PharMerica Corporation Q4 2008 Earnings Call Transcript

Executives

Teri Hartlage – Vice President of Finance

Greg Weishar – Chief Executive Officer

Mike Culotta – Chief Financial Officer

Berard Tomassetti – Senior Vice President and Chief Accounting Officer

Analysts

Glen Santangelo – Credit Suisse

Brendan Strong – Barclays Capital

Frank Morgan – RBC Capital Markets

Albert Rice – Soleil Securities

Constantine Davides – JMP Securities

Eric Gommel – Stifel Nicolaus

Robert Willoughby – Banc of America

Mike Petusky – Noble Research

Presentation

Operator

Welcome to the fourth quarter and year-end 2008 PharMerica Corporation Earnings Conference Call. My name is Latrice, and I'll be your coordinator for today’s conference. (Operator Instructions). At this time, I would now like to turn the presentation over to your host for today's call, Ms. Teri Hartlage, Vice President of Finance. Please proceed.

Teri Hartlage

Good morning and thank you for joining us for the 2008 fourth quarter and year-end conference call for PharMerica Corporation. On the call with me today are Greg Weishar, Chief Executive Officer, Mike Culotta, Executive Vice President and Chief Financial Officer, and Berard Tomassetti, Senior Vice President and Chief Accounting Officer.

Before beginning our remarks regarding the fourth quarter and year-end results, I would like to make a cautionary statement. During the call today, we will make forward-looking statements about our business prospects and financial expectations. We want to remind you that there are many risks and uncertainties that could cause our actual results to differ materially from our current expectations.

In addition to the risks and uncertainties discussed in yesterday's press release and in the comments made during this conference call, more detailed information about additional risks and uncertainties may be found in our SEC filings, including our annual report on Form 10-K. Copies of these documents may be obtained from the SEC or by visiting the Investor Relations section of our website. PharMerica assumes no obligation to update these matters discussed on the call.

During this call, we will be referring to non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available on our fourth quarter and year end 2008 financial results press release. We have made available to you our press release and our 10-K filed with the SEC. In addition, this webcast will be on our website along with the transcript from this call.

I would now like to turn the presentation over to Greg.

Greg Weishar

Welcome everyone. As always, we are pleased to have the opportunity to discuss our company's results today, and we thank you for your attendance. Before I get started with the financial highlights, let me remind you that from a comparative financial standpoint the combined businesses of KPS and PharMerica LTC were merged on July 31, 2007. Therefore, the results for the year ending December 31, 2007, represent the results of operations and cash flows of KPS for those full 12-month periods and PharMerica LTC effective August 1, 2007.

Yesterday evening, we released our fourth quarter and year-end results and we filed our 10-K. The diluted earnings per share for the year were $0.17 and our diluted loss per share was $0.18 for the quarter. Integration, merger-related costs, and other charges represented $8.9 million or $0.20 diluted loss per share for the quarter and represented $26.7 million or $0.53 diluted loss per share for the fiscal year. We took an impairment charge for intangible assets of $14.8 million or $0.30 diluted loss per share for the fiscal year and the quarter. Excluding the integration, merger-related costs and other charges, the impairment charge, and the effect of a favorable tax ruling, our diluted earnings per share totaled $0.26 for the quarter and $1.00 for the year. Our total revenues were $480 million during the quarter, and we dispensed approximately 10 million prescriptions in that period.

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