VALLEY FORGE, Pa.--(BUSINESS WIRE)--Feb. 1, 2001--AmeriSource
Health Corporation (NYSE:AAS) today reported record results for its
first fiscal quarter ended December 31, 2000.
Operating revenue increased 17 percent, or $478 million, to an
all-time record of $3.3 billion in the quarter compared to $2.8
billion for the same period last year. Net income for the quarter was
up 21 percent to $26.2 million, from $21.6 million in the previous
year's first quarter. Earnings per share were a record for a first
fiscal quarter at $.49 per diluted share, a 17 percent increase over
the prior year.
R. David Yost, AmeriSource Chairman and Chief Executive Officer,
said, "This was another outstanding, record-setting quarter for
AmeriSource. All customer groups contributed to strong revenue growth,
despite the comparison to a strong first quarter in fiscal 2000, which
included the positive revenue impact of Y2K in that period. Return on
committed capital, or ROCC, was 25.9 percent, well ahead of our 20
percent target and a clear indication that we continue to build
shareholder value. Earnings per share continue to show strong year
over year growth.
"Our solid revenue growth continues to reflect our ability to
profitably grow our current account base, as well as capture new
business. Critical to this effort is our exceptional customer service.
Last year, we were the pharmaceutical distribution leader in customer
service in two national surveys of healthcare executives. This year,
Premier, Inc., one of the largest group purchasing organizations for
hospitals, conducted its first member survey on customer service.
Again, AmeriSource was rated number one in customer service among the
four national distributors. Our customer service performance continues
to be anchored in our decentralized management structure where our
local distribution centers' general managers are empowered to make key
customer decisions quickly and locally.
"We also continued to deliver on productivity improvement, both
through the implementation of cost reduction programs and by holding
down costs while growing revenue.
"The outlook for the pharmaceutical industry continues to be
strong. According to IMS Health, a health data service, the overall
pharmaceutical industry is projected to grow dollar sales at a
compound annual growth rate of 13.8 percent over the next five years.
The federal Medicare drug benefit, regardless of its final form, is
expected to deliver added volume for the drug distribution industry
and AmeriSource."
Commenting on the specifics of the quarter, Kurt J. Hilzinger,
AmeriSource President and Chief Operating Officer, said, "Our
market-leading Health Systems group is building revenue momentum as we
incorporate $500 million of annualized, incremental Novation business,
and continue to add new hospitals, such as the recently announced
University of Massachusetts account. In the fast-growing Alternate
Site group, we added a number of new accounts in the quarter and
realized the full effect of the large Anthem Prescription Management
account, which we began servicing in the fourth quarter of last fiscal
year.
"Our Chain Drugstore and Independent Community Pharmacy customer
groups continued to contribute to our revenue growth for the quarter
and our recent announcement of familymeds Corp, Inc. and Horizon
Pharmacies, Inc. as new customers contributes to future growth in our
retail businesses.
"Continued positive impact from our centralization initiatives,
which we completed last year, was also clearly evident in the quarter
with improved procurement performance, expense control and capital
productivity. In addition, we expanded the penetration of our health
solutions offerings, such as the addition of more customers to our
iECHO Internet ordering and inventory management portal. We continue
to focus on programs and services to improve our customers'
businesses."
For the first quarter of fiscal 2001, the Company's gross margin
as a percentage of operating revenue was 4.16 percent versus 4.24
percent in the prior year. This expected year-to-year decline in gross
margin primarily reflects a shift in customer mix and a competitive
marketplace. The Company's customer mix in the current quarter was 53
percent institutional, which encompasses Health Systems and Alternate
Site, and 47 percent retail, including Independent Community
Pharmacies and Chain Drugstore. In the same period last year, the
customer mix was 51 percent institutional and 49 percent retail.
Total operating expenses as a percentage of operating revenue
declined 9 basis points to 2.53 percent in the first quarter of fiscal
2001 from 2.62 percent a year ago. This reduction was driven by the
shift in customer mix, increased efficiencies of scale and cost
reductions related to centralization efforts.
The Company's operating income advanced 18 percent to $53.9
million in the first quarter of fiscal year 2001 from $45.7 million
for the same quarter last year. For the fiscal first quarter,
operating margin as a percentage of operating revenue, improved to
-
1.63 percent compared to 1.62 percent for the prior year period.
Interest expense was essentially flat at $10.9 million, reflecting
the net impact of lower average levels of debt, lower borrowing
spreads and higher interest rates. In mid-December, the Company issued
$300 million of fixed-rate convertible notes, which had a slight
positive effect on interest expense for the quarter.
