AmerisourceBergen Reports Record $0.52 in Diluted EPS, a 44 Percent
Increase, and Record Revenue of $19.3 Billion for the December Quarter
Increase, and Record Revenue of $19.3 Billion for the December Quarter
Fiscal First Quarter Highlights
"In the December quarter, we delivered exceptional performance across all our businesses, reflecting strong revenue growth, successful generic drug launches, and continued expense and working capital discipline," said R. David Yost, AmerisourceBergen's President and Chief Executive Officer. "Revenue in the quarter was up 11.5 percent, with approximately half of the growth coming from new business we acquired last year. Sales of generic pharmaceuticals were strong, with recent generic launches significantly contributing to gross profit growth in the quarter. Our balance sheet is even stronger after our November bond offering, and we have good financial flexibility. We are off to a strong start for the fiscal year, demonstrating the strength of our two growth drivers - generics and specialty pharmaceuticals."
Fiscal Year 2010 Expectations
"Based on the exceptional performance in the first fiscal quarter of 2010, the Company is increasing its expectations for diluted earnings per share for fiscal year 2010 to a range of $1.89 to $1.98, which represents an increase of 12 percent to 17 percent over the $1.69 diluted earnings per share from continuing operations in fiscal year 2009," said Yost. "Our key assumptions for revenue growth and operating margin expansion supporting this diluted earnings per share range also have increased, and the Company now expects revenue growth of between 7 percent and 8 percent and operating margin expansion in the low to mid single digit basis point range. We continue to expect free cash flow in the range of $500 million to $575 million, which includes capital expenditures in the $140 million range. Assumptions also continue to include the expected repurchase of approximately $350 million of AmerisourceBergen common shares in fiscal 2010."
The Company will host a conference call to discuss its results at 11:00 a.m. Eastern Standard Time on January 26, 2010. Participating in the conference call will be: R. David Yost, President and Chief Executive Officer; and Michael D. DiCandilo, Executive Vice President and Chief Financial Officer of AmerisourceBergen Corporation.
To access the live conference call via telephone:
Dial in: The dial-in number for the live call will be 210-234-0010. The access code for the call is ABC.
To access the live webcast:
Go to the Investor Relations page at http://www.amerisourcebergen.com.
A replay of the telephone call and webcast will be available from 2:30 p.m. January 26, 2010 until 11:59 p.m. February 2, 2010. The Webcast replay will be available for 30 days.
To access the replay via telephone:
866-427-6406 from within the U.S.
203-369-0895 from outside the U.S.
To access the archived webcast:
Go to the Quarterly Webcasts section on the Investor Relations page at http://www.amerisourcebergen.com.
AmerisourceBergen is one of the world's largest pharmaceutical services companies serving the United States, Canada and selected global markets. Servicing both pharmaceutical manufacturers and healthcare providers in the pharmaceutical supply channel, the Company provides drug distribution and related services designed to reduce costs and improve patient outcomes. AmerisourceBergen's service solutions range from pharmacy automation and pharmaceutical packaging to reimbursement and pharmaceutical consulting services. With more than $71 billion in annual revenue, AmerisourceBergen is headquartered in Valley Forge, PA, and employs approximately 10,000 people. AmerisourceBergen is ranked #26 on the Fortune 500 list. For more information, go to www.amerisourcebergen.com.
Certain of the statements contained in this press release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on management's current expectations and are subject to uncertainty and change in circumstances. Among the factors that could cause actual results to differ materially from those projected, anticipated or implied are the following: changes in pharmaceutical market growth rates; the loss of one or more key customer or supplier relationships; changes in customer mix; customer delinquencies, defaults or insolvencies; supplier defaults or insolvencies; changes in pharmaceutical manufacturers' pricing and distribution policies or practices; adverse resolution of any contract or other dispute with customers or suppliers; federal and state government enforcement initiatives to detect and prevent suspicious orders of controlled substances and the diversion of controlled substances; qui tam litigation for alleged violations of laws and regulations governing the marketing, sale and purchase of pharmaceutical products; changes in U.S. legislation or regulatory action affecting pharmaceutical product pricing or reimbursement policies, including under Medicaid and Medicare; changes in regulatory or clinical medical guidelines and/or labeling for the pharmaceutical products we distribute, including certain anemia products; price inflation in branded pharmaceuticals and price deflation in generics; greater or less than anticipated benefit from launches of the generic versions of previously patented pharmaceutical products; significant breakdown or interruption of our information technology systems; our inability to implement an enterprise resource planning (ERP) system to handle business and financial processes within AmerisourceBergen Drug Corporation's operations and our corporate functions without operating problems and/or cost overruns; success of integration, restructuring or systems initiatives; interest rate and foreign currency exchange rate fluctuations; economic, business, competitive and/or regulatory developments in Canada, the United Kingdom and elsewhere outside of the United States, including potential changes in Canadian provincial legislation affecting pharmaceutical product pricing or service fees or regulatory action by provincial authorities in Canada to lower pharmaceutical product pricing or service fees; the impact of divestitures or the acquisition of businesses that do not perform as we expect or that are difficult for us to integrate or control; our inability to successfully complete any other transaction that we may wish to pursue from time to time; changes in tax legislation or adverse resolution of challenges to our tax positions; increased costs of maintaining, or reductions in our ability to maintain, adequate liquidity and financing sources; volatility and deterioration of the capital and credit markets; and other economic, business, competitive, legal, tax, regulatory and/or operational factors affecting our business generally. Certain additional factors that management believes could cause actual outcomes and results to differ materially from those described in forward-looking statements are set forth (i) in Item 1A (Risk Factors) in the Company's Annual Report on Form 10-K for this Fiscal Year Ended September 30, 2009 and elsewhere in that report and (ii) in other reports filed by the Company pursuant to the Securities Exchange Act of 1934.
