Server: Netscape-Enterprise/3.0F Date: Fri, 19 Dec 1997 19:12:04 GMT Content-type: text/html Last-modified: Fri, 17 Oct 1997 16:22:43 GMT Content-length: 9239 Accept-ranges: bytes
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NEWS RELEASE MINNEAPOLIS, August 13, 1997 -- Chronimed Inc. (Nasdaq: CHMD), today announced its fourth-quarter and year-end results for the fiscal 1997 period ended June 27, 1997. For the fourth quarter, revenues were $30.2 million, up 23 percent from $24.6 million in last year's fourth quarter. Income from operations was $2.8 million for the quarter compared to $2.0 million last year, up 41 percent, while net income per share totaled 24 cents against 12 cents a year ago. Net income was favorably affected by nine cents per share due to a transaction involving Orphan Medical. For the year, revenue grew to $117.2 million, up 29 percent from $90.5 million in fiscal 1996. Income from operations improved to $8.9 million for the year compared to $7.0 million last year, up 27 percent, while net income per share improved to $.56 against $.42 a year ago. Maurice R. Taylor, II, Chronimed's chairman and chief executive officer said, "The fundamental operating results of the Company continue to be strong. Our StatScript Pharmacy business, which serves HIV/AIDS patients, has contributed significantly to our 1997 revenue and profit growth, with high expectations for much of the same in 1998. The self injectables program has more than doubled this year to $15.5 million in revenue. Within the proprietary diabetes products business, profit during the year grew by over 35 percent despite the void left by absence of the Quick Check product. We are very optimistic about Chronimed's future." Chronimed also announced that after careful consideration of issues surrounding the acquisition of manufacturing rights for Diagnostic Solutions Inc.'s Quick Check reagent strip, it appears unlikely that this will occur. Regardless of the ultimate resolution, the Company noted that all future financial benefits from the Quick Check product have been removed from Chronimed's projections. Revenue growth from Managed Care contracts was 45 percent for the quarter and 59 percent for the year; revenue from Proprietary Products declined 32 percent for the quarter, as expected, due to the loss of the Quick Check product, and was flat compared to the prior year; and revenue from patients exercising choice of medical provider increased 58 percent and 42 percent for the two periods, respectively, with strong performance by StatScript Pharmacy. Percentage gross profit in the three- and twelve-month periods increased from 27.2 percent and 28.0 percent in fiscal 1996 to 29.7 percent and 29.3 percent, respectively, in fiscal 1997. These improvements are primarily the result of a favorable sales mix in the proprietary diabetes products. Also, the direct mail diabetes products business has shown very good year-to-year gross profit improvement through tight management and targeted marketing efforts. Total operating expenses have increased as a percent of revenue as the Company continues to invest in managed care selling, management, systems, and facilities. Also, included in total year operating expenses is a $1.4 million write-off of a note receivable in the third quarter. Overall, including the write-off, operating expenses as a percentage of revenue increased from 19.1 percent and 20.3 percent in the three- and twelve-month periods of fiscal 1996 to 20.5 percent and 21.7 percent in the respective 1997 periods. Also, as previously announced in July 1997, Chronimed sold its exclusive rights to market and distribute certain Orphan Medical, Inc., products back to Orphan Medical for cash, royalties, and Orphan Medical stock. To reflect the transaction, Chronimed has recorded $1.7 million as Other Income in its fourth quarter and total year financial statements. This represents approximately 9 cents per share of the total 24 cents per share for the quarter. Chronimed Inc. is a healthcare company specializing in products and services to meet the unique needs of patients with chronic diseases. Chronimed develops, markets and distributes pharmaceuticals, general medical products, and patient education materials directly to the individual and to the patients of managed care and case management companies nationwide, as well as to institutions that serve these patients. (In thousands, except per share data)
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