Chronimed Lowers Second Half Earnings Outlook
MINNEAPOLIS, March 25, 1999—Chronimed Inc. (Nasdaq: CHMD) today announced that earnings for the second half of its fiscal year 1999, ending July 2, 1999, will be significantly below analyst expectations. Chronimed also announced that it is re-examining its business plans, and has engaged an independent financial advisor to support the effort.
The Company now expects to report earnings for the third quarter ending April 2, 1999, in the range of 3 cents to 4 cents per diluted share. This is below previous analyst expectations of at least 12 cents per diluted share. Fourth quarter earnings are anticipated to be significantly below previous expectations of at least 15 cents per diluted share.
"Chronimed has had a long history of consistent earnings performance and we fully expect to remain profitable during calendar 1999 and beyond," said Maurice R. Taylor, II, Chronimed Chairman and CEO. “We have a solid business that is facing what we believe are short term profit pressures. Longer term, we are focused on executing our disease management growth strategy.”
The Company has identified three reasons for the earnings shortfall. First, the Diagnostic Products business is experiencing less-than-expected revenues from its newer blood glucose and urine diagnostic products during their initial roll out. Second, the pharmaceutical research revenues from the Clinical Partners acquisition are significantly below initial projections. Third, there continues to be significant pricing pressures in the Injectables business.
According to Henry F. Blissenbach, Chronimed President and Chief Operating Officer, "We intend to cut our annual costs, expand our disease management capabilities to other diseases, and add non-diabetic diagnostic products to the Diagnostic Products division. These actions, along with re-examining our business plans with the financial advisor, should get us back on track in fiscal 2000."
Chronimed Inc. is a leading integrated healthcare company specializing in diagnostic products, specialty pharmacy services, and disease management for people with chronic health conditions. The Company develops, manufactures, markets, and distributes pharmaceuticals, medical diagnostic products, and provides specialized patient management services nationwide for people with long-term chronic conditions such as HIV/AIDS, diabetes, organ transplants, and diseases treated with injectable medications. Chronimed works directly with patients, providers, and payors to improve clinical and cost-of-care outcomes. Chronimed's web site address is www.chronimed.com.
As a cautionary note to investors, certain matters discussed in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such matters involve risks and uncertainties that may cause actual results to differ materially, including the following: changes in economic conditions; general competitive factors; pressures on product margins; the Company's ability to execute its sales and marketing plans; changes in the status of managed care contracts; and the risks described from time to time in the Company's public reports filed with the SEC.
March 13, 2000
Contacts:
Paul S. Dunn
Investor Relations
or
Maurice R. Taylor, II
Chairman and CEO
Chronimed Inc.
(612) 979-3600