Omnicare likely to continue chipping away at 2015 maturities, CFO says

By Jennifer Lanning Drey

Savannah, Ga., March 16 - Omnicare, Inc. is likely to continue to reduce the spike of debt it has coming due in 2015, John Workman, Omnicare's chief financial officer, said during a Wednesday presentation at the Barclays Capital Global Healthcare Conference in Miami.

Ideally, Omnicare would like to have maturities of about $500 million every five years, he said.

"The logic of that is that a company with Omnicare's cash flow generation capabilities would always have the ability to pay off through cash flow from operations the maturities that would come due in the next five years; thus, we would never be held hostage to certain crises that may exist in the credit markets," Workman said.

As previously reported, Omnicare began approaching the 2015 spike in debt by issuing $500 million of convertibles in the fourth quarter.

"Clearly, we would have liked the stock price to have been higher when we did that, but we also thought it was important to push out maturities while the financing markets were open and also take advantage of some tax elements that were going to expire at the end of 2010," Workman said.

The CFO also noted during the presentation that Omnicare has spent "a fair amount of cash" settling litigation issues in the past, and there may be a few more pieces of litigation on the horizon. However, the company does not believe any potential future litigation would be a threat to its capital structure, he said.

Looking forward, Omnicare will remain disciplined in its use of cash flow, returning cash to shareholders, as well as deleveraging and spending on selected acquisitions, he said.

Omnicare is a Covington, Ky.-based pharmaceutical services company.

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