UNITED STATES
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): May 4, 2004
CURATIVE HEALTH SERVICES, INC.
(Exact name of registrant as specified in its charter)
Minnesota 000-50371 51-0467366
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
150 Motor Parkway
Hauppauge, New York 11788-5145
(Address of principal executive offices)
(631) 232-7000
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
Item 7. Financial Statements and Exhibits
(c) The following exhibit is being "furnished" in accordance with
Item 12 of Form 8-K and shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), or otherwise subject to the
liabilities of that section, nor shall it be deemed to be
incorporated by reference in any filing under the Securities
Act of 1933, as amended, or the Exchange Act, except as
expressly set forth by specific reference in such filing:
99.1 Press Release of Curative Health Services, Inc. dated
May 4, 2004.
Item 12. Results of Operations and Financial Condition
The following information is being "furnished" in accordance with
Item 12 of Form 8-K and shall not be deemed "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or otherwise subject to the liabilities of that
section, nor shall it be deemed to be incorporated by reference in
any filing under the Securities Act of 1933, as amended, or the
Exchange Act, except as expressly set forth by specific reference in
such filing:
On May 4, 2004, Curative Health Services, Inc. issued a press release
reporting on its results of operations and financial condition for
the completed fiscal quarter ended March 31, 2004. The press release
is furnished as Exhibit 99.1 to this Report.
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.
CURATIVE HEALTH SERVICES, INC.
Date: May 4, 2004 By: /s/ Thomas Axmacher
-------------------
Thomas Axmacher
Chief Financial Officer
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact:
Scott Eckstein
Investor Relations
Curative Health Services
631-232-7044
seckstein@curativehealth.com
CURATIVE HEALTH SERVICES REPORTS RESULTS FOR FIRST QUARTER 2004
First Quarter Revenues of $65.6 Million,
GAAP Net Income Per Share of $0.23,
Adjusted Net Income of $0.24 Per Share Before Charges
Hauppauge, New York - May 4, 2004 - Curative Health Services, Inc., (Nasdaq:
CURE), today reported first quarter results for the period ended March 31, 2004.
Total revenues for the first quarter 2004 were $65.6 million, compared with
$58.0 million reported in the first quarter of 2003. GAAP net income was $3.1
million or $0.23 per diluted share for the first quarter of 2004, compared with
GAAP net income of $3.4 million or $0.25 per diluted share, for the first
quarter of 2003. Adjusted net income for the first quarter 2004 was $3.2 million
or $0.24 per diluted share, compared with adjusted net income of $5.0 million or
$0.37 per diluted share for the first quarter of 2003.
For the quarter ended March 31, 2004, the Company reported earnings before
interest and taxes (EBIT) of $5.8 million and earnings before interest, taxes
and charges (Adjusted EBIT) of $6.0 million. Earnings before interest, taxes,
depreciation, and amortization (EBITDA) for the quarter ended March 31, 2004 was
$6.7 million and earnings before interest, taxes, depreciation, amortization and
charges (Adjusted EBITDA) was $6.8 million. A reconciliation of GAAP net income
to these metrics is included in this press release.
The adjusted first quarter 2004 results add back to GAAP net income certain
aggregate after tax charges of approximately $0.1 million ($0.2 million pre-tax)
or $0.01 per diluted share, including Critical Care Systems integration-related
costs and litigation expenses related to the Prescription City situation. Tables
reconciling GAAP net income and net income per diluted share to adjusted net
income and net income per diluted share, as well as GAAP net income to adjusted
EBIT and adjusted EBITDA for the three months ended March 31, 2004 accompany
this press release. Management believes the adjusted net income, adjusted net
income per diluted share, EBIT, adjusted EBIT, EBITDA and adjusted EBITDA
information is necessary to better present the Company's underlying business
operating results.
(more)
"We are very pleased with our accomplishments during the first quarter including
the completion of the Critical Care Systems transaction, which positions
Curative as a national force in specialty infusion," said Joseph Feshbach,
Curative's Chairman and Chief Executive Officer. "Looking ahead, our team is
committed to realizing the strategic benefits of this combination."
More recently, Curative announced that it has completed its acquisition of
Critical Care Systems, Inc. ("CCS") for a total consideration of approximately
$150 million in cash. CCS is a leading national provider of specialty infusion
pharmaceuticals and related comprehensive clinical services. CCS focuses on
delivering four principal therapies: hemophilia clotting factor, intravenous
immunoglobulin (IVIG), Total Parenteral Nutrition (TPN) and anti-infective
therapies. These core therapies represent the essential components of Specialty
Infusion and account for approximately 75% of CCS' revenues.
Also concurrent with the closing of the CCS transaction, Curative has closed an
offering of $185 million aggregate principal amount of 10.75% senior notes due
2011 offered in a private placement to eligible purchasers pursuant to Rule 144A
and Regulation S under the Securities Act of 1933. The net proceeds of the
senior notes offering were used to consummate the Company's acquisition of CCS,
refinance its existing credit facility and pay related fees and expenses.
