EX-99.1 3 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

[LOGO OF NDCHEALTH]

 

NDCHealth Reports Fiscal First Quarter Results

 

ATLANTA, October 1, 2003 — NDCHealth Corporation (NYSE: NDC) today announced financial results for its first quarter ended August 29, 2003. Revenue increased to $108.9 million from $100.1 million in the first quarter of fiscal 2003. Net income in the first quarter of fiscal 2004 was $7.4 million, or $0.21 per diluted per share, compared with net income of $11.2 million, or $0.32 per diluted share, in the first three months of fiscal 2003.

 

Results for the first quarter of fiscal 2004 include a restructuring charge of $1.5 million, or $0.03 per diluted share, primarily related to streamlining the organization, including the integration of the TechRx acquisition into NDCHealth. First quarter results were, and full-year 2004 results are expected to be, affected by increased interest expense related to the company’s debt refinancing completed in November 2002 and a step up in corporate and other costs previously disclosed in its fiscal 2003 year-end report.

 

Net cash provided by operating activities increased to $19.6 million in the first quarter of fiscal 2004, which was more than triple the $6.0 million reported in the same period of fiscal 2003. EBITDA, a key measurement related to NDCHealth’s debt covenants (defined in the company’s credit agreement as income before equity in losses of affiliated companies, plus income taxes, interest expense, depreciation and amortization, and certain other non-cash charges, less minority interest in income and losses), increased to $30.2 million from $29.0 million in the comparable period in fiscal 2003.

 

“We showed solid progress in executing against the eight quarter plan we announced at the beginning of our fiscal year, highlighted by the growth in revenue and net cash from operating activities during our seasonally slow first quarter,” commented Walter Hoff, chairman and chief executive officer. “Our strategy to increase revenue per claim by selling value-adding solutions that improve our customers’ cash flow and profitability is showing success. We remain focused on controlling our corporate costs and delivering new products and services that will provide additional revenue streams in both our Network Services & Systems and Information Management businesses.

 

Based on our first quarter results and our current outlook, we have no changes to our previously issued guidance for fiscal 2004. We estimate that revenue will be approximately $475 to $490 million and diluted earnings per share will be in the range of $1.08 to $1.25, including restructuring charges. As we previously disclosed, we expect to incur restructuring charges totaling $0.05 to $0.07 per share in the first half of this year, which includes the $0.03 restructuring charge in the first fiscal quarter. We expect to continue to be a strong generator of cash, with fiscal 2004 net cash provided by operating activities in the range of $105 to $115 million,” Hoff concluded.

 

Additional information on NDCHealth’s strategies and outlook is available in a Current Report on Form 8-K, Quarterly Report on Form 10-Q and in the company’s Annual Report on Form 10-K/A filed with the Securities and Exchange Commission (SEC), which can be accessed from the Investor Relations page, SEC Filings section of the company’s website, www.ndchealth.com.

 

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Conference Call and Webcast

 

Management will host a conference call for investors to discuss these results on Thursday, October 2, 2003 beginning at 10:00 a.m. Eastern time. The conference call can be accessed by dialing 888-276-9995 and entering ID code 699394. For access via webcast, go to http://webmeeting.att.com and enter meeting number 5114686455 and participant code 254084 when prompted. A replay of the conference call will be available through 11:59 p.m. Eastern time on Friday, October 17, 2003, and can be accessed either via archived webcast at http://webmeeting.att.com, or by dialing 800-475-6701 and entering access code 699394.

 

About NDCHealth

 

NDCHealth is a leading provider of health information solutions that add value to pharmacy, hospital, physician, pharmaceutical and payer businesses.

