PharMerica Reports Results for the Fourth Quarter of 2010 and Year Ended December 31, 2010

PharMerica Corporation PMC, a national provider of institutional pharmacy and hospital pharmacy management services, today reported the financial results of its fourth quarter of 2010 and year ended December 31, 2010. The Company had Adjusted EBITDA of $17.8 million in the fourth quarter with annual Adjusted EBITDA of $78.5 million. Commenting on the Company's recent developments, Gregory S. Weishar, PharMerica Corporation's Chief Executive Officer, said, “Although 2010 was a challenging year, we made significant advancements in the fourth quarter to position our business in key markets by acquiring the Chem Rx and Lone Star Pharmacies. These acquisitions fortify our market presence in the New York, New Jersey and Texas market areas, and we believe they will be accretive to earnings in 2011. The acquisitions were funded primarily by cash flow from operations, which increased 16% in 2010 from $85.0 million to $98.2 million. We also completed the amendment to our Prime Vendor Agreement with AmerisourceBergen, effective January 1, 2011, which provides PharMerica improved pricing, purchasing flexibility and margin opportunities. “In 2010, we repurchased $10.5 million of common stock pursuant to the Company's stock repurchase program. There remains $14.5 million authorized under the program, and the Company may make further purchases from time to time as market conditions warrant. “In 2011, we plan to heavily invest in customer service and improved operating technologies. In the short term, these investments will increase SG&A expenses by approximately $6.0 million compared with last year. We believe these investments will improve customer retention by allowing us to be more proactive in responding to customer needs and that the Company will realize significant long-term benefits.” The results for the fourth quarter as well as the Company's fiscal 2011 guidance are set forth below: * Key Comparisons of Fourth Quarters Ended December 31, 2010 and 2009: o Net income for the fourth quarter of 2010 was $4.7 million, or $0.16 per diluted share, compared with $10.2 million, or $0.33 per diluted share, for the fourth quarter of 2009. Adjusted earnings per diluted share were $0.20 in 2010 compared with $0.32 in 2009. o Cash flow provided by operating activities was $29.4 million compared with $25.4 million in the prior year. o Adjusted EBITDA was $17.8 million compared with $25.1 million in the prior year. * Key Comparisons of Years Ended December 31, 2010 and 2009: o Net income for the year ended December 31, 2010, was $19.2 million, or $0.64 per diluted share, including an after-tax charge of $3.0 million, or $0.10 per diluted share, related to certain legal claims arising from time periods prior to the 2007 formation of the Company. Net income for the year ended December 31, 2009, was $42.2 million, or $1.39 per diluted share, including a $4.5 million favorable income tax adjustment. Adjusted earnings per diluted share were $0.93 compared with $1.30 in the prior year. o Cash flow provided by operating activities was $98.2 million compared with $85.0 million in the prior year. o Adjusted EBITDA was $78.5 million compared with $102.7 million in the prior year.