1388195--2/5/2009--PharMerica

related topics

{regulation, government, change}

{debt, indebtedness, cash}

{system, service, information}

{tax, income, asset}

{stock, price, share}

{interest, director, officer}

{customer, product, revenue}

{condition, economic, financial}

{product, liability, claim}

{acquisition, growth, future}

{provision, law, control}

{product, market, service}

{personnel, key, retain}

{financial, litigation, operation}

{product, candidate, development}

Risk Factors Relating to the Pharmacy Transaction We have a limited history operating as a stand-alone, publicly traded company on which you can evaluate our performance. The historical financial information may not be indicative of our future results as a stand-alone, publicly traded company. The integration of the remaining pharmacy locations and systems infrastructure will be time consuming and could have a material adverse effect on our results of operations. We may be charged for services and products from our former parents at amounts greater than those charged prior to the Pharmacy Transaction and those charged by third-parties. Restrictions on our operations and our obligations to indemnify in connection with the tax-free treatment of the Pharmacy Transaction could materially and adversely affect us. We will no longer be able to rely on our former parent companies for diversification of business risk or to provide capital resources. We may be required to satisfy certain indemnification obligations to our former parent companies or may not be able to collect on indemnification rights from our former parent companies. Risk Factors Relating to Our Business Continued volatility and disruption to the global capital and credit markets may adversely affect our results of operations and financial condition, as well as our ability to access credit and the financial soundness of our customers and suppliers. Intense competition may erode our profit margins. Our operating revenue and profitability may suffer upon the loss of large multi-facility customers. If we fail to comply with complex and rapidly evolving laws and regulations, we could suffer penalties, or be required to pay substantial damages or make significant changes to our operations. Pharmaceutical products can develop unexpected safety or efficacy concerns. Legal and regulatory changes reducing reimbursement rates for pharmaceuticals and/or medical treatments or services may reduce our profitability. The settlement by First DataBank, Inc. on pricing benchmark may reduce reimbursement to us. Adverse results in material litigation matters or governmental inquiries could have a material adverse effect upon the Corporation s business. If we or our customers fail to comply with Medicare and Medicaid regulations, we may be subjected to penalties or loss of eligibility to participate in these programs. Continuing government and private efforts to contain healthcare costs may reduce our future revenue. Healthcare reform could adversely affect the liquidity of our customers which would have an adverse effect on their ability to make timely payments to us for our products and services. The changing U.S. healthcare industry and increasing enforcement environment may negatively impact our business. Further consolidation of managed care organizations and other third-party payors may adversely affect our profits. Possible changes in or our failure to satisfy our manufacturers rebate programs could adversely affect our results of operations. If we or our customers fail to comply with licensure requirements, laws and regulations in respect of healthcare fraud or other applicable laws and regulations, we could suffer penalties or be required to make significant changes to our operations. Federal and state medical privacy regulations may increase the costs of operations and expose us to civil and criminal sanctions. Acquisitions, investments and strategic alliances that we have made or may make in the future may use significant resources, may be unsuccessful and could expose us to unforeseen liabilities. If we fail to comply with our Corporate Integrity Agreement, we could be subject to severe sanctions, including stipulated monetary penalties and exclusion from federal healthcare programs. Risks generally associated with our sophisticated information systems may adversely affect our results of operations. We purchase a significant portion of our pharmaceutical products from one supplier AmerisourceBergen. Prescription volumes may decline, and our net revenues and profitability may be negatively impacted, if products are withdrawn from the market or if increased safety risk profiles of specific drugs result in utilization decreases. We could be required to record a material non-cash charge to income if our recorded intangible assets are impaired, or if we shorten intangible asset useful lives. We primarily obtain our information services from one provider. Failure to provide information services, in a timely manner could cause delays in the delivery of our services, which could damage our reputation, cause us to lose customers and negatively impact our growth. We are highly dependent on our senior management team and our pharmacy professionals. Risk Factors Relating to Ownership of Our Common Stock and Our Senior Secured Credit Facility The market price and trading volume of our common stock may be volatile Certain provisions of our certificate of incorporation and bylaws and provisions of Delaware law as well as certain provisions of agreements entered into in connection with the Pharmacy Transaction could delay or prevent a change of control that stockholders may favor. Agreements entered into in connection with the Pharmacy Transaction Acquisitions, investments and strategic alliances we may make in the future may need to be financed by borrowings from the senior secured credit facility for which funds may not be made available by certain participants. We are exposed to interest rate changes. We have indebtedness, which restricts our ability to pay dividends and has a negative impact on our financing options and liquidity. Our ability to pay dividends is limited by our financial results and we do not anticipate paying any distributions in the foreseeable future.

Full 10-K form ▸

1388195--2/5/2009--PharMerica_CORP