Revenue during the quarter went up marginally by 2.77 percent to $512.60 million from $498.80 million in the previous year period. Gross margin for the quarter contracted 44 basis points over the previous year period to 15.31 percent. Total expenses were 97.66 percent of quarterly revenues, down from 98.30 percent for the same period last year. This has led to an improvement of 64 basis points in operating margin to 2.34 percent.

Operating income for the quarter was $12 million, compared with $8.50 million in the previous year period.

However, the adjusted EBITDA for the quarter was almost stable at $31.50 million, when compared with the prior year period. At the same time, adjusted EBITDA margin contracted 19 basis points in the quarter to 6.15 percent from 6.34 percent in the last year period.

Greg Weishar, PharMerica Corporation's chief executive officer, said, "PharMerica's third quarter 2016 financial results reflect slower than expected growth in new sales in our core Institutional Pharmacy business. We remain optimistic that we will achieve significantly improved results in this year's fourth quarter. We expect a sequential 3% to 4% increase in prescriptions dispensed; lower cost of goods due to further improvements in drug purchasing; continued strong growth in our diversified pharmacy businesses; and contributions from recent and planned acquisitions. The improvement in this year's fourth quarter will provide a springboard for higher earnings in 2017, and more importantly, operating results within the range of analysts' average expectations for 2017."

For financial year 2016, PharMerica Corporation expects revenue to be in the range of $2,051 million to $2,091 million. The company projects diluted earnings per share to be in the range of $1.84 to $1.89 on adjusted basis.

The company has spent $57.50 million cash to meet investing activities during the nine month period as against cash outgo of $38.30 million in the last year period. It has incurred net capital expenditure of $26.20 million on net basis during the nine month period, up 50.57 percent or $8.80 million from year ago period.

The company has spent $39.40 million cash to carry out financing activities during the nine month period as against cash outgo of $14.60 million in the last year period.

Cash and cash equivalents stood at $6.50 million as on Sep. 30, 2016, down 83.75 percent or $33.50 million from $40 million on Sep. 30, 2015.

Working capital increases marginally
PharMerica Corporation has recorded an increase in the working capital over the last year. It stood at $291.50 million as at Sep. 30, 2016, up 2.24 percent or $6.40 million from $285.10 million on Sep. 30, 2015. Current ratio was at 3.10 as on Sep. 30, 2016, up from 2.71 on Sep. 30, 2015.

Cash conversion cycle (CCC) has decreased to 35 days for the quarter from 48 days for the last year period. Days sales outstanding were almost stable at 39 days for the quarter, when compared with the last year period.

Days inventory outstanding has decreased to 13 days for the quarter compared with 28 days for the previous year period. At the same time, days payable outstanding went down to 16 days for the quarter from 18 for the same period last year.