What happened
Shares of Diplomat Pharmacy (DPLO) rose over 11% Friday after the nation's largest independent provider of specialty pharmacy services told investors it will meet its previously issued full-year 2017 guidance for both revenue and adjusted EBITDA. It also gave investors a glimpse of what to expect from operations in the year ahead.
Separately, the company announced that longtime chairman and CEO Phil Hagerman has retired from both posts and will become chairman emeritus of the board of directors. He will be replaced by Jeff Park as interim CEO and Ben Wolin as chairman of the board. Hagerman co-founded Diplomat Pharmacy in 1975 and served as CEO since 1991.
As of 3:08 p.m. EST, the stock had settled to a 10% gain.
Image source: Getty Images.
So what
When it announces full-year 2017 results, Diplomat Pharmacy expects to deliver roughly $4.5 billion in revenue (at the midpoint of guidance) and close to $102 million in adjusted EBITDA (at the high-end of guidance). That will continue a consistent, multi-year trend of growing the top line. But preliminary expectations for 2018 are what really has Wall Street excited.
The company expects to deliver revenue in the range of $5.3 billion to $5.6 billion in 2018. Adjusted EBITDA guidance calls for achieving between $164 million and $170 million, which would mark a more than 60% increase from the year-ago period.
The significant boost in operations will be provided by the recent acquisitions of LDI Integrated Pharmacy Services and National Pharmaceutical Services, both of which closed after Thanksgiving. This preliminary guidance for 2018 also excludes any effect from the new tax environment, which the company is still calculating.
Now what
Diplomat Pharmacy will provide more formal full-year 2018 guidance ranges for revenue and adjusted EBITDA in February when it releases finalized financial results from last year. The company is clearly optimistic about the growth prospects for its newest acquisitions, and expects them to drive both top- and bottom-line growth as they're integrated into its operations.
