VALLEY FORGE, Pa.--(BUSINESS WIRE)--Sep. 21, 2015--
AmerisourceBergen Corporation (NYSE: ABC) today announced that its Board
of Directors has authorized a special $2.4 billion share repurchase
program intended to further enable the execution of the Company’s
previously announced warrant hedging strategy. The new special program
will be used to further mitigate the dilutive effect on the ownership
interests of stockholders that may result from the issuance of common
stock upon exercise of the warrants issued in March 2013.
The Company recently completed the April 2015$1.0 billion special share
repurchase program, and had previously completed the May 2014$650
million special share repurchase program. The Company expects that the
new $2.4 billion program should be sufficient to offset the remaining
share dilution from future warrant exercises, with approximately $140
million expected to be used in connection with call options expiring in
October 2015, approximately $700 million expected to be used in
connection with capped calls expiring in 2016, and approximately $715
million expected to be used in connection with capped calls expiring in
2017. The remainder available under the new special program would be
used for discretionary repurchases intended to supplement these hedging
activities.
“We are very pleased that we have recently made significant progress
towards further offsetting the expected impact from warrant exercises in
2017, after having essentially fully covered the expected impact from
the 2016 warrants during our June 2015 quarter,” said Steven H. Collis,
AmerisourceBergen President and Chief Executive Officer. “With our cash
flow generation, we have tremendous flexibility to mitigate the
remaining impact of the warrants either through share repurchases,
hedging activities, or strategic acquisitions.”
Share repurchases under the new special program will be funded by
proceeds from the warrant exercises, and by cash on hand. Share
repurchases under the special program are expected to take place in the
open market as well as by other means, such as through the exercise of
the call options or capped calls that the Company has previously entered
into, or other contracts we may enter into in the future. The share
repurchases are expected to occur over an extended period of time,
subject to market conditions.
As previously disclosed, the Company intends to continue to exclude the
impact of the share repurchases under its special programs from the
presentation of adjusted diluted earnings per share from continuing
operations until the warrants are exercised or expire. The exclusion of
the special share repurchases is consistent with the Company’s exclusion
of the accounting dilution resulting from the impact of the warrants in
the calculation of the Company’s adjusted diluted earnings per share. As
a result, share repurchases under the special programs will not have an
impact on the Company’s expectations for the range of its adjusted
diluted earnings per share from continuing operations for fiscal 2015 or
fiscal 2016, which were both previously disclosed in its earnings
release dated July 23, 2015. The adjusted earnings per share guidance
from continuing operations continues to include an assumption that the
Company will repurchase $300 million of its common stock in fiscal 2015
and $300 million in fiscal 2016 under its previously announced regular
share repurchase programs, subject to market conditions.
As previously disclosed, subsidiaries of Walgreens Boots Alliance, Inc.
were collectively issued warrants to purchase up to 22,696,912 shares of
the Company’s common stock at an exercise price of $51.50 per share
exercisable during a six month period beginning in March 2016 and
warrants to purchase up to 22,696,912 shares of the Company’s common
stock at an exercise price of $52.50 per share exercisable during a
six-month period beginning in March 2017.
About AmerisourceBergen
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 in human medicine and animal health. With over $120 billion in
annual revenue, AmerisourceBergen is headquartered in Valley Forge, PA,
and employs approximately 16,000 people. AmerisourceBergen is ranked #16
on the Fortune 500 list. For more information, go to www.amerisourcebergen.com.
AmerisourceBergen's Cautionary Note Regarding Forward-Looking
Statements
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. Words such as "expect," "likely," "outlook," "forecast," "would,"
"could," "should," "can," "will," "project," "intend," "plan,"
"continue," "sustain," "synergy," "on track," "believe," "seek,"
"estimate," "anticipate," "may," "possible," "assume," variations of
such words, and similar expressions are intended to identify such
forward-looking statements. These statements are based on management's
current expectations and are subject to uncertainty and change in
circumstances. These statements are not guarantees of future performance
and are based on assumptions that could prove incorrect or could cause
actual results to vary materially from those indicated. Among the
factors that could cause actual results to differ materially from those
projected, anticipated, or implied are the following: competition;
industry consolidation of both customers and suppliers resulting in
increasing pressure to reduce prices for our products and services;
changes in pharmaceutical market growth rates; price inflation in
branded and generic pharmaceuticals and price deflation in generics;
declining economic conditions in the United States and abroad; financial
market volatility and disruption; substantial defaults in payment,
material reduction in purchases by or the loss, bankruptcy or insolvency
of a major customer; the loss, bankruptcy or insolvency of a major
supplier; changes to the customer or supplier mix; the retention of key
customer or supplier relationships under less favorable economics or the
adverse resolution of any contract or other dispute with customers or
suppliers; interest rate and foreign currency exchange rate
fluctuations; the disruption of AmerisourceBergen's cash flow and
ability to return value to its stockholders in accordance with its past
practices; risks associated with the strategic, long-term relationship
between Walgreen Boots Alliance, Inc. and AmerisourceBergen, including
with respect to the pharmaceutical distribution agreement and/or the
global sourcing joint venture; risks associated with the potential
impact on AmerisourceBergen's earnings per share resulting from the
issuance of the warrants to subsidiaries of Walgreen Boots Alliance,
Inc. (the "Warrants"); AmerisourceBergen's inability to implement its
hedging strategy to mitigate the potentially dilutive effect of the
issuance of its common stock in accordance with the Warrants under its
special share repurchase program due to its financial performance, the
current and future share price of its common stock, its expected cash
flows, competing priorities for capital, and overall market conditions;
changes in the United States healthcare and regulatory environment;
increasing governmental regulations regarding the pharmaceutical supply
channel; federal and state government enforcement initiatives to detect
and prevent suspicious orders of controlled substances and the diversion
of controlled substances; federal and state prosecution of alleged
violations of related laws and regulations, and any related litigation,
including shareholder derivative lawsuits or other disputes relating to
our distribution of controlled substances; increased federal scrutiny
and qui tam litigation for alleged violations of fraud and abuse laws
and regulations and/or any other laws and regulations governing the
marketing, sale, purchase and/or dispensing of pharmaceutical products
or services and any related litigation; material adverse resolution of
pending legal proceedings; declining reimbursement rates for
pharmaceuticals; the acquisition of businesses that do not perform as
expected, or that are difficult to integrate or control, including the
integration of recently-acquired MWI or ability to capture all of the
anticipated synergies related thereto; managing foreign expansion,
including non-compliance with the U.S. Foreign Corrupt Practices Act,
anti-bribery laws and economic sanctions and import laws and
regulations; malfunction, failure or breach of the sophisticated
information systems to operate as designed; risks generally associated
with data privacy regulation and the international transfer of personal
data; changes in tax laws or legislative initiatives that could
adversely affect AmerisourceBergen's tax positions and/or
AmerisourceBergen's tax liabilities or adverse resolution of challenges
to AmerisourceBergen's tax positions; natural disasters or other
unexpected events that affect AmerisourceBergen's operations; and other
economic, business, competitive, legal, tax, regulatory and/or
operational factors affecting AmerisourceBergen's 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)
and Item 1 (Business) in the Company’s Annual Report on Form 10-K for
the fiscal year ended September 30, 2014 and elsewhere in that report
and (ii) in other reports.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150921006400/en/
Source: AmerisourceBergen Corporation
AmerisourceBergen Corporation
Barbara Brungess
Vice
President, Corporate & Investor Relations
610-727-7199
bbrungess@amerisourcebergen.com