Concurrent with the transaction closing, the Company also completed the
refinancing of its existing credit facility with GE Healthcare Financial
Services, a unit of GE Commercial Finance, as agent and lender of a $40 million
senior secured credit facility to support permitted acquisitions, and future
working capital and general corporate needs.
Fiscal 2004 Guidance
For 2004 the Company expects revenues to be in the range of $310-$317 million
and adjusted net income to be in the range of $1.05-$1.10 per diluted share.
This guidance reflects eight months of expected results for Critical Care
Systems, Inc. Adjusted net income excludes expected charges related to the
integration of CCS, legal costs associated with Prescription City, amortization
of intangible assets and long term incentive compensation expense. The total
charge for these items is expected to be in the range of $4.3 - $6.3 million.
GAAP net income for 2004, which includes these charges, is expected to be in the
range of $0.70-$0.80 per diluted share. Revenues for Specialty
Pharmacy/Specialty Infusion Services are expected to be in the $282-$288 million
range and revenues for Specialty Healthcare Services are expected to be in the
$28-$29 million range. Specialty Pharmacy/Specialty Infusion Services revenue
growth is expected from both organic growth as well as the inclusion in 2004 of
a full year of operations of the specialty pharmacy businesses acquired during
2003 and the CCS acquisition. For the second quarter 2004, the Company expects
revenues to be in the range of $66-$68 million and adjusted net income in the
range of $0.18-$0.20 per diluted share, before expected charges related to the
integration of CCS, legal costs associated with Prescription City, amortization
of intangible assets and long term incentive compensation expense. The total
charge for these items is expected to be in the range of $4.3 - $6.3 million.
GAAP net loss per diluted share for the second quarter of 2004, which includes
these charges, is expected to be in the range of $(0.05)-$(0.10) per diluted
share, dependent upon when these charges are incurred.
(more)
The guidance above relates to periods which have not yet ended or for which the
Company has not yet closed its books or completed its review of its operating
results and financial position. Accordingly, this guidance is preliminary and
subject to change based on completion of that review.
The Company will host a conference call to discuss the Company's first quarter
2004 financial results, recent developments, business strategy and outlook on
Tuesday, May 4, 2004, at 11:00 a.m. Eastern Time. To participate in the
conference call, dial 1-800-915-4836 approximately 10 minutes prior to the
scheduled start time.
If you are unable to participate, a digital replay of the call will be available
from May 4, 2004 at 1:00 p.m. Eastern Time until 11:59 p.m. Eastern Time on May
11, by dialing 1-800-428-6051 with passcode # 351116. The live broadcast of
Curative Health Services quarterly conference call will be available online by
going to www.curative.com and selecting the Investor Relations link, on
www.streetevents.com, and on www.companyboardroom.com. An online replay will be
available shortly after the call through May 11, 2004 at those sites.
About Curative Health Services
Curative Health Services, Inc., through its two business units, Specialty
Pharmacy Services and Specialty Healthcare Services, seeks to deliver
high-quality results and exceptional patient satisfaction for patients
experiencing serious or chronic medical conditions.
Curative's Specialty Pharmacy Services business unit provides products and
related services to help patients manage the health care process, with a
particular focus on patients with chronic and critical disease states including
Hemophilia, Immune System Disorders, Infectious Diseases, Nutritional Disorders,
Respiratory Syncytial Virus (RSV), Multiple Sclerosis, Rheumatoid Arthritis and
Cancer.
Curative's Specialty Healthcare Services ("SHS") business unit is an industry
leader in chronic wound care management. SHS provides a broad continuum of
services to health care providers through a nationwide network. This national
network of hospital-based Wound Care Center(R) programs has offered
comprehensive treatment to over 440,000 patients.
For more information, visit www.curative.com.
This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors,
which may cause the actual results, performance or achievements of the Company,
or industry results, to be materially different from any future results,
performance, or achievements expressed or implied by such forward-looking
statements. Factors that might cause such differences include, but are not
limited to, risks associated with our acquisition of Critical Care Systems
including, but not limited to integration risks and costs, risks of client
retention, risks associated with the operations of the acquired business, as
well as risks in our current businesses such as the termination or non-renewal
of a material number of contracts, an inability to obtain new contracts, changes
in the government regulations relating to the Company's Specialty Pharmacy
Services or Specialty Healthcare Services business units, changes in the
regulations governing third party reimbursements for the Company's services,
manufacturing shortages of products sold by Curative's Specialty Pharmacy
Services business unit, and the other risks and uncertainties detailed in the
Company's filings with the Securities and Exchange Commission. Readers of this
release are referred to the Company's Annual Report on Form 10-K for the year
ended December 31, 2003 and Form 8-K filed on April 6, 2004, for further
discussion of these and other factors that could affect future results.
