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23/7/2004 13:23
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pink cadillac
N° messaggi: 50 -
Iscritto da: 04/3/2004
Good Stock, may drift a little now after results.
US Oncology Reports Financial Results for Second Quarter 2004
HOUSTON, July 23 /PRNewswire-FirstCall/ -- US Oncology, Inc. (NASDAQ:USON)
today reported results for the 2004 second quarter.
The company recorded quarter-over-quarter and year-over-year increases in
revenue, net income and earnings per share for the second quarter 2004. The
table below provides a review of second quarter results, as well as the results
for the six months ended 2004 along with applicable comparisons:
Q2 2004 Q2 2003 % Change Q1 2004 % Change
Revenue $ 565.2 $ 491.4 15.0 % $ 525.0 7.7 %
Net income $ 24.5 $ 17.7 39.0 % $ 20.1 22.0 %
EPS - diluted $ 0.27 $ 0.19 42.1 % $ 0.23 17.4 %
EBITDA(1) $ 64.2 $ 52.4 22.5 % $ 56.1 14.5 %
Six Months Ended June 30,
2004 2003 % Change
Revenue $1,090.2 $ 938.6 16.2%
Net income $ 44.7 $33.9 31.7%
EPS - diluted $ 0.50 $0.36 38.9%
EBITDA(1) $ 120.2 $ 102.5 17.2%
(1) See Reconciliation of Selected Financial Data for calculations
US Oncology highlights for the second quarter of 2004 are detailed below:
-- US Oncology's EBITDA(1) for the second quarter was $64.2 million,
compared to $56.1 million for the first quarter of 2004 and $52.4
million in the second quarter of 2003.
-- EBITDA(1) for the six months ended June 30, 2004 was $120.2 million,
compared to $102.5 million for the six months ended June 30, 2003.
-- The company's accounts receivable days outstanding were 44 at the end
of the second quarter, compared to 47 at the end of the first quarter
2004 and 43 at the end of the second quarter of 2003.
-- Of US Oncology's revenue for the six months ended June 30, 2004, 16.3
percent was generated by practices on the net revenue model.
Subsequent to June 30, 2004, the company converted two net revenue
practices with a total of 35 doctors to the earnings model. For the
six months ended June 30, 2004 these two practices represented 4.6
percent of the company's revenue.
-- The company generated operating cash flow for the six months ended
June 30, 2004 of $130.1 million compared to $116.6 million for the six
months ended June 30, 2003. The increase in operating cash flow is
due to a decrease in accounts receivable days outstanding, and an
increase in accounts payable days outstanding resulting from
renegotiated payment terms with certain vendors. Also contributing to
this increase is a decrease in tax payments made during 2004, in
anticipation of the fact that the company will be entitled to certain
tax benefits upon closing of the merger transaction discussed below.
As of July 19, 2004, US Oncology had approximately $276.0 million in
cash and equivalents.
(1) See Reconciliation of Selected Financial Data for calculations.
Update on Merger Transaction
The company will hold a special stockholders' meeting on August 20, 2004, to
consider its previously announced merger transaction and related matters. The
merger is subject to the approval by holders of a majority of the outstanding
shares of US Oncology Common Stock and approval by holders of a majority of the
outstanding shares of US Oncology's Common Stock not held by US Oncology
Holdings, Inc., Oiler Acquisition Corp., Welsh Carson, Anderson & Stowe IX,
L.P., its co-investors or members of US Oncology's board or management that are
expected to participate in the merger. All stockholders of record as of July
16, 2004, will be entitled to vote at the special meeting. The company filed
its definitive proxy statement with the SEC on July 21, 2004, and mailed the
proxy to stockholders on July 22, 2004.
The merger remains subject to a number of other conditions, including
consummation of financing transactions necessary to fund the merger
consideration. US Oncology Holdings, Inc. intends to complete the financing
arrangements on or prior to the date of the special meeting of stockholders.
As previously disclosed, the company has received tenders of notes and related
consents to an indenture amendment from holders of more than a majority of the
$175 million outstanding principal amount of its 9 5/8% Senior Subordinated
Notes due 2012, which was a condition to the merger. In addition, the company
received early termination of the waiting period under the Hart-Scott-Rodino
Act.
The company has also entered into a settlement agreement with the plaintiffs in
the previously disclosed lawsuits relating to the merger and naming the company
and each of its directors as defendants. The proposed settlement provides for
the settlement or dismissal with prejudice of all of the lawsuits. The
proposed settlement of the Delaware lawsuit is subject to final approval by the
Delaware Court of Chancery, so any settlement may not be final at the time of
the special meeting. If the proposed settlement is ultimately not approved by
the Delaware Court of Chancery, the litigation could proceed and the plaintiffs
could seek the relief sought in their respective complaints.
