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): April 29, 2003
CURATIVE HEALTH SERVICES, INC.
(Exact name of registrant as specified in its charter)
Minnesota 000-19370 41-1503914
(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 herewith:
99.1 Press Release, dated April 29, 2003, of Curative Health Services,
Inc.
Item 9. Regulation FD Disclosure (also Item 12, Disclosure of Results of
Operations and Financial Condition)
The following information is being provided under Item 12, Disclosure
of Results of Operations and Financial Condition. It is being
furnished under Item 9 of this Form 8-K in accordance with interim
guidance issued by the SEC in Release No.33-8216. Such information,
including the Exhibit attached hereto, shall not be deemed "filed"
for purposes of Section 18 of the Securities Exchange Act of 1934:
On April 29, 2003, Curative Health Services, Inc. issued a press release to
report the Company's results of operations and financial condition for the
completed fiscal quarter ended March 31, 2003. The release is furnished as
Exhibit 99.1 hereto and is incorporated herein by reference.The release includes
non-GAAP financial measure identified as "adjusted net income" and "adjusted net
income per diluted share" which do not include certain special charges. The
Company's management uses these non-GAAP financial measures in presentations to
investors because it believes that these measures more closely track the
performance of the Company's operations from period to period and so have a
higher level of comparability over multiple periods than GAAP net income and
GAAP net income per diluted share.
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: April 29, 2003 By: /s/ Thomas Axmacher
________________
Thomas Axmacher
Chief Financial Officer
Exhibit 99.1
News
FOR IMMEDIATE RELEASE
Contact:
Scott Eckstein
Investor Relations
Curative Health Services
631-232-7044
seckstein@curativehealth.com
CURATIVE HEALTH SERVICES REPORTS FIRST QUARTER 2003 RESULTS
Record First Quarter Revenues of $58 Million,
Adjusted Net Income of $0.37 Per Share Before Special Charges,
GAAP Net Income Per Share of $0.25
New $35 Million Credit Facility Commitment with GE Healthcare Financial Services
Hauppauge, New York - April 29, 2003 - Curative Health Services, Inc., (Nasdaq:
CURE), announced today first quarter financial results for the period ended
March 31, 2003. Total revenues for the first quarter were $58.0 million,
compared with $ 22.8 million reported in the first quarter of 2002, an increase
of 154.4%. Adjusted net income for the first quarter was $5.0 million or $0.37
per diluted share before special charges, and GAAP net income was $3.4 million
or $0.25 per diluted share after including these special charges, compared with
net income of $2.1 million, or $0.19 per diluted share, for the first quarter of
2002. First quarter 2003 results include special charges of $1.6 million or
$0.07 per diluted share from the Company recording charges associated with the
consolidation of its Specialty Pharmacy operations and $1.1 million or $0.05 per
diluted share of special charges associated with settlements, including
severance agreements, with former executives terminated in March 2002. Operating
cash flow for the first quarter 2003 was strong at $6.1 million.
Also during the quarter, the Company received approximately $1.3 million in
proceeds related to a settlement agreement the Company entered into on March 20,
2003 with the former shareholders of eBioCare.com Inc., and $0.3 million in
other recoveries, which were recorded as a reduction to purchase price and
goodwill.
"We are pleased with our overall results and continued momentum in our specialty
pharmacy business," said Joseph Feshbach, Curative's Chairman and Chief
Executive Officer. "We saw a slight shortfall in our earnings as the result of
fewer than anticipated contract signings in our wound care segment; however, we
have signed two contracts thus far in the second quarter and are optimistic as
to momentum in this area.
(more)
"Additionally, we took steps this quarter towards consolidating pharmacy
operations in southern California and incurred special charges for severances
and related costs, lease abandonment and equipment write-offs. We expect a more
efficient pharmacy operation as a result of this reorganization. Also, we have
taken charges for settlement of long standing severance disputes related to the
executive departures as disclosed in March 2002. The total of these charges,
pre-tax was $2.7 million and after tax $1.6 million or $0.12 per share. At the
same time, we received approximately 1.6 million in proceeds related to legal
settlements and other recoveries, which on a cash basis mostly offsets the
special charges we took this quarter to strengthen our existing infrastructure."
The Company also announced it has entered into a commitment with GE Healthcare
Financial Services for a new $35 million revolving and term credit facility, to
replace our existing line of credit. The new facility will be expandable for
acquisitions, subject to conditions, for an additional $45 million. The new
facility is subject to negotiation and execution of definitive agreements and
other customary conditions. When complete it is anticipated that there will be a
charge of $.03-$.04 per diluted share related to terminating our existing credit
facility.
During the first quarter 2003, Curative also acquired MedCare, Inc. ("MedCare")
for approximately $6.6 million in cash. MedCare is a specialty pharmacy with
locations in Alabama, Mississippi, West Virginia and Florida. MedCare's primary
product line is Synagis(R) for the prevention of RSV (Respiratory Syncytial
Virus). Other product lines include Growth Hormone and Hemophilia clotting
factor.
