ST. LOUIS, Dec. 14, 2017 /PRNewswire/ -- Express
Scripts Holding Company (Nasdaq: ESRX) increased its previously
issued consolidated 2017 full-year adjusted EPS guidance range of
$6.97 to $7.05 to $7.00 to
$7.08, which represents growth of 10%
over consolidated 2016 adjusted EPS results at the midpoint of the
range. The Company narrowed its previously issued
consolidated 2017 adjusted EBITDA1 guidance
from a range of $7,350 million to
$7,470 million to a range of
$7,370 million to $7,450 million, which maintains the midpoint of
the range and represents growth of 2% over consolidated 2016
adjusted EBITDA results.
The Company anticipates achieving adjusted earnings per diluted
share2 for 2018 in the range of $7.67 to $7.87,
representing growth of 9% to 12% from the midpoint of our updated
2017 adjusted EPS guidance range.
"The need for a focused PBM has never been greater than it is
today," said Tim Wentworth,
President and CEO of Express Scripts. "In 2017, we
demonstrated the power of our model by consistently delivering
savings to payers while ensuring our patients have access to
the right medications at the best possible price and with the
greatest level of care. We are proud of what we have
accomplished in 2017, and are exceptionally well positioned to
capture saving opportunities for our clients, achieve better health
outcomes and deliver strong results to shareholders in the
future."
2017 Guidance for Core Business
The Company expects 2017 full-year total adjusted claims for its
Core business to be in the range of 1,158 million to 1,172 million,
which is flat over Core 2016 total adjusted claims at the midpoint
of the range. The Company expects Core 2017 full-year
adjusted EBITDA guidance in the range of $4,910 million to $4,970
million, which represents growth of 3% over Core 2016
adjusted EBITDA results at the midpoint of the range. The
Company is providing this information to assist in an analysis of
the underlying performance of the Company's Core business, which
excludes the contributions from Anthem, Coventry and Catamaran,
which we also refer to as the "Transitioning Clients."
For a discussion of the financial measures presented herein
which are not calculated or presented in accordance with U.S.
generally accepted accounting principles ("GAAP"), see
"Supplemental Information Regarding Non-GAAP Financial Measures"
below.
2018 Guidance
The Company is providing the 2018 full-year guidance for the
Core business and the consolidated business, which includes the
pending acquisition of eviCore healthcare and assumes the
completion of the Company's sale of its United BioSource
subsidiary. The eviCore acquisition and the sale of United
BioSource are expected to be completed in December 2017. We
estimate that the eviCore acquisition will generate EBITDA of
$265 million to $285 million in 2018.
|
Core
Estimated Guidance
Ranges
|
Consolidated
Estimated
Guidance Ranges
|
Change*
|
(in millions,
except per share data)
|
Year Ending
December
31, 2018
|
Year
Ending
December
31, 2018
|
Core vs. 2017
|
Consolidated vs. 2017
|
Adjusted earnings per
diluted share
|
N/A
|
$7.67 to
$7.87
|
N/A
|
9% - 12%
|
Total adjusted
claims**
|
1,125 to
1,165
|
1,345 to
1,395
|
(3%) -
flat
|
(4%) -
flat
|
Revenue
|
$80,500 to
$83,000
|
$99,000 to
$102,000
|
N/A
|
N/A
|
Adjusted
EBITDA
|
$5,250 to
$5,400
|
$7,600 to
$7,800
|
6% - 9%
|
3% - 5%
|
Diluted weighted
average shares
outstanding during the period
|
N/A
|
540 to 560
|
N/A
|
(7%) –
(4%)
|
Cash flow from
operations
|
N/A
|
$4,900 to
$5,400
|
N/A
|
(1%) – 9%
|
*The change is
calculated based on the midpoint of 2017 guidance.
|
**Range reflects
non-specialty network claims filled through our 90-day programs
multiplied by three, as these claims, on average, typically cover a
time period three times longer than other network claims.
Home delivery claims are also multiplied by three, as home delivery
claims typically cover a time period three times longer than
unadjusted network claims.
|
While we expect conditions to completing these transactions will
be substantially satisfied, no assurance can be given that these
transactions will be completed. For more information on
guidance information regarding eviCore, see "Supplemental
Information Regarding Non-GAAP Financial Measures – eviCore 2018
Guidance Information" below.
Business Outlook
The Company's enterprise value initiative is currently estimated
to cost approximately $600 million to
$650 million and to deliver
cumulative savings of nearly $1.2
billion by 2021. The Company's 2018 full-year guidance
includes an estimated contribution of $65
million to $75 million in
expense savings affecting the Core and consolidated businesses.
This initiative is expected to help the Company achieve its
targeted compounded annual EBITDA growth rate for the Core business
from 2017-2020 of 2% to 4% and in 2018 will begin
to drive significant value to all of its patients and
clients.
Conference Call Details
The Company will hold its conference call to discuss 2018
financial guidance and the other matters described in this press
release on Thursday, December 14,
2017, at 8:30 a.m. EST
(7:30 a.m. CST). The call
includes a slide presentation and is being webcast via the Internet
and can be accessed at the Investor Relations section of Express
Scripts' web site at http://www.express-scripts.com/corporate.
About Express Scripts
Express Scripts puts medicine within reach of tens of millions
of people by aligning with plan sponsors, taking bold action and
delivering patient-centered care to make better health more
affordable and accessible.
Headquartered in St. Louis,
Express Scripts provides integrated pharmacy benefit management
services, including network-pharmacy claims processing, home
delivery pharmacy care, specialty pharmacy care, specialty benefit
management, benefit-design consultation, drug utilization review,
formulary management, and medical and drug data analysis
services. Express Scripts also distributes a full range of
biopharmaceutical products and provides extensive cost-management
and patient-care services.