In looking ahead, Mr. Yost said, "AmeriSource is exceptionally
well-positioned in the healthcare supply channel. Focused on
pharmaceutical distribution and differentiated by our exceptional
customer service, we continue to grow our balanced customer portfolio
both internally and by adding new accounts. For the remainder of the
fiscal year, we expect both revenue and earnings per share growth of
approximately 20 percent over the same period last year, in line with
our long-term financial targets."
About AmeriSource
AmeriSource Health Corporation, with more than $12 billion in
annualized operating revenue, is a leading distributor of
pharmaceutical and related healthcare products and services, and the
industry's largest provider of pharmaceuticals to the acute
care/health systems market. Headquartered in Valley Forge, PA, the
Company serves its base of about 15,000 customer accounts through a
national network of more than 20 strategically located distribution
facilities. For news and additional information about the company,
visit its web site at www.amerisource.com
Certain information contained in this press release includes
forward-looking statements (as defined in Section 27A of the
Securities Act and Section 21E of the Exchange Act) that reflect the
Company's current views with respect to future events and financial
performance. Certain factors such as competitive pressures, success of
restructuring and system initiatives, market interest rates,
regulatory changes, continued industry consolidation, changes in
customer mix, changes in pharmaceutical manufacturers' pricing and
distribution policies, the loss of one or more key customer or
supplier relationships and other matters contained in the Company's
10-K for fiscal year 2000 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 Months
Ended % of Ended % of
December Operating December Operating %
31, 2000 Revenue 31, 1999 Revenue Change
---------- ------- ---------- ------- ------
Revenue:
Operating
revenue $3,306,751 100.00% $2,828,754 100.00% 17%
Bulk deliveries
to customer
warehouses 444 10,628
---------- ----------
Total revenue 3,307,195 2,839,382
Cost of
goods sold:
Operating cost of
goods sold 3,169,318 95.84% 2,708,827 95.76% 17%
Cost of goods
sold - bulk
deliveries 444 10,628
---------- ----------
Total cost of
goods sold 3,169,762 2,719,455
---------- ----------
Gross profit 137,433 4.16% 119,927 4.24% 15%
Operating
expenses:
Selling and
administrative 79,645 2.41% 70,245 2.48% 13%
Depreciation and
amortization 3,894 0.12% 3,947 0.14% -1%
---------- ----------
Operating income 53,894 1.63% 45,735 1.62% 18%
Equity in net
loss of unconsolidated
affiliate 774 0.02% 0 0.00% N/A
Interest expense 10,876 0.33% 10,898 0.39% 0%
---------- ----------
Income before taxes 42,244 1.28% 34,837 1.23% 21%
Taxes on income 16,053 0.49% 13,238 0.47% 21%
---------- ----------
Net income $ 26,191 0.79% $ 21,599 0.76% 21%
========== ==========
Earnings per
share (a):
Basic $ 0.50 $ 0.42
Assuming
dilution $ 0.49 $ 0.42
Weighted
average
common shares
outstanding (a):
Basic 52,354 51,287
Assuming
dilution 54,578 51,492
AMERISOURCE HEALTH CORPORATION
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
ASSETS (unaudited)
December 31, September 30, Increase
2000 2000 (Decrease)
------------ ------------- ----------
Current assets:
Cash and cash equivalents $ 162,360 $ 120,818 $ 41,542
Accounts receivable, less
allowance for doubtful
accounts 722,930 623,961 98,969
Merchandise inventories 1,917,605 1,570,504 347,101
Prepaid expenses and other 4,854 5,336 (482)
------------ ------------- ----------
Total current assets 2,807,749 2,320,619 487,130
Property and equipment, net 66,801 64,962 1,839
Other assets, less accumulated
amortization 81,207 72,986 8,221
------------ ------------- ----------
Total assets $ 2,955,757 $ 2,458,567 $ 497,190
============ ============= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,755,469 $ 1,584,133 $ 171,336
Accrued expenses and other 43,267 49,398 (6,131)
Accrued income taxes 21,517 12,284 9,233
Deferred income taxes 107,953 105,654 2,299
------------ ------------- ----------
Total current liabilities 1,928,206 1,751,469 176,737
Long-term debt:
Revolving credit facility 0 20,000 (20,000)
Receivables securitization
financing 385,000 385,000 0
Convertible subordinated notes 300,000 0 300,000
Other debt 8,152 8,217 (65)
Other liabilities 11,626 11,587 39
Stockholders' equity:
Common stock and capital in
excess of par value 298,420 284,132 14,288
Retained earnings 30,573 4,382 26,191
Cost of common stock in
treasury (6,220) (6,220) 0
------------ ------------- ----------
Total stockholders' equity 322,773 282,294 40,479
------------ ------------- ----------
Total liabilities and
stockholders' equity $ 2,955,757 $ 2,458,567 $ 497,190
============ ============= ==========