Second Quarter and Fiscal 2003 Guidance
For the full year 2003, the Company revised stated guidance of adjusted net
income per diluted share to be in the $1.43 - $1.49 range from previously stated
guidance of $1.50-$1.56. Revenues are now expected to be in the range of
approximately $234-$244 million, revised from previously stated guidance of
$237-$247 million. This adjusted net income per diluted share guidance does not
include special charges of $0.12 per diluted share the Company recorded in the
first quarter 2003 as well as a charge of $0.03-$0.04 per diluted share related
to terminating our existing credit facility, which will be recorded upon closing
of our new credit facility. Thus the revised guidance for GAAP net income per
diluted share for the full year 2003 is for it to be in the $1.27 - $1.34 range.
For the second quarter of 2003, the Company expects revenues of approximately
$43-45 million and net income of approximately $0.29-$0.30 per diluted share.
For the third quarter of 2003, Curative anticipates revenues in the range of
approximately $49-51 million and net income per diluted share in the range of
$0.28-$0.30. For the fourth quarter 2003, the Company expects revenues of
approximately $86-$90 million and net income of approximately $0.49-$0.52 per
diluted share.
Curative Health Services, Inc. will hold a conference call to discuss the
Company's first quarter 2003 financial results, recent developments, business
strategy and outlook, today at 11:00 a.m. Eastern Time. To participate in the
conference call, dial 1-800-360-9865 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 Tuesday, April 29, 2003 at 1:00 p.m. Eastern Time until 12:00 a.m. Eastern
Time on May 6, by dialing 1-800-428-6051 with passcode # 290138. 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 at those sites.
(more)
About Curative Health Services
Curative Health Services, through its two unique business units, delivers
superior clinical outcomes and unmatched patient satisfaction for patients
experiencing serious 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 and
Rheumatoid Arthritis.
Curative's Specialty Healthcare Services ("SHS") business unit is an industry
leader in chronic wound care management, consistently achieving an outcome
success rate of more than 85 percent. 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, achieving more than a 94 percent patient satisfaction
rate.
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, competitive pressures, changes in customer mix, changes in supplier
relationships, 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, acceptance and demand for
new pharmaceutical products and new therapies, the termination or non-renewal of
a material number of contracts, an inability to obtain new contracts, changes in
the industry and government regulations relating to the Company's Specialty
Healthcare Services or Specialty Pharmacy Services business units, 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 10K for the year ended December 31, 2002 for further
discussion of these and other factors that could affect future results.
(Tables Follow)
CURATIVE HEALTH SERVICES, INC.
Selected Financial Information
Condensed Consolidated Statements of Operations
-----------------------------------------------
(In thousands, except for per share data)- (Unaudited)
Three Months Ended
March 31,
2003 2002
------------------------
Revenues $ 58,020 $ 22,764
Cost and expenses:
Cost of product sales and services 40,865 14,256
Selling, general & administrative 8,345 4,924
Special charges 2,713 -
------- --------
Total costs and expenses 51,923 19,180
------- --------
Income from operations 6,097 3,584
Interest income 2 36
Interest expense 487 137
------- --------
Income before income taxes 5,612 3,483
Income taxes 2,217 1,433
------- --------
Net income $ 3,395 $ 2,050
======= ========
Adjusted net income excluding special charges $ 5,036 $ -
======= ========
Net income per common share, basic $ 0.28 (1)$ 0.21
======= ========
Net income per common share, diluted $ 0.25 (1)$ 0.19
======= ========
Adjusted net income per common
share, excluding special charges, diluted $ 0.37 (1)$ -
======= ========
Denominator for basic earnings per share,
weighted average common shares 12,206 9,653
======= ========
Denominator for diluted earnings
per share, weighted average common shares
assuming conversions 13,920 10,962
======= ========
(1) Calculated on the "as if converted" method.
CURATIVE HEALTH SERVICES, INC.
Selected Financial Information
Condensed Consolidated Balance Sheets
(Dollars in thousands)- (Unaudited)
March 31, December 31,
Assets 2003 2002
--------------- ---------------
Current assets:
Cash and cash equivalents $ 1,998 $ 2,643
Accounts receivable, net 40,858 36,438
Deferred tax assets 2,957 2,957
Inventories 13,741 12,766
Prepaids and other assets 1,570 2,212
------- --------
Total current assets 61,124 57,016
Property and equipment, net 4,666 3,284
Goodwill and intangibles 129,473 125,165
Other long-term assets 1,087 979
------- --------
Total assets $196,350 $186,444
======= ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 30,816 $ 21,786
Accrued expenses 9,852 11,579
Current portion long term liabilities 7,046 6,102
------- --------
Total current liabilities 47,714 39,467
Long-term liabilities 24,087 26,076
Stockholders' equity 124,549 120,901
------- --------
Total liabilities and
stockholders' equity $196,350 $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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