SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 16, 1999
Express Scripts, Inc.
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(Exact Name of Registrant as specified in its Charter)
Delaware 0-20199 43-1420563
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(State or other (Commission File No.) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation)
13900 Riverport Drive, Maryland Heights, Missouri 63043
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (314) 770-1666
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(Former name or former address, if changed since last report)
Item 5. Other Events.
On December 16, 1999, Express Scripts, Inc. (the "Company") representatives
were interviewed by Dow Jones News Service for a news story to be issued on the
Dow Jones news wire.
The Company commented that it expects strong growth in mail prescription
volumes in 2000, and will continue to invest monies received from its
relationship with PlanetRx.com to enhance its internet capabilities.
The Company also reported that its integration of the ValueRx and DPS
operations is proceeding as planned and, in looking ahead to 2000, its primary
integration activities will be focused on information systems consolidation and
management of the United Healthcare ("UHC") account to another pharmacy benefit
management company.
During the interview, the Company commented on the effect that the
termination of the Company's contract with UHC is expected to have on the
Company's operating cash flows. The Company stated that it anticipates that the
majority of the approximately 10 million UHC members will be transitioned to
another pharmacy benefit management company during the third quarter of 2000.
Due to the timing of cash receipts and payments under the UHC contract, the
Company expects that cash flow from operations will be temporarily reduced by
approximately $20 million during that quarter, but will still be positive
overall. The cash flow reduction will have no impact on earnings, and the
Company expects cash flows from operations to recover during the fourth quarter
of 2000 to approximately the levels achieved prior to the termination of the UHC
contract.
The Company also reported that, when it acquired Diversified Pharmaceutical
Services, Inc. on April 1, 1999, it allocated a portion of its purchase price to
the UHC contract and has been amortizing that amount over the remaining term of
the agreement. Consequently, the loss of net income associated with the
termination of the UHC contract is not expected to be material.
Information included in this Current Report on Form 8-K and information
that may be contained in other filings by the Company with the Securities and
Exchange Commission (the "Commission") and releases issued or statements made by
the Company, contain or may contain forward-looking statements, including but
not limited to statements of our plans, objectives, expectations or intentions.
Such forward-looking statements necessarily involve risks and uncertainties. Our
actual results may differ significantly from those projected or suggested in any
forward-looking statements. Factors that might cause such a difference to occur
include, but are not limited to: (i) risks associated with successfully
integrating the PlanetRx.com Internet site with our system, and competition in
the Internet pharmacy business; (ii) risks associated with the consummation and
financing of acquisitions, including our ability to successfully integrate the
operations of the acquired businesses with our existing operations (including
successfully managing the transition of the United Healthcare membership off of
our systems in 2000), client retention issues, and risks inherent in the
acquired entities' operations; (iii) risks associated with obtaining financing
and capital; (iv) risks associated with our ability to manage growth; (v)
competition, including price competition, competition in the bidding and
proposal process and our ability to consummate contract negotiations with
prospective clients; (vi) the possible termination of contracts with certain key
clients or providers; (vii) the possible termination of contracts with certain
key pharmaceutical manufacturers and changes in pricing, discount, rebate or
other practices of pharmaceutical manufacturers; (viii) adverse results in
litigation; (ix) adverse results in regulatory matters, the adoption of adverse
legislation or regulations, more aggressive enforcement of existing legislation
or regulations, or a change in the interpretation of existing legislation or
regulations; (x) developments in the healthcare industry, including the impact
of increases in healthcare costs, changes in drug utilization patterns and
introductions of new drugs; (xi) risks associated with the "Year 2000" issue;
(xii) dependence on key members of management; (xiii) our relationship with New
York Life Insurance Company, which possesses voting control of us; and (xiv)
other risks described from time to time in our filings with the Commission. We
do not undertake any obligation to release publicly any revisions to such
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
SIGNATURE
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 hereunto duly authorized.
EXPRESS SCRIPTS, INC.
Date: December 16, 1999 By: /s/ Barrett A. Toan
Barrett A. Toan
President and Chief Executive Officer
