income taxes paid $ -- $ 1,213
Interest paid 2,426 2,511
</TABLE>
The Notes to Consolidated Financial Statements
are an integral part of this statement.
-5-
<PAGE> 6
OMNICARE, INC. AND SUBSIDIARY COMPANIES
Notes to Consolidated Financial 3tatements
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, 1996, the Company has completed four acquisitions including
Medical Arts Health Care, Inc. in Conyers, Georgia, Managed Health Care in
Springfield, Missouri, and Pharmacy Care Systems Division of Big B, Inc. in
Bessemer, Alabama, all in January, and Benwood Pharmacy Services, Inc., Buffalo,
New York, in February. 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 7, 1996, the Board of Directors declared a 20% increase in the
Company's quarterly cash dividend to 3 cents per share from the 2.5 cents per
share paid in each quarter of 1995.
4. In March 1996, the Company completed a public offering of 5,750,000 shares of
common stock resulting in gross proceeds of $298,281,000 (before underwriting
discounts and expenses).
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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, 1996 increased 55% to
$8,129,000 from the $5,251,000 earned in the first quarter of 1995. Earnings
per share, on a primary basis, rose 45% to $.29 from the $.20 earned for the
same period of 1995. On a fully diluted basis, earnings per share increased
42% to $.27 versus the $.19 earned for the first quarter of 1995. The average
number of shares outstanding rose 7%, on a primary basis, and 4%, on a fully
diluted basis, over the comparable prior-year period. Sales for the first
three months of 1996 of $117,185,000 were 29% higher than the $90,527,000
recorded in the comparable prior-year period.
The increases in the Company's sales and earnings were the product of its
continued focus on acquisitions of long-term care pharmacy providers and
sustained internal growth.
During the first three months of 1996, the Company acquired four
institutional pharmacy providers, adding more than 8,300 new nursing facility
residents to those already served by the Company. The Company purchased Medical
Arts Health, Inc., which serves 2,200 nursing home residents in the Atlanta,
Georgia area. The Company also completed the acquisition of Pharmacy Care
Systems, the nursing home pharmacy division of retail drug chain Big B, Inc.,
which serves approximately 1,700 long-term care facility residents in
Birmingham, Alabama and Atlanta, Georgia. In addition, the Company acquired
Benwood Pharmacy Services, Inc., which serves 1,450 long-term care residents in
the Buffalo, New York area and Managed Health Care, which serves 3,000 residents
in long-term care facilities in southern Missouri .
These four acquisitions, combined with internal growth, brought the total
number of nursing facility residents served to 229,600 at March 31, 1996, up 37%
over the number served one year ago.
-7-
<PAGE> 8
Along with the addition of new clients, internal growth also benefited from
higher acuity levels among nursing facility residents, as well as the continued
expansion of the Company's infusion therapy services.
Interest expense, net of investment income, increased by 42% to $760,000 in
1996 due to a significant decrease in the invested cash balance during the
quarter, owing primarily to the use of funds for the acquisition of businesses
during the twelve month period ended March 31, 1996.
The effective tax rate of 39.5% for the first quarter of 1996 was comparable
to the rate of 39.6% for the prior year quarter.
Liquidity and Capital Resources
Cash and cash equivalents at March 31, 1996 increased by $271,531,000 to
$311,668,000 from the $40,137,000 balance at December 31, 1995. In March 1996,
the Company completed a public offering of 5,750,000 shares of common stock
resulting in gross proceeds of $298,281,000 (before underwriting discounts and
expenses) . The company's capital requirements are primarily related to its
acquisition program. In the first quarter of 1996, the Company made four
acquisitions for an aggregate capital investment of approximately $12 million.
Such acquisitions were financed from cash and cash equivalents and the issuance
of 17,954 shares of common stock for the Medical Arts acquisition. There are no
material commitments outstanding at March 31, 1996 other than
acquisition-related payments which may be made contingent on the performance of
businesses acquired.
The Company has a $135 million revolving credit facility with a consortium of
six banks. No amounts were outstanding at March 31, 1996 under the credit
facility. The Company's current ratio at March 31, 1996 and December 31, 1995
was 9.8 to 1 and 2.9 to 1, respectively .