(Tables Follow)
CURATIVE HEALTH SERVICES, INC. AND SUBSIDIARIES
Selected Financial Information
Condensed Consolidated Statements of Operations
-----------------------------------------------
(In thousands, except for per share data)
Unaudited
Three Months Ended
March 31,
2004 2003
-----------------------
Revenues $ 65,558 $ 58,020
Costs and expenses:
Cost of product sales and services 49,751 40,865
Selling, general & administrative 9,849 8,345
Total charges incurred (see reconciliation table
following) 169 2,713
------ ------
Total costs and operating expenses 59,769 51,923
------ ------
Income from operations 5,789 6,097
Interest income 6 2
Interest expense (616) (487)
------ ------
Income before income taxes 5,179 5,612
Income taxes 2,046 2,217
------ ------
Net income $ 3,133 $ 3,395
====== ======
Net income per common share, basic $ 0.24 $ 0.28
====== ======
Net income per common share, diluted $ 0.23 (1) $ 0.25 (1)
====== ======
Denominator for basic earnings per share,
weighted average common shares 12,925 12,206
====== ======
Denominator for diluted earnings per share,
weighted average common shares assuming
conversions 13,717 13,920
====== ======
(1) Calculated under the "as if converted" method, which requires adding
shares related to convertible notes that have no contingencies to the
denominator for diluted earnings per share and adding to net income,
the numerator, tax effected interest expense relating to those
convertible notes.
CURATIVE HEALTH SERVICES, INC. AND SUBSIDIARIES
Selected Financial Information
Reconciliation of GAAP Net income to
Adjusted net income
-----------------------------------------
(In thousands, except for per share data)
Unaudited
Three Months Ended
March 31,
2004 2003
-------- --------
GAAP Net income $ 3,133 $ 3,395
Adjustments:
Costs related to Critical Care Systems integration 97 -
Costs of litigation expenses related to Prescription City 72 -
Costs of pharmacy consolidation and executive terminations - 2,713
------ ------
Subtotal of adjustments 169 2,713
Tax benefit (67) (1,072)
------ ------
Adjusted net income $ 3,235 $ 5,036
====== ======
Reconciliation of GAAP Net income per common share, diluted
to Adjusted net income per common share, diluted
-----------------------------------------------------------
GAAP net income per common share, diluted $ 0.23 (1) $ 0.25 (1)
Adjustments:
Costs related to Critical Care Systems integration .007 -
Costs of litigation expenses related to Prescription City .005 -
Costs of pharmacy consolidation and executive terminations - 0.20
------ ------
Subtotal of adjustments .012 0.20
Tax benefit (.004) (0.08)
------ ------
Adjusted net income per common share, diluted $ 0.24 (1) $ 0.37 (1)
====== ======
Denominator for diluted earnings per share,
weighted average common shares assuming conversions 13,717 13,920
====== ======
(1) Calculated under the "as if converted" method, which requires adding
shares related to convertible notes that have no contingencies to the
denominator for diluted earnings per share and adding to net income,
the numerator, tax effected interest expense relating to those
convertible notes.
CURATIVE HEALTH SERVICES, INC. AND SUBSIDIARIES
Selected Financial Information
Reconciliation of GAAP Net income to
EBIT and Adjusted EBIT
------------------------------------
Unaudited
Three Months Ended
March 31,
2004 2003
------- -------
GAAP Net income $ 3,133 $ 3,395
Adjustments:
Income taxes 2,046 2,217
Interest expense 616 487
Interest income (6) (2)
----- -----
EBIT 5,789 6,097
Adjustments:
Charges 169 2,713
----- -----
Adjusted EBIT $ 5,958 $ 8,810
===== =====
Reconciliation of GAAP Net income to
EBITDA and Adjusted EBITDA
------------------------------------
GAAP net income $ 3,133 $ 3,395
Adjustments:
Income taxes 2,046 2,217
Interest expense 616 487
Interest income (6) (2)
Depreciation and amortization 888 570
----- -----
EBITDA 6,677 6,667
Charges 169 2,713
----- -----
Adjusted EBITDA $ 6,846 $ 9,380
===== =====
CURATIVE HEALTH SERVICES, INC. AND SUBSIDIARIES
Selected Financial Information
Condensed Consolidated Balance Sheets
-------------------------------------
(Dollars in thousands)
Unaudited
March 31, December 31,
2004 2003
--------- ------------
Assets
Current assets:
Cash and cash equivalents $ 1,506 $ 1,072
Accounts receivable, net 58,216 55,217
Deferred tax assets 2,984 2,984
Inventories 9,684 11,237
Prepaids and other current assets 1,501 4,270
------- -------
Total current assets 73,891 74,780
Property and equipment, net 7,651 7,890
Goodwill and intangibles 149,996 150,040
Other long-term assets 1,359 1,228
------- -------
Total assets $ 232,897 $ 233,938
======= =======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 30,586 $ 28,892
Accrued expenses 9,494 11,502
Deferred taxes 1,007 1,007
Current portion of long-term liabilities 7,871 7,911
------- -------
Total current liabilities 48,958 49,312
Long-term liabilities 34,448 39,599
Deferred tax liability 1,307 1,307
------- -------
Total long-term liabilities 35,755 40,906
Stockholders' equity 148,184 143,720
------- -------
Total liabilities and stockholders' equity $ 232,897 $ 233,938
======= =======
Editors Note: This release is also available on the Internet over the
World Wide Web at: http://www.curative.com
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