<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For Quarter Ended March 31, 2000
Commission File Number 1-8269
OMNICARE, INC.
Incorporated under the laws of the I.R.S. Employer Identification
State of Delaware No. 31-1001351
100 East RiverCenter Boulevard, Covington, Kentucky 41011
---------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (606) 392-3300
------------------------------------------------------------------
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
- ------------------------
Number of
Shares Date
------ ----
Common Stock, $1 par value 92,140,490 March 31, 2000
<PAGE>
OMNICARE, INC. AND
SUBSIDIARY COMPANIES
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Part I. Financial Information:
Item 1. Financial Statements
Consolidated Balance Sheet --
March 31, 2000 and December 31, 1999 3
Consolidated Statement of Income --
Three months ended --
March 31, 2000 and 1999 4
Consolidated Statement of Cash Flows --
Three months ended --
March 31, 2000 and 1999 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk 12
Part II. Other Information:
Item 6. Exhibits and Reports on Form 8-K 13
</TABLE>
<PAGE>
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
OMNICARE, INC. AND SUBSIDIARY COMPANIES
Consolidated Balance Sheet
UNAUDITED
(In thousands, except share data)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
----------- -----------
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 81,321 $ 97,267
Restricted cash 4,900 --
Accounts receivable, less allowances of
$36,746 (1999-$36,883) 424,004 422,283
Unbilled receivables 19,055 18,450
Inventories 127,892 120,280
Deferred income tax benefits 20,627 17,336
Other current assets 84,733 76,729
---------- ----------
Total current assets 762,532 752,345
Properties and equipment, at cost less accumulated
depreciation of $111,337 (1999-$106,022) 161,670 162,133
Goodwill, less accumulated amortization
of $91,260 (1999-$83,243) 1,184,147 1,188,941
Other assets 61,360 64,554
---------- ----------
Total assets $2,169,709 $2,167,973
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 100,196 $ 108,189
Amounts payable pursuant to acquisition agreements 7,517 9,053
Current bank debt 67,118 77,413
Accrued employee compensation 38,233 50,498
Deferred revenue 22,515 24,321
Other current liabilities 73,194 52,769
---------- ----------
Total current liabilities 308,773 322,243
Long-term bank debt 392,003 391,944
5% convertible subordinated notes, due 2007 345,000 345,000
Deferred income taxes 38,542 37,360
Amounts payable pursuant to acquisition agreements 12,898 13,878
Other noncurrent liabilities 33,385 29,168
---------- ----------
Total liabilities 1,130,601 1,139,593
Stockholders' equity:
Preferred stock-authorized 1,000,000 shares without par value; none issued
Common stock-authorized 200,000,000 shares $1 par; 92,545,800 shares
issued (1999-91,611,800 shares issued) 92,546 91,612
Paid-in capital 691,150 684,419
Retained earnings 287,433 275,114
---------- ----------
1,071,129 1,051,145
Treasury stock, at cost - 405,300 shares (1999-325,500 shares) (7,941) (6,950)
Deferred compensation (21,867) (14,098)
Accumulated other comprehensive income (2,213) (1,717)
---------- ----------
Total stockholders' equity 1,039,108 1,028,380
---------- ----------
Total liabilities and stockholders' equity $2,169,709 $2,167,973
========== ==========
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement.
3
<PAGE>
OMNICARE, INC. AND SUBSIDIARY COMPANIES
Consolidated Statement of Income
UNAUDITED
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------------------
2000 1999
--------- ---------
<S> <C> <C>
Sales $ 493,026 $ 445,688
Cost of sales 360,409 309,893
--------- ---------
Gross profit 132,617 135,795
Selling, general and administrative expenses 92,768 81,983
Restructuring and other related charges 4,278 --
--------- ---------
Operating income 35,571 53,812
Investment income 459 282
Interest expense (13,165) (9,981)
--------- ---------
Income before income taxes 22,865 44,113
Income taxes 8,472 16,306
--------- ---------
Net income $ 14,393 $ 27,807
========= =========
Earnings per share:
Basic $ 0.16 $ 0.31
========= =========
Diluted $ 0.16 $ 0.31
========= =========
Weighted average number of common shares outstanding:
Basic 91,599 90,526
========= =========
Diluted 91,599 90,881
========= =========
Comprehensive income $ 14,081 $ 27,303
========= =========
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement.
