St. Louis, MO – Express Scripts Holding Company (Nasdaq: ESRX) recently announced 2016 second quarter net income of $720.7 million, or $1.13 per diluted share. 2016 second quarter adjusted earnings per diluted share was $1.57.
“As the healthcare industry changes, a primary need of payers and patients remains the same: access to affordable medicine,” said Tim Wentworth, CEO and President. “An increase in our expected 2017 retention rate to a range of 96% to 98% is a direct result of our unique business model of client alignment, the industry’s most focused and innovative solutions, and a compassionate culture of caring employees.”
Second Quarter 2016 Review
The following compares second quarter 2016 and 2015 operating results:
- Adjusted claims of 315.3 million, down 2%
- Net income of $720.7 million, up 20%
- Diluted earnings per share of $1.13, up 28%
- EBITDA of $1,798.1 million, flat from 2015 adjusted EBITDA
- EBITDA per adjusted claim of $5.70, up 2% from 2015 adjusted EBITDA per adjusted claim
- Adjusted net income of $998.7 million, up 2%
- Adjusted diluted earnings per share of $1.57, up 9%
- Net cash flow provided by operating activities of $438.9 million, down 51%
As expected, revenue and operating income of $106.6 million related to a large client contract was realized in the second quarter of 2016 compared to $141.7 million in the second quarter of 2015 due to the structure of the contract.
In July 2016, the Company issued senior notes consisting of: $1,000.0 million aggregate principal amount of 3.000% senior notes due July 2023, $1,500.0 million aggregate principal amount of 3.400% senior notes due March 2027 and $1,500.0 million aggregate principal amount of 4.800% senior notes due July 2046. The Company used a portion of the net proceeds to repay a portion of its 2015 two-year term loan, to complete a tender offer for its 2.650% senior notes due 2017 and to complete a tender offer for a portion of each of the 7.125% senior notes due 2018 issued by Medco Health Solutions, Inc., the 7.250% senior notes due 2019 issued by Express Scripts, Inc. and the Company’s 6.125% senior notes due 2041. Total cash payments related to the above, excluding accrued interest, were $3,519.3 million, which included $132.0 million of repayment costs. During the remainder of the third quarter, the Company intends to use the remaining net proceeds to redeem the remaining aggregate principal amount of 2.650% senior notes due 2017, to complete the final settlement for the tender offer of the 7.125% senior notes due 2018 and for general corporate purposes.
The Company narrowed 2016 adjusted earnings per diluted share guidance from a range of $6.31 to $6.43 to a range of $6.33 to $6.43, which raises the mid-point from $6.37 to $6.38. The increased adjusted earnings per diluted share guidance range represents growth of 14% to 16% over 2015.
The complete results release is available here: Express Scripts 2016 Second Quarter Results