 

Forward-Looking Statements

 

This press release contains forward-looking statements. The statements related to the Company’s expected business outlook and the Company’s guidance for fiscal year 2004 are forward-looking statements. These statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in the forward-looking statements. Among other things, the Company’s business outlook and the projected results for the remainder of fiscal year 2004 are based on preliminary estimates, assumptions and projections that management believes to be reasonable at this time, but are beyond management’s control. Some of management’s assumptions that underlie the Company’s forward-looking statements include, among others, assumptions regarding demand for the Company’s products, the cost and timing of product upgrades and new product introductions, gains in market share, industry conditions affecting the Company’s customers, expected pricing levels, expected growth of revenue and net income, the timing and cost of planned capital expenditures, expected outcomes of pending litigation and expected synergies relating to acquisitions, joint ventures and alliances. Additional factors that could cause results to materially differ from current expectations include, but are not limited to, changes in demand for the Company’s services, changes in the U.S. healthcare industry, consolidation within the healthcare industry as well as other factors discussed in NDCHealth’s Annual Report on Form 10-K/A for the fiscal year ended May 30, 2003, filed with the SEC. Forward-looking statements speak only as of the date they are made, and the Company disclaims any obligation to update these statements in light of new information, future events or otherwise. Forward-looking statements are only predictions and are not guarantees of performance.

 

Contact:

Robert Borchert

VP, Investor Relations

(404) 728-2906

robert.borchert@ndchealth.com

 

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CONSOLIDATED STATEMENTS OF OPERATIONS

NDCHealth Corporation and Subsidiaries

 

(In thousands, except per share data)

 

     Three Months Ended
  
     August 29,
2003
    

August 30,

2002

  

Revenues:

                 

Information management

    $ 39,488     $ 36,082  

Network services and systems

      69,403       64,000  
    
 
       108,891       100,082  
    
 

Operating expenses:

                 

Cost of service

      55,152       51,801  

Sales, general and administrative

      23,186       20,153  

Depreciation and amortization

      9,314       7,609  

Restructuring, impairment and other charges

      1,499       —    
    
 
       89,151       79,563  
    
 

Operating income

      19,740       20,519  
    
 

Other income (expense):

                 

Interest and other income

      135       278  

Interest and other expense

      (7,713 )     (3,240 )

Minority interest in losses

      152       378  
    
 
       (7,426 )     (2,584 )
    
 

Income before income taxes and equity in losses of affiliated companies:

                 

Information management

      3,438       4,757  

Network services and systems

      10,375       13,178  

Other

      (1,499 )     —    
    
 
       12,314       17,935  
    
 

Provision for income taxes

      4,617       6,458  
    
 

Income before equity in losses of affiliated companies

      7,697       11,477  

Equity in losses of affiliated companies

      (343 )     (312 )
    
 

Net income

    $ 7,354     $ 11,165  
    
 

Basic earnings per share:

    $ 0.21     $ 0.32  
    
 

Shares

      34,746       34,474  

Diluted earnings per share:

    $ 0.21     $ 0.32  
    
 

Shares

      35,114       39,196  

 

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CONSOLIDATED STATEMENTS OF CASH FLOWS

NDCHealth Corporation and Subsidiaries

 

(In thousands)

 

     Three Months Ended
  
    

August 29,

2003

    

August 30,

2002

  

Cash flows from operating activities:

                 

Net income

    $ 7,354     $ 11,165  

Adjustments to reconcile net income to cash provided by operating activities:

                 

Equity in losses of affiliated companies

      343       312  

Non-cash restructuring, impairment and other charges

      101       —    

Depreciation and amortization

      9,314       7,609  

Deferred income taxes

      4,221       286  

Provision for bad debts

      1,011       722  

Other, net

      884       1,191  

Changes in assets and liabilities which provided (used) cash, net of the effects of acquisitions:

                 

Accounts receivable, net

      (474 )     (5,196 )

Prepaid expenses and other assets

      2,315       (1,728 )

Accounts payable and accrued liabilities

      2,700       (11,317 )

Accrued interest on long term debt

      (5,530 )     2,625  

Deferred revenue

      (3,079 )     739  

Income taxes

      459       (395 )
    
 

Net cash provided by operating activities

      19,619       6,013  
    
 

Cash flows from investing activities:

                 

Capital expenditures

      (13,950 )     (12,902 )

Investing activities and other non-current assets

      (4,865 )     (5,073 )
    
 

Net cash used in investing activities

      (18,815 )     (17,975 )
    
 

Cash flows from financing activities:

                 

Net principal payments under capital lease arrangements and other long-term debt

      (602 )     (439 )

Net cash from refinancing activities

      (154 )     —    

Net proceeds from stock activities

      653       567  

Dividends paid

      (1,408 )     (1,388 )
    
 

Net cash used in financing activities

      (1,511 )     (1,260 )
    
 