For more information, visit Lab.Express-Scripts.com or follow
@ExpressScripts on Twitter.
Supplemental Information Regarding Non-GAAP Financial
Measures
The following provides supplemental information regarding the
non-GAAP financial measures presented herein, for both consolidated
and Core financial measures. Adjusted EPS and adjusted EBITDA are
non-GAAP financial measures presented herein, are not calculated or
presented in accordance with U.S. generally accepted accounting
principles ("GAAP"), and should be considered in addition to, but
not as a substitute for, or superior to, financial measures
prepared in accordance with GAAP. These non-GAAP financial measures
are determined by excluding certain amounts, expenses, income or
other impacts, including the impact of discrete tax and other
items, from the corresponding financial measures determined in
accordance with GAAP. The Company believes that these
non-GAAP financial measures provide management and investors with
useful information about the earnings impact of certain expenses
and are useful for (i) comparison of our earnings to those of other
companies; (ii) a better understanding of the Company's ongoing
Core performance; (iii) planning and forecasting for future
periods; and (iv) assessing period-to-period performance
trends. Management assesses the Company's operating
performance using adjusted EBITDA in order to better isolate the
impact of certain expenses that may not be comparable between
periods or indicative of the ongoing performance of our Core
operations.
Consolidated and Core 2017 and 2018 Guidance
Information: The financial measure attributable to our
Core business presented herein, including adjusted EBITDA, is also
a non-GAAP financial measure. This measure is not calculated
or presented in accordance with GAAP, and should be considered in
addition to, but not as a substitute for, or superior to, financial
measures prepared in accordance with GAAP. This measure
represents operating results excluding specific clients of the
Company; however, it is not regularly reviewed by our Chief
Executive Officer to assess the performance of any of these clients
or make decisions about resources to be allocated to any such
client. This measure also reflects management's estimates as to
allocation of costs of its PBM business to each of the
Transitioning Clients and may not be indicative of costs actually
incurred as a result of servicing each of these clients.
However, management is unable to reasonably estimate the allocation
of certain key items that would impact net income attributable to
each of the Transitioning Clients, including interest and
depreciation and amortization. Accordingly, the Company is
unable to provide net income attributable to any of its Core
business excluding the Transitioning Clients, and is unable to
provide a reconciliation of adjusted EBITDA to net income.
For the same reasons, the Company is unable to address the probable
significance of the unavailable information, which could have a
significant impact on the Company's long-term outlook for the Core,
as discussed above.
Due to the inherent difficulty of forecasting the timing and
amount of certain items that would impact EPS and net income,
including discrete tax and other items, the Company is unable to
reasonably estimate the related impact of such items to EPS and net
income, the GAAP financial measures most directly comparable to
adjusted EPS and adjusted EBITDA, respectively. Accordingly, the
Company is unable to provide a reconciliation of consolidated and
Core 2017 and 2018 guidance for either adjusted EPS to EPS or
adjusted EBITDA to net income. For the same reasons, the Company is
unable to address the probable significance of the unavailable
information, which could have a significant impact on the Company's
full-year consolidated and Core 2017 and 2018 GAAP financial
results. With respect to consolidated adjusted EPS
amortization of intangible assets is expected to be approximately
$1.58 and $1.86 per share for the full-year 2017 and 2018,
respectively.
eviCore 2018 Guidance Information: The financial
measures attributable to the eviCore acquisition presented herein,
including EBITDA, is also a non-GAAP financial measure. This
measure is not calculated or presented in accordance with GAAP, and
should be considered in addition to, but not as a substitute for,
or superior to, financial measures prepared in accordance with
GAAP. This measure reflects management's estimate of the
business prior to closing. However, management is unable to
reasonably estimate the allocation of certain key items that would
impact net income attributable to eviCore, including interest and
depreciation and amortization. Accordingly, the Company is
unable to provide net income attributable to eviCore, and is unable
to provide a reconciliation of EBITDA to net income. For the
same reasons, the Company is unable to address the probable
significance of the unavailable information, which could have a
significant impact on the Company's full-year consolidated and Core
2018 GAAP financial results.
Safe Harbor Statement
This press release contains forward-looking statements,
including, but not limited to, our 2017 and 2018 guidance and our
statements related to the Company's plans, objectives, expectations
(financial and otherwise) or intentions. Actual results may differ
materially from those projected or suggested in any forward-looking
statements. Factors that may impact these forward-looking
statements can be found in Management's Discussion and Analysis of
Financial Condition and Results of Operations and Item 1A – "Risk
Factors" in the Company's Annual Report on Form 10-K filed with the
SEC on February 14, 2017 and the
Company's Quarterly Report on Form 10-Q filed with the SEC on
October 24, 2017. A copy of
these documents can be found at the Investor Information section of
Express Scripts' web site at
http://www.express-scripts.com/corporate.
We do not undertake any obligation to release publicly any
revisions to such forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
1 Throughout this press release, "adjusted EBITDA" is
adjusted earnings before income taxes, depreciation and
amortization and other expense and is presented throughout this
press release as attributable to Express Scripts, excluding
non-controlling interest representing the share allocated to
members of our consolidated affiliates.
2 Throughout this press release, "earnings per diluted
share" or "EPS" refer to earnings per diluted share attributable to
Express Scripts, excluding non-controlling interest representing
the share allocated to members of our consolidated affiliates.
View original
content:http://www.prnewswire.com/news-releases/express-scripts-holding-company-updates-2017-full-year-guidance-and-announces-2018-financial-guidance-300571357.html
SOURCE Express Scripts Holding Company