If the company's stockholders approve the merger at the special meeting and the
other conditions to the merger have been satisfied at that time, the company
would expect to close the merger promptly after the meeting.
Financial Exhibits
Exhibits, including key operating statistics, financial statements and a
reconciliation of selected financial data are included in this news release.
Additional Information and Where to Find It
US Oncology has filed with the SEC and mailed to stockholders a definitive
proxy statement dated July 20, 2004, for the Special Meeting of Stockholders to
be held to vote on the proposed merger with an affiliate of Welsh Carson. US
Oncology, Welsh Carson, certain co-investors of Welsh Carson and certain
members of US Oncology's board and management also filed with the SEC a
Schedule 13e-3 and may file other relevant documents with the SEC concerning
the proposed merger. Stockholders are urged to read the definitive proxy
statement and Schedule 13e-3 and any other relevant documents filed with the
SEC because they contain important information about the proposed merger and
the interests of the participants in the solicitation of proxies. You can
obtain the documents free of charge at the SEC's Web site at
http://www.sec.gov/. In addition, you may obtain copies of documents filed
with the SEC by US Oncology free of charge by requesting them in writing from
US Oncology at 16825 Northchase Drive, Suite 1300, Houston, Texas 77060,
Attention: Investor Relations, by telephone at (832) 601-8766 or by e-mail to .
Participants in the Solicitation
US Oncology, Welsh Carson and their directors, officers and employees may be
deemed to be participants in the solicitation of proxies from the US Oncology
stockholders. Information concerning persons who may be deemed participants in
the solicitation of US Oncology stockholders is set forth in US Oncology's
proxy statement for its 2003 annual meeting of stockholders, the Schedule 13D,
as amended, filed with the SEC by Welsh Carson, certain co- investors of Welsh
Carson and certain members of US Oncology's board and management the definitive
proxy statement for the special meeting of stockholders filed with the SEC on
July 21, 2004, and the Schedule 13e-3, as amended, previously filed with the
SEC.
About US Oncology, Inc.
US Oncology, headquartered in Houston, Texas, is America's premier cancer care
services company. The company provides comprehensive services to a network of
affiliated practices comprising more than 900 affiliated physicians in over 490
sites, including 81 integrated cancer centers, in 32 states.
US Oncology's mission is to enhance access to high-quality cancer care in
America. The company's strategies to accomplish this mission include: (a)
helping practices lower their pharmaceutical and administration costs, (b)
providing the capital and expertise to expand and diversify into radiation
oncology and diagnostic radiology, (c) providing sophisticated management
services to enhance profitability, and (d) providing access to and managing
clinical research trials. In addition, the company assists practices in
negotiations with private payors, in implementing programs to enhance
efficiencies with respect to drugs and in expanding service offerings such as
positron emission tomography and intensity modulated radiation therapy.
This news release contains forward-looking statements, including statements
that include the words "believes," "expects," "anticipates," "estimates,"
"intends," "plans," "projects," or similar expressions and statements regarding
our prospects. All statements other than statements of historical fact included
in this news release are forward-looking statements. Although the Company
believes that the expectations reflected in such statements are reasonable, it
can give no assurance that such expectations will prove to have been correct.
Such expectations are subject to risks and uncertainties, including the
possibility that the merger may not occur due to the failure of the parties to
satisfy the conditions in the merger agreement, such as the inability of US
Oncology Holdings, Inc. to obtain financing, the failure of US Oncology to
obtain stockholder approval or the occurrence of events that would have a
material adverse effect on US Oncology as described in the merger agreement.
Additional risks and uncertainties relating to the Company's operations include
recent legislation relating to prescription drug reimbursement under Medicare,
including the way in which such legislation is implemented with respect to
modifications in practice expense reimbursement, calculation of average sales
price, implementation of third-party vendor programs and other matters, the
impact of the recent legislation on other aspects of our business (such as
private payor reimbursement, the Company's ability to obtain favorable
pharmaceutical pricing, the ability of practices to continue offering
chemotherapy services to Medicare patients or maintaining existing practice
sites, physician response to the legislation, including with respect to
retirement or choice of practice setting, development activities, and the
possibility of additional impairments of assets, including management services
agreements), reimbursement for pharmaceutical products generally, our ability
to maintain good relationships with existing practices, expansion into new
markets and development of existing markets, our ability to complete cancer
centers and PET facilities currently in development, our ability to recover the
costs of our investments in cancer centers, our ability to complete
negotiations and enter into agreements with practices currently negotiating
with us, reimbursement for health-care services, continued efforts by payors to
lower their costs, government regulation and enforcement, continued
relationships with pharmaceutical companies and other vendors, changes in
cancer therapy or the manner in which care is delivered, drug utilization,
increases in the cost of providing cancer treatment services and the operations
of the Company's affiliated physician practices. Please refer to the Company's
filings with the SEC, including its Annual Report on Form 10- K for 2003, as
amended, and subsequent filings, for a more extensive discussion of factors
that could cause actual results to differ materially from the Company's
expectations.
