Piper Jaffray Companies (NYSE:PJC) Q1 2015 Earnings Conference Call Transcript
Apr 23, 2015 • 09:00 am ET
Good morning, ladies and gentlemen. (Foreign Language) Welcome to The Jean Coutu Group's 2015 Fourth Quarter of Fiscal Year Financial Results Conference Call. (Foreign Language) Please be advised that this call is being recorded. (Foreign Language) I would now like to turn the meeting over to Ms. Helene Bisson. (Foreign Language) Please go ahead. (Foreign Language)
Good morning, everyone. The Q4 earnings release was put on the wire earlier this morning and was also posted on The Jean Coutu Group's corporate website. The quarterly press release is accompanied by additional financial information and we'll refer to the quarterly results slide presentation and MD&A during this call. The press release and MD&A are also available on SEDAR.
Here with me today are Francois Coutu, President and CEO, and Mr. Belzile VP, Finance and Corporate Affairs. Mr. Coutu will discuss Company's results and key operating highlights and Mr. Belzile will then cover through financial details. This will be followed by a question-and-answer period for analysts only. I would ask you to limit yourselves to only one question at a time, so as to allow us time to address as many different analyst questions as possible. Media are invited to contact me for comments or interview purposes. We would like to remind listeners that the Company's forward-looking statement disclaimer applies to all our communications.
Now, Mr. Coutu will begin our presentation.
Good morning everyone. Welcome to our spring conference. Total sales have achieved solid growth, in a market which still remains very competitive. Let's look at the details of these results. During the fourth quarter network sales increased by 4% to CAD1.1 billion, while The Jean Coutu Group's consolidated sales were up by 4.1% at CAD641 million.
As shown on the first table network pharmacy sales increased by 4.4%, whist distribution center pharmacy sales were up by 3.7%. The introduction of new generic drugs reduced retail, pharmacy sales growth by 1% in the last quarter and price reductions of the generic drugs reduced by another 0.6%. Without these deflation factors network pharmacy sales growth would have been 6% in the last quarter.
Furthermore, the generics penetration rate increased by 1.3% year-over-year to reach 68.5% in the last quarter thus impacting pharmacy sale, this increase can be explained not only by new generic drugs coming to market, but also by the ageing of the population covered by public health insurance, which favors the dispensing of generic drugs. Network front-end sales showed an increase of 3.5%, while distribution center front-end sales grew by 5.2%.
Turning to the next slide, we see that operating income before depreciation and amortization decreased by 3.9% this quarter to CAD84.1 million. Despite a solid operational performance, this decrease is due to the negotiation of a retroactive credit for previous quarters of CAD4.9 million for publicity costs recorded as a reduction of the general and operating expenses during the fourth quarter of fiscal year 2014, last year.
Furthermore, a charge of CAD600,000 for a stock appreciation rights and deferred share units was