4
<PAGE>
OMNICARE, INC. AND SUBSIDIARY COMPANIES
Consolidated Statement of Cash Flows
UNAUDITED
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------------
2000 1999
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 14,393 $ 27,807
-------- --------
Adjustments to reconcile net income to net cash
flows from operating activities:
Depreciation and amortization 19,712 15,735
Provision for doubtful accounts 7,006 3,841
Deferred tax provision 1,248 1,145
Non-cash portion of restructuring costs 724 --
Changes in assets and liabilities, net of effects from acquisition of
businesses:
Accounts receivable and unbilled receivables (11,380) (13,850)
Inventories (7,835) (23,182)
Current and noncurrent assets (3,932) (10,188)
Payables and accrued liabilities (528) 19,110
Accrued employee compensation (6,867) 3,268
Deferred revenue (1,806) 68
Current and noncurrent liabilities 16,746 (6,379)
-------- --------
Net cash flows from operating activities 27,481 17,375
-------- --------
Cash flows from investing activities:
Acquisition of businesses (16,912) (41,464)
Capital expenditures (8,444) (14,983)
Transfer of cash to trusts for employee health and severance costs (4,900) --
Other 58 (786)
-------- --------
Net cash flows from investing activities (30,198) (57,233)
-------- --------
Cash flows from financing activities:
Borrowings on line of credit facilities -- 60,000
Payments on line of credit facilities (10,000) --
Principal payments on long-term obligations (353) (425)
(Payments) for and proceeds from exercise of stock options
and warrants, net of stock tendered in payment (762) (1,253)
Dividends paid (2,074) (2,040)
-------- --------
Net cash flows from financing activities (13,189) 56,282
-------- --------
Effect of exchange rate changes on cash and other (40) 704
Net increase (decrease) in cash and cash equivalents (15,906) 16,424
Cash and cash equivalents at beginning of period 97,267 54,312
-------- --------
Cash and cash equivalents at end of period $ 81,321 $ 71,440
======== ========
Supplemental disclosures of cash flow information:
Income taxes (refunded) paid, net $ (8,030) $ 6,592
Interest paid 7,947 5,002
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of this
statement.
5
<PAGE>
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 flows of
Omnicare, Inc. and its consolidated subsidiaries ("Omnicare" or the "Company").
Certain reclassifications of prior year amounts have been made to conform with
the current year presentation.
2. Based on the "management approach," as defined by Statement of Financial
Accounting Standards (SFAS) No. 131, Omnicare has two business segments. The
Company's largest segment is Pharmacy Services. Pharmacy Services provides
distribution of pharmaceuticals, related pharmacy consulting, data management
services and medical supplies to long-term care facilities. The Company's other
reportable segment is Contract Research Organization ("CRO") Services, which
provides comprehensive product development services to client companies in
pharmaceutical, biotechnology, medical devices and diagnostics industries.
The table below presents information about the reportable segments as
of and for the three months ended March 31, 2000 and 1999 (in thousands):
<TABLE>
<CAPTION>
Three Months Ended March 31,
---------------------------------------------------------------
Corporate
Pharmacy CRO and Consolidated
2000: Services Services Consolidating Totals
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales $ 460,946 $ 32,080 $ -- $ 493,026
Depreciation and amortization 18,465 1,005 242 19,712
Operating income (expense), excluding restructuring
and other related charges 43,341 2,732 (6,224) 39,849
Restructuring and other related charges (4,278) -- -- (4,278)
Operating income (expense) 39,063 2,732 (6,224) 35,571
Total assets 1,935,327 120,178 114,204 2,169,709
Expenditures for additions to long-lived assets 7,378 1,013 53 8,444
====================================================================================================================================
1999:
- ------------------------------------------------------------------------------------------------------------------------------------
Sales $ 411,710 $ 33,978 $ -- $ 445,688
Depreciation and amortization 13,970 1,576 189 15,735
Operating income (expense) 55,488 4,424 (6,100) 53,812
Total assets 1,769,419 116,768 116,853 2,003,040
Expenditures for additions to long-lived assets 13,075 568 1,340 14,983
====================================================================================================================================
</TABLE>
3. In the second quarter of 1999, the Company announced a comprehensive
restructuring plan to streamline company-wide operations through the
implementation of a productivity and consolidation program. This program is in
response to the recent changes in the healthcare
6
<PAGE>
industry and will complement Omnicare's ability to gain maximum benefits from
its acquisition program. The productivity and consolidation initiatives are
expected to eliminate redundant efforts, simplify work processes and apply
technology to maximize employee productivity, and standardize operations around
best practices. Facilities in overlapping geographic territories are being
consolidated to better align pharmacies around customers, to improve efficiency
and enhance the Company's ability to deliver innovative services and programs to
its customers. Productivity initiatives are being introduced at the majority of
the Company's pharmacy and other operating locations, which totaled
approximately 220 sites at the commencement of the program. As part of the
initiative, the roster of pharmacies and other operating locations is being
reconfigured through consolidations and relocations of approximately 44
facilities, the closing of approximately 20 sites and the creation of nine new
sites. These strategic measures are designed to lead to the net reduction of
approximately 1,700 full- and part-time positions upon completion of the plan.
