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Express Scripts Reports Second Quarter 2013 Results

July 29, 2013 - WorkCompWire

St. Louis, MO – Express Scripts Holding Company (Nasdaq: ESRX) recently announced 2013 second quarter net income from continuing operations attributable to Express Scripts shareholders of $558.3 million, or $0.67 per diluted share. Adjusted earnings per diluted share from continuing operations attributable to Express Scripts were $1.12 for the second quarter.

“Our second quarter results reflect the successful execution of our business model of alignment,” stated George Paz, chairman and chief executive officer. “As we head toward 2014 and the introduction of insurance exchanges, additional costly regulations, escalation of brand drug prices and increased specialty drug utilization, our clients face unprecedented challenges to manage the cost and complexity of the pharmacy benefit. Our clinical specialization, advanced application of the behavioral sciences, and ability to leverage actionable data allow us to drive down costs, reduce waste and improve health in ways no other company can.”

Second Quarter 2013 Review

  • Adjusted claims from continuing operations of 369.4 million, down 7% from the second quarter of 2012, reflecting the expected roll-off of claims from United Healthcare Group
  • As expected, revenue of $108.2 million related to a large client contract was realized in the second quarter of 2013 due to the structure of the contract
  • Adjusted EBITDA from continuing operations attributable to Express Scripts of $1.7 billion, up 17% from the second quarter of 2012
  • Adjusted EBITDA from continuing operations attributable to Express Scripts per adjusted claim of $4.69, up 26% from the second quarter of 2012
  • Adjusted effective income tax rate for continuing operations attributable to Express Scripts for the quarter of 38.3%, with the full year adjusted effective income tax rate for continuing operations attributable to Express Scripts expected to be approximately 38.8%
  • Cash flow from operating activities from continuing operations was an outflow of $156.2 million for the quarter.
    • The cash outflow for the quarter was due to the timing of payments and receipts at quarter-end related to the legacy Medco business.
    • If the quarter had been extended by one day, cash flow from continuing operations for the quarter would have been an inflow of approximately $700 million.
    • Cash flow provided from operating activities from continuing operations is still expected to be between $4.5 and $5.0 billion for 2013.
  • Repurchase of 8.2 million shares of common stock for $501.0 million, leaving 62.9 million shares available under the current share repurchase program

2013 Guidance
As expected, earnings for a large client were realized in the second quarter due to the structure of the contract. The Company anticipates this pattern of earnings to continue for the foreseeable future. Adjusted earnings per diluted share from continuing operations attributable to Express Scripts for the third quarter are expected to be between $1.05 and $1.09.

The Company previously provided 2013 guidance on adjusted earnings per diluted share from continuing operations attributable to Express Scripts in the range of $4.23 to $4.33, or growth of 13% to 16% over 2012. The Company now anticipates achieving adjusted earnings per diluted share from continuing operations attributable to Express Scripts for 2013 in the range of $4.26 to $4.34, or 14% to 16% growth over 2012. Adjusted earnings per diluted share from continuing operations attributable to Express Scripts for 2013 exclude items.

Chief Financial Officer Transition Plan
The Company announced that it is initiating a Chief Financial Officer transition process. As part of that transition, Jeff Hall will no longer serve in the role of Executive Vice President and Chief Financial Officer of the Company, effective as of July 30, 2013. Mr. Hall will continue his employment with the Company in a different role through September 1, 2013 in order to facilitate a smooth and orderly transition. The Company has commenced a search for a permanent successor as Chief Financial Officer and will make an announcement once a successor is appointed.

Express Scripts also announced that effective July 30, 2013, Matthew Harper will serve as the Company’s interim Chief Financial Officer until such time as the Board has appointed a permanent successor to Mr. Hall. Mr. Harper, 44, joined the Company in 2000 and has served as Vice President over financial planning and analysis since April 2013. Previously, Mr. Harper served in a variety of roles with the Company, including Vice President over treasury operations from 2004 until April 2013. Mr. Harper will continue in his current role as a Vice President of the Company while serving as interim Chief Financial Officer.

The complete earnings release is available here: Express Scripts Second Quarter 2013 Results

Source: Express-Scripts

Filed Under: Industry News, Top Stories

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