On February 7, 1996, the Company's Board of Directors increased
-8-
<PAGE> 9
the quarterly cash dividend by 20% to 3 cents per share for an indicated
annual rate of 12 cents per share in 1996. Dividends of $792,000 were paid in
March 1996 versus the $632,000 paid in March 1995.
The Company believes its sources of capital are adequate for its needs .
-9-
<PAGE> 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
Exhibit Page
Number Exhibit Number
------ ------- ------
11 Computation of Earnings per Share 11
(b) REPORTS ON FORM 8-K - On February 26, 1996, a Form 8-K was
filed to report the audited financial statements and
management's discussion and analysis of operations and
financial condition as of and for the three years in the period
ended December 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 14, 1996 By /s/ Joel F. Gemunder
---------------------- --------------------------
Joel F. Gemunder
President
(Principal Executive Officer)
Date May 14, 1996 By /s/ David W. Froesel, Jr.
---------------------- --------------------------
David W. Froesel, Jr.
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
-10-
<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,
--------------------
1996 1995
-------- --------
<S> <C> <C>
Primary Earnings
Net income $ 8,129 $ 5,251
Other (6) (1)
-------- --------
Net income as adjusted $ 8,123 $ 5,250
======== ========
Shares
Weighted average number of common
shares outstanding 26,863 25,968
Additional shares assuming conversion of
stock options and stock warrants 1,061 634
-------- --------
Average common shares outstanding and
equivalents as adjusted 27,924 26,602
-------- --------
Primary earnings per common share $ 0.29 $ 0.20
======== ========
Fully Diluted Earnings
Net income $ 8,129 $ 5,251
Aftertax interest expense related to 5 3/4%
convertible subordinated debentures 798 803
Other (6) (1)
-------- --------
Net income as adjusted $ 8,921 $ 6,053
======== ========
Shares
Weighted average number of common
shares outstanding 26,863 25,968
Additional shares assuming conversion of:
Stock options and stock warrants 1,131 727
Convertible subordinated debentures 5,555 5,576
-------- --------
Average common shares outstanding and
equivalents as adjusted 33,549 32,271
-------- --------
Fully diluted earnings per common share $ 0.27 $ 0.19
======== ========
</TABLE>
-11-
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000353230
<NAME> OMNICARE, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 311,668
<SECURITIES> 0
<RECEIVABLES> 89,416
<ALLOWANCES> 5,746
<INVENTORY> 34,121
<CURRENT-ASSETS> 441,825
<PP&E> 57,752
<DEPRECIATION> 21,019
<TOTAL-ASSETS> 650,342
<CURRENT-LIABILITIES> 45,136
<BONDS> 82,298
<COMMON> 32,379
0
0
<OTHER-SE> 479,478
<TOTAL-LIABILITY-AND-EQUITY> 511,857
<SALES> 117,185
<TOTAL-REVENUES> 117,185
<CGS> 83,553
<TOTAL-COSTS> 83,553
<OTHER-EXPENSES> 19,433
<LOSS-PROVISION> 1,279
<INTEREST-EXPENSE> 1,320
<INCOME-PRETAX> 13,439
<INCOME-TAX> 5,310
<INCOME-CONTINUING> 8,129
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,129
<EPS-PRIMARY> .29
<EPS-DILUTED> .27
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<CIK> 0000353230
<NAME> OMNICARE, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 25,616
<SECURITIES> 45,980
<RECEIVABLES> 69,231
<ALLOWANCES> 3,891
<INVENTORY> 25,264
<CURRENT-ASSETS> 172,450
<PP&E> 39,458
<DEPRECIATION> 13,852
<TOTAL-ASSETS> 337,025
<CURRENT-LIABILITIES> 50,072
<BONDS> 85,175
<COMMON> 15,609
0
0
<OTHER-SE> 178,326
<TOTAL-LIABILITY-AND-EQUITY> 337,025
<SALES> 90,527
<TOTAL-REVENUES> 90,527
<CGS> 65,879
<TOTAL-COSTS> 65,879
<OTHER-EXPENSES> 15,413
<LOSS-PROVISION> 560
<INTEREST-EXPENSE> 1,631
<INCOME-PRETAX> 8,700
<INCOME-TAX> 3,449
<INCOME-CONTINUING> 5,251
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,251
<EPS-PRIMARY> .20
<EPS-DILUTED> .19
</TABLE>