In connection with this program, Omnicare has recorded a total of
$39,672,000 ($25,393,000 after taxes) for restructuring and other related
charges, of which $4,278,000 ($2,695,000 after taxes) were recorded in the first
quarter of 2000. Additional charges of this nature are expected to be incurred
and expensed during the remainder of 2000, at such time the amounts are required
to be recognized per generally accepted accounting principles. The restructuring
charges include severance pay, the buy-out of current employment agreements, the
buy-out of lease obligations, the write-off of other assets (representing
$4,922,000 of pretax non-cash items) and facility exit costs. The other related
charges are primarily comprised of consulting fees and duplicate costs
associated with the program. Details of the restructuring and other related
charges relating to the productivity and consolidation program follow (in
thousands):
<TABLE>
<CAPTION>
First Utilized
Utilized as of Balance at Quarter During Balance at
1999 December 31, December 2000 First Quarter March 31,
Provision 1999 31, 1999 Provision 2000 2000
--------- ---- -------- --------- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Restructuring charges:
Employee severance $12,178 $ (3,717) $ 8,461 $ -- $(1,182) $ 7,279
Employment agreement buy-outs 6,740 (3,377) 3,363 49 (844) 2,568
Lease terminations 5,612 (1,089) 4,523 172 (403) 4,292
Other assets and facility exit costs 8,310 (6,662) 1,648 2,315 (1,548) 2,415
------- -------- ------- ------ ------- -------
Total restructuring charges 32,840 $(14,845) $17,995 2,536 $(3,977) $16,554
======== ======= ======= =======
Other related charges 2,554 1,742
------- ------
Total restructuring and other
related charges $35,394 $4,278
======= ======
</TABLE>
As of March 31, 2000, the Company had incurred approximately $9.1
million of severance and other employee-related costs relating to the reduction
of approximately 937 employees. All remaining liabilities recorded at March 31,
2000 were classified as current liabilities since the Company expects that the
overall restructuring program will be completed in 2000.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
Results of Operations
Quarter Ended March 2000 vs. 1999
Diluted earnings per share for the three months ended March 31, 2000
were $0.19 as compared with $0.31 earned in the prior year quarter, excluding
from the 2000 period restructuring and other related charges of $4,278,000
($2,695,000 after taxes, or $0.03 per diluted share) relating to the Company's
previously announced productivity and consolidation initiative. Net income for
the 2000 quarter, excluding restructuring and other related charges, was
$17,088,000 versus the $27,807,000 earned in the comparable 1999 quarter.
Earnings before interest, taxes, depreciation and amortization ("EBITDA"), on
this basis, totaled $59,561,000 for the three months ended March 31, 2000
as compared with EBITDA of $69,547,000 earned in the first quarter of 1999.
Net income for the first quarter of 2000 was $14,393,000 (or $0.16 per diluted
share) as compared to $27,807,000 (or $0.31 per diluted share) in the same
period of 1999. Sales for the three months ended March 31, 2000 rose 11% to
$493,026,000 from the $445,688,000 recorded in the comparable prior year
period.