US ONCOLOGY, INC.
Exhibit 1
Key Operating Statistics
(in millions)
(unaudited)
Q2 2004 Q2 2003 % Change YTD 2004 YTD 2003 % Change
Product
revenues $ 355.4 $298.9 18.9% $ 687.9 $ 562.4 22.3%
Service
revenues 209.8 192.5 9.0% 402.3 376.2 6.9%
Total revenues $ 565.2 $491.4 15.0% $ 1,090.2 $ 938.6 16.2%
Physician
Summary:
PPM physicians 805 776 3.7% 805 776 3.7%
Service Line
physicians 109 60 81.7% 109 60 81.7%
Total physicians 914 836 9.3% 914 836 9.3%
Medical Oncology/
Hematology:
Medical
oncologists/
hematologist 756 686 10.2% 756 686 10.2%
Medical
oncology
visits (1) 585,413 609,208 (3.9)% 1,164,121 1,194,894 (2.6)%
Other
oncologists 36 37 (2.7)% 36 37 (2.7)%
Radiation
Oncology:
Radiation
oncologists 122 113 8.0% 122 113 8.0 %
Radiation
treatments
per day 2,597 2,584 0.5% 2,584 2,606 (0.8)%
Total cancer
centers 81 76 6.6% 81 76 6.6 %
Imaging/
Diagnostics:
PET installations 1 2 (50.0)% 4 4 0 %
Total PET
installations 25 19 31.6 % 25 19 31.6 %
PET scans 7,023 4,752 47.8 % 13,604 8,963 51.8 %
New patients
enrolled in
research studies 718 951 (24.5)% 1,461 1,856 (21.3)%
Days sales
outstanding 44 43 2.3 % 44 43 2.3 %
(1) Visits only include information for practices affiliated under the
practice management model and do not include results of service line
practices.
US ONCOLOGY, INC.
Exhibit 2
Condensed Consolidated Statement of Operations and Comprehensive Income
(in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Product revenues $ 355,454 $298,895 $687,929 $562,426
Service revenues 209,789 192,517 402,310 376,196
Total revenues 565,243 491,412 1,090,239 938,622
Cost of product 332,783 277,153 639,549 520,461
Costs of services:
Field compensation
and benefits 96,461 88,631 189,154 175,663
Other field costs 55,216 56,872 112,017 108,011
Depreciation and
amortization 15,131 12,912 28,957 25,913
Total costs
of services 166,808 158,415 330,128 309,587
Total costs
of product
and services 499,591 435,568 969,677 830,048
General and
administrative
expense 16,616 16,365 29,300 31,941
Depreciation and
amortization 5,205 6,054 10,333 11,866
Income from
operations 43,831 33,425 80,929 64,767
Other income
(expense):
Interest
expense, net (4,541) (4,952) (8,923) (10,084)
Other income 622 - 622 -
Income before
income taxes 39,912 28,473 72,628 54,683
Income
tax provision (15,366) (10,820) (27,962) (20,780)
Net income and
comprehensive
income $ 24,546 $ 17,653 $ 44,666 $ 33,903
Net income per
share - basic $ 0.28 $ 0.19 $ 0.52 $ 0.37
Shares used in
per share
computation - basic 87,192 91,358 86,590 92,165
Net income per
share - diluted $ 0.27 $ 0.19 $ 0.50 $ 0.36
Shares used in per
share computation -
diluted 90,674 93,017 89,975 93,825
US ONCOLOGY, INC.
Exhibit 3
Condensed Consolidated Statement of Cash Flows
(in thousands)
(unaudited)
Six Months Ended June 30,
2004 2003
Cash flows from operating activities:
Net income $44,666 $33,903
Non cash adjustments:
Depreciation and amortization 39,290 37,779
Deferred income taxes 4,200 12,222
Undistributed earnings (losses)
in joint ventures 32 (900)
Non cash compensation expense 48 100
Changes in operating
assets and liabilities: 41,870 33,468
Net cash provided
by operating activities 130,106 116,572
Cash flows from investing activities:
Acquisition of property and equipment (37,853) (39,452)
Net cash used by investing activities (37,853) (39,452)
Cash flows from financing activities:
Repayment of other indebtedness (10,001) (14,728)
Cash payment in lieu of stock issuance - (710)
Proceeds from exercise of options 18,599 895
Purchase of Treasury Stock (4,247) (40,972)
Net cash provided (used)
by financing activities 4,351 (55,515)
Increase in cash and equivalents 96,604 21,605
Cash and equivalents:
Beginning of period 124,514 75,029
End of period $ 221,118 $ 96,634
Interest paid $ 9,775 $ 10,720
Taxes paid $ 575 $ 8,755
Non cash transactions:
Delivery of Common Stock
in affiliation transactions $ 6,585 $ 6,839
US ONCOLOGY, INC.
