Diplomat nears CEO decision amid solid Q1 results

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Diplomat nears CEO decision amid solid Q1 results

By David Salazar - 05/08/2018
Specialty pharmacy services company Diplomat has shared its first-quarter 2018 financial results. The company’s revenue hit a record high of $1.34 billion, thanks in part to the addition of its newly minted pharmacy benefit management segment, recently renamed CastiaRx, Diplomat said.

For the quarter, the Flint, Mich.-based company’s specialty segment brought in $1.15 billion, with the PBM segment bringing in $191 million. Diplomat’s specialty segment dispensed a total of 223,000 prescriptions — a 3,000-script increase over the prior period. The company’s gross margin was up to 8.2% from 7.9% in the previous period, with specialty segment margin at 8.1% and PBM segment margin at 9.2%. However, due to an $8.4 million increase in interest expenses from debt that financed its PBM acquisitions, the company posted a $500 million net loss of $500,000, with earnings per share dipping $0.01.

“Diplomat reached a new high mark this quarter in which the incredible team we've built executed on our plan and achieved record revenues,” Diplomat interim CEO Jeff Park said. “Our first quarter demonstrated strong performance in both our Specialty segment and our PBM segment – relaunched last week under its new brand, CastiaRx. Our PBM integration has progressed rapidly, and as our innovation, growth and profitability initiatives continue to gain momentum, we believe we can drive substantial market share gains over time and generate long-term value for all our stakeholders.”

Following Monday’s earnings announcement, Park on Tuesday voluntarily stepped down from his post as interim CEO, effective May 11, as Diplomat said it was entering the final stages of its search for CEO. With the company expected to name a CEO by the end of the week, CFO Atul Kavthekar will assume additional responsibilities until the new CEO’s appointment is effective. Park assumed the role in January following the retirement of co-founder Phil Hagerman.

“The board has been encouraged by the high-quality executives that we've met with throughout the search process, and we are now focused on an external candidate,” Diplomat chairman Ben Wolin said.

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