|(In thousands, except per share data)|
|Months Ended||Months Ended|
|December 31,||% of||December 31,||% of||%|
|Cost of goods sold||18,772,489||16,848,529||11.4||%|
|Distribution, selling and administrative||280,239||1.45||%||272,026||1.57||%||3.0||%|
|Depreciation and amortization||20,797||0.11||%||18,909||0.11||%||10.0||%|
|Facility consolidations, employee severance and other||(48||)||-||%||1,029||0.01||%|
|Interest expense, net||17,267||0.09||%||14,183||0.08||%||21.7||%|
|Income from continuing operations before income taxes||244,838||1.27||%||183,272||1.06||%||33.6||%|
|Income from continuing operations||151,307||0.78||%||112,529||0.65||%||34.5||%|
|Loss from discontinued operations, net of tax||-||(1,473||)|
|Basic earnings per share:|
|Diluted earnings per share:|
|Weighted average common shares outstanding:|
|(1) Includes the dilutive effect of stock options, restricted stock, and restricted stock units.|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|December 31,||September 30,|
|Cash and cash equivalents||$979,567||$1,009,368|
|Accounts receivable, net||3,540,919||3,916,509|
|Prepaid expenses and other||33,794||55,056|
|Total current assets||9,916,131||9,953,753|
|Property and equipment, net||641,909||619,238|
|Other long-term assets||2,998,231||2,999,749|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Current portion of long-term debt||593||1,068|
|Other current liabilities||1,017,298||961,380|
|Total current liabilities||9,243,448||9,479,610|
|Long-term debt, less current portion||1,375,256||1,176,933|
|Other long-term liabilities||196,706||199,728|
|Total liabilities and stockholders' equity||$13,556,271||$13,572,740|
|CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS|
|Months Ended||Months Ended|
|December 31,||December 31,|
|Loss from discontinued operations||-||1,473|
|Income from continuing operations||151,307||112,529|
Adjustments to reconcile income from continuing operations to net cash used in operating activities
|Changes in operating assets and liabilities||(254,904||)||(461,252||)|
|Net cash used in operating activities - continuing operations||(41,689||)||(304,115||)|
|Net cash used in operating activities - discontinued operations||-||(251||)|
|Net cash used in operating activities||(41,689||)||(304,366||)|
|Proceeds from the sale of PMSI||-||14,936|
|Net cash used in investing activities - continuing operations||(42,447||)||(27,408||)|
|Net cash used in investing activities - discontinued operations||-||(1,138||)|
|Net cash used in investing activities||(42,447||)||(28,546||)|
|Purchases of common stock||
|Exercises of stock options||
|Cash dividends on common stock||(23,149||)||(15,571||)|
|Net cash provided by (used in) financing activities||54,335||(74,285||)|
|Decrease in cash and cash equivalents||(29,801||)||(407,197||)|
|Cash and cash equivalents at beginning of period||1,009,368||878,114|
|Cash and cash equivalents at end of period||$979,567||$470,917|
|SUMMARY FINANCIAL INFORMATION|
|(dollars in thousands)|
|Three Months Ended December 31,|
|Pharmaceutical Distribution gross profit||$561,823||$489,848||14.7||%|
Gain on antitrust litigation settlements
|Total gross profit||$563,370||$489,848||15.0||%|
|Pharmaceutical Distribution operating income||$260,787||$198,913||31.1||%|
|Facility consolidations, employee severance and other||48||(1,029||)||N/M|
|Gain on antitrust litigation settlements||1,547||-||N/M|
|Total operating income||$262,382||$197,884||32.6||%|
|Percentages of revenue:|
|Operating income *||1.35||%||1.15||%|
|Operating income *||1.36||%||1.14||%|
* Calculated as a percentage of revenue. May or may not equal the gross profit % less the operating expenses % due to rounding.
SOURCE: AmerisourceBergen Corporation
Michael N. Kilpatric, 610-727-7118