Exhibit 4
Condensed Consolidated Balance Sheet
(in thousands)
(unaudited)
June 30, 2004 December 31, 2003
ASSETS
Current assets:
Cash and equivalents $ 221,118 $ 124,514
Accounts receivable 316,582 304,507
Other receivables 61,100 47,738
Prepaids and other current assets 17,507 18,451
Inventories 28,768 7,481
Due from affiliates 40,650 43,629
Total current assets 685,725 546,320
Property and equipment, net 362,391 356,125
Service agreements, net 232,541 239,108
Deferred income taxes 6,715 10,915
Other assets 21,820 22,551
Total assets $ 1,309,192 $ 1,175,019
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term
indebtedness $ 74,251 $ 79,748
Accounts payable 201,146 160,628
Due to affiliates 88,299 64,052
Accrued compensation costs 20,965 26,316
Income taxes payable 39,911 19,810
Other accrued liabilities 42,027 41,847
Total current liabilities 466,599 392,401
Deferred revenue 7,290 5,349
Long-term indebtedness 183,908 188,412
Total liabilities 657,797 586,162
Minority interest 10,529 10,497
Stockholders' equity 640,866 578,360
Total liabilities and
stockholders' equity $ 1,309,192 $ 1,175,019
US ONCOLOGY, INC.
Exhibit 5
Reconciliation of Selected Financial Data
(in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Net Income / EPS
Income before income taxes $ 39,912 $ 28,473 $ 72,628 $ 54,683
Tax rate 38.5% 38.0% 38.5% 38.0%
Net income $ 24,546 $ 17,653 $ 44,666 $ 33,903
Weighted average shares
outstanding - diluted 90,674 93,017 89,975 93,825
EPS $ 0.27 $ 0.19 $ 0.50 $ 0.36
EBITDA
Net income $ 24,546 $ 17,653 $ 44,666 $ 33,903
Interest expense,
net, and other 3,919 4,952 8,301 10,084
Income tax provision 15,366 10,820 27,962 20,780
Depreciation 16,289 14,744 31,147 29,154
Amortization 4,047 4,222 8,143 8,625
EBITDA $ 64,167 $ 52,391 $ 120,219 $ 102,546
Net Cash provided
by Operating Activities
Net income $ 24,546 $ 17,653 $ 44,666 $ 33,903
Interest expense,
net, and other 3,919 4,952 8,301 10,084
Income taxes 15,366 10,820 27,962 20,780
Depreciation 16,289 14,744 31,147 29,154
Amortization 4,047 4,222 8,143 8,625
EBITDA 64,167 52,391 120,219 102,546
Changes in assets
and liabilities 39,333 71,498 41,870 33,468
Undistributed earnings
(losses) in joint ventures 138 (949) 32 (900)
Non-cash stock
compensation expense 23 27 48 100
Deferred income taxes 2,200 10,500 4,200 12,222
Interest expense, net,
and other (3,919) (4,952) (8,301) (10,084)
Income tax expense (15,366) (10,820) (27,962) (20,780)
Net cash provided by
operating activities $ 86,576 $ 117,695 $ 130,106 $ 116,572
Discussion of Non-GAAP Information
In this release, we use the term "EBITDA". EBITDA is earnings before interest,
taxes, depreciation and amortization. We believe EBITDA is useful to investors
in evaluating companies, and their liquidity and ability to service their
indebtedness. Management uses EBITDA to evaluate the company's liquidity and
financial condition, both with respect to the business as a whole and
individual sites.
EBITDA is not calculated in accordance with generally accepted accounting
principles of the United States ("GAAP"). EBITDA is derived from relevant
items in our GAAP financials. A reconciliation EBITDA to our income statement
is included in this release.
Management believes that EBITDA is useful to investors, since it provides
investors with additional information that is not directly available in a GAAP
presentation. In all events, EBITDA is not intended to be a substitute for
GAAP measures, and investors are advised to review such non-GAAP measures in
conjunction with GAAP information provided by us.
DATASOURCE: US Oncology, Inc.
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