Proceeds To Be Used for Debt Reduction
DALLAS, May 10, 2019 (GLOBE NEWSWIRE) -- Dougherty’s Pharmacy, Inc. (MYDP) (“Dougherty’s” or the “Company”) today announced the signing of an agreement to sell the prescription files of three locations to a national Fortune 500 pharmaceutical and healthcare retail company. The Company anticipates receiving proceeds of $2.7 million to be paid at closing, with an additional $300,000 retention earnout to be received one year after the closing of the sale. On an annualized basis, the sale includes prescription files from Dougherty’s Pharmacy in Springtown, Texas; McCrory’s Pharmacy in El Paso, Texas; and The Medicine Shoppe Pharmacy in McAlester, Oklahoma. Following the sale, the Springtown and El Paso locations will be closed, and the McAlester location may be restructured as a different business in the future. Dougherty’s will retain the inventory from the three locations and will transfer inventory to the Company stores that will continue to operate. The agreement is expected to close on or before May 31, 2019. Dougherty’s intends to use the entire proceeds to reduce debt and improve the balance sheet.
Commenting on the sale, Stewart Edington, President and Chief Executive Officer of Dougherty’s, said, “Throughout my first few months with the Company, it became clear that these three pharmacy locations were not the best fit for our strategic model moving forward. For various reasons, these specific locations do not fit the mold for growth that we are striving to achieve at Dougherty’s. In using the proceeds to pay down debt, we believe we will gain some of the needed flexibility to move forward with our strategic initiatives. I would like to take this opportunity to thank all the employees at these locations for their dedication to Dougherty’s throughout the years and wish them all the best with their future endeavors.”
Edington continued, “It is our intention for Dougherty’s to play an instrumental part in the ever-changing way in which healthcare is provided throughout the United States. The pharmacist’s role and training, although still underutilized, is rapidly expanding past the traditional product-oriented functions of dispensing and distribution of medicine and health supplies to a more patient service-centric model. Dougherty’s pharmacies, no matter where or in which state they are located, will always belong to the communities they serve.
“The traditional pharmacies that have served their communities so well for many years dispensing everyday medications are under tremendous pressure from the unscrupulous reimbursement practices of pharmacy benefit managers (PBMs), and these traditional pharmacies will not survive unless they evolve,” he said. “Dougherty’s, celebrating its 90th birthday this year, has been a leader when it comes to independent pharmacies in the United States, and I am excited to be part of its journey as the Company continues to lead through innovation, strategic partnerships and acquisitions.”
About Dougherty’s Pharmacy, Inc.
Dougherty’s Pharmacy, Inc. operates independent, community-based pharmacies. Interested investors can access financials and stock trading information for Dougherty’s at OTCMarkets.com or at www.doughertys.com.
This press release contains forward-looking statements within the meaning of the Securities Act of 1933, the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Such statements are based upon management's current expectations, projections, estimates and assumptions, including future events such as expectations for the Company receiving its pharmacy licensure for its new location as well as its expectations for revenue generation from this new pharmacy location. These forward-looking statements may be identified by words such as "expects," "believes," "anticipates" and similar expressions. Forward-looking statements involve risks and uncertainties that may cause future results to differ materially from those suggested by the forward-looking statements. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances.
Geralyn DeBusk or Tom Carey
Halliburton Investor Relations