Cash flows from discontinued operations:

                 

Cash provided by tax benefits of discontinued operations

      —         5,343  

Cash used in discontinued operations

      (728 )     (290 )
    
 

Net cash (used in) provided by discontinued operations

      (728 )     5,053  
    
 

Increase in cash and cash equivalents

      (1,435 )     (8,169 )

Cash and cash equivalents, beginning of period

      16,103       13,447  
    
 

Cash and cash equivalents, end of period

    $ 14,668     $ 5,278  
    
 

 

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CONSOLIDATED BALANCE SHEETS

NDCHealth Corporation and Subsidiaries

 

(In thousands, except share data)

 

    

August 29,

2003

    

May 30,

2003

  

ASSETS

                 

Current assets:

                 

Cash and cash equivalents

    $ 14,668     $ 16,103  

Accounts receivable

      79,081       78,988  

Allowance for doubtful accounts

      (7,100 )     (6,785 )
    
 

Accounts receivable, net

      71,981       72,203  
    
 

Income tax receivable

      745       1,199  

Deferred income taxes

      17,528       21,663  

Prepaid expenses and other current assets

      30,791       34,304  
    
 

Total current assets

      135,713       145,472  
    
 

Property and equipment, net

      123,922       116,678  

Intangible assets, net

      473,422       479,234  

Deferred income taxes

      5,312       5,018  

Debt issuance cost

      12,282       12,756  

Investments

      16,877       15,662  

Other

      12,338       12,432  
    
 

Total Assets

    $ 779,866     $ 787,252  
    
 

LIABILITIES AND STOCKHOLDERS’ EQUITY

                 

Current liabilities:

                 

Current portion of long-term debt

    $ 6,447     $ 6,558  

Current portion of obligations under capital leases

      772       1,028  

Accounts payable and accrued liabilities

      60,683       61,211  

Accrued interest

      7,751       13,281  

Deferred revenue

      34,507       38,137  
    
 

Total current liabilities

      110,160       120,215  
    
 

Long-term debt

      321,212       321,262  

Obligations under capital leases

      372       558  

Deferred revenue

      9,906       9,461  

Other long-term liabilities

      30,119       30,225  
    
 

Total liabilities

      471,769       481,721  
    
 

Commitments and contingencies

      —         —    

Minority interest in equity of subsidiaries

      8,867       9,019  

Stockholders’ equity:

                 

Preferred stock, par value $1.00 per share; 1,000,000 shares authorized, none issued

                 

Common stock, par value $.125 per share; 200,000,000 shares authorized; 35,192,896 and 34,888,753 shares issued, respectively.

      4,399       4,361  

Capital in excess of par value

      221,834       216,156  

Retained earnings

      85,173       79,228  

Deferred compensation and other

      (8,639 )     (4,301 )

Other comprehensive income

      (3,537 )     1,068  
    
 

Total stockholders’ equity

      299,230       296,512  
    
 

Total Liabilities and Stockholders’ Equity

    $ 779,866     $ 787,252  
    
 

 

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EBITDA Reconciliation

NDCHealth Corporation and Subsidiaries

 

In light of our significant levels of borrowing and interest expense, we believe that EBITDA is a meaningful measure of our operating performance as it is a key measurement related to our debt covenants. EBITDA is defined in our credit agreement as income before equity in losses of affiliated companies, plus income taxes, interest expense, depreciation and amortization, and certain other non-cash charges, less minority interest in income and losses. EBITDA is not a Generally Accepted Accounting Principles (GAAP) measurement and may not be comparable to EBITDA reported by other companies. The tables below reconcile EBITDA for the three months ended August 29, 2003 and August 30, 2002 to our results determined under GAAP.

 

(In thousands)

 

     Three Months Ended
  
    

August 29,

2003

    

August 30,

2002

  

Net income

    $ 7,354     $ 11,165  

Equity in losses of affiliated companies

      343       312  

Income taxes

      4,617       6,458  

Interest expense and related costs

      8,136       3,071  

Depreciation and amortization

      9,314       7,609  

Amortization of restricted stock

      495       765  

Other non-cash charges

      99       23  

Minority interest in losses

      (152 )     (378 )
    
 

EBITDA

    $ 30,206     $ 29,025  
    
 

 

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