News Release

 

Back
 

AmeriSource Net Income Up 23% and Board Declares Two-for-One Stock Split

01/27/99

    Business Editors

    MALVERN, Pa.--(BUSINESS WIRE)--Jan. 26, 1999--

    Expanding Margins Drive Earnings Improvement

    AmeriSource Health Corp. (NYSE: AAS) one of the nation's leading wholesale distributors of pharmaceuticals, Tuesday reported substantially higher earnings for the first quarter of its fiscal year 1999.
    For the three months ended Dec. 31, 1998, net income increased 23% to $17.8 million versus $14.5 million for the same period last year. Diluted earnings per share exceeded analysts' expectations at $.73, an increase of 22% from $.60 per share earned one year ago. These results mark a continuation of the Company's strong history of earnings per share growth of 20% or greater.
    Revenue for the quarter was $2.2 billion compared to $2.3 billion one year ago. The slight decrease of 4% reflected last year's termination of service contracts with two major warehousing chain customers and one large mail order customer whose purchases resulted in operating margins below the Company's average.
    For the first quarter of fiscal 1999, gross margin as a percentage of operating revenue increased to 4.71% as compared to 4.68% for the same period one year ago. This increase reflects changes in customer mix.
    The Company's operating margin expanded in the first quarter to 1.71% of operating revenue versus 1.61% a year ago. Operating expenses were 3.00% of operating revenue compared to 3.07% for the same period last year.
    Reflecting continued disciplined capital usage, the Company's interest expense showed a significant decrease of 36% to $8.1 million as compared to $12.7 million for the same quarter last year. The Company's return on committed capital remained strong at 25.3%, again exceeding stated goals of 20% or greater.
    R. David Yost, AmeriSource President and CEO said, "The significant and recent awards of the Veterans Affairs and Premier contracts is strong evidence that our core competencies and operating model are right for the market. AmeriSource is keenly focused on locally-driven customer responsiveness supported by a low-cost national distribution platform. When combined with our portfolio of technology and value-added service offerings, we have a winning combination for the healthcare market. We expect these extremely valuable contracts to further support our growing momentum and to strengthen our financial prospects for the remainder of 1999."
    Reflecting the strong confidence in the Company's future prospects, AmeriSource's Board of Directors today approved a two-for-one stock split, subject to shareholders authorizing additional shares. Shareholders will receive one additional share for each share held on the anticipated record date of March 3, 1999.
    As of Dec. 31, 1998, AmeriSource had approximately 24.4 million diluted shares outstanding and that number will increase to approximately 48.8 million. Shares resulting from the split will be distributed by the Company's transfer agent, Chase Mellon Securities.
    R. David Yost added, "Since our public offering nearly four years ago, our stock value has increased at a compounded annual growth rate of 42%. This decision affirms the Company's strong fundamental outlook. Historically, AmeriSource's stock has been thinly traded, and this action will provide an opportunity for us to reach a broader investor base and will help to improve the overall liquidity of our stock."
    In addition, after the close of the market today, AmeriSource filed a registration statement with the Securities and Exchange Commission (SEC) covering the sale of six million shares of common stock held by Citicorp Venture Capital, Ltd. (CVC). After the intended sale of such shares, CVC would own approximately 720,000 shares of AmeriSource common stock.
    No shares of common stock will be sold by the company in the offering. Assuming no review by the SEC, the Company expects to complete the offering by mid-February.
    Commenting on these developments, Yost said, "We expect that our recently announced management changes in combination with our recent contract wins and our announced actions to broaden our shareholder base, will serve to strengthen AmeriSource's long-term growth prospects and further maximize shareholder value. We expect to continue our history of strong earnings growth through strengthened operating performance in a very attractive industry."
    AmeriSource Health Corp. is a Fortune 200 company with revenue of $8.7 billion for fiscal year 1998. The Company, one of the nation's leading pharmaceutical distributors, serves customers nationwide from a network of 23 strategically-located distribution centers. News and additional information about AmeriSource are available at www.AmeriSource.com

Attachments: AmeriSource Health Corp. Financial Summary
    AmeriSource Health Corp. Consolidated Balance Sheets

    Certain information contained in this press release includes forward-looking statements (as defined in Section 27-A of the Securities Act and Section 21-E of the Exchange Act) that reflect the Company's current views with respect to future events and financial performance.
    Certain factors such as changes in competitive pressures, success of strategic initiatives, continued industry consolidation, customer mix and other matters contained in the Company's Form 10-K for its 1998 fiscal year and other public documents could cause actual results to differ materially from those in the forward looking statements.
    The Company assumes no obligation to update the matters discussed in this press release.
                    AMERISOURCE HEALTH CORPORATION
                           FINANCIAL SUMMARY
                 (In thousands, except per share data)
                              (unaudited)


                     Three                 Three
                    Months    % of        Months      % of                               
                     Ended   Operating     Ended    Operating     %                 
                   Dec. 31,   Revenue    Dec. 31,    Revenue    Change              
                      1998                  1997
                   --------  ---------   --------   ---------   ------          
Revenue:                                                                                                                                                       
Operating 
 revenue         $2,160,904    100.00% $2,254,560     100.00%      -4%           
Bulk deliveries 
 to customer 
 warehouses           8,762                24,998                                            
                 ----------            ----------
Total revenue     2,169,666             2,279,558                                            
                                                                                                                                                               
