LONG BEACH, N.Y., May 30 Chem Rx Corporation(OTC Bulletin Board: CHRX, CHRXU, CHRXW), a leading provider of institutionalpharmacy services, today reported financial results for the first quarterended March 31, 2008.
Net sales of Chem Rx Corporation for the first quarter ended March 31,2008 were $87.5 million, a 20.2% increase compared to $72.8 million for thefirst quarter ended March 31, 2007. This growth was primarily attributed toincreased beds serviced by the Company's New Jersey, Pennsylvania and New Yorkfacilities, principally as a result of continued focus on relationshipmanagement and high quality of service.
Adjusted earnings before interest, income taxes, depreciation andamortization ("Adjusted EBITDA") was $5.5 million for the first quarter endedMarch 31, 2008, compared to pro forma Adjusted EBITDA of $5.7 million for thefirst quarter ended March 31, 2007. Adjusted EBITDA is a non-GAAP financialmeasure.
Gross profit for the first quarter ended March 31, 2008 was $22.0 million,a 21.5% increase compared to pro forma gross profit of $18.1 million for thequarter ended March 31, 2007. Gross profit as a percentage of net sales was25.1% and 24.8% for the three months ended March 31, 2008 and 2007,respectively. The increase in the gross profit dollars and percent wasattributable to the growth in net sales, coupled with efficiencies resultingfrom greater utilization of the Company's facilities and other fixed-costresources.
Selling, general and administrative expenses for the first quarter endedMarch 31, 2008 were $19.1 million, compared to pro forma selling, general andadministrative expenses of $15.0 million for the quarter ended March 31, 2007.This $4.1 million increase in selling, general and administrative expenses wasattributable to higher expenditures to support the revenue growth in theCompany's South Plainfield, New Jersey; Albany, New York; and Sciota,Pennsylvania facilities and start-up costs of the Company's recently openedDeerfield Beach, Florida location. In addition, the Company incurred $0.2million of expenses associated with the business combination, $0.9 million ofprofessional and consulting fees related primarily with the cost of being apublic company and an increase in delivery expenses of $0.8 million due toincreased sales and higher fuel costs.
Interest expense and other income were $3.5 million for the three monthsended March 31, 2008 and pro forma for the three months ended March 31, 2007,respectively. The Company recorded a benefit for income taxes of $267,000 forthe three months ended March 31, 2008, based on the Company's expectedeffective tax rate of 41% for the year ending December 31, 2008. The Companyrecorded an income tax provision of $1,000 for the three months ended March31, 2007 based on the Company's expected effective tax rate of 0.3% for theyear ended December 31, 2007. The increase in the effective income tax ratewas primarily related to the October 27, 2007 business combination.
Net loss for the first quarter ended March 31, 2008 was $(386,000), or$(0.03) per basic and diluted share, compared to a pro forma net loss of$(293,000), or $(0.03) per pro forma basic and diluted share, for the quarterended March 31, 2007.
Jerry Silva, Chairman and Chief Executive Officer, commented, "We are verypleased to report our first quarter 2008 results, which mark our continuedprogress as a public company with an operating business. We continue toexecute on key growth initiatives, as evidenced by the 20.2% increase in netsales. Importantly, our first quarter increase in net sales was achievedthrough organic growth, driven by our strong reputation and high quality ofservice. We continue to be excited about our opportunities in Florida andhave recently received a commitment for 1,000 new beds beginning in the fourthquarter of 2008."
Steven C. Silva, President and Chief