The increase in the Company's sales represents continued internal
growth of the pharmacy services business and, to a lesser extent, the cumulative
effect of its acquisitions of long-term care pharmacy providers. The reduction
in earnings primarily reflects the difficult operating environment in the
long-term care industry originating as a result of the implementation of the
federal government's Prospective Payment System ("PPS") for Medicare residents
of skilled nursing facilities. While Omnicare experienced PPS-related pricing
pressure from skilled nursing facility customers late in 1998, and to a greater
extent in 1999, much of this pressure was offset by the addition of new
business, the benefits of increased compliance with Omnicare's proprietary
geriatric formulary, the Omnicare Geriatric Pharmaceutical Care Guidelines'r',
and reduced operating costs. However, increasing reluctance on the part of
skilled nursing facilities to admit Medicare residents, particularly those
requiring complex care, owing to concerns relating to the adequacy of
reimbursement under PPS caused the weakening of Medicare census in many areas
primarily during the second quarter of 1999 and thereafter. Moreover, for many
skilled nursing facilities, the average length of stay for Medicare residents
decreased. These factors had the effect of significantly reducing overall
occupancy in the facilities Omnicare serves. Additionally, the mix of residents
in skilled nursing facilities adversely affected Omnicare's results as these
facilities attempted to avoid high acuity patients, which impacts overall
utilization of drugs. Reimbursement concerns have increasingly driven many
nursing facilities to admit residents funded by payors other than Medicare.
Although these trends appeared to be stabilizing in the first quarter of 2000,
they had an unfavorable impact on the year-to-year comparison of sales, profit
margins and net income.
The number of residents served at March 31, 2000 was 634,500, up 7%
over the number served one year earlier. This addition of new accounts is net of
the elimination of uneconomic PPS contracts, unprofitable accounts and the
withdrawal from certain client facilities owing to a deterioration in their
financial condition.
8
<PAGE>
Internal growth resulted primarily from the efforts of the Company's
National Sales and Marketing Group and pharmacy staff in developing new pharmacy
contracts, drug price inflation and changes in sales mix.
Omnicare's CRO Services segment recorded sales of $32,080,000 during
the first quarter of 2000 as compared to $33,978,000 recorded in the same
prior year period, representing a decline of $1,898,000. This decline was
primarily the result of delays in decision making by pharmaceutical
manufacturers in commencing clinical studies, relating in part to merger
activities, as well as the cancellation of planned projects prior to
commencement. Operating profit for the first quarter of 2000 was $2,732,000, a
decline of $1,692,000 in comparison to the same prior year quarter operating
profit of $4,424,000, owing primarily to the volatility in sales arising from
the aforementioned factors.
Gross profit as a percentage of sales decreased to 26.9% in 2000 from
30.5% in 1999. The positive impact on gross profit relating to the Company's
purchasing leverage associated with purchases of pharmaceuticals, leveraging
fixed and variable overhead costs at the Company's pharmacies, benefits realized
from the Company's formulary compliance program and productivity and
consolidation initiative, and changes in sales mix were more than offset by the
aforementioned unfavorable impact of PPS on the Pharmacy Services segment and
the less favorable performance of the CRO Services segment.
Selling, general and administrative ("operating") expenses for the
quarter ended March 31, 2000 increased $10,785,000 to $92,768,000 as compared to
1999 due primarily to the overall growth of the Company. Operating expenses as a
percentage of sales of 18.8% in 2000 were marginally higher than the 18.4%
experienced in the comparable prior year period. Unfavorably impacting the
year-to-year comparison was an increase in the Company's provision for doubtful
accounts brought about by a deterioration in the financial condition of certain
skilled nursing facility clients as a result, in part, of the impact of PPS
on their business, causing an increase of 0.6 percentage points of sales.
Operating expenses for the first quarter of 2000 were also unfavorably impacted
as compared to the same prior year period due to an increase in retirement
expense as a result of the modification of the Chairman's retirement plan,
causing an increase of 0.3 percentage points of sales. These increases in
operating expenses were offset, in part, by the favorable impact of the
Company's productivity and consolidation program.
In 1999, the Company announced its commitment to the implementation of
a company-wide productivity and consolidation program to take place over the
remainder of 1999 and 2000. This initiative is intended to gain maximum benefit
from the Company's acquisition program and to respond to changes in the
healthcare industry. The program is designed to eliminate redundant efforts,
simplify work processes and apply technology to maximize employee productivity
and standardize operations around best practices. This will be achieved by
reconfiguring the roster of pharmacies and other operating locations through
consolidation/relocation of approximately 44 facilities, the closing of
approximately 20 sites and the creation of nine new sites. The plan is designed
to result in the reduction of the Company's work force by 15%, or approximately
1,700 full- and part-time employees, and annualized pretax savings of $46
million upon completion. In connection with this program, the Company recorded
pretax restructuring and other related expenses of $4,278,000 in the first
quarter of 2000, primarily comprised of employee severance, employment agreement
buy-out costs, lease termination costs, other assets and facility exit costs,
and other related charges.
