Things are looking up for long-term care pharmacy provider, Omnicare. The company’s second quarter earnings more than doubled and it has raised its full-year 2013 guidance.
The company reported its net income increased to $52.2 million from $18.7 million, or from $0.17 per share to $0.48 per share, from the last year. Adjusted cash earnings rose 8.4 percent from $0.83 per share to $0.90 per share.
The solid financial results were driven by a year-over-year revenue growth of 25 percent in the company’s specialty care group, the impact of the greater penetration of low-cost generic drugs and a continued emphasis on returning capital to shareholders, said Omnicare’s CEO John Workman during an earnings call Wednesday morning. Nitin Sahney, Omnicare's president and chief operating officer, added that key operational advancements also helped the company take a more proactive approach.
Given the positive financial results of the first half of 2013, the company has revised its outlook for the rest of the year. It has raised its per-share earnings from $3.47 to $3.57 to $3.56 to $3.64; its revenue from $6.1 billion to $6.2 billion to $6.1 billion to $6.3 billion; and its cash flows from operations from $450 million to $500 million to $475 million to $525 million.
Also of note in the earnings report was a significant drop in settlement and litigation costs. The second quarter period shows settlement and litigation costs at $3.5 million, compared to $26 million last year.
Included in the company’s quarterly report filed with the Securities and Exchange Commission after the earnings call, the company detailed a number of legal cases it is involved in or has recently resolved.
Among the unresolved issues, two Justice Department investigations, each looking into possible violations of the False Claims Act or the Anti-Kickback Statue, in one case as related to agreements Omnicare had with the manufacturer of the pharmaceutical Depakote, and the other case as related to the company’s customer collection practices.
The report to the SEC also revealed Omnicare settled with whistle-blower Maureen Nehls for approximately $20 million. The amount of the settlement was undisclosed when the court announced the settlement and dismissed the case earlier this month.
[See also: Omnicare whistle-blower suit settled.]
Nehls had alleged that Omnicare submitted false claims for reimbursement from Medicare and Medicaid and paid a kickback to Philip Esformes, one of the owners of Total Pharmacy Services (a pharmacy company Omnicare purchased in 2004), and his father, Morris Esformes.
While Omnicare chose to settle the case, the Esformes did not. They are scheduled to go to trial in August.