                                                                                                                                                               
Cost of 
 goods sold:                                                                                                                                            
Operating cost 
 of goods sold    2,059,211     95.29%  2,148,954      95.32%      -4%
Cost of goods 
sold - bulk 
 deliveries           8,762                24,998                                            
                  ---------             ---------
Total cost 
 of goods sold    2,067,973             2,173,952
                  ---------             ---------
                                                                                                                                                               
                                                                                                                                                               
Gross profit        101,693      4.71%    105,606      4.68%       -4%
                                                                                                                                                               
                                                                                                                                                               
Operating 
 expenses:
Selling and 
 administrative      61,013      2.82%     65,765      2.92%       -7%
Depreciation          3,500      0.16%      3,155      0.14%       11%           
Amortization            256      0.01%        282      0.01%       -9%
                     ------                   ---
                                                                                                                                                               
Operating income     36,924      1.71%     36,404      1.61%        1%           
                                                                                                                                                               
Interest expense      8,141      0.38%     12,662      0.56%      -36%           
                      -----                ------
                                                                                                                                                               
                                                                                                                                                               
Income before taxes  28,783      1.33%     23,742      1.05%       21%           

Taxes on income      10,938      0.51%      9,259      0.41%       18%           
                     ------                 -----
                                                                                                                                                               
Net income          $17,845      0.83%    $14,483      0.64%       23%           
                    =======               =======
                                                                                                                                                               

Earnings per share:                                                                                                                                            
Basic                 $0.74                 $0.61
Assuming dilution      0.73                  0.60                                            
                                                                                                                                                               
Weighted average 
common shares                                                                                                                                 
outstanding:                                                                                                                                             
Basic                24,184                23,856                                            
Assuming dilution    24,434                24,224
                                                                                                                                                               

                    AMERISOURCE HEALTH CORPORATION
                      CONSOLIDATED BALANCE SHEETS
                        (dollars in thousands)
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
        ASSETS        (unaudited)                                                        
                        Dec. 31,       Sept. 30,         Increase                  
                          1998           1998           (Decrease)                 
                     --------------  ------------      -------------              
Current assets:                                                                                                                                   
 Cash  and cash 
  equivalents           $44,406         $48,461          ($4,055)              
 Restricted cash         31,526          37,044           (5,518)              
 Accounts  
  receivable, 
  less allowance 
  for doubtful 
  accounts              522,044         458,238           63,806               
                                                                                                                                                        
 Merchandise 
  inventories         1,066,567         870,223          196,344               
 Prepaid expenses 
  and other               3,150           4,356           (1,206)              
                     --------------  -----------       -------------              
   Total current 
    assets            1,667,693       1,418,322          249,371               
                                                                                                                                                        
Property  and  
 equipment, net          59,851          60,789             (938)              
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
Other assets, 
 less accumulated 
 amortization            79,374          73,171            6,203               
                     -------------- ------------       -------------              
                                                                                                                                                        
   Total assets      $1,806,918      $1,552,282         $254,636               
                    =============== ============       =============               
                                                                                                                                                        
                                                                                                                                                        
        LIABILITIES AND STOCKHOLDERS' EQUITY                                                                       
                                                                                                                                                        
                                                                                                                                                        
Current 
 liabilities:                                                                                                                              
  Accounts 
   payable             $908,529        $873,181          $35,348               
  Accrued  
   expenses and 
   other                 42,158          48,532           (6,374)              
  Accrued  
   income taxes          11,629              78           11,551               
                                                                                                                                                        
 Deferred  income 
  taxes                  97,430          93,385            4,045               
                      -----------     -----------      -----------              
    Total  current  
     liabilities      1,059,746       1,015,176           44,570               
                                                                                                                                                        
Long-term debt:                                                                                                                                   
                                                                                                                                                        
 Revolving credit 
  facility              331,660         145,000          186,660               
 Receivables 
  securitization 
  financing             299,956         299,948                8               
                                                                                                                                                        
Other debt                8,654           8,813             (159)              
                                                                                                                                                        
Other  liabilities        8,730           8,036              694               
                                                                                                                                                        
Stockholders' equity:                                                                                                                             
 Common stock and 
  capital in excess 
  of par value          249,956         244,938            5,018               
 Retained earnings 
  (deficit)            (145,564)       (163,409)          17,845               
 Cost of common 
  stock in treasury      (6,220)         (6,220)               0               
                      ------------    ------------     ------------              
    Total  
     stockholders' 
     equity              98,172          75,309           22,863               
                      ------------    ------------     ------------              
                                                                                                                                                        
    Total 
     liabilities and 
     stockholders' 
     equity          $1,806,918      $1,552,282         $254,636               
                   =============   =============     ============              
                                                                                                                                                        

     
     CONTACT:  AmeriSource Health Corp.  
               MaryBeth Alvin, 610/296-4480                      
               malvin@amerisource.com            

Corporate Overview

AmerisourceBergen is one of the largest global pharmaceutical sourcing and distribution services companies, helping both healthcare providers and pharmaceutical and biotech manufacturers improve patient access to products and enhance patient care. With services ranging from drug distribution and niche premium logistics to reimbursement and pharmaceutical consulting services, AmerisourceBergen delivers innovative programs and solutions across the pharmaceutical supply channel..

Learn More