Share Repurchase Program
In conjunction with its $5.5 billion share repurchase program, Medco repurchased 21 million shares at a cost of $1 billion during the first quarter, representing an average per-share cost of $47.55. From the inception of the share repurchase program in 2005 through the end of the first quarter of 2008, Medco has repurchased 132.4 million shares at a total cost of $4.5 billion, with an average per-share cost of $34.10.
Specialty Pharmacy Segment
Revenues for Medco's specialty pharmacy segment, Accredo Health Group, achieved a new record and grew 30.3 percent to nearly $1.9 billion, compared to $1.4 billion in the first quarter of 2007, primarily the result of the contribution from significant new clients commencing in January 2008, and the addition of Critical Care Systems in fourth-quarter 2007.
Gross margin in first-quarter 2008 of 7.7 percent declined from 8.0 percent in first-quarter 2007, reflecting new client mix and start-up costs from new client installations. Operating income rose 19.1 percent, to $63.7 million from $53.5 million in the first quarter of 2007, driven by increased mail-order volume from the new business.
Reaffirming 2008 Guidance
For full-year 2008, Medco continues to expect GAAP diluted earnings per share in the range of $2.07-$2.11, representing growth of 27-29 percent over 2007. Diluted earnings per share in 2008, excluding the effect of amortization of intangibles that existed when Medco became a public company, continue to be projected in the range of $2.27-$2.31, a growth rate of 25-27 percent over 2007. (Please see Table 9 for a reconciliation of earnings per share guidance).
Use of Non-GAAP Measures
Medco calculates and uses EBITDA and EBITDA per adjusted prescriptio
|SOURCE Medco Health Solutions, Inc.|
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