Investment income for the three months ended March 31, 2000 was
$459,000, an increase of $177,000 in comparison to the same period of 1999 due
to an increase in the average invested cash balance during the first quarter of
2000 as compared to the first quarter of 1999, as well as an increase in
interest rates earned on the investment of cash and cash equivalents.
9
<PAGE>
Interest expense during the three months ended March 31, 2000 was
$13,165,000, an increase of $3,184,000 versus the comparable prior year period
primarily due to the impact of interest expense associated with a $90 million
increase (net of recent repayments of $20 million) in borrowings under the
Company's line of credit facilities from March 31, 1999 to March 31, 2000, as
well as an increase in the line of credit interest rates for the first quarter
of 2000 as compared to the same period in the prior year. The increases in the
Company's line of credit borrowings were primarily attributable to the Company's
acquisition program.
The Company's effective tax rate of 37.1% in the first quarter of 2000
was consistent with the comparable prior year quarter rate of 37.0%.
Liquidity and Capital Resources
Cash and cash equivalents (including restricted cash) at March 31, 2000
were $86.2 million versus $97.3 million at December 31, 1999. Contributing to
this reduction of $11.1 million was a $10 million payment made late in the first
quarter of 2000 on the Company's 364-day, $400 million line of credit facility.
In October 1996, the Company entered into a five-year agreement with a
consortium of sixteen banks for a $400 million revolving credit facility
available through October 2001. In December 1998, the Company amended this
five-year, $400 million line of credit to permit an additional 364-day, $400
million line of credit, which is convertible at maturity into a one-year term
loan. During 1999, Omnicare renewed this 364-day, $400 million revolving line of
credit through September 2, 2000, with no change in pricing or terms. Interest
rates and commitment fees for the five-year, $400 million line of credit
facility are based on the Company's level of performance under certain financial
ratios, debt covenants and the amount of borrowings under the line of credit.
The total amount outstanding under this facility as of March 31, 2000 was $390
million. Interest rates and commitment fees under the 364-day, $400 million line
of credit are based on the Company's debt ratings. The amount outstanding at
March 31, 2000 under the 364-day facility was $65 million. The Company generated
positive net cash flows from operating activities of approximately $27 million
during the three months ended March 31, 2000, which was used primarily for
acquisition-related payments (including amounts payable pursuant to acquisition
agreements relating to pre-2000 acquisitions), debt repayment and capital
expenditures. Improved management of working capital significantly contributed
to the favorable first quarter 2000 operating cash flow results.
The Company's capital requirements are primarily related to its
acquisition program and, to a lesser extent, capital expenditures, including
those related to investments in the Company's information technology systems.
There are no material commitments outstanding at March 31, 2000, other than
estimated future acquisition-related payments to be made in accordance with
purchase agreements.
The Company's current ratio at March 31, 2000 and December 31, 1999 was
2.5 to 1.0 and 2.3 to 1.0, respectively. The increase in the current ratio is
primarily attributable to the reduction in current bank debt due to the $10
million payment on its 364-day line of credit facility.
10
<PAGE>
On February 2, 2000, the Company's Board of Directors declared a
quarterly cash dividend of 2.25 cents per share for an indicated annual rate of
9 cents per share in 2000. Dividends of $2.1 million were paid during the three
months ended March 31, 2000 versus the $2.0 million paid in the comparable prior
year period.
The Company believes its sources of liquidity and capital are adequate
for its ongoing operating needs. If needed, other external sources of financing
are readily available to the Company.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Regarding Forward-Looking Information
In addition to historical information, this report contains
forward-looking statements and performance trends that are subject to certain
known and unknown risks, uncertainties, contingencies and other factors that
could cause actual results, performance or achievements to differ materially
from those stated. Such forward-looking statements and trends include those
relating to Omnicare's acquisition program, internal growth trends, nursing home
admission and occupancy trends, census and length of stay trends, purchasing
leverage, the leveraging of costs, the formulary compliance program, the impact
of PPS, changes in sales mix, the impact of the productivity and consolidation
program, the Company's capital requirements and the adequacy and availability of
Omnicare's sources of liquidity and capital. Such risks, uncertainties,
contingencies and other factors, many of which are beyond the control of
Omnicare, include, but are not limited to: overall economic, financial and
business conditions, the availability of suitable acquisition candidates and the
successful integration of acquired companies, the effect of new government
regulation and/or legislative initiatives including those relating to
reimbursement policies and in the interpretation and application of such
policies, the failure of Omnicare to obtain or maintain required regulatory
approvals or licenses, loss or delay of CRO contracts for regulatory or other
reasons, the ability to implement the productivity and consolidation program and
to realize anticipated benefits, the impact and pace of technological advances,
the ability to obtain or maintain rights to data, technology and other
intellectual property, the impact of consolidation in the pharmaceutical
industry, changes in tax law and regulation, trends for the continued growth of
the businesses of Omnicare, volatility in Omnicare's stock price, the demand for
Omnicare's products and services, pricing and other competitive factors in the
industry and variations in costs or expenses.
