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): November 5, 2003
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
November 5, 2003.
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 November 5, 2003, Curative Health Services, Inc. issued a press
release reporting on its results of operations and financial
condition for the completed fiscal quarter ended September 30, 2003.
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: November 5, 2003 By: /s/ Thomas Axmacher
-------------------
Thomas Axmacher
Chief Financial Officer
Exhibit 99.1
Contact:
Scott Eckstein
Investor Relations
Curative Health Services
631-232-7044
seckstein@curativehealth.com
CURATIVE HEALTH SERVICES REPORTS THIRD QUARTER 2003 RESULTS
Third quarter Revenues of $46.6 Million,
GAAP Net Income Per Share of $0.13,
Results Include Charges of $0.08 Per Share
Hauppauge, New York - November 5, 2003 - Curative Health Services, Inc.,
(Nasdaq: CURE), announced today third quarter financial results for the period
ended September 30, 2003. Total revenues for the third quarter were $46.6
million, compared with $36.9 million reported in the third quarter of 2002, an
increase of 26.4%. GAAP net income was $1.8 million or $0.13 per diluted share,
compared with GAAP net income of $3.9 million, or $0.31 per diluted share, for
the third quarter of 2002. Adjusted net income for the third quarter was $2.9
million or $0.21 per diluted share. The adjusted third quarter 2003 results add
back to GAAP net income certain aggregate after tax charges of approximately
$1.1 million ($1.8 million pre-tax) or $0.08 per diluted share. A table
reconciling GAAP net income and net income per diluted share to adjusted net
income and net income per diluted share for the three months ended September 30,
2003 accompanies this press release. Management believes the adjusted net income
and adjusted net income per diluted share information is necessary to better
present the Company's underlying business operating results.
Total revenues for the nine months ended September 30, 2003 were $149.3 million.
GAAP net income was $8.7 million or $0.64 per diluted share. Adjusted net income
for the nine months ended September 30, 2003 was $11.9 million or $0.87 per
diluted share. These adjusted nine month results add back to GAAP net income
charges taken during the first and second quarters that have been previously
disclosed, as well as the charges taken during the third quarter discussed
above. A table reconciling GAAP net income and net income per diluted share to
adjusted net income and net income per diluted share for the nine months ended
September 30, 2003 accompanies this press release.
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"Our third quarter was a challenging one as sequential revenue growth relating
to our blood products paused, and the reorganization in the Synagis(R)
distribution network made the competitive outlook somewhat uncertain for the
2003-2004 RSV season," said Joseph Feshbach, Curative's Chairman and CEO.
"Moreover operating expenses as well as investment requirements have proven to
be higher than expected. The combined effect of all of these changes was what
prompted us to lower our guidance early in October. We also experienced isolated
pricing pressure in our Wound Care business.
"Nonetheless we do expect solid sequential gains in Hemophilia and IVIG and
other infusables in Q4 as well as good revenue gains in Synagis(R). We are also
redoubling our expense control efforts." In the Wound Care business, the
Company signed five new multi-year contracts to manage acute care hospital
Wound Care Center(R) programs and had three contracts terminated.
Additionally, the Company has signed one multi-year contract thus far in the
fourth quarter of 2003.
Fourth Quarter, Fiscal 2003 and Fiscal 2004 Guidance
For the full year 2003, the Company expects revenues to be in the range of
$219-$221 million and GAAP net income in the range of $0.93-$0.96 per diluted
share. Adjusted net income per diluted share for the full year 2003 is expected
to be in the range of $1.17-$1.20. This adjusted net income per diluted share
guidance reflects the adjustments shown for the first nine months of 2003 in the
table reconciling GAAP net income per diluted share to adjusted net income per
diluted share which table accompanies this press release. For the fourth quarter
2003, the Company expects revenues to be in the range of $70-$72 million and
GAAP net income in the range of $0.30-$0.32 per diluted share.
For 2004, the Company anticipates revenues of approximately $270-$280 million
and GAAP net income to be in the range of $1.35-$1.45 per diluted share.
Revenues for Specialty Pharmacy Services are expected to be in the $240-$250
million range and revenues for Specialty Healthcare Services are expected to be
approximately $30 million. Specialty Pharmacy Services revenue growth is
expected from both organic growth as the result of the Company's expanded sales
force, as well as the inclusion in 2004 of a full year of operations by
specialty pharmacy businesses acquired during the first nine months of 2003.
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. In addition, the
guidance above does not reflect the impact, if any, of the pending government
investigation of the Company's Prescription City pharmacy which was announced
today in a separate release.
Management believes that adjusted net income and adjusted net income per diluted
share provide useful information that is essential to understanding the
operating results of the Company's core business operations and that allows
investors to more easily compare operating results from period to period.
