Omnicare allocates excess cash to increase shareholder value, says CEO

By Lisa Kerner

Charlotte, N.C., May 16 - Omnicare, Inc. chief executive officer John Workman said with fewer acquisitions currently available, the company's recent focus has been on returning value to shareholders.

In the past two years, according to Workman, Omnicare has increased its dividend sevenfold and bought back about 15% of the market capitalization of the company in share repurchases.

"Omnicare generates a lot of cash, and because we generate a lot of cash, we believe that allocation is an important component of that," Workman said during a presentation at the Bank of America Merrill Lynch 2013 Health Care Conference in Las Vegas on Thursday.

During the first quarter, Omnicare's cash flows from operations were up 8.5% from the prior-year period at about $109 million.

"In the last two years, we've generated over $1 billion in cash flow from operations," said Workman.

As of March 31, Omnicare had $510 million cash on the balance sheet and $220 million of share repurchase authorization remaining.

The company's first-quarter gross profit was $370.8 million, and its gross margin increased 121 basis points to 24.32%.

Omnicare is a Cincinnati-based provider of pharmaceutical services to patients and providers.

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