11
<PAGE>
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company does not have any financial instruments held for trading
purposes and does not hedge any of its market risks with derivative instruments.
The Company's primary market risk exposure relates to interest rate
risk exposure through its borrowings. The Company's debt obligations at March
31, 2000 include $390 million outstanding under its five-year, $400 million
variable-rate revolving line of credit facility at an approximate average rate
of 7.1% at March 31, 2000 (a one-hundred basis point change in interest rates
would impact interest expense by approximately $1.0 million per quarter), $65
million outstanding under its 364-day, $400 million variable-rate revolving line
of credit facility at an approximate average rate of 7.2% at March 31, 2000 (a
one-hundred basis point change in interest rates would impact interest expense
by approximately $0.2 million per quarter) and $345 million outstanding under
convertible subordinated notes due in 2007, which accrue interest at a fixed
rate of 5%. The fair value of the Company's debt obligations approximates their
carrying value.
12
<PAGE>
PART II. - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Exhibit
------ -------
11 Computation of Earnings Per Common Share
27 Financial Data Schedule
(b) Reports on Form 8-K - The Company did not file any Reports on Form
8-K during the quarter ended March 31, 2000.
13
<PAGE>
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 15, 2000 By: /s/David W. Froesel, Jr.
---------------------- ------------------------------
David W. Froesel, Jr.
Senior Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
14
STATEMENT OF DIFFERENCES
The registered trademark symbol shall be expressed as........................'r'
Exhibit 11
OMNICARE, INC. AND SUBSIDIARY COMPANIES
Computation of Earnings Per Common Share (EPS)
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
<S> <C> <C>
BASIC EARNINGS:
Net income $14,393 $27,807
======= =======
Shares
Weighted average number of common
shares outstanding 91,599 90,526
======= =======
Basic earnings per common share $ 0.16 $ 0.31
======= =======
DILUTED EARNINGS (a):
Net income $14,393 $27,807
======= =======
Shares
Weighted average number of common
shares outstanding 91,599 90,526
Additional shares assuming conversion of
stock options and stock warrants (b) -- 355
------- -------
Weighted average common shares outstanding
as adjusted 91,599 90,881
======= =======
Diluted earnings per common share $ 0.16 $ 0.31
======= =======
</TABLE>
(a) The $345,000,000 of 5.0% Convertible Subordinated Notes due 2007 which are
convertible into 8,712,121 shares at $39.60 per share were outstanding
during the three months ended March 31, 2000 and 1999, but were not included
in the computation of diluted EPS because the impact was anti-dilutive.
(b) Options and warrants to purchase shares of common stock were excluded from
the computation of diluted earnings per share in those cases where the
exercise price was greater than the average market price of common shares.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 86,221
<SECURITIES> 0
<RECEIVABLES> 479,805
<ALLOWANCES> 36,746
<INVENTORY> 127,892
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<DEPRECIATION> 111,337
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<CURRENT-LIABILITIES> 308,773
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0
0
<COMMON> 92,546
<OTHER-SE> 946,562
<TOTAL-LIABILITY-AND-EQUITY> 2,169,709
<SALES> 493,026
<TOTAL-REVENUES> 493,026
<CGS> 360,409
<TOTAL-COSTS> 360,409
<OTHER-EXPENSES> 97,046
<LOSS-PROVISION> 7,006
<INTEREST-EXPENSE> 13,165
<INCOME-PRETAX> 22,865
<INCOME-TAX> 8,472
<INCOME-CONTINUING> 14,393
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,393
<EPS-BASIC> 0.16
<EPS-DILUTED> 0.16
</TABLE>