The Company will host a conference call to discuss the Company's third quarter
2003 financial results, recent developments, business strategy and outlook on
Wednesday, November 5, 2003, 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.
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If you are unable to participate, a digital replay of the call will be available
from Wednesday, November 5, 2003 at 1:00 p.m. Eastern Time until 12:00 a.m.
Eastern Time on November 12, 2003 by dialing 1-800-428-6051 with passcode #
309426. The live broadcast of Curative's 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 November 12, 2003
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 services to help
patients manage the health care process, and offers related pharmacy products to
patients for chronic and critical disease states including Hemophilia, Immune
System 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 375,000 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, 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, 2002 and Quarterly
Report on Form 10-Q for the quarter ended June 30, 2003, 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) (Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
------------------------ ------------------------
Revenues $ 46,587 $ 36,851 $ 149,296 $ 91,535
Costs and expenses:
Cost of product sales and services 30,998 22,872 100,413 57,573
Selling, general & administrative 10,221 7,086 27,516 18,619
Total charges incurred (see reconciliation
table following) 1,793 - 5,332 -
------ ------ ------- ------
Total costs and expenses 43,012 29,958 133,261 76,192
------ ------ ------- ------
Income from operations 3,575 6,893 16,035 15,343
Interest income 3 4 7 57
Interest expense 661 393 1,673 675
------ ------ ------- ------
Income before income taxes 2,917 6,504 14,369 14,725
Income taxes 1,152 2,570 5,676 5,910
------ ------ ------- ------
Net income $ 1,765 $ 3,934 $ 8,693 $ 8,815
====== ====== ======= ======
Net income per common share, basic $ 0.14 (1) $ 0.33 $ 0.70 (1) $ 0.79
====== ====== ======= ======
Net income per common share, diluted $ 0.13 (1) $ 0.31 $ 0.64 (1) $ 0.73
====== ====== ======= ======
Denominator for basic earnings per share,
weighted average common shares 12,434 11,869 12,344 11,098
====== ====== ======= ======
Denominator for diluted earnings per share,
weighted average common shares assuming
conversions 14,025 12,726 13,880 12,117
====== ====== ======= ======
(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) (Unaudited)
Three Months Ended Nine Months Ended
September 30, 2003 September 30, 2003
------------------ ------------------
GAAP Net income $ 1,765 $ 8,693
Adjustments:
Costs of credit facility termination and corporate structure
reorganization 274 1,100
Costs of pharmacy consolidation and executive terminations 508 3,221
Costs of convertible note offering not completed due to market
conditions 682 682
Costs of acquisition not completed 329 329
------ ------
Subtotal of adjustments 1,793 5,332
Tax benefit (708) (2,106)
------ ------
Adjusted net income $ 2,850 $ 11,919
====== ======
Reconciliation of GAAP Net income per common share,
diluted to Adjusted net income per common share, diluted
--------------------------------------------------------
GAAP net income per common share, diluted $ 0.13 (1) $ 0.64 (1)
Adjustments:
Costs of credit facility termination and corporate structure
reorganization 0.02 0.08
Costs of pharmacy consolidation and executive terminations 0.04 0.23
Costs of convertible note offering not completed due to market
conditions 0.05 0.05
Costs of acquisition not completed 0.02 0.02
------ ------
Subtotal of adjustments 0.13 0.38
Tax benefit (0.05) (0.15)
------ ------
Adjusted net income per common share, diluted $ 0.21 (1) $ 0.87 (1)
====== ======
Denominator for diluted earnings per share,
weighted average common shares assuming conversions 14,025 13,880
====== ======
(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
Condensed Consolidated Balance Sheets
-------------------------------------
(Dollars in thousands)
(Unaudited)
September 30, December 31,
2003 2002
------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 995 $ 2,643
Accounts receivable, net 43,945 36,438
Deferred tax assets 3,088 2,957
Inventories 10,839 12,766
Prepaids and other current assets 2,394 2,212
------- -------
Total current assets 61,261 57,016
Property and equipment, net 6,128 3,284
Goodwill and intangibles 150,155 125,165
Other long-term assets 1,827 979
------- -------
Total assets $ 219,371 $ 186,444
======= =======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 19,931 $ 21,786
Accrued expenses 11,833 11,579
Current portion long term liabilities 7,916 6,102
------- -------
Total current liabilities 39,680 39,467
Long-term liabilities 41,919 26,076
Stockholders' equity 137,772 120,901
------- -------
Total liabilities and stockholders' equity $ 219,371 $ 186,444
======= =======
Editors Note: This release is also available on the Internet over the World
Wide Web at: http://www.curative.com
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